Do Efficient Dairy Producers Purchase Quota?

We examine the effect of farm level cost and scale efficiencies on dairy quota exchanges in Ontario. A constrained profit maximization framework is used to illustrate the role of cost efficiency in quota exchanges (i.e., sales and purchases). Using a multinomial logit model, where net quota buyers and net quota sellers are identified our empirical results indicate that variations in cost efficiency do not have a significant effect on purchases milk production quota, whereas scale efficiency does. Younger farmers, farms with underutilized barns space and farms with a recent history of quota purchase tend to buy milk production quota.


Issue Date:
2013-03
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/148901
Total Pages:
20
Series Statement:
CATPRN Working Paper
2013-02




 Record created 2017-04-01, last modified 2017-04-26

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