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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. Wilson, William W., 1989. "Differentiation And Implicit Prices In Export Wheat Markets," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(01), July.
    2. 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.
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    Cited by:

    1. Richard Pedde & Al Loyns, 2011. "Pulling the Plug on Monopoly Power: Reform for the Canadian Wheat Board," e-briefs 118, C.D. Howe Institute.
    2. 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.

    More about this item

    Keywords

    State Trading; Wheat Marketing; Price Premium;

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