Sarkozy unveils massive aid package for French farmers

28.10.09 @ 09:29

  1. By Leigh Phillips

French President Nicholas Sarkozy has pledged a €1.65 billion aid package for his country's already heavily subsidised farmers who have nevertheless been bludgeoned by falling prices in the sector.

  • The French state aid decision comes after agricultural protests over the summer (Photo: European Milk Board)

"I will not let French agriculture be swept away by the crisis," the French leader said during a visit to the town of Poligny in the Jura department in the east of the country, a region celebrated for its cheese-making.

He noted that the prices farmers can charge for their products had dropped 20 percent in the last year, while retail prices in supermarkets had eased only one percent, calling this situation "unacceptable."

"This gap is putting our food production in danger," he said.

Mr Sarkozy announced a support plan for the struggling farmers of €650 million in government aid and another €1 billion in low-interest loans.

Farmers will enjoy interest rates of 1.5 percent, while young farmers will be charged 1.0 percent.

In the same speech, the president demanded that Europe increase regulation on agricultural commodities.

Blaming above all "a lack of European and global regulation" for the farming crisis, Mr Sarkozy said the European Commission should propose new rules preventing speculation on farm products.

"In the area of agricultural commodities markets, Europe should put in place proper regulation," he said, reports Agence France Presse.

Mr Sarkozy also said he would make farm labour costs cheaper by lifting all social contributions from seasonal workers.

The announcement could incur the wrath of European competition monitors, however.

The French farming sector is already the biggest recipient of Europe's agricultural subsidy largesse and the new announcement comes only a week after the European Commission proposed a special milk fund worth €280 million for EU dairy farmers.

The bloc has seen repeated protests from the dairy farmers in recent months over the fall in milk prices.

Reacting to the Poligny aid announcement, the European Commission said it would make a ruling on whether the plan breaches competition rules once it had looked at the details of the package.

Farmers for their part gave the move a lukewarm welcome.

Jean-Michel Lemetayer, president of the FNSEA, the largest farming union, said that what was really needed was government regulation of retail food prices.

"This plan is going in the right direction, but as important as it is, it will never replace a pricing policy to ensure a good income for our farmers."

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