March 24, 2004

Euro farm crisis

It would seem that it's not just the US where farms are going under...

(from the NZ Herald)

French farmers a dying breed

Whichever way world trade negotiations go, the French farmer is looking increasingly like an endangered species.

The numbers speak for themselves. Between 1980 and 2000, despite all their subsidies and protection, the number of French farmers fell by half.

There are now 700,000 farmers in France, making up about 3 per cent of the workforce.

The decline is likely to accelerate in the next 20 years as the baby-boomer farmers reach retirement age.

EU subsidy reform is expected to further exacerbate already declining farm incomes.

When you talk to French farmers the message is grim: there just aren't enough young people interested in staying on the land.

In the dairy sector numbers are expected to fall from 120,000 at present to about 50,000 by 2010.

On top of the demographic trends of urban drift and an ageing population, French farmers feel under attack from the World Trade Organisation.

They believe the European Union has let them down and conceded too much in its international negotiations.

Jean-Claude Chibarie, a wheat farmer from the southern county of Haute-Garonne, says reforms have steadily eroded farm incomes.

Farm sizes in the cereal-growing Haute-Garonne region - which surrounds the southern city of Toulouse - range from 25ha to 300ha.

They are relatively big compared with beef and dairy farms in other parts of the country.

Luckily for Chibarie he has a full-time job as president of the regional Chamber of Agriculture - France's equivalent of Federated Farmers.

Working full-time means he has to pay workers to run his farm. The farm, even with subsidies, earns Chibarie just 1500 (about $3000) a month.

That doesn't cover the cost of wages for his workers, he sighs wearily.

So why does he pay for the privilege of staying on the land? It's not as if the farm is likely to become any more profitable in the near future.

For French farmers the connection with the land is more than just economic, Chibarie says.

A keen rugby fan with more than a passing understanding of New Zealand, he expresses great respect for the skill and competitiveness of our farmers.

But he says the connection he has to his land is more like the relationship Maori have to their land.

There is a spiritual dimension, which means the French will never be happy to emulate New Zealand and adopt the most competitive economic model.

"We do not want to be world leaders - our approach is to occupy the land," he says. "Our concern is to live in a way that is dignified."

Chibarie is unhappy with the Government for giving in to EU pressure and adopting subsidy reform.

The new system of "decoupling" means farmers will no longer be paid for the amount they produce. Instead subsidies will be based on historical output levels.

The idea is to reduce overproduction. It should make farming more environmentally friendly and mean that subsidised European produce has less of a distorting impact on world prices.

"Decoupling is very difficult for us to accept," Chibarie says. "This is a pale copy of what already happens in the United States."

It had been adopted despite its failure there.

"We believed we deserved better."

The reforms will force people to leave the land, he says.

In fact, it is already happening.

"In this country we have four farmers retiring for every new one. The issue is uncertainty."

At an official level there is sympathy for the position of farmers such as Chibarie.

The decision to bow to pressure from less agricultural countries like Britain and Germany and agree to reform was one of political compromise.

There is certainly no intention in the Chirac Government to take reforms any further.

Pascal Brice, director of communications for the Ministry of Foreign Affairs, says the French will always fight for the right to protect their farmers from international competition.

"Okay, there is a trend for reform of protection, but the end of that trend is not zero protection," he says. "For us, agriculture is a way of life. It's a political matter that rises above the economic."

French farmers and agricultural officials share a common perception. They strongly believe that without protection farming would die out in many parts of France.

If the land is not farmed, they say, it will become a wasteland, rural communities will die out and cities will become overpopulated.

It seems a trifle over-dramatic. It's difficult for someone from underpopulated New Zealand to accept that a country with more than 60 million people would not find economically viable alternative uses for its land.

When pushed on the issue, officials like Brice argue that even the best-case scenario - a huge increase in farm size - is not acceptable.

"The question is what kind of agriculture do you want. We in France believe in our way of farming, that it is part of the cultural equilibrium."

In some parts of the country some sectors are competitive, he says.

In the northwest dairy farmers might survive without subsidies, although their farms would certainly get bigger.

But in the southwest where irrigation is a concern they could not, Brice says.

Despite all the talk about the great progress the EU is making on reforming subsidies, the French attitude to protection remains deeply entrenched.

"All political parties want to keep farmers on the land in France," Brice says.

"There is 95 per cent support for the Common Agricultural Policy across the political spectrum."

The French, it seems, will fight to the end to preserve their ancient agricultural system.

But although they may yet win a few fights at an EU and WTO level, it looks like their biggest battle will be trying to turn back the tide of internal social change.

That is one battle it is hard to see them winning.

* Liam Dann travelled to France as a guest of the French Government.

Posted by rich at March 24, 2004 08:41 AM