Hostname: page-component-586b7cd67f-dsjbd Total loading time: 0 Render date: 2024-11-22T23:38:12.371Z Has data issue: false hasContentIssue false
  • English
  • Français

Orderly Marketing in Agriculture Revisited

Published online by Cambridge University Press:  15 September 2016

Howard Leathers
Howard Leathers*
Affiliation:
Department of Agricultural and Resource Economics at the University of Maryland, College Park, Maryland
Get access

Abstract

This paper presents a model of economic behavior that explicates the phenomenon known as “orderly marketing,” which was a main objective of the Marketing Orders agricultural program introduced early in the New Deal. Recent analyses of marketing orders start with an implicit assumption that there is no market failure—thus, that price regulation can cause only deviations from the first-best market solution. However, historical evidence suggests that disorderly marketing might refer to a kind of market imperfection. In the model presented here, a monopsonist processor sets a price to be paid, and an aggregate quantity to be purchased. In some states of the world, some farmers are excluded from the market. In other words, nonprice rationing can occur, and changes in consumer expenditure for the final product are absorbed by the processor rather than passed along to the farmer. The classified price and pooling provisions of federal orders can lead to a Pareto improvement in welfare.

Keywords

disorderly marketingmarket orders
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 36 , Issue 2 , October 2007 , pp. 281 - 292
Copyright
Copyright © 2007 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Black, J.D. 1934. “The Agricultural Situation, February 1934.” The Review of Economic Statistics 16(3): 54–60.CrossRefGoogle Scholar
Brown, C.A. 1928. “Costs and Margins and Other Related Factors in the Distribution of Fluid Milk in Four Illinois Market Areas.” Illinois AES Bulletin No. 318, Illinois Agricultural Experiment Station, Urbana, IL.Google Scholar
Calomiris, C.W., and White, E.N. 1994. “Political Bargaining and Cartelization in the New Deal: Orange Marketing Orders.” In Goldin, C. and Libecap, G.D., eds., The Regulated Economy: A Historical Approach to Political Economy. Chicago, IL: University of Chicago Press.Google Scholar
Clark, F.E., and Weld, L.D.H. 1932. Marketing of Agricultural Products. New York: MacMillan Co.Google Scholar
Converse, P.D. 1935. The Elements of Marketing. New York: Prentice-Hall.Google Scholar
Dardis, R., and Bedore, B. 1990. “Consumer and Welfare Losses from Milk Marketing Orders.” Journal of Consumer Affairs 24(2): 366–380.CrossRefGoogle Scholar
Dobson, W.D., and Salathe, L.A. 1979. “The Effects of Federal Milk Orders on the Economic Performance of U.S. Milk Markets.” American Journal of Agricultural Economics 61(2): 213–227.CrossRefGoogle Scholar
Fehr, E., and Falk, A. 1999. “Wage Rigidity in a Competitive Contract Market.” Journal of Political Economy 107(1): 106–134.CrossRefGoogle Scholar
Gardner, B. 2002. American Agriculture in the Twentieth Century. Cambridge, MA: Harvard University Press.Google Scholar
Garver, F.B., and Trelogan, H. 1936. “The Agricultural Adjustment Act and the Reports of the Brookings Institution.” Quarterly Journal of Economics 50(4): 594–621.CrossRefGoogle Scholar
Hamilton, D.E. 1991. “From New Day to New Deal: American Farm Policy from Hoover to Roosevelt, 1928–1933.” Chapel Hill, NC: University of North Carolina Press. Google Scholar
Helmberger, P., and Chen, Y.-H. 1994. “Economic Effects of U.S. Dairy Programs,” Journal of Agricultural and Resource Economics 19(2): 225–238.Google Scholar
Herman, S. 1937. “Orderly Marketing in Agriculture.” Journal of Political Economy 45(3): 394–411.CrossRefGoogle Scholar
Kriger, T.J. 1998. “The 1939 Dairy Farmers Union Milk Strike in Heuvelton and Canton, New York: The Story in Words and Pictures.” The Journal for Multimedia History. Available online at http://www.albany.edu/jmmh/vollnol/dairy1.html#fnlr.Google Scholar
Masson, R.T., and Eisenstat, P.M. 1980. “Welfare Impacts of Milk Orders and the Antitrust Immunities for Cooperatives.” American Journal of Agricultural Economics 62(2): 270–278.CrossRefGoogle Scholar
Mortensen, W.P. 1940. Milk Distribution as a Public Utility. Chicago: University of Chicago Press.Google Scholar
Rasmussen, W. 1975. A Documentary History of American Agriculture (Vol. II). Westport, CT: Greenwood Press.Google Scholar
Rausser, G. 1992. “Predatory versus Productive Government: The Case of U.S. Agricultural Policies.” The Journal of Economic Perspectives 6(3): 133–157.CrossRefGoogle Scholar
Taylor, H.C., and Taylor, A.D. 1952. The Story of Agricultural Economics in the United States, 1840–1932. Ames, IA: Iowa State College Press.Google Scholar
U.S. Department of Agriculture. 1873. “City Milk Supply.” In 1872 Annual Report (pp. 332–347). USDA, Washington, D.C.Google Scholar
U.S. General Accounting Office (U.S. GAO). 1985. “The Role of Marketing Orders in Establishing and Maintaining Orderly Marketing Conditions.” Report No. GAO-RCED-85-57, U.S. GAO, Washington, D.C.Google Scholar
Waugh, F.V., Burtis, E.L., and Wolf, A.F. 1936. “The Controlled Distribution of a Crop Among Independent Markets.” Quarterly Journal of Economics 51(1): 1–41.CrossRefGoogle Scholar