Milner wrote a great book, a model for those working on dissertations, arguing that the interests of protectionists (such as the dairy industry in Canada) are often offset by those with stakes in international stuff:
- those firms that rely on exports since they understand that trade involves reciprocity
- those firms with foreign investments that sell back to the domestic market (less relevant here)
- those firms that rely on foreign parts for their own products. Barriers to trade increase their costs.
I don't expect consumers, who are hurt by the dairy cartel via higher produces and reduced selection, to lobby because their pain is diffuse. I don't expect consumers to solve their collective action problems to organize to push for lower prices and more selection (and better quality--competition does help with that as well).
Given that dairy farmers are but a few, where are the companies whose interests are threatened by these few folks? I am seriously confused. Helen Milner cannot be denied!
2 comments:
What company/industry in Canada does stand to gain from a loosening of restriction on dairy?
The only one I can think of is shipping and they are fairly tightly regulated or controlled by the government (relatively speaking).
Packaging is largely done in-house in Ontario dairy farming.
Retailers don't care because they'll do a 50% mark-up on the product whether that's 4$ on 2$ bag of milk or 2$ on a 1$ bag of milk. And it's a pain in their butt because they have to stock more.
From what I can tell - for a consumer good - the people who stand to gain are the consumers. And you already rightly pointed out the reasons the consumers won't lobby...
You miss the point--it is about companies losing out in other areas, other trade restraints that other countries impose in part because they don't like Canada's trade restraints.
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