The Minister of the Economy, Bruno Le Maire, announced on Friday October 6 a tax exemption measure in favor of cattle breeders, a flagship measure of a “plan to regain livestock sovereignty” in France presented on the occasion of the Livestock Summit in Puy-de-Dôme.
“In the 2024 budget, an exceptional measure of support for French breeding will take the form of a provision of 150 euros per cow, up to 15,000 euros per farm, or one hundred cows, in order to reduce the taxation of breeders who results from the increase in the value of their stock”indicated Mr. Le Maire in an interview with the regional daily The mountain.
“This is a strong demand from the world of breeding. In these times of budgetary scarcity we still wanted to access it”added the one who was Minister of Agriculture from 2009 to 2012.
During a visit to the Livestock Summit in Cournon-d’Auvergne (Puy-de-Dôme), Bruno Le Maire specified that the measure would cost “several tens of millions of euros”.
The National Federation of Farmers’ Unions (FNSEA) welcomed in a press release a “victory for breeders” resulting from its “determined action” to the minister.
“Stop decapitalization”
The majority union recalls having alerted the government for months “on an unprecedented deterioration in the cash flow of breeders, due to an increase in the value of suckler and dairy cows due to market increases and inflation. This leads to an increase in taxes and social security contributions without any real enrichment.”
In short: the book value of cows increases with inflation – even though they do not produce more milk or calves – which ultimately increases the farmer’s taxes.
From an accounting point of view, cows are “immobilized stock”. “We must stop the decapitalization (decline, editor’s note) of the French cattle herd”asserted Mr. Le Maire at the Livestock Summit. “We must stop this hemorrhage as we have managed in recent years to stop the industrial hemorrhage.”
This measure is in fact seen as a means of combating the decline in livestock numbers and the decline in French production of beef and milk.
Without tax exemption, “breeders might be tempted to sell a few cows” to reduce their tax, which risks resulting in a “loss of production capacity”underlined the president of the FNSEA, Arnaud Rousseau, Wednesday during a press conference.
On the contrary, the Confédération paysanne, the third agricultural union, estimated in a press release that tax exemption was not “not the solution to the decapitalization of herds” and did not resolve “the problem of farm transmission”.
While professionals also fear paying the price for the government’s desire to lower the cost of food, Mr. Le Maire assured that he “(would) ensure the defense of interests” farmers during annual negotiations between supermarkets and their major agri-food suppliers.
Bercy is currently pushing a bill to bring forward the start date of these negotiations in the hope of bringing prices down more quickly.
“The drop in shelf prices should not result in an effort by producers but by an effort by distributors and manufacturers”Mr. Le Maire said on Friday.
In particular, he will ask the General Financial Inspectorate (IGF) to ensure “respecting producers’ margins”in accordance with the Egalim laws which protect farmers’ income.
In a joint press release published Friday evening, the Ministries of Agriculture and the Economy mentioned “a plan of reconquest” where they reaffirm their desire to preserve the income of breeders in the short term while improving the competitiveness of the sectors in the long term.
They list the priorities for this sector, ranging from “improving the income of breeders” has “taking into account the sustainability of the mode of production”strengthening research to “improve the resilience of livestock sectors in the face of climate change”.
For example, in “making a reality of the obligation, for collective catering, to use from January 1, 2024, at least 60% of meat products from sustainable farming or with an official sign of quality and origin”. Or even by moving towards breeding “400 million guaranteed loans (…) in the coming years”.
