Supply management in the Manitoba egg industry : performance and implications of trade liberalization

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Mbaga, Msafiri Daudi
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The objectives of this thesis are (a) to develop a model which can be used to analyze the impact of supply management on Manitoba, (b) to develop a framework for analyzing the impact of removal of border controls, (c) undertake empirical analysis within the constraints of data availability, and (d) outline the research required to complete the analysis. Economic and program criteria were used to evaluate the impact of supply management to egg producers and on Manitoba's economic activity. The analysis of short-run impacts of removing border controls required an estimation of short-run marginal cost in Manitoba. We estimated short-run marginal cost in Manitoba using a Translog cost function. Results suggest that the province of Manitoba has not benefitted from supply management. However, egg producers have benefitted because egg prices are now more stable than they were before supply management, price levels have increased and substantial economic rents accrue to egg producers. If supply management in the egg industry were dismantled, it is likely that the immediate effect to Manitoba egg producers will be substantial, however, if egg producers are going to take advantage of the excess capacity which currently exists in Manitoba, then it is likely that in the short-run egg production in Manitoba would not be affected.