Why is a legal regulatory system for the agricultural sector justified? Marie-Anne Frison-Roche _____________________________________________________________________ Marie-Anne Frison-Roche , professor and director of the Chaire Régulation at Sciences Po in France has opened a very interesting debate on the application of regulatory laws in the agricultural sector. During a conference she organised with the DGCCRF (the French Department for Competition, Consumption and Fraud Prevention) entitled “A regulatory system for agricultural markets” on 7th March, Marie-Anne Frison-Roche was kind enough to answer our questions.
For further reading on this subject, we recommend the article entitled “Appliquer le droit de la régulation au secteur agricole” ("Applying regulatory laws to the agricultural sector" – Lamy journal August/September 2005 on the subject of competition)
A central theme of the debate was the reasoning behind the justification of a legal regulatory system of the market when the goods in question involve an element of “humanity and risk” for the consumer, which is the case for agricultural products. The debate has just begun, and WOAgri would like further deliberation on the legal aspect of this question in order to define the terms “regulatory” and “regulation” in cases applied to the agricultural sector.
_______________________________________________________________________________ 1. What is your definition of a legal regulatory system?
Technically, regulatory laws are applied to a dynamic competitive market with the aim of achieving an objective, which the market cannot reach alone, either because there is a technical problem, such as the lack of an essential infrastructure, or where it is necessary to impose a structure for the common good 1.
In this second case, a regulatory system humanises the market.
The regulatory system adds an extra dimension to the existing market. In fact it adds further objectives, which enable, for example, more consumers to gain access to the product in question, those beyond the circle of people who have the technical and financial means to acquire it on the market.
In order to achieve this objective, the regulatory system must have specific rules, since laws and regulation are partly linked, and this often leads to the setting up of institutions, in theory, an independent regulator. The new stability, which results from a regulatory system, is not the result of an exceptional radical notion in relation to market exchanges, or a confrontation between the state and the market 2, but a kind of support for the liberalization of markets and exchange for the public good. 3.
There is in fact very little choice because in a liberalised and global system, state sovereignty has no influence 4. At a time when we doubt that public policies can still be created in a global agricultural economy 5, because Governments cannot extend their powers beyond their borders 6, it is pertinent to think of the agricultural sector in terms of a regulatory system. […]
More technically, a regulatory system essentially takes into account the specificity of products and is constructed around this specificity. For example, a regulatory system for energy can be justified because electricity is not a product like any other – it cannot be stored, it cannot be easily transported, it is dangerous, and there must be autonomy on a national basis.
This shows that a regulatory system is a “realistic” idea 7, which means that it is directly applied to the product, contrary to liberal trade policies, which neutralise objects and people.
In fact, the power of the market stipulates that all goods are interchangeable, and therefore it is not necessary to consider the technical specificity of a product, and that it simply needs to be evaluated – in terms of money – for trading purposes. The market therefore has an approach and a reality which neutralises objects – we can even say that this is the reason for its hugesuccess – when on the contrary, a regulatory system is based on the specificity of products, their utility and usage.
A regulatory system can become politicized by the nature of its objectives. In other words, the legislator, whose role is clearly justified in the regulatory system, as it is necessary to make choices for the community, considers not only the effects of the market - for example there are people who consume and are therefore clients, which is a form of access to products - but also because of his normative powers, he can incorporate other aims, not only outside the market but also beyond the reach of its effects, aims which will then have to be satisfied artificially. The law has therefore decreed a “right to energy”, which declares that everyone, even those who are geographically isolated or financially deprived, can have access to the product 8. The political dimension imposed can even be detached from economic needs, for example through a desire to show a diversity of opinions broadcast by the mass media.
2. Why is a regulatory system for agriculture necessary?
The agricultural sector is pulled in opposite directions by the vastness of the market and the protection of State sovereignty, causing conflict between the two models. Regulatory laws do not deal with confrontation thanks to the importance of technology based on the specificity of agricultural products. In fact, in spite of its diversity 9 and the multiplicity of the markets concerned, the agricultural sector has a specificity shared by all of its products 10.
Therefore the organisation and even the protection of the jobs of those involved, mainly the farmers and the distributors, will only differ from the ordinary statute of the right to competition as far as the specificity of the products and their use is concerned 11. The consumer must be the prime concern, not only for efficiency in the market, but also because in order to satisfy the consumer, the rules of the market must be in line with the specific rules of a regulatory system.
