At the close of the large demonstration by grain farmers through Paris on April 27, President Sarkozy outlined his vision, goals and program for French and European agriculture in two specialized publications La France Agricole and Agrapresse.
Published on Friday, April 30, this interview is all the more noteworthy as it signals a genuine step forward compared to previous declarations1. While the French President already focused on the need to regulate agricultural markets in his latest speeches, he never was so specific. As he points out from the outset of the interview, “what matters now is to take action. Farmers do not need to hear speeches on the fact that they are the salt of the earth and the identity of France and are entitled to the affection and the love from each and every one of us. We must make decisions.”
Now insisting on the strategic scope of agriculture in economic as well as geopolitical terms, President Sarkozy categorically restated his recent opposition to any dismantling of the regulation tools in Europe, currently advocated by the CAP.
Excerpts from the interview of President Nicolas Sarkozy, “I understand the difficulties faced by grain farmers and we are going to assist them”, granted on April 30, 2010 in La France Agricole and in Agrapresse
You are speaking out on agriculture at a particular time with a large demonstration held this week in Paris. How do you translate this distress and what can the Government do to reassure farmers?
First of all, talking about agriculture is not what matters. I have heard many people speaking on agriculture for a long time. What matters is taking action. Farmers do not need to hear speeches on the fact that they are the salt of the earth and the identity of France, and are entitled to the affection and the love from each and every one of us. We must make decisions. It is a priority sector for the French economy. Europe is the world’s second agricultural power and France is Europe’s first agricultural power. Agriculture is thus strategic for the French economy, for France’s independence and our fellow citizen’s food security. As far as the economy is concerned, agriculture is as important as aerospace, the aviation industry or manufacturing.
You are talking about farmers-entrepreneurs. The Bill of Modernization of Agriculture emphasizes insurance systems––crop insurance and income insurance. In the future, is the Government ready to play its role of reinsurer?
The truth of the matter is that for the past 30 years, the State has served as insurer for the profession, when income declined. Today, the Government supports income insurance by allocating over €100 million each year and proposes €1.8 billion in subsidized loans to cover cash flow. Isn’t this insurance? Agriculture is subjected to hazards––climatic hazards and market hazards. Markets are corrupted by speculation and to cope with such hazards, the solution of insurance is the good solution. As we take insurance against disasters, one should be able to take insurance against sharp drops in prices.
For tomorrow’s farmers who want to make a living off prices, do you think we need more government or less government?
We need more regulation. And we need a contracting process system. Farmers cannot be constantly fighting with their purchasers. Contracting means a better organization of supply, and I am thinking of some activities such as fruits and vegetables, where producers must regroup to gain more negotiating weight against retailers. In this case, the government is clearly on the farmers’ side to assist them in their showdown.
Even if this ends up to be a little more expensive for consumers?
I told you quite the opposite when I mentioned the agreement on margin reductions. We must not be ashamed of government support. Is the government not supporting French aviation production with reimbursable loans? Do you think that the French nuclear industry would exist without the government? EDF, Areva or GDF-Suez are companies that are wholly or partially government-owned. Where would be the development of electric cars if the government had not launched a program to support it? And car sales, where would they be without the scrapping premium? And automotive production, where would it be without the car emission rating bonus/penalty system, which, by the way, was more costly than planned because we delivered more bonuses than gave penalties? Why must we make farmers guilty in this matter?
Of course, both contracting process and insurance are not enough. We must clearly address the issue of regulation in agriculture.
What is your implied meaning of the word “regulation”?
We do not have to go from a total super-production economy to an economy that does not produce enough, where speculation plays an extensive role and where one billion people in the world are starving to death. Regulation is a European as well as a global issue. I will deal with it in Europe, as well as within the framework of the G-20 Summit. I cannot accept that speculation is pocketing unbelievable sums on agricultural commodities. One can purchase five percent of a crop; resell it before even paying for it. All this involves about ten middlemen, who plunder farmers throughout the world, without any gain for consumers. I thus clearly state: Let’s create a global organization of agriculture to develop market openness and orderliness. There is a problem of global governance in agricultural production, and I am not only speaking about European farmers. Indian farmers, Brazilian farmers and Turkish farmers need price visibility, just as European farmers do. Who would dare say that the cocoa, coffee or grain markets are fluid markets defined by supply and demand?
