Today's Date:

May 2001

From the nineteenth century on, French agriculture enjoyed strong protection at the nation's borders, but since the 1960s its development has been to a very large extent shaped by the Common Agricultural Policy (CAP), the most comprehensive and integrated European policy.

Within this framework, farming in France has evolved along very similar lines to farming in other countries of the EU, particularly its oldest members. Nevertheless, certain of its features resulting from some natural attributes are more particularly specific to France: firstly, the sheer amount of land available for farming giving it the largest agricultural sector in Europe, and which has made France a net exporter of agrifoodstuffs since the end of the 1960s. Secondly, thanks to the diversity of her soils and climates, France can produce large quantities of almost every type of production characteristic of the European area, from those of mixed livestock farming to those of the Mediterranean regions. And, thirdly, the overseas departments and territories supply large quantities of tropical products (sugar cane, bananas, fruit and flowers).

Present situation: background and key figures

The total agricultural area of metropolitan France is around 33 million hectares, i.e. 60% of the country, the remainder being divided between forest (15 million hectares) and non-agricultural land (7 million). This agricultural area has been slowly decreasing for many years, to the benefit of the other two uses. Some of this land is uncultivated: after some major clearance and drainage operations and return of land to cultivation which went on until the 1970s, the uncultivated area is now stable at about 3 million hectares. Utilized agricultural area (UAA) is therefore about 30 million hectares, i.e. 0.5 hectare per head of population, and about 23% of the total agricultural area of the fifteen EU States.

The greater part of this area (over 61%, compared with 55% in 1950) is arable land: the area still under grass is a little less than 35% of the total, against 38% in 1950; vineyards and orchards now account for only about 4% of it, or just over one million hectares, compared with 2 million in 1950, following moves to concentrate fruit-growing in highly-specialized farms and the grubbing-up of some of the vineyards producing ordinary wine, especially since 1980.

The areas planted to cereals (around 9 million hectares) and sugar beet (about 450,000 hectares) have been fairly stable for 40 years. The areas under oil seeds and protein crops have greatly increased, up from 250,000 hectares in 1960 to over 2.7 million today. The total area under arable crops has increased by more than 2.3 million hectares. By contrast, the area devoted to animal feed (areas still under grass and fodder crops) has been much reduced, falling in 40 years from 20 to 14.6 million hectares and accounting both for most of the decline in the total agricultural area and the expansion of arable crops. But this trend has not been uniform. There have been some highly complex moves towards regional specialization, with some regions turning their permanent grasslands into arable land, and others replacing their crops or some of their grassland with intensive fodder crops, particularly maize.

Farms

Their number has been in constant decline, at a rate fluctuating between 3% and over 5% per year, essentially depending on the number of the oldest farmers retiring, with that number itself influenced by European and national farm closure schemes (severance grants, early retirements, retirement at age 60). In 1997 there were about 680,000 agricultural holdings (compared with 1.6 million in 1970), 424,000 of them farmed full time.

Their average size is therefore now close to 42 hectares, i.e. more than twice the average for the fifteen EU countries. Of course this average covers some very different situations: about 70,000 farms, 11% of the total, are larger than 100 hectares and account for 43% of the total area. Conversely, 244,000 farms of under 10 hectares (many of them part time) account for only 3%.

Employment on these holdings is directly related to their size, and more specifically to the area available per worker. The bulk of French holdings used to be devoted to mixed cropping and stock farming, but the number of these has gradually declined, giving way to more specialized farms. While the largest can employ and pay their workforce by devoting themselves almost exclusively to arable crops, most medium-sized farms still concentrate on stock farming, particularly dairy farming and the intensive production of beef meat in fattening plants. The smallest farms specialize in products with a high gross yield per hectare: viticulture, market gardening, specialized animal production (pork or poultry).

