France: Government action plan for the price of cereals

The French government has submitted a plan of action in response to higher priced grain and oilseed. The plan aims to protect French livestock and food industry and limit the impact on the consumer end.

This includes immediate measures to help overcome the current situation, but also structural measures to try to limit price volatility in agricultural markets and mitigate the effects in the future. The plan has three levels:

1) At the international level, France will implement the following actions:

• Mobilizing G20 agricultural authorities to ensure proper coordination,
• Promotion of a pause in the development of biofuels that compete with food,
• Evaluation of the G20 and FAO agriculture Action Plan to produce more and better storage to better respond to emergencies.

2) At the European level, it is necessary to strengthen the mechanisms of market regulation. For this, France will:

• Defend greater oversight of financial markets in EU legislation, taking more into account the specificities of agricultural raw materials,
• Promote a European collective position to pause the development of biofuels that compete with food use,
• Request the Commission to strengthen community mechanisms that enable smooth regulation of the effects of volatility in the context of the CAP reform

3) Nationally, the French plan aims to:

• Facilitate the implementation of a plan to modernize and increase storage capacity,
• Prepare a development plan for the production of plant proteins,
• Stop the development of first-generation biofuels, with a limit of 7%,
• Assist farmers in financial difficulties arising from the increase in production costs,
• Support of 10 million Euros to support the modernization of the facilities for pregnant sows,
• Review, starting in 2013, of agricultural taxes,
• Organization of a round table to improve contractual relations and trade of livestock.

The industry players will also cooperate with this plan: Cereal producers will create a professional fund of 100 million Euros. Commercial negotiations between distributors and producers will integrate rising production costs, protecting customers.