Last May, Nicolas Sarkozy was elected as President of France, replacing Mr Chirac. If a majority of French farmers supported and voted for Mr Sarkozy, the new President may not be as concerned with agriculture than Mr Chirac was. Mr Chirac was firstly elected as MP in the rural area of Correze (center of France) and had been minister of agriculture in the 70’s, but Mr Sarkozy who is a 52 years old business lawyer started his political career as Major of Neuilly, the wealthy suburb of Paris. The question is wether Mr Sarkozy would be firm enough to support the CAP in Brussels.
Highlight from 2007 campaign: Hot winter, dry spring, wet summer, low yield and poor quality, but prices beyond all expectation.
2006-2007 winter will remain in memories as the hottest winter since long, without frost nor snow. Most of the crops did not stop their growth during winter time and the lack of cold temperatures appeared to be responsible for high populations of insects in the spring, especially aphids on rape seeds. If most of the regions did not have the slightest drop of water in April, rains come back from May to August. Late attacks of brown roost were observed on wheat, and in many regions farmers had to wait up to early September to finish harvesting.
Wheat yields ranged from 6.5 to 7.5 tons per hectare, 1 ton below normal. Density was also below average, around 700 to 740 g per litre, sometimes even less. Protein rates were rather better.
For spring barley average yield was 5.6 tons per hectare, instead of 7 tons in 2006.
Rapeseed yields ranged around 2.5 to 3.0 ton par hectare. Yields exceeding 3.5 tons were considered as exceptional.
Due to a strong demand worldwide and despite the poor quality, wheat prices increased from 160 € in July up to 300 € per ton in early September, to finally stabilize at 210 €/t . In comparison, average prices in 2006 were around 120 – 140 €/t, never exceeding 150 €. Before 2007 harvest, some farmers had even contracted for bio ethanol on a basis of 100 €/t.
Nevertheless the high ratio Euro-Dollar is still a severe handicap to compete to non EU cereals.
On the other side pork and poultry breeders see those high prices as a threat for their competitiveness, seeking for alternative outside Europe such as maize, soya beans or manioc.
Maize crops profited well from the wet summer to compensate their late emergence due to dry spring. The yields being rather better than in 2006, the prices were not able to follow the increase of wheat.
Main issues for 2007 autumn
CAP health check: Following the increase of cereal prices, the idea is making its way that subsidies cost too much to the EU budget and are not longer useful to guarantee farmer’s income, and the idea of topping the subsidies comes back. This is considered as a serious threat especially for most competitive farms that are also the biggest employers. Modulation is also to be discussed and may be accepted only if the money goes for real agricultural issues inside the 2nd pillar but not for financing non agricultural programs, such as Galileo.
European sugar reform: In order to reach the expected level of 14 million tons of sugar in EU and to fit the WTO regulations, France (1st producer of beet sugar in Europe, 2nd in the world) will have to reduce its production of sugar beets by 13.5%. For many producers, either small producers or located far away from the factories, the question is to stop or not to stop. For 2008, sugar beet growers have been offered a 35 to 44 € compensation per ton of beets and will have to make their decision to abandon or to reduce their quotas before November 30th. From 2009 the maximum indemnity will be only 7 € per ton of quota and from 2010 zero. Nevertheless the last word will be more on manufacturer’s side than on grower’s.
“Grenelle de l’environnement”: One of Mr Sarkozy’s main commitment was to settle a “Grenelle” (coming from the negotiations on wages and social laws between Government and trade unions in Grenelle Street in Paris after 1968’s riots) to discuss on environmental issues. As far as agriculture is concerned, pesticides and GMO crops were on the table. Now pesticide uses will have to be reduced by 50% in the next 10 years and the most dangerous actives ingredients will have to be prohibited. Organic crops will be encouraged to reach 20% of the total production. FNSEA (Major farmer’s union) who before was opposed to any regulation on GMO crops, finally accepted that authorizations to grow Monsanto’s Bt maize be suspended, when ORAMA (Cereals growers’ organization, a part of FNSEA) still refuse any prohibition, talking about “a total lack of pertinence” and asking that “European laws on GMO must be respected”. This “Grenelle” may be qualified as “a mountain giving birth to a mouse”.