Farmers and farm workers

The number of people employed in agriculture has declined with that of holdings, only faster. Fewer family members, other than the farmer and his wife, now work on the farm (there were only 24,000 in 1997). There has also been a sharp decline in the number of permanent farm workers, although this is partly offset by the use of casual labour. Finally, fewer and fewer farmers' wives now work on the farm: 55% of them in 1997, as against three quarters in 1979. All in all, in 1997, agricultural holdings provided employment for 1,260,000 family members, 473,00 of them full time, and 140,000 permanent farm workers. This workforce accounts for about 4% of the total working population (compared with 8% twenty years ago), a level very close to the European average, to which should be added employment in the food-processing industry, itself fairly stable at around 2.7% of the total working population.

Agricultural production

The total value of agricultural production is now running at about EUR 63 billion, 23% of total EU production, a percentage close to France's share of the EU's geographical area. Agriculture now accounts for about 2.3% of value added to the gross domestic product, equivalent to that of the food processing industry.

The steady decline of this percentage has been due, during periods of strong economic growth, to an increase in production markedly below the general growth rate, while farm-gate prices kept pace with average GDP prices. On the other hand, for the past twenty years the growth in the volume of agricultural production has been close to general growth. The continuing decline of its share of GDP is mainly attributable to the steady deterioration in agricultural prices relative to prices in general with the saturation of the European single market and changes to the CAP.

Agricultural production is not uniformly distributed across the national territory. The regions of the north and west contain most of the farmland, the largest farms and the bulk of production, and are consequently now encountering the same problems of environmental management as other regions of northern Europe. Conversely, the south/south-eastern half of the country contains most of the mountain areas and less-favoured areas, and thus suffers from low agricultural incomes and population density.

National production very largely satisfies France's domestic demand for the principal products, with the main exceptions being certain oil seeds and oil cake for animal feed, some fruits and vegetables, certain meats (particularly sheep meat), various tropical products and fishery products.

Foreign trade

France's foreign trade balance in agrifoodstuffs, was positive for the first time in 1969, and since then the surplus has substantially increased. It now regularly tops EUR 9 billion. Today it accounts for only part of the trade surplus, but its contribution has often been decisive in the past, notably at a time when the trade balance played an essential role in the management of exchange rates.

This positive balance results from far larger trade flows: over EUR 35 billion of exports and about EUR 26 billion of imports. France has thus become the world's second-largest exporter of agrifoodstuffs. The bulk of this trade is within the EU: about 70% of agrifoodstuff exports and imports, accounting for 75% of the trade balance in these products.

In order of decreasing importance, the main items in surplus are: wines and beverages, which, after strong and steady growth in exports, since 1970 alone account for over 90% of the total trade surplus; cereals, where the surplus peaked in 1985 and now fluctuates at around EUR 4 billion and, finally, dairy products, live animals, sugar and sugar-based products.

The main items in deficit are fishery and aquaculture products, tobacco (with the increasing use of mild tobaccos), fruit and fruit-based preparations, exotic products (coffee, tea, spices, cocoa).

Changes in French agriculture

The present situation of French agriculture results from a prolonged period of change, which is certainly not over, even though it is continuing under different conditions.

Despite the country's large areas of farmland, French agriculture was unable, before the 1930s and a fortiori in 1945, to cover the entirety of the nation's food needs. The particular circumstances of France's economic development had made it a "special case", with productivity lagging well behind that of other countries. From 1945 onwards this situation began to change radically. Faced with the double necessity of rapidly resolving the problems of feeding the nation and limiting the proportion of the workforce engaged in agriculture in order to meet the needs of reconstruction and industrial development, the government made great efforts to develop production and productivity: agricultural machinery and fertilizers were among the priority sectors in the first modernization plan. These efforts soon produced results, to the point where imbalances appeared from the mid-1950s in certain markets where production was growing faster than domestic demand (milk and beef), leading to the creation of the first national intervention bodies.

Creation of the European agricultural market

In this context, the opening-up of the common agricultural market seemed to farmers to be both an opportunity and a danger. An opportunity, because the market of the first six member countries was still clearly short of the principal products; but a danger too, because the productivity of French agriculture lagged behind that of other States, at least in livestock production and certain intensive crops. It was against this background that young farmers prevailed upon the government, in the early 1960s, to institute a "structural" policy designed to promote the growth and modernization of farms, by encouraging the retirement of elderly farmers and managing the distribution of the farmland which thus became vacant. The guidelines and instruments of this policy were largely incorporated, from 1972 onwards, in the "socio-structural" policy of the European Economic Community (EEC).

