The CAP Dualism-Efficiency or Competition

Abstract

The Common Agricultural Policy of the EU (CAP) contains incentives for consolidation of resources and integration of organizations. The entire CAP follows the concept of efficiency achieved through product structure optimization and economies of scale. CAP imposes an advantage for the concept of efficiency at each level of the economic system. For this reason, integration -- horizontal and vertical -- has been imposed as more important for farmers than competition. Such an approach stimulates large-scale exchange and consolidation of resources, at the same time being a prerequisite for problems for market competition. The Chicago School addresses the concept of efficiency in relation to the “antitrust paradox” . Harvard authors propose that the “leverage effect” can occur as a result of efficiency, meaning that the related markets could be influenced by some market players, and therefore discrimination against other subjects can emerge. Another way to achieve higher economies of scale is horizontal integration. Practically, however, in the course of resource exchange, certain actors can be excluded from the economic organization. The type of organizational structure determines the way of resource distribution and it is essential for competition. A critical analysis of the collision between competition and integration has been offered by Glick M. Actually, efficiency may turn out to be in a conflict with competition.