Abstract
The dairy sector in Morocco is a sector that struggles to develop by facing several difficulties. Therefore, a significant gap has emerged between the main national producers and small farmers, while in the economy, the development of small economic actors presents an important lever of growth. If we assume that the consumer’s milk demand function is linear, that it depends only on the consumer’s price, and that production costs follow a decreasing return, and finally, by considering only two actors representing the different types of producers, we will show in this paper that a competitive production subsidy of 0.5 MAD can triple the market share of small farmers while being in a situation of Nash-Cournot’s equilibrium. In addition, the addition of a subsidy to production costs will reduce the price of milk and, thus, increase the annual milk consumption of Moroccans from 59 liters, which is below the world average consumption, to 94 liters annually, thus benefiting the consumer in addition to small farmers.
Highlights
Since its independence, Morocco has placed the agricultural sector at the center of its development choices given the important economic, social, and territorial issues it raises
To learn more about the aid granted under the Green Morocco Plan, see the document produced by the Moroccan Agricultural Development Fund [3]
The method of analysis of the system amounts to finding the Nash equilibrium of the game in which two firms simultaneously choose their level of production
Summary
Received 18 April 2021; Revised 1 September 2021; Accepted 21 September 2021; Published 19 October 2021. A significant gap has emerged between the main national producers and small farmers, while in the economy, the development of small economic actors presents an important lever of growth. If we assume that the consumer’s milk demand function is linear, that it depends only on the consumer’s price, and that production costs follow a decreasing return, and by considering only two actors representing the different types of producers, we will show in this paper that a competitive production subsidy of 0.5 MAD can triple the market share of small farmers while being in a situation of Nash-Cournot’s equilibrium. The addition of a subsidy to production costs will reduce the price of milk and, increase the annual milk consumption of Moroccans from 59 liters, which is below the world average consumption, to 94 liters annually, benefiting the consumer in addition to small farmers
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