Evaluation of Econometric Analysis in the Norwegian Parliament
Aftenposten reports, that Nortura, the farmer-controlled cooperative that has a de facto monopoly on meat and egg distribution in Norway, is in trouble; prices are regulated and have to be adjusted in such a manner that everything produced is sold, but at the highest possible price. This has led to 2.3 million metric tons of beef being stored in warehouses around Norway, which is close to the government regulated maximum of 2.5 million.
Action is needed, and the econometric modellers at Nortura expect that a price decrease of 2 Norwegian kroner combined with decreased production next year, will ensure that storages don’t exceed government limits. FrP, the populist party that wants do deregulate the agricultural market, is not impressed, and points out that one can buy beef across the border to Sweden for half the price. Today, in parliament, the agriculture minister has to explain why a price reduction of 2 kroner will be sufficient. Good times.
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The ulitmate question is; would monopoly or oligopoly distributers ( which seems to to be the order of the market in many current economies) in principle behave much differently, and would they be able to balance the interests of the consumers, producers and the overall economy much better. For that is the claim of free market economics is it not??
Note that the sustainability of local food production becomes a more and more important asset of a nations preparedness and economic vulnerability, as well as an important aspect of their consumtion power, emplyment regional politics and more. It is also a longterm investment and production chain with harvest usually only once a year, for meat units (cows) only once every two to four-five yearsdwith conditions not only decided by the market but also by
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