How Can France Save Its Farmers?

 By Steven Jacobson

Steven Jacobson is a sophomore at the University of Pennsylvania studying business and history. 

Amidst demonstrations across the country by cabbies, truckers and air traffic controllers last week, French farmers took to the streets to protest plummeting milk and livestock prices that have been falling since early 2014. Farmers blocked roads around La Rochelle with tractors and burning tires, demanding a meeting with French Prime Minister Manuel Valls. Didier Lucas, a pig farmer and chair of the local chapter of the FDSEA, a farmers’ union, told France Info that he felt the protests were “the only way for farmers to get their voices heard,” adding that they felt the government “despised” them.
 
These hard feelings have come despite €600 million in emergency aid that the French government extended in response to similar protests this summer and a further €290 million announced on January 26. [1] [2] The farmers have countered that these measures fail to mitigate the underlying crisis. Milk prices have dropped 17 percent and beef prices 3.5 percent in the past two years. [3] Ten percent of French farms—about 22,000 sites—are on the verge of bankruptcy, with a combined debt of €1 billion. [4] Prices have fallen so low that many farmers produce unprofitably. Jean-Michel Juhel, a pig farmer from France’s Brittany region, loses €30 on each pig he sells.

"Maybe I can last another year,” Juhel told AFP. “But my wife asks me: 'What are we going to do if it continues like this?’”
 
Both rising supply and falling demand have driven prices down. The European Union’s milk quotas, implemented in 1984 to fight oversupply in the market, expired last March. The quotas had been rising for years in preparation for their eventual removal, causing supply to rise and prices to drop steadily. China’s economic slowdown has reduced demand for dairy imports. EU sanctions imposed on Russia in response to the country’s actions in Ukraine have caused a huge market for French farmers to disappear. Changing dietary habits have also caused a shift away from red meat for many European consumers.
 
French agriculture needs more than just stopgap measures to weather the downturn in prices, a fact acknowledged both by Stephane Le Foll, France’s agriculture minister, and the industry’s unions. The FNSEA, the largest such union, has demanded structural reforms at the EU level. At 17 percent, France is already the largest recipient of the EU’s Common Agricultural Policy. [5] Not all French farmers benefit equally, however, as the largest farms receive the most aid. The program allocates 80 percent of France’s share of the funds to merely a quarter of the country’s farmers. [6] While these larger farms can produce more cheaply due to economies of scale, it is the smaller farmers who have felt the pinch in prices and subsequently taken to the streets.
 
For now, the farmers must settle for patchwork aid packages from the government while their struggles brought on by the low prices drive them into the arms of the far-right economic protectionist National Front party.  


[1] Matthias Verbergt and William Horobin. "France Moves to Placate Farmers With Aid," Wall Street Journal (New York City), July 22, 2015.

[2] Sybille De La Hamaide, "France Has 290 Mln Eur to Help Livestock Farmers -Le Foll," Reuters, January 26, 2016. 

[3] Rudy Ruitenberg, "French Farmers Block Roads, Burned Tires to Protest Low Prices," Bloomberg, ​January 25, 2016.

​[4] Scott Sutton, "1000 farmers are converging on Paris carrying angry farmers," SunTimes Network, September 2, 2015.

[5] British Broadcasting Corporation, “Q&A: Reform of EU Farm Policy,” BBC.com, July 1, 2013

[6] Ibid.

Photo Credit: Flick User Deschamps Productions

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