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Food Research Institute Studies in Agricultural Economics, Trade, And Food Research Institute Studies in Agricultural Economics, Trade, and Development Published by the Food Research Institute Stanford University, Stanford, California 94305 Reprints of articles in this issue may be purchased from the Institute. Articles in this journal are abstracted or indexed in Journal of Economic Literature, Bibliography of Agriculture, L'Agronomic Tropicale, Biological Abstracts, Field Crop Abstracts, Nutrition Abstracts and Reviews, Public Af­ fairs Information Service Bulletin, Schrifttum del' Agrarwirtschajt, Tropical Abstracts, World Agricultural Economics and Rural Sociology Abstracts, and the American Economic Association Index of Economic Journals. Table of contents of each issue of the journal of Food Research Institute is also listed in Contents of Recent Economics Journals (London) and Current Contents Agricultural, Food, and Veterinary Sciences. ® 1972 by the Board of Trustees of the Leland Stanford Junior University Annual subscription, $10.00. Single copy, $4.00 Food Research Institute Studies in Agricultural Economics, Trade, and Development Editors William O. Jones Clark W. Reynolds Vol. X NO·3 iU!:H-(I:\~Yr 'l.' "I() of Sf. Schoia~ 1"'\ (. 'r.. l\jh ....... , ... ~+~ ~J\St 1,1: FOOD RESEARCH INSTITUTE STUDIES IN AGRICULTURAL ECONOMICS, TRADE, AND DEVELOPMENT Volume X, No.3, 1971 CONTENTS Marketing Orders and Public Policy for the Fruit and Vegetable Industries by John A. Jamison Introduction ......................................................... 229 Marketing Orders: Basis, Importance, and Major Provisions, 230 Framework for Analysis ............................................. 231 Objectives and Implications of Marketing Controls, 232 - Marketing Orders and Marketing Organization, 236 - Marketing Orders and Market Structure, 238 - Marketing Orders and Public Policy for Agriculture, 239 Marketing Order Case Studies . .. 241 Case Studies: Introduction, 241 - California Cling Peaches, 241- California Bartlett Pears, 250 - California-Arizona Lemons, 256, Pacific Coast Walnuts, 263, California Almonds, 268 Prices and Incomes: Level and Stability . .. 272 Farm Level Prices and Incomes, 273 - Prices at Processor, Handler, and Retail Levels, 286 - Evidence from Other Studies, 295 - Conclusions: Price and Income Experience, 296 Marketing Order Cost and Efficiency .................................. , 299 Marketing Order Costs and Services, 300 - Market Integration and Coordina- tion, 311-Market Power and Price Determination, 324 - Conclusions: Mar- keting Costs, Services, and Efficiency, 330 224 CONTENTS Marketing Order Controls and Resource Allocation ., ................. " 333 Resource Allocation and Controlled Industries, 333 - Resource Allocation and the General Public, 344 - Conclusions: Resource Allocation Under Mar­ keting Order Controls, 348 Conclusions and Policy Guideposts .................................... 350 Case Study Conclusions, 351- General Conclusions, 357 - Policy Guideposts, 361 Addendum: Marketing Controls in Other National and International Markets ............................ .. 363 International Commodity Agreements, 365 - Significance of Marketing Con- trol Experience, 369 Appendix A. Cling Peach Marketing Order: Summary of Provisions..... 371 Appendix B. Bartlett Pears for Processing Marketing Order: Summary of Provisions ............................................. 378 Appendix C. Lemon Marketing Order: Summary of Provisions . .. 380 Appendix D. Walnut Marketing Order: Summary of Provisions........ 383 Appendix E. Almond Marketing Order: Summary of Provisions . .. 385 Appendix F. Sources of Data for Charts................................ 387 Citations ............................................................. 388 TABLES 1. Value to Growers, Major Fruits for Canning, California, 1969 ......... 242 2. California Cling Peaches, Estimated Tonnage Reductions Due to Mar- keting Order Regulations, 1949-69 .................................. 248 3. Pacific Coast Bartlett Pears: Alternate Utilization by State, Five-Year Averages, 1950-67 ................................................. 253 4. California-Arizona Lemons: Utilization of Total Crop, Five-Year Aver- ages, 1925-68 ..................................................... 259 5. Lemons: Share of Total Crop Diverted from Domestic Fresh Market Under Marketing Order Regulations, 1941-68 ....................... 261 6. Lemons: Allocation of Total Crop among Utilizations, by District, 1956-68 ........................................................... 262 7. Walnuts: Percentage of Production Sold Shelled, Five-Year Averages, 1940-68 .......................................................... 265 8. Quantity Controls Applied Under Walnut Marketing Order, 1960-69 .. 