Wednesday, August 05, 2009

'Can't pay, won't pay' say French farmers

French farmers have been told that they have to pay back hundreds of millions of euros after the Commission ruled that the subsidies were paid out illegally. Moreover, the Commission doesn't just want the €330m back, it is also charging interest of up to €150m.

With Sarko disporting himself in the Mediterranean as he recovers from his recent fainting fit, Francois Lafitte, president of the fruit and vegetable producers' union Fédécom has warned of a 'fiery' summer if the government pushes ahead with plans to claw the money back in September.

According to Mr Lafitte, recovering the money for taxpayers would bankrupt farmers. He also claims that Brussels has got its sums wrong (which is possible). But the French state has admitted that the subsidies, paid over a ten year period, were illegal under European law.

Mr Lafitte claims that the subsidies were needed to see off competition from Spain and Portugal. They were producing more cheaply at a time when French producers had a surplus. No mention of the consumer here.

France has launched an appeal at the European Court of Justice, but thinks that the process of repayment should start even before a decision is taken, otherwise they could end up paying even more. They don't sound very confident about their case.

The subsidies have to be paid back by January 2010, but new farm minister Bruno Le Maire has said that he would 'do nothing to compromise the future of the industry' which is being hit by current low prices.

He didn't explain how he would square this particular circle other than to say 'I will be very careful that the situation of each farmer will be analysed on a case-to-case basis in order not to penalise the most fragile.'

1. Decisions will be subject to political pressures as I don't want to blot my copybook.
2. The most efficient will be hit hardest.

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