Marketing Boards
Marketing BoardsIntroduction
Marketing Boards are government involved ways of regulating farmer’s production and price, while protecting the overall profit of every farmer in that particular production. Since there is nothing farmers can do about the inelastic nature of the demand for farm products, the key to supporting and stabilizing farm prices and incomes lies in controlling the supply of farm products. In other words, farmers would benefit greatly from an oligopolistic (banning firms together) price and supply agreement among themselves. Farming is a highly competitive industry – it consists of many small, independent producers selling substantially similar products in a big marketplace.
Given these realities, it has proven very difficult to achieve any kind of agreement or coordinated action on the part of farmers, even when it would be in their best interest to do so. Attempts have been made to use farm cooperatives to restrict production and thus support and stabilize prices; however, these efforts rarely work. Such agreements are voluntary and lack means of enforcement; as a result, too many farmers don’t participate or break the agreements. This is when farmers turned to government assistance to help with their low and unstable incomes and marketing boards was proposed.
In the following we will discuss what marketing boards are, how they work, how they effect the Canadian economy, and how widespread they are. We will focus on particular Canadian producers who use marketing boards and how they are both positive and negative in contributing to the economy. We will also look at how marketing boards are effecting the consumers. In total outlook, the purpose of this review is to provide a clear and explicit focus for the research to be undertaken as well as to establish the scope of the study.
What are Marketing Boards?
The main objective of marketing boards is to operate in the best long term interests of the producer and the consumer. By smoothing out seasonal and alternate supply irregularities in providing farmers with a fair return for their labor and investment. Marketing boards also attempt to promote marketing efficiency through centralized coordination of product and market research, transportation and selling. Marketing Boards are Government-sponsored organizations of farmers that support farm incomes by restricting the supply of produce, usually through a system of quotas on individual farmers.
Every province has marketing boards for each major commodity, and the provincial boards differ widely in their authority over the control of both marketing and production. With the institution of the National Farm and Products Marketing Act in 1972, the first national marketing boards were established- the Canadian Egg Marketing Agency and the Canadian Turkey Marketing Agency. Although operating under separate legislation, the Canadian Dairy Commission and the Canadian Wheat Board are also national boards.
Marketing Boards are criticized for their attempt to manage supply, even though only a few operate comprehensive supply management systems (dairy products, eggs, turkeys and...
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