Spatial and Temporal Marketing Considerations Under Marketing Loan Programs

Alexander Saak ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: Marketing assistance loan (MAL) and loan deficiency payment (LDP) programs differ in their treatment of transportation costs. Marketing decisions are analyzed under these programs when producers are differentiated by location with respect to the terminal market. Under certain conditions, a complete characterization of equilibrium is developed. The proposed model broadly fits several "stylized" facts about producer enrollment in these programs. If LDPs are uniform at all locations, LDP programs do not interfere with marketing decisions. MAL programs distort the optimal marketing pattern by providing incentives to store for producers who should be among the first ones to supply the market.

Date: 2004-11-01
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Published in American Journal of Agricultural Economics, November 2004, vol. 85, pp. 872-887

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Journal Article: Spatial and Temporal Marketing Considerations under Marketing Loan Programs (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:11884

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