France becomes net importer of agriculture products

France has become a net importer of agricultural products for the first time in almost a decade, prompting warnings that the competitiveness of Europe’s largest farming country is deteriorating.

The trade balance for raw products, including grain, meat, dairy and fruit and vegetables, declined for the third year in a row to reach a narrow deficit of €300mn in 2025, according to French customs data released on Friday.

Results were dragged down by higher prices of some imports like cacao and coffee, as well as a weak dollar. Exports of wheat, usually a leading category for France, also suffered from a bad harvest in 2024 which affected the 2025 figures. Imports of agricultural products rose 9 per cent to €19.7bn, a sixth consecutive annual increase and a new historical high.

 Dorian Roucher, senior economist at Insee, told the Financial Times that beyond the temporary factors, which will probably improve next year, the data pointed to more worrying structural weaknesses in the sector. “France has lost much of the comparative advantage it once had in agriculture,” Roucher said, adding that the reasons included farms shutting down when their owners retired, scaling back of cattle herds and neighbouring countries improving their product quality. 

For decades, France had come to rely on agrifood being surplus items in its foreign trade balance, acting as economic pillars on a par with aerospace or luxury goods. But Roucher said that could no longer be taken for granted, despite demand for food growing globally.

The trade balance was better for the broader category of agriculture and food products, which includes high-margin wine and spirits where France is a powerhouse. But even in this category, France last year eked out only a small trade surplus of €200mn, its lowest in 25 years and down €5bn year on year.  

To blame were trade tensions with the US that flared when President Donald Trump initially threatened up to 200 per cent tariffs on French alcoholic drinks, including Champagne and cognac. In the last quarter, wine and spirits exports roughly halved.

The data comes as French farmers have been protesting for months over threats to their wages, driving their tractors to Paris and pelting town halls with manure. They warn of being squeezed between higher input prices — fuel, fertiliser, energy — and retail prices that fail to cover their costs.

Farming unions also complain that stifling administrative and environmental regulations are handicapping them on world markets, making it impossible to compete with imports produced under looser standards.

Their anger has crystallised around the Mercosur trade deal between the European Union and Brazil, Argentina, Uruguay and Paraguay, which the bloc clinched recently after years of wrangling. Yannick Fialip, head of agriculture lobbying group CNPA, told the Pink ‘Un that the worsening of the trade balance for farm products should be a wake-up call to spur the industry and government to action. “More than merely confirming the slow decline of France’s agricultural and agrifood trade balance, this [data] seals the country’s downgrading among the world’s major exporting powers. It is a shock of unprecedented scale that calls for a general mobilisation,” he said.

EU green thrust irks farmers

No surprise perhaps to seem them on the streets, but French farmers have begun blocking motorways and targeting government buildings to express anger over rising costs and what they call suffocating red tape at both a national and EU level.

 “To attain our objectives, violence is not the answer, but some farmers have simply had enough,” said Arnaud Rousseau, head of the country’s biggest farmers’ union, FNSEA, on France Inter radio on Monday. He promised further demonstrations until farmers’ concerns were addressed. 

The government has said for months it would introduce legislation to help farmers but on Sunday pushed back the proposal for a few weeks, saying it wanted to improve it.  The movement in France, the biggest agricultural producer in the EU and a main recipient of the bloc’s Common Agricultural Policy subsidies, comes as similar protests have occurred in recent weeks in Germany, the Netherlands, Poland and Romania.  In the Netherlands, farmer discontent over fertiliser curbs helped boost an insurgent party..

Although farmers’ rage has sometimes been touched off by national measures such as a fuel tax subsidy cut in Germany, there is also a broad consensus against the EU’s “farm to fork” strategy that aims to reduce pesticide use and impose new rules to take climate change into account in farming practices. 

Macron takes on the farmers

No one should underestimate President Macron's determination to modernise France, but farmers are one of the most difficult groups to deal with. They may be only three per cent of the population, but they have considerable public sympathy. British farmers have resorted to direct action from time to time, but if they blockaded roads as often as the French do, public opinion would soon turn against them.

I am no expert on France, but it does seem to me that food is absolutely integral to the national culture. Apart from perhaps Italy, there is no country where I can eat so well so consistently at reasonable prices.

I also happened to be up in the mountains the year before last when transhumance was taking place and this gave me some idea of how important farming is culturally in France. Britain is a much more urbanised nation in outlook.

Emmanuel Macron endured jeers and whistles on his first visit as president to France’s largest agricultural fair amid growing tension between his government and the country’s farmers, although earlier in the week 700 farmers have been invited to the Elysée Palace in a charm offensive. Mr Macron was confronted by hostile crowds on Saturday as he toured the showground in southern Paris, underlining the difficulties he faces in winning over France’s powerful agricultural lobby, which has been angered by EU trade talks and Chinese land purchases. Last year the acquisition of 900 hectares of farmland in Allier and 1,700 hectares in Indre by Chinese investors caused alarm.