In fact the fears turned out to be excessive. Europe's other founder members, faced with the same problems as France, had adopted similar policies. So the Common Agricultural Policy (CAP) was an extension of the main lines of those policies. The protection of the domestic market and the market intervention mechanisms made it possible to continue regulating agricultural prices, thereby giving a powerful stimulus to investment in farms and the productivity of labour, land and animals, boosted still further by the fact that, on the whole, common prices have been set at the highest levels already existing in member States, leading for example to a marked rise in the price of cereals in France.

So the creation of a common market in agriculture has not led to strong competition between member countries, but rather to a general expansion, initially in the domestic market, then in international markets.

Against this background, the necessary restructuring of agriculture has taken place without too many problems. The very rapid growth of labour productivity (over 8% a year), has occurred without major social difficulty, since the reduction in the number of farms was almost entirely due to the retirement of older farmers and the fact that in some cases agricultural production ceased on their former properties. The stability of the relative producer prices meant that people employed in agriculture reaped the benefits of their productivity gains: farm incomes rose in line with average wages in the rest of the economy.

Sectoral crises and CAP reforms

This favourable situation has gradually changed since the 1980s under the impact of the saturation of the European market and successive adaptations of the CAP imposed by the budgetary and international consequences of this saturation. Agricultural incomes fell significantly because of the decline in farm-gate prices, and the successive crises which have periodically affected the intensive production and livestock sectors have revealed the growing financial vulnerability of many farms. Bankruptcies, which used to be almost unknown, have become more and more frequent.

While the latest CAP reforms have helped to stop the slide in average incomes by replacing some price supports with fixed aid, they have not provided a long-term solution to the quest for the right general economic framework for agricultural activity.

The CAP now faces the pressure of globalization, through the EU's involvement in various multilateral or bilateral negotiations; it must also deal with the new concerns of consumers, who have long forgotten the difficulties that can result from breakdowns in supply or sharp fluctuations in food prices and are worried about the quality of the products on offer; finally, the CAP must correct the imbalances and the environmental damage inherited from earlier modes of agricultural development.

Whatever approaches are finally adopted, French agriculture will always enjoy the advantages conferred by the large amount of available land, its natural conditions, and the diversity and quality of its products. But how these advantages are turned to account in practice will largely depend on the policy adopted for supporting agriculture.

The CAP is being progressively adjusted to pay greater heed to concerns about product quality, environmental protection and the economic balance of rural areas, with the policies of product identification, the increased weight given to rural development policy, and finally the inclusion in the criteria for the allocation of aid payments of conditions aimed at putting a brake on intensification and paying more attention to the environment. These concerns are also being taken into account in national policies: France is currently developing, with its land use contracts (Contrats territoriaux d'exploitation - CTE), a new approach whereby some of the aid money will be redirected to activities tailored to the specific problems of different areas - in a contractual form designed to guarantee that the funding is accurately targeted and that its beneficiaries respect the objectives set.

Future of the CAP

However, there is great uncertainty as to how the CAP will in future address the essential issues to which it has tried to respond since its inception: the regulation of production and of productivity. The operation of the agricultural sector is complex, and slow to change. And spontaneously, i.e. in the absence of government intervention, its development consists in successive crises of overproduction and deficit, from which the CAP has so far happily protected Europe. It has admittedly indeed done this by setting prices at levels which have had to be adjusted since the 1980s, but the issue of regulation per se is still on the table, at no matter what level it operates. In any case, no sector can provide satisfactory rates of pay in the long term if average labour productivity in it falls too far behind the general trend. The increase in output per worker has thus far been largely based on increases in the productivity of soil and animals. This route is now problematical because of its various consequences (dangers to the environment, for example), which means that other methods will have to be explored for increasing the productivity of work in agriculture, or changing the way it is remunerated.