Effects of Marketing Boards on the Agribusiness Sector

Abstract

The titles of the two previous papers are indicative of the current and past emphasis of research and discussion concerning marketing boards. Although these institutions have effects outside the producer and consumer sectors, these effects have not been the direct subject of research by agricultural economists. This is unfortunate, because as Loyns and Loucks have pointed out, marketing boards should be studied in relationship to the entire competitive framework and overall marketing efficiency if we are to take a broad view of food policy issues. We have been asked to look at the question of the effects of marketing boards on the agribusiness sector. Undoubtedly these effects vary depending upon the type of industry and marketing board involved; however, because of the lack of research evidence covering a variety of situations, our comments will pertain mainly to the Ontario Broiler Industry and its supply management marketing board, the Ontario Chicken Producers' Marketing Board (OCPMB). This industry was the subject of a recent study to determine the nature and extent of possible effects of a marketing board on agribusiness, and therefore should serve as a useful case study from which tentative inferences can be made to other situations. The study was conducted in early 1978 and consisted of in-depth personal interviews with general managers from all the major sectors of the Ontario Broiler Industry. Rice provides a detailed discussion of the methodology and results of this research. To approach the question we would like to make a few general observations on what we believe to be the major effects of marketing boards on agribusiness. Although the term agribusiness can be defined very broadly, we will use it here to include only those firms having direct contact with the production sector. In the case of the broiler industry, this includes hatcheries and feed companies on the input side, and chicken processors on the output side.