In January 2025, the French Competition Authority issued its second informal sustainability guidelines concerning a project setting up a collective financing model to support the agroecological transition.
Introduction
The request from the “Pour une Agriculture du Vivant” organization concerns the COVALO project, an innovative device to support farmers in their agroecological transition.
The project uses a regeneration index and incentive bonuses to compensate for transition’s additional costs and risks, aiming to promote sustainable practices while complying with economic and regulatory requirements.
Risks or effects
Several elements in this project raised risks in competitive terms and encourage farmers to carry out an analysis of compatibility with competition rules.
First, the requirement for a minimum IR score of 40/100 and at least three eligible crops could exclude some farmers, even those transitioning to sustainable practices, undermining the objectivity and fairness of the access conditions.
The project’s territorial limitation to specific pilot regions could create a distortion of competition between farmers, although such limits may be justified by clear, objective, and non-discriminatory criteria.
Finally, the authority acknowledges the terms of participation as appropriate, while maintaining some limits.
The key role of certain private collectors in governance gave them privileged access to sensitive farmer data, creating a competitive advantage. Moreover the transmission of information by competitors of the collector coordinator or affiliated increases the risk of collusion due to information exchanges among competitors.
No mechanisms were planned to monitor how farmers used the bonuses or whether these were effectively invested in agroecological practices, raising questions about the reliability of the commitments.
The Authority also insists on the importance of sound scientific data and methodology in the calculation of an environmental footprint.
Finally, the bonus mechanism lacks precise evaluation of the farms’ real costs, creating a risk of overcompensation or windfall effects, potentially distorting the market.
Conclusion
Although these guidelines may be helpful, we recommend submitting your project to the authority, provided you meet the applicable eligibility criteria.
Article by Loi & Stratégies (France).
