Major players in agriculture flourish amidst adversity
In Europe, efforts to address market dominance and monopolies in the agricultural commodity sector are gaining momentum, with the focus on ensuring fairness and competitiveness for farmers and consumers. The European Commission has announced plans to develop new abuse of dominance guidelines by 2025, as concerns over the market power of the "Big Five" agricultural commodity traders continue to grow.
The EU's main agricultural funding tool, the Common Agricultural Policy (CAP), represents about one-third of the EU budget and deeply shapes how food is produced across Europe. Despite the CAP's emphasis on sustainability and fairness, it does not specifically target monopolistic practices. Mandatory social conditionality introduced in 2025 means that farmers receiving CAP funding must comply with social and labor rights standards, which indirectly help ensure fairer market conditions but do not explicitly regulate market dominance.
Introduced in 2025, the European Commissioner for Agriculture and Food's framework shifts focus towards boosting farmers’ income and competitiveness while reducing reliance on critical imports. However, it prioritizes food producers’ fair living standards and sector attractiveness rather than structural transformation of food systems or value chains, which includes addressing concentration or monopolies in these chains. The Vision employs a territorial, diverse approach without quantitative targets, which may affect the ability to specifically regulate or monitor market dominance within agricultural commodities.
While not explicitly detailed in the provided search results, the EU historically uses competition law and antitrust regulations to address market dominance and monopolies across sectors, including agriculture. These include monitoring mergers, unfair trade practices, and abuse of dominant positions. Additionally, emerging regulations like the EU Regulation on Deforestation-free Products (EUDR) indirectly influence the agricultural commodity markets by enforcing compliance with environmental and human rights laws, which can affect producer practices and market access.
The "Big Five" agricultural commodity traders, including Archer Daniels Midland (ADM), Bunge, Cargill, China Oil and Foodstuffs Corporation (COFCO), and Louis Dreyfus Company (LDC), collectively hold a monopoly for staples like grain, corn, soy, and sugar. Up to 20% of food inflation can be attributed to profiteering by these companies, with the control they exert on different parts of the food supply chains allowing them to be well-informed on when and where food shortages can be expected.
Despite the steep rise in food prices impacting billions, these companies and their market power received little attention. Over the past decade, market concentration has driven a broad range of harms, including negative impacts on consumers and corporate capture of regulators. Cases of anti-competitive behaviour, such as price-fixing and violating antitrust law, have been levelled against the ABCCDs in various cases. Examples of joint ventures and joint investments include LDC's port terminals for grain and sugar export with Cargill, and strategic investments in the French biotechnology company InnovaFeed SAS by ADM and Cargill.
The strategies through which the "Big Five" attained and now maintain their dominant position, including mergers and acquisitions, vertical integration, and joint ventures and investments, have allowed them to increase their profit margins significantly. The ABCCDs achieved historically high profits during the 2021-2022 period, with net profits rising between 75% and 260% compared to the average for the 2016-2020 period. Meanwhile, the competition policy toolkit is notably under-utilised, with only 1% of notified mergers prevented since the enactment of the EU Merger Regulation in 1990.
As the European Commission continues to develop new guidelines to address market dominance and monopolies, ongoing debates in the European Parliament may further evolve regulatory approaches to market concentration and fairness in agricultural markets. The top four companies in most sectors of the economy have a larger market share than they did 10 years ago, raising concerns about the potential for further consolidation and the need for more robust regulatory measures to ensure fairness and competition in the agricultural commodity sector.
References: [1] European Commission. (2021). Common Agricultural Policy (CAP). Retrieved from
In the realm of European politics, discussions about regulating market dominance in various sectors, including agriculture, are progressing, aiming to foster fairness and competition. The plans include revising the abuse of dominance guidelines by 2025, as concerns escalate over the market power of the "Big Five" agricultural commodity traders.
Despite the focus on social conditionality in the Common Agricultural Policy (CAP), which indirectly helps ensure fairer market conditions, it does not explicitly target monopolistic practices in the agricultural commodity sector. Consequently, addressing concentration or monopolies within the agricultural sector may require additional regulations beyond the CAP framework.
