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Can the Canadian Wheat Board Extract Monopoly Rents? The Case of the Spring Wheat Market

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  • W. H. Furtan
  • D. F. Kraft
  • E. W. Tyrchniewicz

Abstract

The Canadian Wheat Board (CWB) is a monopoly seller of wheat, durum and malting barley from western Canada. This paper examines the question whether the CWB monopoly can extract a premium in the international market place. Using actual transaction data (i.e. actual transaction prices) we estimate that the CWB charged importers an average price premium of $13.35/tonne for wheat over the period 1980-94. In periods when high quality wheat was in short supply the CWB was able to charge higher premiums.We also show that during the period of export subsidies the CWB earned farmers a premium by avoiding subsidized markets.

Suggested Citation

  • W. H. Furtan & D. F. Kraft & E. W. Tyrchniewicz, 1999. "Can the Canadian Wheat Board Extract Monopoly Rents? The Case of the Spring Wheat Market," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(3), pages 417-437.
    • Handle: RePEc:taf:ijecbs:v:6:y:1999:i:3:p:417-437
    DOI: 10.1080/13571519984160
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    References listed on IDEAS

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    1. Bruno Larue, 1991. "Is Wheat a Homogeneous Product?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(2), pages 103-117, July.
    2. Colin Carter & Andrew Schmitz, 1979. "Import Tariffs and Price Formation in the World Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(3), pages 517-522.
    3. Chris M. Alaouze & A. S. Watson & N. H. Sturgess, 1978. "Oligopoly Pricing in the World Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(2), pages 173-185.
    4. Wilson, William W., 1989. "Differentiation And Implicit Prices In Export Wheat Markets," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.
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    Cited by:

    1. Ryan Cardwell & Pascal L. Ghazalian, 2020. "The Effects of Untying International Food Assistance: The Case of Canada," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(4), pages 1056-1078, August.
    2. Richard Pedde & Al Loyns, 2011. "Pulling the Plug on Monopoly Power: Reform for the Canadian Wheat Board," e-briefs 118, C.D. Howe Institute.
    3. Schmitz, Troy G. & Gray, Richard S., 2000. "State Trading Enterprises And Revenue Gains From Market Power: The Case Of Barley Marketing And The Canadian Wheat Board," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-20, December.
    4. Joseph M. Santos, 2014. "Back to the futures: An assessment of market performance on the early Winnipeg Grain Exchange," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1426-1448, November.
    5. Serfas, D., 2018. "an ex-post econometric analysis of the abolishment of the canadian wheat board," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277286, International Association of Agricultural Economists.
    6. Furtan, William Hartley, 2005. "Transformative Change in Agriculture: The Canadian Wheat Board," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(2), pages 1-13.
    7. Cardwell, Ryan & Ghazalian, Pascal L., 2022. "State-trading enterprises and productivity: Farm-level evidence from Canadian agriculture," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321159, Agricultural Economics Society - AES.
    8. Colin A. Carter & Shon M. Ferguson, 2020. "State trading deregulation and prairie durum wheat production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(1), pages 107-116, March.
    9. Sarker, Rakhal & Ratnesena, Shashini, 2014. "Revealed Comparative Advantage and Half-A-Century Competitiveness of Canadian Agriculture: A Case Study of Wheat, Beef and Pork Sectors," Working Papers 165675, Canadian Agricultural Trade Policy Research Network.
    10. Ryan Cardwell & Pascal L. Ghazalian, 2020. "“The Effects of Untying International Food Assistance: The Case of Canada” — Authors' Response to Comment," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(4), pages 1081-1082, August.

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