Trade Effects of Dairy Pricing Arrangements

Pavel Vavra, Nobunori Kuga, Jesus Anton and Joe Dewbre

No 25862, 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa from International Association of Agricultural Economists

Abstract: Milk producers in virtually every OECD country, and in many non-OECD countries as well, benefit from government interventions. Indeed, government support and protection for milk producers is more widespread than for any of the other commodities for which the OECD calculates producer subsidy equivalents. The purpose of the analysis reported in this paper was to investigate the relative market effects of these two varieties of government intervention in milk pricing: 1) interventions through trade measures applied to dairy products and 2) discriminatory pricing arrangements. Which kind of policy creates 'dollar-for-dollar' the greater effects? This paper shows the answer to that question is - it depends. Neither economic theory by itself, nor economic theory combined with 'plausible' ranges of numerical values for key parameters is enough to say definitely one way or another. In some plausibly real-life situations domestic milk pricing arrangements can be, at the margin, more distorting than explicit trade measures. The key determining parameters include the usual suspects - the relative elasticities of fluid and manufacturing milk demand, as well as initial price gap between fluid and manufacturing milk provided by various measures and the proportion of domestic milk production used to manufacture tradable dairy products.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 19
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/25862/files/cp03va01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae03:25862

DOI: 10.22004/ag.econ.25862

Access Statistics for this paper

More papers in 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa from International Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().