System of Allocating Mandarin Oranges by Uses and Nature of Allocator

Takahashi Iichiro, Kido Keiji

doi:10.15017/22305

Within recent 10 years, the volume of mandarin oranges for processing has been remarkably increased. This paper aims (1) to study the current system of allocating mandarin oranges between fresh and processing uses and its problems, (2) to establish a new system of al10cating among uses based on the theory of price discrimination, and (3) to discuss what the allocator should be in Japan in comparison with those in the U.K. and the U.S.A. 1. As far as the current allocation system and its problems are concerned, following points are discussed. (1) The volume of oranges for fresh use is allocated in such way to maximize the gross revenue on the national base, then the volume is apportioned among prefectures. (2) The volume of oranges for processing is allocated as the residuals on both of the national and prefectural levels. (3) The current allocation system assures neither the maximization of the total revenue from oranges for both of fresh and processing uses nor the stable supply for the processmg use. 2. A new system of allocation among uses and pricing oranges is established on the theory of price discrimina tion. The characteristics of the new system are as follows: (1) the maximization of the total revenue from both of fresh and processing uses is dealt with, and (2) the net revenue in stead of the gross is maximized. As compared with the 1990 long-term projection by the Ministry of Agriculture, Forestry and Fisheries as well as with the Fujitani's estimate, following are the expected results of this new system: (1) the total volume of orange production is greater in the rate of decrease than for fresh use, (3) the price of oranges for fresh use is considerably increased, and (4) the total gross revenue is sligh tly decreased. 3. Following discussions are made on what the al1ocator should be to take the theory of price discrimination into practice. (1) The allocator must be monopolistic, so it is necessary to take measures which make the allocator refrain from doing evils against the interest of the society. (2) Therefore, it seems desirable to follow either of two ways; one way is to make stronger the regulative power of the current national council of growers associations by the government guidance, and the other is to integrate prefectural associations into 4 or 5 district organizations which are authorized strong regulative power such as the marketing board in the U.K.

System of Allocating Mandarin Oranges by Uses and Nature of Allocator

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