DISTRIBUTION OF RESEARCH GAINS UNDER DIFFERENT MARKET STRUCTURES - THE IMPACT OF TECHNOLOGICAL-CHANGE WITHIN THE UK DAIRY-INDUSTRY

This paper describes a model for assessing the aggregate level and distribution of benefits within the UK diary industry from research aimed at reducing the costs of dairying equipment and machinery. The effect of the market structure of the farming and processing sectors is examined. It is shown, in this model, that the machinery sector always loses from a technological advance. The benefits and losses to the other sectors depend on the organisational structure of farmers and processors. Finally, the effect of imposing a levy on farmers to pay for research is discussed. The losses are shown not to be distributed in the same way as the research gains. The results have direct implications for the funding of research.