Change of competition regime and regional innovative capacities: Evidence from dairy restructuring in France

Abstract

The aim of this article is to analyze how market actors, and farmers in particular, mobilize collective coordination capacities to face global changes – market price or sectorial policies – within different regional contexts. A multi-scale conceptual framework is proposed to analyze market functioning and transformation over time and space. We extend Commons and Fligstein’s work on market institutions to define the notion of competition regime as a combination of four market institutions that legitimizes competition strategies. We also mobilize Ostrom’s work on common property rights regimes to show that a competition regime relies on the creation and management of two systems of common-pool resources, namely innovation capacity and reputation-building. This paper then shows the relevance of this framework through the case study of the current restructuring of dairy supply chains in mountainous areas in France. It shows that market liberalization strongly destabilizes the regional competition regimes that were based on the appropriation of social rights inherent to the national public policies. In the hybrid and specific competition regimes, existing territorial coordination devices are not directly threatened and can support the development of new cooperative strategies. In all cases, with the development of a contractual economy, farmers are incited to develop or to strengthen coordination devices to become effective market participants. Through the development of large territorial producers’ organizations capable of managing milk supply in volume and quality, they would be able to take part in the management of the supply chains. To do so, the present paper suggests that farmers’ organizations need material and immaterial investments and assistance from regional public players to build new local collective capacities. The competition regime framework is an asset for the design of such public supports in accordance with the principle of subsidiarity, taking the regional specificity of the markets’ institutions and collective capacities into account.