2024-02-22 15:52:30
At the start of 2024, French farmers have widely expressed their dissatisfaction with the Common Agricultural Policy (CAP) and the European Green Deal, perceived as policies of constraints and decline weighing negatively on their income. Their grievances also targeted the government for the double reason of the overtransposition of Brussels injections and the ineffectiveness of the EGalim laws for balancing agri-food commercial relations.
In a crisis situation, crisis measures announced by the Prime Minister in three bursts on January 26, 28 and 30. These advertisement include measures to simplify and weaken constraints, particularly environmental ones, including the “shutdown” of the EcoPhyto Plan to reduce the use of pesticides. They are associated with tax decisions, including the maintenance of the niche on non-road diesel and emergency aid to several sectors for a budgetary cost of 400 million euros.
Following Gabriel Attal’s announcements, the main agricultural unions announced that they would movement on pause, conditioning its resumption on whether or not the promised measures come to fruition quickly. Deadline set? The agricultural show which takes place from February 24 to March 3, and which opened with clashes between farmers and the police.
A few days before the show, the Prime Minister took stock of various progress during a press conference on February 21.
At the same time, the President of the Republic obtained concessions from his European counterparts on three community files : the temporary suspension of the withdrawal of production from 4% of arable land, better control of Ukrainian agri-food exports, and recognition of the interest of an “EGalim like” law on a European scale. He reaffirmed his opposition to France’s ratification of the trade agreement with Mercosur as it stands, in disagreement with several other heads of state and government.
But that’s clearly not the end of the story.
An unequal distribution of support
Let’s start with a little background. Under international pressure exerted within the World Trade Organization, the European Union replaced, from the early 1990s, its policy of guaranteeing internal prices at levels higher than world prices with a policy of supporting agricultural income via direct aid progressively disconnected from the choices and levels of production. This so-called decoupling process is almost complete.
As aid is paid per hectare, a close link is maintained between the size of the farm, measured by its surface area, and the amount of aid it receives. On average over the 3 years 2020, 2021 and 2022, a French farm from the Agricultural Accounting Information Network (sample which excludes the 30% of micro-farms) received 13,200 euros in direct aid if it had less than 50 hectares compared to 82,400 euros for its sister of more than 200 hectares. Over the same years, there was a gap of 1 to 2, from 35,700 to 64,300 euros, between the current income before tax per self-employed work unit of small farms compared to large ones (indicator which includes aid and subsidies) . The gap varies however, greater for certain productions (from 20,000 to 84,700 euros for specialized farms of large cereal and oilseed and protein crops) and less for others, moreover around a much lower average ( cattle, sheep and goats).
The new CAP in force since 1is January 2023 for five years should not change the situation. The measures announced by the Prime Minister are therefore not an answer to the double question of the low income of many small farms and theunequal distribution of public support between farms.
Between producers, manufacturers and distributors
In France, the first EGalim law was adopted in 2018. A second followed in 2021 and a third in 2023. These laws made the part of the price of the final product corresponding to the cost of the agricultural raw material non-negotiable between manufacturers and distributors. , including today for private label products. However, exports and livestock feed outlets are not affected.
The application of these laws is lacking. Manufacturers and distributors pass the buck, the former accusing the latter of relocating part of the negotiations outside our borders via purchasing centers based abroad, the latter accusing the former of being very opaque regarding the costs of the agricultural raw materials and their production costs more generally.
The government has promised to strengthen controls at both players and increase fines in the event of non-compliance. Gabriel Attal reaffirmed this at a press conference on February 21:
“Fraudsters must be punished, checks are increasing and sanctions will be there. »
A parliamentary mission has been launched and a bill to strengthen the system is expected “by the summer”.
“The construction of the price must start first from the producer with the industrialist, then the mass distribution”
Will this be enough? In addition to the question of the lasting translation of the promise into action, these announcements do not fully respond to the grievances of which the two actors accuse each other. The negotiations must also be completely transparent so that it is possible to develop independent and reliable analyzes of their effects.