In a tense exchange with a farmer over a weed-killer which the government has said it will ban, a visibly angry Mr Macron said he would find solutions for farmers who were unable to replace glyphosate, which is claimed to be carcinogenic. The Salon de l’Agriculture traditionally brings France’s political class into close, and often confrontational, contact with the country’s farmers. Last year, Mr Macron was hit by an egg when he visited as presidential candidate.

Macron wants farmers to move away from an over reliance on EU subsidies and to move towards less intensive production methods.

He has said that he will curb the forces of globalisation represented by Chinese land purchases. But he recognises that the EU will not have as much money for farm subsidies when Britain leaves, reducing net income by about eight per cent or some €15bn. (Sometimes I wonder if it might have been in the EU's interest to offer Dave Cameron a little more).

CAP is being eyed by Mr Macron as a French 'taboo' that needs to be revamped. 'We have come to this paradoxical situation in which the CAP has become a French taboo while our farmers continue to criticise the way it works', Mr Macron said in a speech at the Sorbonne last September.

Macron is prepared to pump in €5bn to help farmers to switch to environmentally friendly methods, find successors for their land and bring on a new generation of agricultural entrepreneurs. He wants 22 per cent of farmland to be managed organically by 2022, compared with 6.5 per cent today (ambitious in my view). He is also going to fund much needed early retirements. What he didn't seem to have much to say about were the efficient, competitive grain farmers in the Paris Basin.

As someone who has been wary of France and the French, my attitude is I admit paradoxical. I don't like their arrogance and elitism, but I would also admit their étatisme has brought some remarkable achievements. In a way I think they are most effective when they are assertive, which is why I like Macron and wish him well. But he has a tough task with the farmers.

More regulation urged in French presidential election

One would not expect candidates in the French presidential election to advocate less spending on the CAP or looser regulation, but there are significant differences of emphasis.

President Sarkozy said that he would focus his efforts if re-elected on improving the competitiveness of French farmers. 'Farmers are entrepreneurs, they want to live from work, not from direct aid.' he said.

One might question how far the CAP in its current form encourages them to be enterprising. However, Sarko was clear that France 'would fight against all attempts to reduce the CAP budget.'

Francois Hollande said that basing aid on farm size was unfair to specialist producers who had holdings of only a few hectares. Aid should take employment on farms into account. Needless to say, some French producers would benefit.

He also said that there should be more regulation of supply, saying that there too few policy instruments and specifically regretting the phasing out of milk quotas as a regulatory tool.

Many commentators, of course, favoured getting rid of the rigidities which this system introduced and which did nothing to boost the international competitiveness of the EU's dairy sector. But then that is clearly not a concern for Hollande.

The French perspective: the new French food law

Recently I had the opportunity to talk to some French agriculture and food policy advisers. This was very informative in the sense of understanding where we differ. The French stance on these matters is a product of their own values which in turn reflect their historical development. One has to understand their stance, even if one does not agree with it.

One topic was the new French law on the 'modernisation' of agriculture which I understand has reached the Senate. I think our understanding of modernisation is somewhat different from the French one. There appear to be three broad objectives: creating a public policy for food; stabilising and re-regulating the agricultural market; and ensuring food security.

Apparently, there is a view in France that there is need to combat new food behaviours. From an English perspective, I would say that this was no concern of the Government, but again this reflects the difference between a liberal and an étatiste tradition.

France was once the country of the one hour lunch: indeed it was not unknown for some lunches to extend more than hour and be washed down with more than a glass of 'vin ordinaire'. However, the view is that France has moved away from having a fixed eating time and young people are turning to fast food. This is thought to be not good for public health, but above all it is believed that restoring traditional behaviour would open the market for agricultural products.

France would also like to strengthen corporatist associations of producers, but admits this would require competition law changes at EU level. A somewhat more sensible idea is to seek longer-term contracts between farmers and the hypermarkets.

However, some of the goals sound a little strange to English ears. Preserving the food heritage is one. Now, whilst I do not share the English middle class love affair with France, I would admit there is something special about a Parisian café. But does this require government intervention?

The policy also seeks to rely on educated citizens, that is educated about food and that objective would certainly resonate with many in England. However, the notion of keeping competitive enterprises on all parts of the territory is a less comfortable one, even if one admits that many parts of France are thinly populated and at risk of depopulation. (Whether depopulation is necessarily a bad thing is itself an interesting question).

A British participant in our discussions argued that the structure of dirigisme facilitated collusion and was essentially anti-competitive. Were the objectives coherent and did they try to cut across the expressed preferences of the French people? The attempt to stabilise might be an attempt to immoblise.

