Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1185: Deregulation and Regional Specialization: Evidence from Canadian Agriculture

Colin A. Carter and Shon Ferguson ()
Additional contact information
Colin A. Carter: Dept. of Agricultural and Resource Economics and Giannini Foundation of Agricultural Economics, Postal: UC Davis, USA
Shon Ferguson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: For about seventy years, the Canadian Wheat Board (CWB) was one of the world’s largest export “single desk” state traders in agriculture, until it was deregulated in 2012 and stripped of its marketing powers. One of the main crops controlled by the CWB was barley. We estimate the impact of the removal of the CWB’s single desk on the spatial pattern of malting barley production in Western Canada. We find that deregulation encouraged growers located closer to malt barley plants to increase production relative to growers located further from the plants. Additionally, malting barley production shifted to regions with more of a natural advantage arising from climatic conditions. This change in cropping patterns after deregulation can be explained by efficiency gains, combined with transportation and handling cost savings.

Keywords: tate trading; Deregulation; Agricultural regulation; Trade costs; Comparative advantage

JEL-codes: L43; Q17; Q18; R12; R14

25 pages, October 23, 2017

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