Economic Impacts of Privatizing the Marketing of Canadian Oats By Robert W. R. Morrissey A Thesis Submitted to the Faculfy of Graduate Studies in Partial Fulfilment of the Requirements for the Degree of MASTER OF SCIENCE Department of Agricultural Economics and Farm Management O October 1996 N,flonarLibrav Bibliothèque nationale I*l du Canada Acquisitions and Direction des acquisitions et Bibliographic Services Branch des services bibliographiques 395 Wellington Street 395, rue Wellington Ottawa, Ontario Ottawa (Ontario) K1A ON4 K.lA ON4 Yourl¡le volrc(élérence Oú lile Nolre élérence The author has granted an L'auteur a accordé une licence irrevocable non-excl us¡ve licence irrévocable et non exclusive allowing the National Library of permettant à la Bibliothèque Canada to reproduce, loan, nationale du Canada de distribute or sell cop¡es of reproduire, prêter, distribuer ou his/her thesis by any means and vendre des copies de sa thèse in any form or format, making de quelque manière et sous this thesis available to interested quelque forme que ce soit pour persons. mettre des exemplaires de cette thèse à la disposition des person nes intéressées. The author retains ownership of L'auteur conserve Ia propriété du the copyright in his/her thesis. droit d'auteur qu¡ protège sa Neither the thesis nor substantial thèse. Ni la thèse ni des extraits extracts from it may be printed or substantiels de celle-ci ne otherwise reproduced without doivent être imprimés ou his/her permission. autrement reproduits sans son autorisation. ISBN 0-612-16216_8 C,anadä l.lønc- DÍsæ¡ffion AhsMs lnternalíonol otÅ lvlos¡ets AhshæE lnlemolíonql are orronged bv brood, gen€rol subiea coteoories. 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H¡ó É¡ä'sy..-:-...-...-...0æa mdGmælory..O:ì8O Flu¡.dorld Plãim ..-.....-..-..0759 rd H.ålAonl' f'{ol¡o¡b O:¡5¡( ----.---.--...-,Oú09 .-.-.--.....-...--- Nud.û - -..-.....::-:::-:-::o¿íó Qtic¡ ---......... ...........-.-.O7 52 H.--::::::::::::tPl Rãdéio¡ ....- -....................O75ó solid stö ................--......0ó¡ I 3-:--:-:--:--::Sl $di¡¡c¡ .--*-..-...-.......-.-...o¡ó:t unnsoH(B ffY.:.-::.:::::-::8S3 ADeEed &iem¡¡ Biof,-dì.m¡¡y --.-.......---.-. 0¡25 AF¡d rt4.dìúúc¡ .,............--.03¡ó G€ãdìdtúùt .:--.......-.----.0t9ó ---.--.---...*.-.ot¡ ----......--.-.....o!75 Cåúpt b Sd.tF. ..,.-........-..-.098¡ THE UNTYERSITY OF MÄNITOBA FACULTY OF GRADUATE STUDIES COPYRIGHT PERMISSION ECONOMIC IHPAGTS OF PRIVATIZING l.EE HARreTING OF CANADIAN OATS BY ROBERT T{.R. }IORRISSEY A Thesis/Practicum submitted to the Faculty of Graduate Studies of the University of Manitoba in partial fulfillment of the requirements for the degree of UAS]ER OF SCIENCE Robert I{.R. Horrissey @ 1996 Permission has been granted to the LIBRARY oF TIIE IjNT\¡ERSITY oF MANIToBA to tend or selt copies of this thesis/practicum, to the NATIONAL LIBRARY oF CANADA to microfilm this thesis/practicum and to lend or sell copies of the film, and to UNTyERSITY n/trCROFILMS INC. to publish an abstracr of this thesis/practicum.. This reproduction or copy of this thesis has been made avaitable by authority of the copyright orvner solely for the purpose ofprivate study and research, and may only be reproduced and copieà ai permitted by copyright laws or with express written authorizatiou from the copyright owner. Table of Contents Abstracts 1V Acknowledgements List of tr'igures vlt List of Tables ..... vlll List of Appendices IX CHAPTER ONE: BACKGROUND AND RESEARCH OBJECTIVES . 1 . Introduction . 1 History of CWB in the Western Canadian Oat Industry . I a Canadian Wheat Board Act 1935 J The Canadian Oat Industry (1935-1989) . 3 Amendments to the Act . 5 Removal of Oats from the CWB 5 Framework Of The Study 6 Problem Statement 6 Objectives Hypothesis CHAPTER TWO: HISTORICAL PERSPECTIVES & MARKET STRUCTURE 8 Introduction . 8 MarketStructureoftheWesternCanadianOatlndustry... ........ g I)MarketOrganizationUnderCentralDeskSelling .... ....9 i) Marketing Stratagem of the CWB . 1l ii) Quota System . .12 iii)ExportingOats .......13 II) Organization Under the Open Market . .14 Factors Motivating Oat Market Structural Reform . .17 I) Government of Canada's Position . .l7 ii)IndustryPosition .......19 iii)PositionoftheProducer ......20 Opposition Towards Oat Market Structural Reform . .2I I) Canadian Wheat Board . Zl ii)IndustryPosition .......21 iii) Positionof theProducer ......22 Summary .....22 CHAPTER THREE: LITERATURE REVIEW 24 Introduction . 24 Relevance of Reviewed Literature To This Study 24 performance I) Market structure, Market conduct, and Market . 25 ii) Economic Rationale for Single Desk Marketing 28 iii) Economic Rationale for an Open Market 34 iv) Neutral Studies Regarding Monopoly Central Desk Selling . 42 Summarv ¿ 44 CHAPTER F'OUR: A THEORETICAL FRAME\ryORK FOR ANALYSIS