Not surprisingly, this was seen as a rather polemical point on the French side. They explained, that their policy was not economically rational, but was a [normative] choice. The production of food had a very strong public good component and belonged to public policy. However, it was admitted that French consumers had a very limited role in food policy formation.

More from our discussions at a later date.

Sarko accepts budget cuts

President Sarkozy has accepted the reality of CAP budget cuts, provided they are offset by greater import protection for farmers: Sarko

Farmers do not lack protection as it is with many tariffs in the three figure range. Sarko says that imported products should be produced to the same standard as in the EU which sounds reasonable enough but in fact is a way of excluding developing country exports altogether.

The French agenda

An interesting article in the Financial Times which looks at some short-run political maneouvring in France, reviews French proposals to tackle price volatilty and suggests that, as CAP money is transferred to new member states, the policy may become a drain on the French exchequer, possibly leading to a long-run shift in the French stance: France

Sarko: the answer lies in the soil

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.

'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.'

Translation:
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.

Franco German alliance revived

France and Germany are seeking to revive the Franco-German alliance on CAP reform, seeking to agree a mutual deal which they can then impose on others. This may, however, not be so easy in a 27 member state EU. France and Germany may, however, be able to exploit the existence of a lame duck administration in Britain, the main champion of liberal solutions, combined with a likely change of government next year.

Paris and Berlin haveannounced the creation of a Franco-German working group to frame reform of the EU's Common Agricultural Policy (CAP) after 2013. The working group was established on 2 July, a day before newly-appointed French Farm Minister Bruno Le Maire met with European Commission President José Manuel Barroso to explain France's stance on the future reform.

Le Maire said Barroso had shared his views on the 'strategic importance' of agriculture to the EU and on guaranteeing European food security.' It is absolutely necessary to regulate production,' Le Maire told the press after the meeting, insisting that the agricultural sector is far too strategic to be left to market forces alone.

'More regulation' will be France's guiding line in negotiations on farm reform, he added. But regulation does not necessarily mean quotas, he added, a reference to ongoing protests over milk prices.

'Our main political objective must be to guarantee stable and decent revenue for farmers,' he went on, noting that French farmers had lost 20 pet cent of their income since 2008. Such price volatility and decreases are 'not economically viable' and 'farmers cannot live with such instability,' he stressed. In other words, they must be funded by European taxpayers.

Franco-German cooperation on CAP reform will be very tight, Le Maire said, indicating that he would add a German official to his cabinet to prepare the work. Similarly, a French official will be sent to Berlin, he said.

The working group is open for others to join, he added, announcing a charm offensive tour of EU capitals that will start in London before going to Madrid, Rome, Bucharest and Warsaw. Paris and Berlin expect to table their first guiding principles for CAP reform 'in the coming months,' he added.

The appointment of Marie, formerly junior minister for European affairs, as farm minister in the 23 June reshuffle was itself significant. An ENArque, he has no clear agricultural experience or background. He is, however, a fluent German speaker and made numerous visits to Berlin in the first half of the year.

The debate on the post-2013 CAP

The debate on the future of the CAP after 2013 has now started following the informal Farm Council in the Czech Republic earlier this month. Those who want to influence the debate have about twelve months before the Commission publishes a Communication (effectively a White Paper) on future policy in the summer/early autumn of next year. Formal legislative proposals will then be published in the middle of 2011 together with the proposals for the financial perspectives from 2014 to 2019 or 2020.

At the Farm Council there was a surprisingly strong consensus on maintaining a strong 1st Pillar after 2013, principally in the form of Single Farm Payments (SFP). Britain sent a junior minister, Jane Kennedy, who has since resigned and she made a ritual reptition of the UK Government's position of wanting to phase out direct payments altogether. However, it is clear that this argument is going nowhere and that the French subsidisation discourse is back in the driving seat.

Justifications advanced for subsidy

What are the justifucations for continuing SFP? Are they an income support or are they there to support the provision of public goods? If the former, they are remarkably inefficient as most of the money goes to larger farmers. Commissioner Fischer Boel, however, made the argument that dairy farmers would be in even worse trouble without direct payments.

The Commission has estimated that 40 per cent of farms would disappear in some sectors if the CAP budget was stopped tomorrow - and farmer incomes would drop by more than two-thirds, from levels already below the EU average. No serious analyst is recommending withdrawing the budget overnight. We would rather not be here, but we do not start with a blank sheet of paper. However, objectives need to be clearly stated and prioritised and there needs to be a measureable link between objectives and policy instruments. In other words, no blanket subsidies that do not lead to demonstrable outcomes.

It is argued that the ovearching objective is to maintain farming across the EU, i.e., to avoid rural exodus and abandonment of the land. Leaving the land unfarmed would certainly have negative biodiversity impacts and also impair landscapes, affecting rural tourism. However, there needs to be more emphasis on the overall vigour of the rural economy, reducing its dependence on farming and ensuring that infrastructure such as broadband is in place everywhere.

