This paper analyses the impact of a tradable production quota on firm entry and exit in the agricultural industry. We develop a dynamic stochastic equilibrium framework considering that a release of production capacity by exiting firms affects the investment options for entrants. Firms'...

The spatial dimension of most agricultural raw product markets (e.g., milk) and the high concentration of food processors facilitate the exercise of market power towards farmers. In the milk sector, processors that are investor-owned firms (IOFs) compete alongside processing cooperatives (COOPs)...