Hollande faces hard sell over proposed CAP budget cuts

  

French President François Hollande faces the awkward prospect of walking away from this week's European Union summit having accepted a cut in the bloc's agricultural spending for the next seven years.

That would once have created uproar among French farmers who have enjoyed generous EU subsidies for decades. But most are resigned to less overall aid and are pushing instead for a wider shake-up of the sector to ensure they can compete for a bigger share of the rising global demand for food.

"We're in a fierce competition on a world market," said Pascal Clément, a dairy and cereal farmer near the north-western town of Le Mans, famous for its 24-hour car race.

"We just need to be given the means to be competitive. We have a lot of doors to push open," he told Reuters on his farm.

Such attitudes reveal a revolution in mindset since the EU's Common Agricultural Policy (CAP) was created under the impetus of President Charles de Gaulle in 1962, subsidising farmers to ensure adequate food supplies in the then six-nation bloc.

Its production-led model was discredited by excesses such as the surplus food mountains that prompted public disgust in the 1980s. And the CAP has also come under criticism for distorting global trade and disadvantaging farmers in developing countries.

Belt-tightening

A pact between the French and German farm ministries to hold EU farm spending for 2014-2020 at its nominal 2013 level fell victim to budget austerity when German Chancellor Angela Merkel insisted in November that cuts would have to be made after all.

Hollande will keep fighting hard to defend CAP spending when he meets his counterparts in Brussels on Thursday and Friday to discuss the EU's next long-term budget, his entourage says, but Agriculture Minister Stéphane Le Foll in December acknowledged that EU farm aid would be cut.

France's ageing farmers now account for less than 2% of national output, against 80% for the services sector.

Yet the French have a special attachment to the land and no president can be seen to ignore their interests. The Socialist's conservative predecessors, Jacques Chirac and Nicolas Sarkozy, championed French farmers' interests in Europe.

A boon to French farmers

The CAP accounts for 39% of total EU spending. In 2011, France alone took nearly 17% of the farm budget and nearly 20% of the direct payments to farmers which it most wants to safeguard.

Subsidies can be double the income of livestock farmers, who face rising costs for grain-based animal feed, and prevent them making a loss. Cattle farmers earned on average 15,000 last year, including subsidies, the farm ministry says, just above the 13,300 of a worker on France's minimum wage.

These disparities are one reason why Hollande may be able to cope politically with an overall cut in the CAP pot of money.

His farm minister wants to shift aid - perhaps several hundred million euros - to worse-off livestock farmers as part of the CAP reform, a plan that has angered crop growers.

"This is the explosive CAP issue at the French level," said Patrick Theet, a grain and sugar beet grower near Paris.

More flexibility

Farmers favour a more flexible subsidy scheme, as exists in the United States, that would give them more aid in bad years and less in good times. Research also needs to be better funded, notably to boost stagnant grain yields and compensate for France's refusal to adopt genetically modified crops, they say.

Environmental constraints are among French farmers' top grievances and they fear a proposed "greening" of the CAP will bring more red tape.

"When we get up in the morning it's to do our job, not to check we've filled in the right form or are within the rules," said Michel Dauton, a cattle farmer south of Le Mans.

Moreover, with much of the EU economy set to remain stagnant through 2013, policymakers should ensure they do nothing to harm one sector whose growth prospects are shining, they argue.

"In the midst of an economic crisis, we have a sector with growing markets," said Dauton. "What company boss could wish for anything better than markets that await him?"

Timeline: 
  • 7-8 Feb.: EU budget summit in Brussels
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