On selling wheat and the Canadian Wheat Board

I have mixed feelings about agricultural marketing boards.  On the one hand I like competition to keep consumer prices down and on the other hand through the millennia food producers have often lived at a subsistence level and that is not fair.

The Canadian government is going to strip the Canadian Wheat Board of its exclusive powers to sell wheat and barley.

The problem for marketing boards is that any producer who can sell outside the marketing board will be able to sell at a cheaper price and therefore sell more and presumably get a better return for his work.  But if everybody sells on the open market then prices for all will go down and all will be worse off – except for us consumers.

When we drive across the Canadian prairies and see the nice farm houses, it appears most of them are doing quite well although one wonders if some that may reflect subsidies.

There is a basic problem in agriculture around the elasticity of the demand curve.  If you are making electronic gadgets and bring the price down by making more of them you can hope to sell more and your overall profits will increase.

That doesn’t always work in agriculture because when the price goes down rather than buying more food we will likely buy electronic gadgets.  If a farmer has a poor crop the price will go up and we will pay the higher prices in order to continue eating.  In theory when farmers have a poor crop they can do better than with a good crop.

I really don’t want to be a farmer although I still think that under current economic conditions a market garden would be a good investment and a good career.

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