Time to Decide on French Agriculture

Despite significant amounts of subsidies, the French agricultural sector delivers unsatisfactory results in several respects: falling employment rates, partly low revenues, environmental degradation and declining commercial performance. The profession often highlights regulatory complexity and high labour costs as the main culprits. But also the predominantly small structures, in particular in the downstream industry, sluggish technical progress, unequal competence level among farmers, lacking coordination between sectors and questionable non-price competitiveness strategies add to the problem. In this context, public policies lack clear direction as various tools sometimes pursue conflicting objectives. Today, agricultural policy clearly needs to be refocused on key long-term objectives. Protection of natural capital needs to become a central part of agricultural policy. This is both an environmental issue and a condition for the future economic success of agriculture itself. To achieve this, policy needs to be directed at financing amenities, such as soil quality, rather than pursuing uncertain objectives with undifferentiated subsidies. Regulations, currently working restrictively and not effectively, need to better target results. In order to create the conditions necessary for innovative agriculture, promising biological innovations and spatial data, which are becoming strategic, should not be left to a few international companies. Instead there is a need to help public research direct the innovation, so that to ensure the compliance with biologic regulations. At the same time continuing vocational training for farmers needs to be reinforced by enhancing the role of digital tools, agricultural colleges and higher education. Regarding the French export strategy, national agriculture should principally rely upon a small number of labels promoting food control, full traceability, the absence of antibiotics and growth enhancement products and respect for the environment and animal welfare. Finally, in order to help farmers exposed to market volatility, measures such as smoothing taxes over several years, and the postponement of loan and social security contributions, as well as access to risk coverage, need to be promoted more favourably than administered prices and counter-cyclical subsidies. At the EU Community level, non-transferable contractual subsidies targeting public goods or with social objectives should substitute surface-area based subsidies. Competitiveness, environment and revenue are not necessarily incompatible in agriculture. However, major reorientation of policies is required to reconcile them.