Discrepancies in income highlight challenges for French farming
By Thomas on Saturday 5 January 2008, - Irish Farmers' Journal - Permalink
The year 2007 has ended with the news that 12 per cent more money made its way into French farmers' pockets than in 2006 – an average figure that hides massive discrepancies between different enterprises.
Preliminary data compiled by the French department of agriculture detail
evolutions in the average pre-tax income per farmer. The variations were
calculated in real terms, i.e. after inflation is factored in.
The fastest-growing income was that of tillage farmers, which nearly doubled thanks to buoyant grain prices. The study found that overall prices paid to cereal, oilseed and proteinseed growers shot by more than 50 per cent last year – a lot faster than production costs – leading to a 98 per cent increase in pre-tax income.
“This was not the case for everyone”, said Pierre Marcille, who farms 170 hectares of wheat, oilseed rape and barley in the Beauce area south of Paris. He saw his income grow by 30 to 50 per cent in 2007 compared to previous years.
“All the grain was not traded at the best moment: I sold some as prices began to go up before the harvest”, he said. He reported selling wheat for €130 per tonne at one time and €220 later.
Pierre Marcille decided to invest a large part of the extra cash generated from soaring prices, because “otherwise everything goes up in taxes”. He and a neighbour replaced both their old drills with a new, jointly-owned one. He also upgraded his fuel tank to comply with environmental regulations. “This was all planned, but the boost in income helped”, he said.
He also set some money aside for the future. “In the 25 years since I started farming, this is one of the rare times I've been able to save a little for my children”, he said.
Although he expects grain prices to remain high, he does not think they will stay at this year's level. “Contracts are currently on offer at €190 per tonne for wheat; rape is going through the roof at €400”, he said. He has decided to commit only a small amount of rape so far. “In a market like this, everybody is lost”, he said, adding that he relied on SFPs for income stability in the future.
Pierre Marcille has chosen to keep a cool head and to stick to his usual choice of crops: 70 hectares of wheat, 40 of oilseed rape and the rest under barley. Only poor plant establishment in some rape fields led him to change his plans slightly and replace part of it with winter barley.
High costs hit dairy farms
While the jump in grain prices meant good news for tillage farmers, they weighed heavily on the income of livestock farmers. French dairy income was down by 4 per cent in 2007 as a 7.7 per cent milk price rise failed to cover growing feed costs.
However, it will receive a boost when a recently agreed 10 cents-per-litre increase in milk prices is implemented in the first quarter of 2008. The much-awaited top-up was decided on December 18 by farmers' and processors' representatives sitting on the national committee in charge of establishing guide prices for milk. French dairy farmers had been getting 35 cents per litre on average in the last months of 2007.
“We expect a good year in 2008”, said Thierry Roquefeuil, secretary general of the FNPL dairy farmers' union. However, he warned against attempts by French supermarket chains and the European Commission to “get cheaper milk”. “Our parents started as dairy farmers and retired as dairy farmers. Nowadays it is possible to change. If prices do not cover costs, many will exit this business”, he said.
Indeed, many French dairy farms grow their own crops, either to feed their cattle or to sell grain. Farmers with a mixed tillage-livestock production have seen their income grow by 19 per cent in 2007. But the cereal price hikes have led some of them to focus on the tillage end of their enterprise and reduce or stop dairying.
As a result, France was under quota in 2007 and the department of agriculture has just decided to allow farmers to exceed their individual quota by 15 per cent instead of 10 per cent previously.
The next big issue on the French dairy farmers' agenda is the design of a workable form of supply contract with processors. FNPL president Henri Brichat considers that the end of quotas will “give the power back to processors” and he wants to establish a new form of market regulation instead.
Negotiations are under way to see how farmers and factories could sign medium-term contracts that allow both sides to develop their business while complying with competition legislation. “Either side will make investments only if they have a certain visibility range in terms of time, prices and volume”, Henri Brichat said. He hopes to get support from the EU and the government in setting up rules to govern such contracts.
Sheep under threat
Drystock farmers were the worst off in 2007, with beef income dropping by 23 per cent and sheep income by 28 per cent. Pig and poultry units were the worst hit, with profitability taking a -59 per cent hit.
Beef and sheep farmers, in particular, have had to deal with strict blue tongue restriction as the disease spread over the country throughout the past year. Over 11,000 cases are now accounted for in the current outbreak, which still gives no sign of weakening.
GM legislation coming soon
France is putting a system in place to regulate GM crops after years of dithering and failure to transpose EU directives on the issue, which is highly controversial in the country.
A bill to be voted in parliament early this year proposes the establishment of an independent authority to advise the government on new GM plants. It also provides for a public registry of GM fields and makes it compulsory for farmers who grow GM crops to take out insurance in case their plants' pollen contaminates neighbouring non-GM fields.
Until the legislation is passed, a committee comprising scientists, local councillors, consumer bodies and environmentalists as well as farmers' representatives from both pro- and anti-GM farmers' unions was set up in December to prefigure the independent authority. Some anti-GM groups have already suspended their participation in protest at parts of the proposed legislation.
