Efficiency losses in milk marketing boards : the importance of exports
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Date
2006-02Metadata
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- Discussion papers (SAM) [640]
Abstract
A milk marketing board (MMB) is a well known instrument for regulating the markets for dairy
products. MMBs are based on price discrimination, and receipts from sales are pooled so that the
farmers receive a single price adjusted for composition and quality. Using a numerical model, we
find that the economic welfare cost of the Norwegian MMB, is as much as 26.3% of the milk
production value. This computed cost is far larger than for the other countries with MMBs. The
main reasons are that exports are a major ingredient of the Norwegian system, and that production costs are very high.
Publisher
Norwegian School of Economics and Business Administration. Department of EconomicsSeries
Discussion paper2006:8