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Do Efficient Dairy Producers Purchase Quota?

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  • Elskamp, Rebecca
  • Hailu, Getu

Abstract

We examine the effect of farm level cost and scale efficiencies on dairy quota exchanges in Ontario. A constrained profit maximization framework is used to illustrate the role of cost efficiency in quota exchanges (i.e., sales and purchases). Using a multinomial logit model, where net quota buyers and net quota sellers are identified our empirical results indicate that variations in cost efficiency do not have a significant effect on purchases milk production quota, whereas scale efficiency does. Younger farmers, farms with underutilized barns space and farms with a recent history of quota purchase tend to buy milk production quota.

Suggested Citation

  • Elskamp, Rebecca & Hailu, Getu, 2013. "Do Efficient Dairy Producers Purchase Quota?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149678, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea13:149678
    DOI: 10.22004/ag.econ.149678
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    1. Milk quota markets are not efficient
      by Economic Logician in Economic Logic on 2013-06-21 19:48:00

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    Cited by:

    1. Rajsic, Predrag, 2013. "Cost Structure of the Ontario Dairy Industry Revisited: Distributional Aspects," Working Papers 157407, Canadian Agricultural Trade Policy Research Network.

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    Agricultural and Food Policy; Production Economics;

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