France launches a rescue plan for the swine industry

As a result of the COVID crisis (disorganization of international transport, inflation of agricultural inputs and raw materials, especially for use in animal feed) as well as the emergence of African swine fever in Europe (causing a supply surplus), the French swine industry is facing the largest price decrease and cost increase in the last 30 years: the price paid to the producer has fallen by 14% in one year for the average farm while costs have risen by 27%. Losses in the sector are reaching unprecedented levels: 440 million € losses in one year according to the interprofessional, and nearly a quarter of pig farmers have reached critical thresholds of short-term debt that no longer allow them to meet current expenses, nor to benefit from additional short-term bank loans. At least 30% of French pig farmers risk going out of business by 2023.

Faced with such a situation, the government and the sector have come together to define a concerted roadmap, in which all stakeholders formally commit to helping the pig industry overcome the crisis and set structural and transformational objectives for the industry.

To this end, the Government has announced a rescue plan for a total amount of up to 270 million euros, which includes, among other aspects:

• Emergency aid of up to 75 million euros in the form of a check for an amount of €15,000 for pig farms with severe cash flow difficulties. This aid will be deployed within fifteen days.
• Structural aid, backed by a commitment to contract under Egalim2, for a maximum amount of 175 million euros, which will complement the compensation for losses on pig farms, according to criteria and modalities to be specified in consultation with professionals.

At the same time, the approved roadmap includes a set of transitional provisions such as:

• At the European level, the continued mobilization of other Member States to alert the Commission to the pig market situation and request the activation of European measures for this sector (private storage aid, exceptional market measures, etc.). These measures are absolutely necessary to get the market unblocked;
• The launching of promotional campaigns, if necessary in conjunction with other European countries;
• Continued mobilization of the "National Initiative for French Agriculture" (INAF) mechanism (public loan guarantee for €100 million of allocated credits, €1 billion of loans are created);
• Reinforcement of biosecurity measures against the risk of African swine fever.

This roadmap also includes strong structural measures to strengthen the sector's resilience to crises:

• The commitment of all actors, from producers to distributors, to accelerate within one month the implementation of Egalim2 and, in particular, the contracting of upstream links in the sector (from producers to slaughterhouses via producer organizations), accompanied, as required by law, with indexation clauses and taking into account production costs, to better transmit their evolution along the food chain;
• Various measures to support the opening of export markets (research and opening of new markets).