Browse by: "PRE-2008"

The Competition Committee (WP2 on Competition and Regulation) hold a roundtable discussion in June 2004 on Competition and Regulation in Agriculture: Monopsony Buying and Joint Selling. Monopsonistic purchasing practices and joint price-setting activities in the agro-food sector were examined, with a particular focus on regulation and on the potential improvements that could arise from more pro-competitive regulations. Joint activity by producers can have a number of beneficial effects, such as from promoting a brand or food that would not otherwise be promoted, promoting a style of production (like organic production) or purchasing in large quantity in order to obtain quantity discounts. Harms may arise when the joint activity involves price or qualitysetting and there is little competition from close substitutes. Cartellike activity by producers has often been supported by governments but is unlikely to achieve stated public policy goals because it often leads to higher consumer prices but enhance land values more than farmer income. Potentially monopsonistic purchasing practices in the agricultural sector were also considered. At times, price manipulation by large purchasers may occur. Competition authorities play an important role in assuring that activities of purchasers do not involve market power, particularly when purchases are concentrated in few, large firms and sellers have limited options besides selling into a highly concentrated market. However, to the extent that purchasers wish to contract for very specific forms of production, such as specific varieties of grain, there can be good commercial reasons that a purchaser would wish to focus on a specific forms of production and agriculture products should not be considered different from supplies in other sectors, which are customized for different purchasers.

Swiss competition policy has traditionally been relatively lenient and low profile. The impact of competition policy on economic development has therefore been at best neutral. As the slow rate of growth becomes an issue, however, a more vigorous approach to competition has been identified as an important factor for improving growth prospects. The 2003 reform of the Cartel Act strengthened Swiss competition law, in particular by introducing direct sanctions for the most serious infringements and a leniency programme, thus bringing it closer to that of the European Union and of many other OECD countries. The Swiss Competition Commission has been given considerable new powers to combat private restraints of competition. Comco will have to enforce the new laws resolutely and step up action to promote regulatory reforms. In doing so, it is burdened by institutional arrangements and mechanisms that temper its full independence. The Swiss competition enforcers do not benefit from the networks of exchanges available to national competition authorities in EU member States. Matters are further complicated by a relative lack of resources. Strengthening competition is key for an effective internal market. The amendments to strengthen the Cartel Law and pending reform proposals signal determination on the part of the Confederation to tackle the problems. This report served as the basis for a peer review in the Competition Committee in 2005.

Environmental protection and competitive markets are two of the highest policy priorities. In June 2006 the Competition Committee held a roundtable discussion on potential restrictions to competition due to environmental protection. Environmental regulations can constitute substantial barriers to entry in some markets, can provide a basis for predatory behaviour in some markets and can be harmful to competition and welfare through a variety of other channels. Environmental rules can thus raise prices to consumers by reducing competition in the market. Any assessment of the costs and benefits of an existing or proposed environmental rule is incomplete without an analysis of the costs generated by any resulting reduction in competition. On the other hand, there is no firm empirical evidence that environmental policy affects the competitiveness of firms and countries. Ideally, environmental policies should be effective and among equally effective policies, the policy that is least restrictive of competition should be chosen. Environmental policy makers should ensure that environmental benefits continue to outweigh costs, including the indirect costs associated with effects on market structure. Environmental policy is first and foremost about securing public environmental goods which are demanded in their own right and which are fundamental to a well-functioning market.

This article provides a broad historical and conceptual overview of the evolution of legislative roles in budgeting, and assesses the potential consequences of expanded roles. By analysing country budget institutions and practices, the article proposes ways to establish sound relationships between the executive and legislative branches of government.