Big business takes over French farming

 

A recent article published in Le Monde Diplomatique highlights the growing acquisitions of French farm lands by big companies, both foreign and French [1]. They want complete control of their production chains, not just the retail link, as numbers of small farmers are fast depleting. This is happening not only in developing countries but also in developed European countries like France. Here’s a summary of this article.

Chinese firm Reward Group buys 1700 hectares

In April 2016 Reward Group, a Beijing-based conglomerate acquired 1,700 hectares of wheat fields in the French Indre and Allier departments. This land purchase was over 20 times bigger than the average farm holding in France. The wheat from this land was destined to make flour for the Chinese bakery chain Chez Blandine. Although the Reward Group became insolvent in 2019, the farms are still operated by Ressources Investment, a French subsidiary that escaped bankruptcy proceedings.

Italian group Euricom buys 1300 hectares in Camargue

Euricom, a major European group in rice acquisition and transformation, possess 1300 hectares of land in Camargue, a famous rice producing region of France.

Aqualande, biggest pisciculture firm in France

The French enterprise Labeyrie Fine Foods is the number one producer of foie gras, smoked salmon, trut fish and seafood in France. Its subsidiary, Aqualande, now possesses 37 pisciculture holdings, spread over 10 departments and thus becoming the biggest player of this sector in the country.  

Why is big business massively buying arable land in France?

In France, the investments made by both regional and national companies in the farm sector far outweigh those made by their international counterparts. There are 3 major advantages for the big companies in holding agriculture lands.

1) Companies can ensure procurement of the farm produce on their own, without depending on other farmers.

2) The control over the primary products offers more flexibility to respond to the fluctuating demands of the consumer.

3) Production on its own allows the companies to bypass costly intermediates such as farmers, cooperatives and middlemen.

Further, the new farm lands operate on a corporate model. The farm laborers are now directed by white collar agro managers. For instance, in case of the rice fields owned by Euricom in Camargue, the decisions like planning of the cultures, material, shift timings, etc., come from the company’s headquarter, situated in Lambardie region of Italy, around 500 kms from Camargue. 

European Union Common Agriculture Policy - CAP (« Politique Agriculture Commune – PAC ») subsidy

One of the major goals of the big companies is to reduce their production cost. This also involves availing massive subsidies offered by the European Union under the Common Agriculture Policy (CAP). For instance, in the year 2020 Euricom received 680000 Euros as CAP aid when the average amount received per farmland in France is around 30000 Euros [2]. The European CAP policy does not limit the land holdings: the more hectares on possess the more aid s/he receives.

Why is agriculture sector in France vulnerable?

The French agriculture sector is going through a crisis since last many years now. Many debt ridden farmers are often obliged to work for more than 60h per week for a paltry sum. One out of four farmers is aged above 60 years. If all the eligible farmers are to take their retirement in next 3 years, there will be 160000 farm holdings that will need a successor. Given this context, it is not surprising that the big business is making huge investment in the agriculture sector.

SAFER

In France, to buy agricultural land, applicants must obtain the approval of the local “Société d'Aménagement Foncier et d'Etablissement Rural” (SAFER – Land development and Rural management society). These non-profit public sector companies – there is one per department – ​​carry out a mission of public interest, that of redistributing agricultural land in favor of farmers. However, it is turning out to be an increasingly misguided mission [3]. This drift is explained by the drastic drop in their funding. When they were created in the 1960s the SAFERs were 80% financed by public funds. Since 2017 this proportion has dropped to 2%. Today, most of their revenue comes from the transactions they carry out. They are thus encouraged to increase their sales to maintain their finances in good health.

A new but an insufficient law

Pressed by the Court of Auditors, the French Parliament finally adopted on December 13, 2021 the law on "Emergency measures to ensure the regulation of access to agricultural land through corporate structures". But this law authorizes many derogations, which make it partly ineffective. In particular, the SAFERs will have to assess the "territorial development" with regard to "the jobs created and the economic, social and environmental performance".

Today, the European Commission has already authorized significant measures, such as the right of pre-emption in favor of farmers, a cap on the size of land holdings or provisions against speculation. However, it still lacks the will to act against large companies and a broader awareness.

 

[1] https://www.monde-diplomatique.fr/2022/02/LECLAIR/64330

[2] Source : Telepac, ministère de l’agriculture,

https://www.telepac.agriculture.gouv.fr/telepac/auth/accueil.action 

[3] https://www.monde-diplomatique.fr/2019/07/LECLAIR/60033