Pulling the Plug on Monopoly Power: Reform for the Canadian Wheat Board
Change is in store for the Canadian Wheat Board (CWB), which has the legal authority to purchase all Western Canadian wheat and barley produced for export and for domestic human consumption. The CWB defends the continuation of this legal authority on the premise that by selling together, Western Canadian farmers exert more market power in wheat markets and receive higher returns than they could if competing against each other. However, the declining global market share of Canadian wheat makes it increasingly unlikely that the CWB is able to exert market power: the CWB is a price taker in many markets. In the absence of strong evidence that the CWB is able to achieve its policy goal of higher returns to farmers because of the compulsory purchase of grains, its monopoly over Western Canadian wheat and most barley sales should be reconsidered with an eye to ending it.
|Date of creation:||Jun 2011|
|Date of revision:|
|Publication status:||Published on the C.D. Howe Institute website, June 2011|
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- Mulik, Kranti & Koo, Won W., 2006. "Substitution Between U.S. And Canadian Wheat By Class," Agribusiness & Applied Economics Report 23615, North Dakota State University, Department of Agribusiness and Applied Economics.
- Peter G. Helmberger & Sidney Hoos, 1963. "Economic Theory of Bargaining in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(5), pages 1272-1280.
- 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.
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