The Impact of Market Intervention on Quota Mobility: The Case of the Ontario Dairy Industry

Abstract

We examine the relationship between farm‐level scale efficiency and quota purchases in the Ontario dairy quota market before and after the implementation of a progressive transfer assessment policy and a price cap policy. We find that scale efficiency has a positive effect on net quota purchases and that the two regulations slowed down this effect. The largest deterrent in the movement of quota from less efficient to more efficient producers occurred after the implementation of the capital asset pricing policy. If the capital asset pricing policy remains in effect, it will likely take a longer time to achieve an efficient allocation of quota across producers in the industry.

Publication
Canadian Journal of Agricultural Economics, 65: 249-270.
Date
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