French agriculture in decline

French agriculture in recession
  • Jonathan Rowe
  • 03.01.2024

According to preliminary figures released on Wednesday by INSEE and the statistics department of the Ministry of Agriculture, 2023 was generally less favorable for French farmers than 2022 and 2021, which were marked by a sharp rise in grain prices.

According to these preliminary estimates, the agricultural sector's gross value added - the wealth created by this activity - "declined by 5,3%" in 2023.

"This represents a gap with the two previous years (+14,4% in 2021 and +17,3% in 2022)", the Chamber of Agriculture said in a press release.

This is generally attributed to falling grain selling prices, which have risen sharply since the outbreak of war in Ukraine. At the same time, costs continue to rise, especially fertilizer costs (up 19,1% in 2023 after 79,7% in 2022).

"The good times are over", summarizes the farmers' union FNSEA in its press release.

"There are many reasons for this: falling volumes, declining prices and burdensome payments on farmers' accounts", the employer organization continues.

By 2022, farmers' current income before tax (EBIT) has grown by an average of 28,2%.

Specifically, the increase was +10% for cereal and oilseed producers (including canola and sunflower), +45,9% for other field crops (including sugar), +25,8% for beef cattle farmers, +36,8% for cow milk producers, +57,3% for poultry farmers and even +371,3% for pig farmers.

In 2023, while crop prices fell by 10,1%, driven by falling grain prices, prices of livestock products (livestock, poultry, eggs, milk) continued to rise (+7,9%) amid tight supply, according to INSEE (National Institute of Statistics and Economic Research).

For pork, the increase is estimated at "21,7% for the year". As for eggs, "after a record 68% increase in 2022", INSEE estimates that prices will rise by 5,5% in 2023, "still driven by strong demand".

Conclusion

French farmers are facing serious difficulties in 2023. The decline in farmers' incomes was due to two main factors: falling grain prices and rising costs. As a result of these factors, farmers faced lower incomes, higher debts and an increased risk of bankruptcy.

These difficulties could have serious consequences for French agriculture and the country's food security. Farmers may reduce production, leading to higher food prices. In addition, farmers may be forced out of business, resulting in reduced food production and increased French dependence on imports.

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