Costs and Benefits of Producer Board Deregulation (WP 99/04)

Abstract

This paper considers evidence on whether deregulation of single-buyer Producer Boards is likely to yield net benefits to producers, relevant industries and the New Zealand economy. It assumes some familiarity with industry structures and the ongoing debate. The discussion focuses on the static and dynamic effects of the statutory single buyer powers of the Dairy, Apple & Pear and Kiwifruit Boards, and concludes that on balance, the benefits of deregulation are expected to significantly outweigh the risks posed.

The paper also considers the implications of the cooperative industry structures inherent in the producer boards for dairy, apples and pears, and kiwifruit, noting evidence that the cooperative payment systems of Producer Boards impose an economic cost.

Acknowledgements

Paper edited for publication by Kevin Guerin, NZ Treasury.

Disclaimer

This working paper represents the views of the New Zealand Treasury as at November 1998. It was developed from the Treasury’s 10 December 1998 report to the Treasurer titled ‘Producer Boards - Costs and Benefits’. The Treasury recently released that report under the Official Information Act 1982.