Cereal producers are the big losers of the CAP ‘à la française’


French cereal producers claim the reformed CAP will create competition distortions in Europe, especially with German farmers, who will receive more subsidies. However, they should be able to secure compensation with a plan to raise the share of biodiesel to 7% of the total content of transport fuels sold on the continent. euractiv.fr reports.

Cereal producers feel they are the big losers of the French version of the reformed Common Agricultural Policy (CAP). Their association, Orama, which includes 52,000 wheat, corn and oilseed workers, has called for a competitiveness plan to help them cope with the changes in subsidies.

The reformed CAP’s novelty is that it allows “à la carte” implementation, country by country. In France, the choice was made to support the livestock sector, which would lead to a gradual decline of subsidies for arable crops. These include cereal producers, be it wheat, peas, corn, beans or soy.

“We denounce the distortion of competition between the French and German poultry and pork sectors because of the social dumping, but the new CAP will create new distortions,” warned Pascal Hurbault, a spokesperson for Orama.

The organisation calculated that the premiums of cereal specialists will drop especially by the end of the new CAP period, which stretches from 2014 to 2020.

According to figures from the European Commission's Farm Accountancy Data Network (FADN), French arable crop farms will receive a €220 subsidy per hectare in 2019, while their German competitors will get €295 per hectare.

French cereal farmers said this would worsen the competitiveness gap between the two countries. Local cereal producers were very competitive in the export field, they claimed.

The difference in subsidies can be explained by diverging choices made by the two countries. While France chose to concentrate most of the subsidies on the first 52 hectares of farmland, a move aimed at supporting smaller producers, Germany opted to give more or less the same amount to small and big farms.

In France, this means that arable crops farmers, who are relatively numerous in France, tend to lose out, especially those located in the regions of Picardie, Champagne-Ardenne, Beauce and the South West (see graph below).

Going for quality

To deal with the changes, the sector is considering adapting its offer. “We will insist on quality, notably by providing in our delivery contracts commitments on the protein content,” said Philippe Pinta, the president of Orama in charge of the wheat sector.

French wheat is known for its rich protein content, which improves its bread making qualities. By comparison, German or Danish wheat growers struggle to achieve the same levels of protein, making their products less attractive to potential buyers in the Maghreb region, such as Algeria, the world's largest purchaser of wheat.

Beyond competitiveness efforts, cereal growers plan on re-interpreting France's greening measures of the CAP in their own terms.

For instance, the corn sector is very much opposed to limiting its production to 75% of the farm surface, a measure which is meant to decrease the consumption of water and avoid soil depletion.

“We must acknowledge the corn diversity," said Anne-Claire Vial, secretary general of the association of corn producers in France . "There is sweet corn, seed corn, vegetable corn and corn used to feed the pork and poultry sectors. Those are not the same crops,” she stresses.

“We will demonstrate that by using the mulching technique, we will get to an agronomic equivalence of soil quality,” she says, persuaded that the 75% limit can be abandoned.

Rapeseed growers win biodiesel consolation prize

If arable crops are the big loser of the reformed CAP 'à la française', they still managed to negotiate a consolation prize for the rapeseed sector, to which the president of the national trade union of farmers, Xavier Beulin is particularly attached, as he is also the director of Sofiproteol, the consortium of biodiesel production.

Despite fierce debates in the European Parliament and opposition from several countries, France should be able to secure a plan to raise the share of biodiesel to 7% of the total content of transport fuels sold on the continent.

>> Read: Lithuania mounts rescue bid for first generation biofuels

While the average in France is already at 7%, the European average currently stands at 4.6%. The French Green party wants the rate to drop due to the impact of biofuels on food prices as well as their questionable carbon footprint performance.

Sources said that President François Hollande assured on 3 December at the 30th anniversary of Sofiproteol that the EU accepted the 7% rate, after a meeting held in Brussels on 29 November. This represented a major victory for the cereal lobby. The decision is yet to be endorsed by the European Council on 12 December.

The Common Agricultural Policy (CAP) is the European Union's system of direct payments for farmers and subsidies, which costs each EU citizen around 30 euro cents a day, according to the European Commission.

The CAP has a budget of €53 billion a year, making it the European Union’s most expensive programme. The CAP accounts for 37.8% of the EU's 2014 to 2020 budget, compared to nearly 71% in 1984.

The majority (over 70%) of CAP spending goes to direct payments for farmers, while some 20% of the CAP budget is spent on rural development measures. The rest is handed out as export subsidies to food companies.

The Commission's reformed CAP places a greater emphasis on environmental measures, with up to 30% of the funding granted to farmers who diversify production, rotate their land or maintain permanent pastures.

Subscribe to our newsletters