Wednesday, February 17, 2016

To overcome the crisis, Manuel Valls announced a cut in payroll taxes for farmers – Europe1

The farmers were heard. Manuel Valls announced Wednesday a significant reduction of social contributions to enable them to reduce costs and therefore to regain competitiveness. The more difficulties can even benefit from an exemption from social security contributions. In exchange, the government hopes that the trade unions – the FNSEA and the Young Farmers. – Arrive to get farmers on their farms

This announcement Manuel Valls. The social security contributions paid by farmers will fall by seven points so “immediate”, Manuel Valls said on Wednesday, saying the effort to 500 million euros. He stressed that with the decline of three points of current family contributions since January 2015, the lower premiums for farmers was ten points. That is to say exactly at what asking the FNSEA, which called for a cut in payroll taxes to 10 points for they spend about 45% to 35%.

As for farmers whose incomes are “very low”, they receive a “lost year” of social contributions: in short, they will have no contribution to be paid until the end of the year. These will benefit from a “lost year by social automatic postponement of one year, renewable for a maximum of three years, without any steps of the farmer, without penalty or default interest, all of the 2016 contributions” said the Prime Minister.

Why agriculture is there to it? the origins of the crisis are many. Internationally, two events changed that: there first had the decision of Russia to set up in the summer of 2014 an embargo on all food and agricultural products from Europe, which has deprived the French industry an important market. Milk and fruit growers were affected first. Then was decided in April 2015, the end of milk quotas in the EU, with a predictable but poorly anticipated result: the main producers – Germany, the Netherlands and France – have significantly increased their production at the same time when global demand slowed. Result, prices fell.

These two episodes have a little destabilized an already fragile agricultural sector, because if the French cooperatives became heavyweight, most of the farmers who supply them have them, financial resources too limited to accommodate or hold out waiting for an upturn. To make matters worse, the consumption of meat of French back several years and low inflation has led to a price war between supermarkets and food sector that puts ultimately farmers a little more pressure. As if that were not enough, the bird flu is back in the Southwest. Result, nearly one farmer in ten is at the edge of bankruptcy.

What farmers want? Their demands are as numerous as the difficulties they face. There is first the demand for better regulation at European level to put an end to social dumping by certain countries. Hog farmers have got their side as their production is bought at better prices. But this artificial increase in prices did not keep more than two months

A message is however supported by the whole profession: it is necessary to revise downward social charges and standards – including environmental -. to make the most competitive French production. This claim was partly heard since the CICE and responsibility pact will allow farmers to save more than 4 billion euros in 2016. And Manuel Valls has just agreed a further reduction of social security contributions. But this reduction in expenses will not solve all French production will always be more expensive than those of emerging powers, as demonstrated by the defeat of the chicken industry and the fall of the empire Sweet. Resume the race for productivity began after 1945 therefore has limitations.

This is why part of the agricultural world offers another crisis, which involves a move upmarket and better utilization of French production. First, by allowing consumers to be better informed about what they consume, making it mandatory to label the origin of the meat. This is done for meat sold raw. It is however more complicated for prepared dishes: Despite the scandal of horse meat sold as beef, agribusiness refuse to play the game and believes that labeling is too complicated and expensive

the growing range of French production is another challenge but also an opportunity: the demand for better quality products is increasing but is not necessarily satisfied. Thus, France is not self-sufficient in terms of organic farming and imports about 25% of its consumption. The food industry nevertheless begins to move. Thus, the Fleury Michon Group aconclu late 2015 an agreement in April to source pigs without antibiotics or GMOs. Similarly, the Label Rouge products are increasingly present in the rays.

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& lt; p & gt; A demonstration of angry farmers, on January 27 in western France. Image for illustration. & Lt; / p & gt; © FRED TANNEAU / AFP

What are the answers to the farmers? The government is playing on several tables, with both emergency measures and negotiations to prepare for the future. But he has not yet convinced, as shown by the new mobilization of farmers since early February. The announcement of a reduction in charges, however, could change that.

To manage the emergency, the government first proposed financial assistance to farmers who borrowed to postpone their repayments a year. This measure saves time but does not solve the structural problems of the sector. European aid to the storage currently enjoyed by milk producers to reduce supply and prevent further decline in prices, is of the same ilk.

The upmarket French agriculture on the model of the wine industry, will take more time and the government has limited leverage since it is primarily the food industry and consumers who have hands on this. That is why the state is campaigning to improve consumer information and paradigm change where he hand: local communities are especially encouraged to source more local products, seasons and from the organic sector.

The last two projects are rather more difficult. There is first the distribution of added value: farmers, yet at the beginning of the chain, say they earn much less money than the other players in the sector. Several roundtables with intermediaries, industrial and retail have been organized but they quickly turned dialogue of the deaf. And the state can not impose its views on the entire sector. The other site is even more complicated: reinstate minimum regulation at European level to end the distortions of competition. Discussions have already started but will take time and their outcome is uncertain.


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