French farm income falls by 10 percent in 2005

15th December 2005, Comments 0 comments

PARIS, Dec 15 (AFP) - The income of French farmers has fallen by 10 percent in 2005, a study by the French agriculture ministry showed on Thursday just as France is under pressure on several fronts to agree to cuts in agricultural subsidies.

PARIS, Dec 15 (AFP) - The income of French farmers has fallen by 10 percent in 2005, a study by the French agriculture ministry showed on Thursday just as France is under pressure on several fronts to agree to cuts in agricultural subsidies.

The sharp fall in earnings for France's farmers was most acutely felt in wine-producing regions where the income of wine makers has fallen by 36-37 percent this year.

The preliminary findings of the study were released as France was under fire from Britain to agree reforms of the EU's Common Agriculture Policy (CAP), a system of financial support for European farmers.

The issue of subsidies for agriculture is also at the centre of a World Trade Organisation ministerial meeting in Hong Kong where developing nations are urging rich countries to increase proposals to reduce farm subsidies and protective tariffs.

The study from the agriculture ministry showed that the decline in the earnings of French farmers had accelerated this year after a fall of 0.8 percent in 2003 and of 1.6 percent in 2004.

The decline this year was the result of a fall in volume and prices at a time of increasing costs related to the surge in the price of oil, the ministry said.

However, excluding incomes for wine producers, the decline in income was 3 percent for the sector as a whole, the study noted.

France is a leading defender of farm support in the EU. In France, the farm sector represents a powerful political force and periodically farmers and wine-makers protest about high costs, competition from imports and low prices paid by supermarkets.

The farm lobby is also hostile to changes in the CAP which might weaken farm support and therefore incomes. Britain, which holds the EU's rotating presidency, is arguing for reform of the CAP as a counter argument to demands from other EU members that it should give up a rebate it receives on its contributions to the EU budget.

The rebate was obtained in 1984 by the then British prime minister Margaret Thatcher, under a review allowed for when Britain joined the European Economic Community, to compensate for low payments to Britain under the CAP.

French wine producers, after enjoying a sharp rise in income last year, have been hit in 2005 by falling demand at home and growing competition on export and home markets from Australia, Chile and California.

France's biggest farming trade union, FNSEA, said that the French farming sector had shed 15,000 full-time jobs this year, about 2.5 percent of the number of people employed in the industry.

"Farming is in danger," the union said in a statement, adding that income had fallen for France's farmers for the fourth year running.

European leaders were meeting in Brussels on Thursday for the first day of a two-day summit aiming to agree a new budget for the 25-nation bloc for 2007-2013.

Copyright AFP

Subject: French news

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