267 9. California Almonds, Salable and Surplus Percentages Established Under Marketing Order, 1950-69 ......................................... 272 10. Average Costs and Return per Acre for Production of California Cling Peaches, Bartlett Pears, Lemons, Walnuts, and Almonds, in Leading Production Areas, 1965-68 ........................................ 277 11. Average Parity Price Ratios, Cling Peaches, Pears, and Apples for Proc­ essing, Lemons, Walnuts, Almonds, and All Commodities, Five-Year Averages, 1950-68 ................................................ 279 12. Year-to-Year Variation in Grower Prices, Total Revenues, and Returns per Acre, Cling Peaches, Bartlett Pears, Lemons, Walnuts, Almonds, and Apples, Ten-Year Averages, 1930-68 ........................... 280 13. Change in Average Percentage Variation in Prices, Total Revenues, and Returns per Acre, 1960-68 Compared to 1930-68 .................... 285 14. Selected Estimates of Price Elasticities of Demand for Fruits, Nuts, and Vegetables ........................................................ 287 15. Retail Prices: Canned Peaches, Canned Fruit Cocktail, Frozen Lemon Concentrate, Fresh Lemons, Fresh Apples, 1947-68 . .. 292 16. Marketing Order Expenditures and Their Percentage of Total Reve­ nues, for Cling Peaches, Bartlett Pears, Lemons, Walnuts, Almonds, 1960-68 .... .. 301 17. Marketing Order Expenditures by Category: Cling Peaches and Bartlett Pears for Processing, 1960-68 ....................................... 303 226 TABLES 18. California Lemons, Grower Prices and Share of Crop Sold, Fresh and Processed, 1950-68, Five-Year Averages ........................... " 314 19. Cling Peach Growers and Processors, Number of Firms, 1939-68 ...... 337 20. Per Capita Consumption: Peaches, Pears, Canned Fruit Salad and Cock- tail, Lemons, Walnuts, Almonds, 1925-68, Five-Year Averages....... 346 21. Share of Annual Supply Diverted from Primary Markets Under Federal Marketing Orders, Averages 1960-64, and 1965-68 ................... 347 Appendix Tables I. Lemon Administrative Committee Allocation Estimates, 1967/68 ..... 381 II. Walnut Marketing Policy Computation Table....................... 383 III. California Almonds, Computation of Salable and Surplus Percentages for 1968/69 Crop Year for Marketing Order Control ............... 385 CHARTS 1. California Cling Peaches: Area, Production, and Yield per Bearing Acre, 1924-69 ..................................................... 244 2. Trends in Marketing Controls, California Cling Peaches, 1927-69 ..... 247 3. California Cling Peaches, Estimated Total Production and Tonnage Sold for Canning after Elimination under Marketing Order Regula- tions, 1949-69 ..................................................... 249 4. Bartlett Pears: Area and Yield per Bearing Acre for California and Pro- duction for Pacific Coast States, 1925-69 ............................ 252 5. California-Arizona Lemons: Area 1925-68, Production and Yield per Bearing Acre, 1940-68 ............................................ 258 6. Walnuts: Area and Yield per Bearing Acre for California and Produc- tion for California and Oregon, 1925-68 ........................... 264 7. Walnuts, United States Imports and Exports, 1950-67 ............... 266 8. California Almonds: Area, Production, and Yield per Bearing Acre, 1925-69 ........................................................... 269 9. Almonds, Shelled, United States Imports and Exports, 1950-69 ....... 270 10. California Cling Peaches: Grower Price per Ton, Total Revenue from Canning, and Returns per Bearing Acre Compared with U.S. Cash Re- ceipts from All Fruits and Nuts, Five-Year Averages, 1925-69 ........ 274 11. California Bartlett Pears: Grower Price per Ton, Total Revenue from Canning, and Returns per Bearing Acre Compared with U.S. Cash Re­ ceipts from All Fruits and Nuts, Five-Year Averages, 1925-69 . .. 274 12. California Lemons: Grower Price per Ton, Total Revenue, and Returns per Bearing Acre Compared with U.S. Cash Receipts from All Fruits and Nuts, Five-Year Averages, 1925-69 ............................. 275 13. California Walnuts: Grower Price per Ton, Total Revenue, and Returns per Bearing Acre Compared with U.S. Cash Receipts from All Fruits and Nuts, Five-Year Averages, 1925-69 .. .. 275 14. California Almonds: Grower Price per Ton, Total Revenue, and Re­ turns per Bearing Acre Compared with U.S. Cash Receipts from All Fruits and Nuts, Five-Year Averages, 1925-69 ...................... 276 15. Year-to-Year Variability in Price, Total Revenue, and Returns per Bear­ ing Acre to Growers from California Cling Peaches Sold for Canning, 1925-68 ........................................................... 281 16. Year-to-Y ear Variability in Price, Total Revenue, and Returns per Bear- 228 CHARTS ing Acre to Growers from California
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