This is above all due to the fact that agricultural products can be dangerous, and therefore food safety is covered by the regulatory system 12. The necessity for a regulatory system can arise because some products which are vital for people living in certain geographical and social conditions, are inaccessible to them.
In this capacity, the regulatory system of the agricultural sector runs parallel to that of water13 and health.
The two situations, theoretically very different, technically have a lot in common, because in food safety, it is essential that neither be affected, but as vital commodities, they must be accessible to everyone. They have different aims but quite similar techniques, particularly because of issues of traceability and public funding.
In the creation of a supreme realistic regulatory system we have to take into consideration the fact that time is needed to set up a protection system for products – a problem relatively unknown to a market which lives in the present - as breakdowns in the production chain of agricultural products would cause systemic risks. Therefore, systemic risks require a specific regulatory system, with regulations closely related to those of banking and finance, particularly concerning information and certification obligations.
If we go further into the political dimension, whose existence we must now accept, we must consider the fact that agricultural products are also linked to culture, the products themselves and also eating habits, whereas agricultural activity itself is part of land development, an element which the telecommunications regulatory system specifically takes into consideration.
We can therefore, through the market and on the market, set up regulatory policies, that are not a set of exceptions, but with specific rules depending on the technical specificity of a product, which is then no longer neutralised by market rules, the main purpose being to satisfy the needs of those who should have access to the market, that is to say the consumer.
A regulatory system consists, therefore, not of opposing the market, by objecting to its influence on the sector, or by placing the sector to the realms of public law and the sovereignty of the state, but of setting up a commercial system providing wider access to certain agricultural products, a long-term production policy and greater transparency concerning the technical nature of products in circulation.
Although it is difficult to imagine the creation of a regulatory system, i.e. a structured non-political and independent organisation, at least we can see that the institutional principles of regulatory laws, such as the separation of the functions of the controller and the controlled in matters of sanitary risk, are welcome14.
In the same way, the interactions between the agricultural sector, water regulatory systems, health policies, and the protection of innovative medicines, call for “inter-regulatory” systems, that is to say taking into consideration several aims and interactions in the decision-making in each sector15.
[…]
3. What are the legal references which could justify the need for a system such as this?
The relevant issues in the creation of regulatory policies of agricultural products are: economic law beyond the realms of public law and civil law, people’s rights and fundamental rights to basic human goods.
Economic law beyond the realms of public law and civil law
[…]
In the legal system, agriculture is usually subject to rural law and civil law, which dissociates its concept and techniques from the economic aspect. The reference to civil law comes from the fact that agricultural activity does not consist of buying to sell and cannot therefore operate within commercial law. The gap between the economic reality of agriculture and its common legal representation is consequently enormous. […]
People’s rights
[…]
Fundamentally this concerns consumer rights, those who have the right of access to products.
[…]
These consumer rights must be determined. They depend on political claims which stipulate that there is a basic right to survival when the means of survival are available to the person concerned, and that this person has the possibility to acquire them (geographic proximity, the skill to use them, financial means). This refers to a new proposed legal category: “basic human goods”16.
Less importantly, we could also insist on the right to live in one’s own culture, where food, products and way of life play an important role.
Fundamental rights to basic human goods
If commercial exchange satisfies these consumer rights, liberalisation will be sufficient.
A regulatory system uses the market to monitor the effectiveness of ultimate rights, that is to say consumer rights, by making sure that the rights of institutions and the intermediate rights of all those involved in this market are respected. […]
This justifies a policy for agricultural products which goes beyond economic policies. In fact, the economic policy aims to create an optimal economic organisation. However everything in the regulatory system does not involve economics. […]
A regulatory system aims – through the market, and thanks to it – at a policy for agricultural products, which goes beyond the economic policy, by using notions such as “basic human goods”… […] which justifies the fact that nobody should be excluded. To do this, regulatory systems must be combines with market forces, to achieve what has not been naturally accomplished by the market. As for the meaning of basic human goods, it is relatively easy to define if we associate it with the notion of life: vital goods for people are basic human goods, without which they cannot truly live.
The demonstration which was carried out for the WTO, concerning medicines, can be repeated with agricultural products.
[…]
Consequently and in conclusion, a regulatory system could be set up politically and technically as a sort of second nature to the market economy, of which the agricultural sector is a part – and not a war machine against the market economy – bearing in mind that we are dealing with marketable goods, but at the same time asserting their political aspect, by demonstrating this distinct pragmatic side of humanity and the risk that some products involve.
