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U.S. Trade Policy on Lamb Meat: Who Gets Fleeced?
Author(s) -
Paarlberg Philip L.,
Lee John G.
Publication year - 2001
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/0002-9092.00147
Subject(s) - tariff , oligopoly , imperfect competition , market power , competition (biology) , welfare , partial equilibrium , economics , business , international economics , general equilibrium theory , microeconomics , market economy , ecology , biology , monopoly
The U.S. lamb meat industry received protection from import competition in 1999 with a tariff‐rate quota. This paper analyzes proposed and adopted policies using a partial equilibrium model of lamb meat and lambs incorporating imperfect competition in the packing industry. Under a tariff policy packers can only exercise oligopsony power in the lamb market and both packers and lamb growers benefit from protection. If a quota or tariff‐rate quota policy is used, packers can assert oligopoly power. Packers benefit from protection, but lamb growers may not. Under the tariff‐rate quota adopted, lamb growers suffer a welfare loss.