Spatial and Temporal Marketing Considerations Under Marketing Loan Programs

Posted: 11 Oct 2003

See all articles by Alexander E. Saak

Alexander E. Saak

Kansas State University - Department of Agricultural Economics; CGIAR - Markets, Trade, and Institutions Division

Abstract

Marketing assistance loan (MAL) and loan deficiency payment (LDP) programs differ in their treatment of transportation costs. Marketing decisions are analyzed under these programs when producers are differentiated by location with respect to the terminal market. Under certain conditions, a complete characterization of equilibrium is developed. The proposed model broadly fits several "stylized" facts about producer enrollment in these programs. If LDPs are uniform at all locations, LDP programs do not interfere with marketing decisions. MAL programs distort the optimal marketing pattern by providing incentives to store for producers who should be among the first ones to supply the market.

Suggested Citation

Saak, Alexander E. and Saak, Alexander E., Spatial and Temporal Marketing Considerations Under Marketing Loan Programs. Available at SSRN: https://ssrn.com/abstract=457772

Alexander E. Saak (Contact Author)

CGIAR - Markets, Trade, and Institutions Division ( email )

United States

Kansas State University - Department of Agricultural Economics

Manhatten, KS 66506-4001
United States
(785) 532-3334 (Phone)

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