Marketing order impacts on farm-retail price spreads:the suspension of prorates on California-Arizona navel oranges by Gary D. Thompson and Charles C. Lyon in American journal of agricultural economics vol. 71, no. 3, August 1989.: a review.

Abstract

The paper attempted to measure the impact of the suspension of prorate on California-Arizona (C.A.) navel oranges on the price differentials between retail and farm-gate rates. The exercise was to test the efficacy of the policy measure of volume control in an organised agricultural setting. The method used by the authors was empirical and four seemingly unrelated linear equations were specified. The paper was structured into three sections. Section one contained the history of the California-Arizona navel oranges and the events leading up to the suspension. In section two, the authors utilized four price models for estimating the variables of the· equations. Section three considered some policy implications of the model chosen to be the best fitted. The aim of this review is to highlight some of the major results of the study as well as to x-ray the methodologies employed in arriving at them.