An Economic Analysis of the Ontario Winter Wheat Marketing System

Abstract

Following a background of pertinent economic theory and a description of the present system for marketing Ontario winter wheat, this study examines the current problems of the marketing system. Briefly, the domestic minimum price negotiated by the Ontario Wheat Producers’ Marketing Board bears no relation to the value of the entire crop; the financial position of the Board is inherently unstable; and finally, very little planning of transportation and storage facilities for Board purchases occurs. In light of the present problems and objectives of the Board, a number of possible changes concerning supply and demand are presented. The author concludes that the Ontario Wheat Producers’ Marketing Board (hereafter referred to as O.W.P.M.B.) should adopt a new marketing system. Essentially, the Board would buy and sell an amount equal to, or less than, the total amount of soft wheat needed for domestic flour and cereal manufacturers. The remainder of the crop would be sold by farmers at free market prices. A study of transportation and existing storage facilities would be required before this proposed marketing system could be adopted.