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State Trading Enterprises And Revenue Gains From Market Power: The Case Of Barley Marketing And The Canadian Wheat Board

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  • Schmitz, Troy G.
  • Gray, Richard S.

Abstract

According to the U.S. General Accounting Office, the Canadian Wheat Board (CWB) is the largest state trading enterprise reporting to the World Trade Organization under article XVII requirements. This study estimates the market power exerted by the CWB in international barley markets. The analysis incorporates international price discrimination across markets for similar types of barley, the intertwining relationships between feed and malting barley markets, and producer behavior in the absence of the CWB. The CWB was able to capture an annual average of $72 million in additional revenue beyond the amount that would have been generated by purely competitive multiple sellers of Canadian barley during the period 1985-94.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:jlaare:30897
    DOI: 10.22004/ag.econ.30897
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    References listed on IDEAS

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    1. Harvey G. Brooks, 1993. "First, Let's Assume We Have a Can Opener: An Analysis of the Economics of a Single North American Barley Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(3), pages 271-281, November.
    2. Schmitz, Andrew & Furtan, William Hartley & Baylis, Katherine R., 1999. "State Trading and the Upcoming WTO Discussions," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 14(2), pages 1-4.
    3. Colin A. Carter & R.M.A. Loyns & Derek Berwald, 1998. "Domestic Costs of Statutory Marketing Authorities: The Case of the Canadian Wheat Board," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(2), pages 313-324.
    4. Harvey Brooks & Troy G. Schmitz, 1999. "Price discrimination in the international grain trade: The case of Canadian Wheat Board feed barley exports," Agribusiness, John Wiley & Sons, Ltd., vol. 15(3), pages 313-322.
    5. 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.
    6. Alston, Julian M. & Gray, Richard S., 2000. "State Trading Versus Export Subsidies: The Case Of Canadian Wheat," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(1), pages 1-17, July.
    7. Johnson, D. Demcey & Wilson, William W., 1995. "Competition And Policy Conflicts In Canada-U.S. Barley Trade," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-18, July.
    8. Richard Gray & Alvin Ulrich & Andrew Schmitz, 1993. "A Continental Barley Market: Where Are the Gains?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(3), pages 257-270, November.
    9. J. Stephen Clark, 1995. "Single Desk Selling by the Canadian Wheat Board: Does It Have an Impact?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 43(2), pages 225-236, July.
    10. Schmitz, Andrew & Furtan, William Hartley & Brooks, Harvey G. & Gray, Richard S., 1997. "The Canadian Wheat Board: How Well Has It Performed?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 12(1), pages 1-7.
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    Cited by:

    1. Fengxia Dong & Thomas L. Marsh & Kyle W. Stiegert, 2006. "State Trading Enterprises in a Differentiated Product Environment: The Case of Global Malting Barley Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 90-103.
    2. Troy G. Schmitz, 2018. "Impact of the Chinese embargo against MIR162 corn on Canadian corn producers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(4), pages 571-586, December.
    3. Jian Yang & Jin Zhang & David J. Leatham, 2003. "Price and Volatility Transmission in International Wheat Futures," Annals of Economics and Finance, Society for AEF, vol. 4(1), pages 37-50, May.
    4. Schmitz, Troy G. & Schmitz, Andrew & Moss, Charles B., 2004. "Two Approaches To Measuring The Economic Impact Of Starlink Corn On U.S. Producers," 2004 Annual meeting, August 1-4, Denver, CO 20306, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Troy G. Schmitz & Andrew Schmitz & Charles B. Moss, 2005. "The economic impact of StarLink corn," Agribusiness, John Wiley & Sons, Ltd., vol. 21(3), pages 391-407.
    6. Franz Sinabell, 2005. "Marktspannen und Erzeugeranteil an den Ausgaben für Nahrungsmittel," WIFO Studies, WIFO, number 25398, Juni.
    7. Stiegert, Kyle W. & Wang, Shinn-Shyr, 2003. "Imperfect Competition And Strategic Trade Theory: What Have We Learned," Working Papers 14589, International Agricultural Trade Research Consortium.
    8. Maeda, Koushi & Suzuki, Nobuhiro & Kaiser, Harry M., 2001. "Measuring the Effects of Eliminating State Trading Enterprises on the World Wheat Sector," Working Papers 127664, Cornell University, Department of Applied Economics and Management.
    9. Derek G. Brewin, 2016. "Competition in Canada's Agricultural Value Chains: The Case of Grain," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 64(1), pages 5-19, March.
    10. Schmitz Troy G. & Schmitz Andrew & Moss Charles B., 2004. "Did StarLink Reduce Import Demand for Corn?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(2), pages 1-16, May.
    11. 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.

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