Agriculture and competition: Two policies at war?

Are the Common Agricultural Policy (CAP) and EU Competition policy inherently antithetical? Have these two policies been condemned to mutual misunderstanding ever since the entry into force of the Treaty of Rome? For some, the issue is clear: the agriculture industry should not be subject to the competition rules due to its specific features which are incompatible with the concept of free competition in markets. For others, there are no sectors — including agriculture — which should be exempt from the competition rules. For market proponents, the competition rules are deemed to be adaptable to all sectors of the economy and any such exemption of a specific sector would undermine the fundamental basis of the competition rules. This said, those in favor of an exemption in favor of agriculture point to a whole series of grounds for special consideration: climatic uncertainty, food safety, inelasticity of supply over the short term, the systemic crises which periodically threaten the industry, asymmetric market information and the unequal balance of forces between a multitude of individual producers and vast and concentrated distribution networks, and finally, land use imperatives. Competition purists respond to these arguments by saying that interventionism which shields market participants from the dynamic forces of competition turn ultimately against the interests of consumers... This dossier brings together three contributions. The first, by Michael Debroux, a practicing attorney, provides an update on the application of competition law to the agriculture industry by the EU and French authorities and courts. In a second contribution, David Spector, an economist, sets out an economic analysis of the agriculture industry in the context of the competition rules. Finally, in a third contribution, Pierre Kirch, Michael Cohen and Hart Holden, practicing attorneys, explain, as a counterpoint, the way that the US competition rules are applied to the agriculture industry. Analytical tables set out all European precedent (national courts and competition authorities) concerning the sector.