Stephen Cadogan: Farmers’ problems strike at the heart of Europe

France is at the heart of the EU, and you have to monitor the pulse of French farmers to keep European agriculture healthy.
Stephen Cadogan: Farmers’ problems strike at the heart of Europe

The announcement of an extraordinary EU agriculture council meeting has come hot on the heels of French farmers blockading roads from Germany and Spain to stop foreign meat, vegetables and dairy produce.

With the French government estimating that about 22,000 of their farmers are on the verge of bankruptcy, farmers across Europe can hope the EU will respond with some relief from reduced prices.

When it took over the EU presidency a month ago, the Luxembourg government pledged to make sustainability the fundamental principle for development of European agriculture, and to focus on a response to the Russian embargo on EU agricultural products, as well as on simplifying rules and procedures for farmers.

With the FWA, the farmers’ union in southern Belgium, describing the dairy, beef and pig situation in the EU as “catastrophic”, it is clear that hard times are striking at the heart of Europe — and hurting enough to bring back Ministers back early to EU work (nearly on the anniversary of the September 2014 extraordinary council meeting where they approved about €160m of aid for food sectors hit by the Russian import ban).

At the extraordinary agriculture council meeting on Monday, September 7, in Brussels, agriculture commissioner Phil Hogan will come under intense pressure, probably led by France, to bring in new aid measures, particularly for the dairy and pig sectors.

He has opposed increasing intervention prices to help dairy farmers, warning that it “would give the wrong signal” to the industry, in the new situation where production quotas no longer exist.

But Lithuania, Poland, and Belgium have now become the first member states to request placement of dairy produce into EU intervention storage — even though intervention payment terms dictate that they won’t get paid for 120 days.

With Irish milk prices towards the bottom of the EU price league, good news from the September 7 meeting would be welcomed here — perhaps in the form of increasing the intervention price and the volumes eligible.

Commissioner Hogan had also rejected calls for re-opening of private storage aid for pigmeat, saying the market must find its own balance. But measures to help pig farmers will be near the top of the agenda in September, and beleagured Irish pig farmers will be among those looking for some relief from long periods of unprofitable or break-even production.

Even beef prices will be on the agenda in Brussels, because cattle farmers across the EU are well down the price league from Ireland, which is benefitting from huge sales into the premium priced UK market. R3 heifer prices in late June varied from 475c/kg in the UK to 427c in Ireland, and 407c in France, but were well under 400c in EU agriculture powerhouse member states like Germany.

In September, French agriculture minister Stéphane Le Foll will lead the push for an increase in milk market intervention prices.

For him, it’s not just a matter of EU budgets and euros and cent, because polls in recent months have shown that more and more struggling French farmers may switch allegiance from the conservative parties they usually vote for, to the far-right Front National party.

The depth of French farmer frustration has become clear after the government announced a €600m emergency package in tax relief and loan guarantees (under EU rules, Paris cannot give direct financial aid) — but it wasn’t enough for farmers, who resumed their protests, dumping manure in cities, blockading roads and limiting access to tourist destinations.

French President François Hollande urged French consumers to buy domestic produce. That would hurt Irish exporters — one more reason, if needed, for Commissioner Hogan to come to the rescue of EU farmers.

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