Paying for Marketwide Services in Fluid Milk Markets

Alden Manchester

No 309372, Agricultural Information Bulletins from United States Department of Agriculture, Economic Research Service

Abstract: Excerpt from the report: Functions in marketing raw milk have shifted from processors to cooperatives in the past 25 years. The change has usually produced more efficient milk markets, but some cooperatives are not paid for the marketwide benefits of their services. These marketwide services are like public goods in that everyone gains from them with no restriction. Like all public goods, these services provide both public and private benefits. Balancing the milk supply, for example, for a number of processors provides them with a service that each would otherwise have to provide at a higher cost. It also supplies a public service of increased efficiency that individual processors could not provide. This report reviews marketwide services, issues surrounding them, and various ways to pay for them, a question of particular interest since the Food Security Act of 1985 has for the first time explicitly authorized Federal marketing order payments for such services.

Keywords: Agricultural and Food Policy; Marketing (search for similar items in EconPapers)
Pages: 8
Date: 1987-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersab:309372

DOI: 10.22004/ag.econ.309372

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