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05/12/2016

Crisis-hit French farmers unconvinced by new CAP

Agriculture & Food

Crisis-hit French farmers unconvinced by new CAP

French pork farmers were particularly hard-hit by the Russian embargo.

[Arran Moffat/Flickr]

French milk, pork and beef farmers are currently facing severe crises, and they fear that the new Common Agricultural Policy (CAP) will not have the answers they need. EurActiv France reports.

The end of milk quotas in April 2015 and the Russian embargo have put French farmers under enormous strain. And the CAP is struggling to improve the situation.

The Russian embargo dealt a severe blow to France’s pork farmers, already weakened after a number of difficult years. For beef farmers, sale prices now hardly cover production costs. And for milk producers, the end of quotas in 2015 exacerbated the existing crisis of overproduction.

Faced with this situation, French farmers have been calling on Brussels and Commissioner Phil Hogan to implement exceptional measures. But the European executive is more interested in finding new export markets than in direct public intervention as a way to end the crises.

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On 18 July the Commission did approve a new support package for struggling farmers. “I welcome the European Commission’s authorisation of a significant package, which is consistent with France’s demands over recent months,” said French Minister for Agriculture Stéphane Le Foll.

But for French farmers, these emergency measures are a sure sign that the CAP cannot provide solutions to the sector’s problems.

Different points of view

“With the fluctuations we are currently seeing, we know that the CAP system is not enough,” said Claude Cochonneau, the vice-president of the French Chambers of Agriculture.

The current CAP, which covers the period 2014-2020, is broadly export-focussed. “But in France there is real sensitivity to local markets. Opinion is more divided over the question of the EU’s export capacity,” the vice-president said.  “In future we could imagine that the CAP would do more for farmers that position themselves on the local market.”

CAP 2014-2020: A long road to reform

Politicians approved in June 2013 an agreement on the first large reform of the Common Agricultural Policy (CAP) in a decade, after months of haggling over how ambitious to make the policy on overhauling direct payments, ending quotas, and making farmers more environmentally accountable. The long road to a deal means that many policies will not come into force before 2015.

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The disagreement over the CAP reveals a deep divide between Brussels and rural France. “Europe has a strong liberal tendency,” said Cochonneau. But this economic philosophy us not shared by members of the farming profession.

“The idea that the market regulates itself, well, we’ve seen where that gets us,” he added.

Complex process

The introduction of the new CAP was a complicated affair. In 2015, the French government gave 360,000 farms extra time to fill in their CAP declarations after the complexity of the new procedure caused serious delays.

This year, the declaration process has been simplified. But navigating the complex administrative requirements remains a big challenge for French farmers, particularly regarding the greening criteria.

CAP reform sows seeds of panic among French farmers

The CAP’s complicated new “greening” criteria are causing a headache for Europe’s 12 million farmers. In France, the revision of plots eligible for the subsidy has added to the confusion. EurActiv France reports

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“Contrary to the stated objective, this CAP is not simple,” said Thierry Fellmann from the French Chambers of Agriculture. “The new greening obligations created a certain complexity for farmers.”

Yet European subsidies account for the lion’s share of French farmers’ income. “In France and in other European countries, 80-90% of a farmer’s revenue comes from subsidies. For milk producers it can even be higher,” said Fellmann.

European agricultural insurance?

The different points of view will be at the heart of the debate on CAP reform. In Brussels, the question of whether to continue devoting 38% of the EU budget to agricultural subsidies is open.

“We can see that to legitimise the CAP after 2020 we will have to find other arguments,” said Cochonneau.

One potential direction for the future reform of the subsidy programme is to place part of the European subsidies in an insurance scheme to protect farmers against climate or market shocks, common factors in agricultural crises.

This model has already been tried and tested in Canada. But to encourage farmers to branch out into new types of agriculture and to increase investment, Cochonneau estimated that “one third of the CAP budget” would have to be dedicated to insurance.

Only 2% of the overall CAP budget is currently devoted to insuring farmers against climate hazards.