Competition Policy in Agriculture: A Review of Methods

The nature of the competition policy public benefit tests, applied to various agricultural industries, is reviewed. Then, various analytical techniques that have been applied to the assessment of the public benefit test are examined. These techniques include analysis of price premiums, consideration of pooling and averaging, pricing to market tests, what-if scenarios, market power analysis, and price discriminating monopolist models. Some of the advantages and disadvantages of these approaches are summarised. Generally, all of these approaches have various strengths and a number of weaknesses so that the case for the assessment of costs and benefits must substantially depend on the logic of the effects of the regulation rather than the results of any particular model.