Institutionalized Metzler Effects: Tariff-Rate Quota Liberalization in a Supply-Managed Industry
A supply management system governs Canada’s poultry sector. Tariff Rate Quotas (TRQs), with prohibitive above-quota tariffs and low in-quota tariff, mimic import-quotas limit international competition in Canada’s poultry market. The quota part of the TRQs is a minimum access commitment under international trade agreement that is defined as a fraction of domestic production. We show in a 3-stage game involving negotiations between retailers and processors and between processors and farms that increasing minimum access commitment under current trade agreements can produce Metzler effects with larger price increases observed at the farm and processing levels. Simulations based on 2008 data support the Metzler paradox and shed light on import license allocations between retailers and poultry processors in Canada.
|Date of creation:||01 Mar 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://servsas.fsaa.ulaval.ca/index.php?id=12482&L=1|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jean-Philippe Gervais & Stephen Devadoss, 2006. "Estimating bargaining strengths of Canadian chicken producers and processors using a bilateral monopoly framework," Agribusiness, John Wiley & Sons, Ltd., vol. 22(2), pages 159-173.
- Jean-Philippe Gervais & David Surprenant, 2003. "Evaluating the TRQ Import Licensing Mechanisms in the Canadian Chicken Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 51(2), pages 217-240, 07.
When requesting a correction, please mention this item's handle: RePEc:ags:spaawp:102651. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.