If only there was a simple answer.
At the farm gate if the price is assured does that encourage over production?
At the farm gate if the processor buys on the lowest price does that cause closures?
In the Australian market does a milk producer have a choice which processor to sell to, and does the processor have a choice of which retailers to service?
Is the real question for the ACCC the lack of retail and processing competition in the market place? The ACCC tried to answer this two years back. It needs 240+ pages.
To most consumers milk is just milk, niche brands and products aside. The OECD in a broader review tried to find the answers in a global context in 2004. It only needed 210+ pages.
P.S.
There’s no need to read all 450+ pages.
The two docs serve to illustrate the diversity and complexity of the issues.
