A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Focus on issues

  Focus on issues  

Managing risks and volatility:
Corn growers support an American-style CAP

Arnaud Carpon, Terre-net Média

Article published in Terre-net Média

As they lament “their negative operating results for the third consecutive year”, the corn farmers from the National Association of Corn Producers (AGPM) want to place managing risks and insurance systems at the heart of the CAP reform, in order to no longer suffer from market volatility. Referring to the Farm Bill, these corn growers are dreaming of an American-style CAP.

2015 sounds like another crisis year for corn farmers. As it reports on the 2015 crop, the AGPM endures a double whammy––a 15 percent drop in yields compared to 2014 and low-level prices.

The past year was first marked by summer climate conditions “that took a heavy toll on grain corn,” explained AGPM President Daniel Peyraube during the November 3, 2015 presentation of the corn campaign. This year’s 90.1 quintals/hectare average yield is concealing significant disparities. For Daniel Martin, President of the Irrigants de France association, 2015 has also been a year that proved “the need for irrigation that lets us sustain both yield and quality.”

The year’s problematic climate also takes producers back to the painful memories of 2003, the previous year of severe drought. Yet, the genetic improvements in corn growing during the past 12 years have led to increased yields of about one ton per hectare, enough “to lower production costs by €19/ton,” states the AGPM.

The American dream

Yet this drop in costs is not enough to offset the persistent very low price levels. “At €140/ton, prices are far from covering production costs,” insists the trade association president.

The AGPM demands “stabilizing agents” and mentions the upcoming 2020 CAP reform to tackle corn price volatility and climate events. “We need systems to soften volatility for our farms,” asserts Daniel Peyraube. “And I am thinking about sales insurance.”

French and European growers will meet in Toulouse on November 17 and 18, 2015 for the “2015 Corn Days.” They will discuss the European CAP and the American Farm Bill, and compare the ways to address and support risk management. For the AGPM, managing risks will entail new guidelines for the CAP, as this was done on the other side of the Atlantic.

“France must be the driver in Europe in issues of income or sales insurance. We must rally our European neighbors on this issue of risk management and the tools that could be implemented.”

Towards lower electricity rates for irrigators

The 2015 Corn Days will also provide an opportunity to address the liberalization of the electricity market after January 1, 2016. Due to the end of regulated power rates, farmers using irrigation and holding a “green” or “yellow” EDF contract must undertake a new tender before January 1, 2016. Four energy suppliers targeted by the AGPM will propose contract bids to farmers using irrigation, whose power requirements are very high during very short periods.

The impact of this new free competition system should be globally positive. “Most farmers using irrigation should save between two to ten percent on their energy bill,” asserts the AGPM. But there again, we note strong disparities due to the cost of power transmission, which accounts for a third of the total electricity cost, while the remaining thirds are shared between consumption per se and taxes. “Some farmers who are far from the major electricity networks could see a 10 percent increase in their bill.”

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Paris, 16 June 2019