A widely used argument at the Council was that the higher environmental, food safety, food quality, traceability, animal health and welfare standards that EU producers face in relation to non-EU producers cannot be rewarded by the market and therefore justify subsidies. There is certainly a case here, but the monitoring and enforcement of cross-compliace needs to be substantially improved if these subsidies are to be justified.

The food security argument was also raised and the difficulty with this is that it can become a portmanteau argument for 'business as usual', rather than taking a careful look at what might be required, for example, in terms of climate change adaptation.

Abandoning old forms of calculation

There was broad agreement that the historical reference base must be abandoned to legitimise payments after 2013. The adoption of a regional flat rate payment for all member states seems likely, although Finland is pressing for a differentiation between different types of farms, e.g., arable and livestock. Decoupling is also important, but Finland has argued in favour of coupling in sensitive regions where farming might otherwise stop.

Some are nore equal than others

Retiring European Parliament Agriculture Committee chaurman Neil Parish paraphased Orwell by stating that while all Member States are equal, some are more equal than others. New member states receive less than €200 per hectare in SFP compared with an EU average figure of just over €300. Greece receives more than €500 per hectare and Latvia barely €100.

However, French Minister Michel Barnier made it clear that 'equity was not the same as equality', arguing that a wide range of other criteria should be considered. Commissioner Fischer Boel made it clear that she thought that a flat rate payment across the EU was unrealistic.

Commissioner Fischer Boel has reserved her position about serving a second term as Farm Commissioner, but acknowledged that she would have to come to a decision in the near future.

Re-education for Commission officials

On a visit to China a few years ago I met an elderly professor who had been sent with his students to the countryside during the Maoist period for 're-education' by the peasants. He struck a deal with the local peasants that allowed them to work on their books two days a week.

Now farm commissioner Mariann Fischer Boel, a large-scale farmer with her husband in Denmark, has decided that Commission officials in DG Agri need re-education. She considers that they are too detached from farmers and don't understand their problems.

The so-called Harvest Experience programme means that all agriculture staff will be sent to stay on farms from 2010. One goal is to encourage Commission officials to use simpler language.

It will be interesting to see where the farmer hosts are found from. I suspect that many of them will be drawn from farmer organisations and will have an axe to grind.

Historically, DG VI as it once was had a reputation of being particularly close to farmers. Its head official was always drawn from France and was usually close to large-scale French grain interests. Many of the officials were French and those Brits who worked there were usually Francophiles. One compensation was that it was said to have the best canteen in the Commission.

The Kinnock reforms ended the French domination at top level. Mind you, a lot of nonsense still comes out of DG Agri. A British academic was telling me about a talk given to students by one of its officials. He claimed that the livelihood of one person in five in Europe depended on the CAP. He worked this out by adding up those working in farming, those in food processing and those in input industries.

It was pointed out to him that it would be possible to have a healthy and competitive food sector in Europe without subsidy and protection.

The French official view

At the meeting of the Franco-British Council I attended last Monday, it was interesting to hear the current French official view expressed by a senior French person.

A food security theme was heavily emphasised with the food riots being invoked, it being argued that the health and well being of one billion people was threatened. Reference was made to the challenge presented by volatile prices. It was argued that food was a strategic asset and that we had lost sight of this in recent decades.

European policy ensured the food security of half a billion Europeans. Far from being a fortress, the EU was the world's leading importer from the developing world.
It was claimed that we had now reformed the CAP. This may be true, but it has not been transformed and many of its undesirable features remain in place.

It was argued that we should move away from the old stereotypical arguments about productionism versus environmentalism or markets versus self-sufficiency. We must produce more in a more sustainable way.

Into the lion's den

The Franco-British Council invited me to a large seminar in London yesterday on the Common Agricultural Policy. It was a very interesting day, although it was somewhat disconcerting to be asked questions in French about the policy from its defenders. Those present were a mix of academic and practitioners.

The meeting was conducted on Chatham House terms, but it gave an interesting indication of both current French and British thinking on the future of the CAP. Over the next week or so, I will reflect on some of the arguments put forward. The overall atmosphere was one of constructive dialogue, although one French speaker had to get in a dig about Britain not having learnt anything from BSE.

Much of the discussion focused on Pillar 2 issues in terms of rural development and how the CAP could be developed to meet the challenge of climate change. Indeed, one argument put forward from the British side was that the distinction between the pillars had become unhelpful and what was needed was a blended rural and environmental policy.

I wouldn't claim that the French participants necessarily bought into this, but I think there was an acceptance that there had to be debate about the underlying principles and goals of the CAP and without this one would not be able to arrive at better policy.