French farmers are among the most productive and the most belligerent in the European Union but they are nevertheless being crucified by the fastest drop in global agricultural commodities prices recorded in seven years. This has been caused by a slump in demand from China, Europe’s diplomatic war with Russia and the biggest fundamental problem of all: the European Union itself.
At the heart of the mess is the Common Agricultural Policy (CAP), which was originally agreed too soon after the ill-conceived Common Market came into existence in 1957
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Almost 60 years later it has clearly achieved its primary task of keeping Europe amply fed. But food security is hardly an issue anymore, especially in the context of a global economy built on the premise of free trade.
It was also designed to help the industry manage the impact of fluctuating commodity prices and in so doing safeguard small farming communities.
Instead it has rewarded farmers for inefficient agricultural practices and promoted the overproduction of food on a scale previously unseen. Neither is it cheap for the average taxpayer. Although farmers only make up 5.4pc of Europe’s population, they account for 47pc of the EU budget.
Now the system of subsidising farmers in less productive member countries is warping the economics of producing food across the entire region. Taxpayers across Europe pay to fund €58bn of annual farming subsidies and then are hit again by
food prices, which some argue are still kept artificially high just to keep farmers in business. Instead of using payments from CAP to develop more efficient farming practices, the industry has instead loaded up on debt which is essentially underwritten by subsidies.
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