The word reserve is not a bad world, once reserves are well utilized to regulate production and I will, in the name of France, clearly oppose the dismantling of the regulation tools in European markets.
The Bill of Modernization of Agriculture aims to encourage farmers to regroup. Are you prepared to ease––or require the easing of––competition rules so that these groupings are not legally punished?
I will answer your question in three points. First, we need reference prices that allow for decent compensation for production. I also object to the idea that a dairy farmer delivers his production without knowing the price he will get for it. Thus, my idea of developing a contracting process. We must clearly modify competition rules. I will deal with this issue with President Barroso, as well as with the Agriculture Commissioner, whom I will host shortly. Lastly, we will certainly encourage higher-value production through development programs tailored to some activities––including the dairy sector. It is better to produce cheese than milk powder, which competes with global markets.
You talked about “preferring a clash rather than calling The CAP into question”. At which point would you feel a CAP reassessment has been reached?
I was extremely shocked to see that Commission’s first draft of a strategy for the European Union in 2020, agriculture was not mentioned once. I told President Barroso that if it was not modified, France would leave the negotiating table. It was changed, but this is not enough. The Commission is in charge of implementing European policies. The first common European policy is the agricultural policy. The Commission should be proud of it, rather than apologize for it. Discussing Europe’s assets by 2020 while omitting agriculture is something I could not accept. It was a too strong giveaway of a technocratic rationale that does not reflect what Europe’s founding fathers wanted and accomplished.
It is not normal to talk about fighting poverty, about training and education, which are not within European jurisdiction, and say nothing about agriculture that is part of it. I will not accept dismantling the regulation tools that enabled us to prevent a serious milk crisis. Finally, it would not be prudent to give up the common agricultural policy that is a key component of food security for consumers, especially after all the crises we experienced––including that of the mad cow disease. We saw the consequences. Europe’s role is to protect its citizens’ food security. Nor will I accept that we align with global prices, while the Americans are assisting their farmers, morning, noon and night. And they are quite right to do so. I just do not see why Europe cannot do likewise.
As far as the budget is concerned, negotiations are going to start at a time when we will soon be a net contributor to the EU budget…
But we have already reached that point! We paid a €4.5 billion net balance to Europe. We will not be lectured on this issue, with that of the British check! One cannot reduce subsidies without restoring the EU preference principle, and guarantee production prices at least equal to production costs for European farmers. I will not cave in.
Are you optimistic on this issue? You are setting the bar quite high. Will we obtain even only a portion of what you are asking?
Do we have another possible choice? To let the ball unthread till there is nothing left?
That would mean more restructuring for agriculture…
Obviously, we must restructure our agricultural production system, but only in the framework of common development programs. I am not telling others “Change. As far as we are concerned, we are not changing anything”. I will not let French agriculture be destroyed. It is my mission. My goal is to prevent doing to agriculture what we allowed to be done to finance.
What argument can you give the United Kingdom, so that it gets closer to our positions?
It is quite simple: there are two arguments. First, are you concerned by food security? Britons have not forgotten the mad cow disease crisis that wreaked havoc. Yet, the only way to guarantee food security is to have a common agricultural policy. The second argument is a budgetary one: If you feel the budget is too high, let’s guarantee prices. It is not because Americans guarantee bottom prices to their grain farmers that their country is a great free-trade nation. I am not even asking for that, but, more simply, equal competition conditions between Europe and its competitors. We have no choice.
Recorded by Eric Maerten for La France Agricole and Hervé Plagnol for Agrapresse.
1 See the February 20, 2009 speech given in Daumeray, or the address delivered in Poligny on October 27 of that same year.