The body's first report on MON810 maize is due on January 18. The French government has said that it will veto the authorisation of Monsanto's corn borer-resistant maize at EU level if the independent authority advises against its cultivation.
The fastest-growing income was that of tillage farmers, which nearly doubled thanks to buoyant grain prices. The study found that overall prices paid to cereal, oilseed and proteinseed growers shot by more than 50 per cent last year – a lot faster than production costs – leading to a 98 per cent increase in pre-tax income.
“This was not the case for everyone”, said Pierre Marcille, who farms 170 hectares of wheat, oilseed rape and barley in the Beauce area south of Paris. He saw his income grow by 30 to 50 per cent in 2007 compared to previous years.
“All the grain was not traded at the best moment: I sold some as prices began to go up before the harvest”, he said. He reported selling wheat for €130 per tonne at one time and €220 later.
Pierre Marcille decided to invest a large part of the extra cash generated from soaring prices, because “otherwise everything goes up in taxes”. He and a neighbour replaced both their old drills with a new, jointly-owned one. He also upgraded his fuel tank to comply with environmental regulations. “This was all planned, but the boost in income helped”, he said.
He also set some money aside for the future. “In the 25 years since I started farming, this is one of the rare times I've been able to save a little for my children”, he said.
Although he expects grain prices to remain high, he does not think they will stay at this year's level. “Contracts are currently on offer at €190 per tonne for wheat; rape is going through the roof at €400”, he said. He has decided to commit only a small amount of rape so far. “In a market like this, everybody is lost”, he said, adding that he relied on SFPs for income stability in the future.
Pierre Marcille has chosen to keep a cool head and to stick to his usual choice of crops: 70 hectares of wheat, 40 of oilseed rape and the rest under barley. Only poor plant establishment in some rape fields led him to change his plans slightly and replace part of it with winter barley.
High costs hit dairy farms
While the jump in grain prices meant good news for tillage farmers, they weighed heavily on the income of livestock farmers. French dairy income was down by 4 per cent in 2007 as a 7.7 per cent milk price rise failed to cover growing feed costs.
However, it will receive a boost when a recently agreed 10 cents-per-litre increase in milk prices is implemented in the first quarter of 2008. The much-awaited top-up was decided on December 18 by farmers' and processors' representatives sitting on the national committee in charge of establishing guide prices for milk. French dairy farmers had been getting 35 cents per litre on average in the last months of 2007.
“We expect a good year in 2008”, said Thierry Roquefeuil, secretary general of the FNPL dairy farmers' union. However, he warned against attempts by French supermarket chains and the European Commission to “get cheaper milk”. “Our parents started as dairy farmers and retired as dairy farmers. Nowadays it is possible to change. If prices do not cover costs, many will exit this business”, he said.
Indeed, many French dairy farms grow their own crops, either to feed their cattle or to sell grain. Farmers with a mixed tillage-livestock production have seen their income grow by 19 per cent in 2007. But the cereal price hikes have led some of them to focus on the tillage end of their enterprise and reduce or stop dairying.
As a result, France was under quota in 2007 and the department of agriculture has just decided to allow farmers to exceed their individual quota by 15 per cent instead of 10 per cent previously.
The next big issue on the French dairy farmers' agenda is the design of a workable form of supply contract with processors. FNPL president Henri Brichat considers that the end of quotas will “give the power back to processors” and he wants to establish a new form of market regulation instead.
Negotiations are under way to see how farmers and factories could sign medium-term contracts that allow both sides to develop their business while complying with competition legislation. “Either side will make investments only if they have a certain visibility range in terms of time, prices and volume”, Henri Brichat said. He hopes to get support from the EU and the government in setting up rules to govern such contracts.
Sheep under threat
Drystock farmers were the worst off in 2007, with beef income dropping by 23 per cent and sheep income by 28 per cent. Pig and poultry units were the worst hit, with profitability taking a -59 per cent hit.
Beef and sheep farmers, in particular, have had to deal with strict blue tongue restriction as the disease spread over the country throughout the past year. Over 11,000 cases are now accounted for in the current outbreak, which still gives no sign of weakening.
GM legislation coming soon
France is putting a system in place to regulate GM crops after years of dithering and failure to transpose EU directives on the issue, which is highly controversial in the country.
A bill to be voted in parliament early this year proposes the establishment of an independent authority to advise the government on new GM plants. It also provides for a public registry of GM fields and makes it compulsory for farmers who grow GM crops to take out insurance in case their plants' pollen contaminates neighbouring non-GM fields.
Until the legislation is passed, a committee comprising scientists, local councillors, consumer bodies and environmentalists as well as farmers' representatives from both pro- and anti-GM farmers' unions was set up in December to prefigure the independent authority. Some anti-GM groups have already suspended their participation in protest at parts of the proposed legislation.
The body's first report on MON810 maize is due on January 18. The French government has said that it will veto the authorisation of Monsanto's corn borer-resistant maize at EU level if the independent authority advises against its cultivation.
Thomas Hubert est un journaliste pigiste bilingue basé à Kinshasa, RD Congo depuis le premier trimestre 2009 et auparavant à Paris. Ce blog présente une sélection de ses articles publiés par divers médias et des notes sur la vie quotidienne à Kinshasa.