[…]
We can make other incantatory speeches concerning other issues, restoring statehood or the ethical autoregulatory structure within companies, but as the above-mentioned notion is more pragmatic and immediate, there is more possibility of it working.
_______________________________________________________________________________ 1 (sur les réflexions et polémiques autour de la définition du droit de la régulation, cf. Frison-Roche M.-A., Définition du droit de la régulation économique, D. 2004, p. 126, La régulation : nouveaux modes ? Nouveaux territoires ?, RF adm. Publ. 2004, n°109, p. 53)
2 (cf. Chevallier J., De quelques usages du concept de régulation, in La régulation entre droit et politique, coll. « Logiques juridiques » l’Harmattan, 1995, p.71 ; La régulation juridique en question, Dr. et Société 2001, n°49, p. 827)
3 (cf. Timsit G., Les deux corps du droit. Essai sur la notion de régulation, RF adm. Publ. 1996, n° 78, p. 375 ; Frison Roche M.-A., La régulation, la notion et le phénomène, in Les nouveaux champs de la régulation, RF adm. Publ. 2004, n°109, p.5)
4 (cf. Tracy M., L’Etat et l’agriculture en Europe occidentale, Economica 1986)
5 5CF ; Berthelot J., L’Agriculture, talon d’achille de la mondialisation, L’Harmattan, 2001 ; Kroll J.–Ch., Politique agricole et échanges internationaux : dynamique de la régulation en Europe et aux Etats-Unis, mondes en développement, t.30, 2002, p.65 ; Rainelli P., Les politiques agricoles sont-elles condamnées par la mondialisation ? Bruylant, 2005)
6 (d’une façon plus générale, cf. Auby J.-M., La globalisation, le droit et l’Etat, coll. « Clefs », Montchrestien, 2003)
7 (en cela, le droit de la régulation répond à la conception traditionnelle du droit, centré depuis Aristote sur la considération des des choses concrètes à partager. […], cf. Frison-Roche M.-A., Le partage par le droit des choses essentielles dans un monde global et libéral, Archives de Philosophie du Droit, à paraître)
8 (pour l’analyse théorique, Cf. Frison-Roche., Droit à l’énergie, in La Revue de l’énergie, Numéro anniversaire 50 ans, sept. 1999, Editions Sociales, p.615 ; pour l’analyse pratique, Cf. Clerc M., Un droit à l’énergie pour tous, Revue de l’Energie, déc. 2004, p.637)
9 (Cf. Bartoli P. et Boulet D., Conditions d’une approche en termes de régulation sectorielle. Le cas de la sphère viticole, Cahiers d’économie et de sociologie rurale, n°17, INRA-ESR, Paris, p.7)
10 (cf. Boyer R., Les problématiques de la régulation face aux spécificités sectorielles, Cahiers d’économie et de sociologie rurales, n°17, 1990 ; Lacroix A. et Mollard A., L’approche sectorielle de la régulation : L’agriculture entre régulation globale et sectorielle, in Boyer R. et Saillard Y., Théorie de la régulation. L’Etat des savoirs, coll. « Recherches », La Découverte, 2002, chap. 33)
11 (Cf. Peignot B., RD rur. 1997, p.474)
12 (Cf. Hirsch M., Le risque sanitaire, objet de la régulation, in Droit et Economie de la régulation, vol. 3 ; Frison-Roche M-A., Les risques de régulation, Presses de Sciences-Po, Dalloz, 2005, p.43)
13 (Cf. Finger M. –K et Allouche J., Water privatisation : transnational corporations and the re-regulation of the water industry, Spons architecture price book, 2003)
14 (Cf. Hirsch M., Le risque sanitaire, objet de la régulation, p.47 et s)
15 (Cf. Frison-Roche M-A., L’hypothèse de l’interrégulation, in Les risques de régulation, précité, p.69)
16 (sur la notion en générale, cf. Frison Roche M.-A., Les biens d’humanité, débouché de la querelle entre marché et patrimoine, in Propriété intellectuelle et mondialisation, coll. « Thèmes et commentaires » Dalloz, 2004, p.165 ; sur l’application au domaine de la santé, qui jouxte le secteur agricole, cf. L’évolution conceptuelle et technique du cadre juridique européen et français relatif à la propriété intellectuelle sur le médicament et le vivant, in Frison Roche M.-A. et Abello A., Droit et Economie de la propriété intellectuelle, LGDJ, 2005, p. 289). |