French president Nicholas Sarkozy has unveiled a €1.65bn rescue package to help French farmers cope with lower commodity prices and shore up his support among rural voters. It forms part of a broader thrust to reaffirm French 'national identity' and also to deflect criticisms over local tax reforms and allegations of nepotism in relation to the promotion of his son's career. Mr Sarkozy is facing difficult regional elections next year and needs the support of rural voters.
In a speech in the Jura, the president claimed that 'The word "soil" has a special meaning in French and I was elected to defend French national identity'. The package of subsidies is made of €1bn in subsidised loans and €650 in cuts to land and energy taxes and social charges (which have particularly hit fruit and vegetable producers weighed down by high social charges on seasonal labour).
Mr Sarkozy insisted that the plan, with its focus on tax cuts, would not contravene EU rules on state aid. He attacked the Commission for dragging its feet on proposals to help dairy farmers. French dairy farms are on average smaller than their competitors in other large member states.
The package signals a tougher stance by Paris as the EU prepares for the debate on scaling back CAP subsidies. Mr Sarkozy said that he wanted tighter regulation of the milk market from next year.
Mr Sarkozy has described a complete U turn from the first speech he made to farmers as president in 2007 when he told his audience they had to learn to make a living from market prices rather than subsidies. But now he needs to consolidate his traditional centre-right base and he has reverted to a more typical French stance.