Virtuous circles that will not be applied
The same goes for the (re)placing on the agenda of the question of the supposed overtransposition of European texts on the basis of cases that are certainly proven but which do not make up the whole story. It is not possible to demonstrate that there is today generalized overtransposition. In practice, farmers’ anger is just as much regarding the excess of standards, particularly those relating to the environmental aspect of the CAP. This includes obligations, via the conditionality of the granting of aid to compliance with certain European texts and good agricultural and environmental conditions.
It also includes financial incentives via compensation for additional costs linked to the use of more environmentally friendly agricultural practices. In this second respect, the CAP 2023-2027 includes a new instrument, the eco-regime, with an annual budget much higher than that of the agri-environmental and climate measures in place since 1992: in France, it is equivalent to 1.6 billion euros compared to 260 million for agri-environmental and climate measures which nevertheless benefit from an additional allocation of 150 million euros in 2023.
The eco-diet might have been the vector of greening the CAP. This will not be the case since almost all French farmers will have access to the basic payment of the instrument (46 euros per hectare) without changing their current practices, and more than 80% will have access to the higher level (62 euros per hectare) under the same conditions. This access should also be easy in a large majority of Member States. From this perspective, French responses to the crisis only accentuate the signal that the environment can still wait.
The agroecological transition would benefit from being implemented through fiscal measures aimed at changing behavior rather than through an increase in the standards that farmers denounce. There would also be a way of offsetting a large part of the negative economic impacts of the transition, by redistributing the income to farmers in a decoupled manner. proceeds from these environmental taxes. Increasing budgetary resources allocated to the agricultural sector can also be done through creation of environmental markets. From this perspective, the elimination of the tax loophole on non-road diesel and the targeting of the revenue thus generated to finance the transition and transmission were in the right direction. This virtuous mechanism will ultimately not be applied.
This also applies to the Green Deal, which aims to develop healthy and sustainable food systems. If its implementation has positive effects on the environment, it will also have negative impacts on actors in food systems. Renouncing it on this basis is undoubtedly not the solution and support for “losers” seems preferable. Note that it is not yet applied in the agri-food sector and therefore cannot be blamed for current ills.
Europe, loser in international trade?
With regard to international trade, finally, the failure of the Doha round, recognized in 2006 by Pascal Lamy then Director General of the WTO, led the Union to increase the number of bilateral trade agreements. If it failed to conclude the transatlantic partnership with the United States, it signed with Canada, Singapore, Japan or Vietnam, without forgetting the United Kingdom in 2020 in the context of Brexit. Other agreements await signature or ratification with Mercosur, Mexico and New Zealand. And discussions are underway with countries as different as Australia and Thailand.
These agreements can be legitimately criticized on the grounds that they do not take sufficient account of social, health or environmental aspects. To date, they have rather benefited the European agri-food sector since its exports have increased more than its imports. Between 2000 and 2022, the first ones went from [69 à 233 milliards d’euros]the seconds of 70 to 202 billion euros. Furthermore, these agreements are far from opening the Community agri-food market to all winds. When the risks of destabilization of the latter are high, the opening to zero or reduced customs duties is limited to predetermined quantities which are the subject of fierce negotiations.
What regarding France? With 9.4 billion euros, its agri-food trade surplus in 2022 reached its highest level since 2013. This figure hides the fact that our country’s agri-food trade balance is improving with non-European countries. and deteriorates with the rest of the Union. Double evolution which questions the product and price positioning of our country without hiding behind the sole cause of overtransposition.
Competition from Ukrainian exports is another matter because it results from a temporary liberalization of trade via a regulation including the possibility of reinstating customs duties in the event of excessive disruption of community markets. The two priorities here seem to be to base possible trade restrictions on an objective measure of disruption, sector by sector, and to ensure that the regulation benefits Ukrainian farmers and not a small number of intermediaries.
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