by Henry MacphillamyNews Weekly
Letter from France - Farm subsidies a fact of life in Europe
, January 15, 2000
Henry Macphillamy runs a sheep property in France. He explains how family farming works in Europe and why it is futile for Australian free traders to campaign for the removal of agricultural subisidies.
France is divided into 22 regions, each with a Consul General. These are further sub-divided into 95 Departments , also with Consul Generals. It is further subdivided into 36,000 Communes, each of which has a mayor whose duties in the smaller communes are only part time, but he has premises and paid assistance.
It seems to me to have a top heavy bureaucracy which is very powerful and which no government - left or right - is prepared to tackle.
France is a highly socialised country, highly taxed, with innumerable small taxes as well as a massive TVA [Value Added Tax] of 20.5 per cent on most items, the exceptions being staple foods (which are taxed at 5.5 per cent). In one instance, where our equivalent of rates is paid, there is a tax on the tax paid to the local commune.
My part of France is very fertile, with a rich red limestone soil, and about 60-65 cm of rain which is generally reliable. It is very closely settled, but as in other agricultural countries, farm size has increased substantially in recent years, hereabouts from an average of 35-40 hectares to 80-90 hectares.
We live between two villages, each of which would be only one kilometre away. Within a radius of 10 km, there would be at least another dozen villages of 250 to 1000 inhabitants.
Farm size has increased partly because of increased mechanisation, but also because of necessity. The small farms are no longer viable. My wifeÕs son farms an area which is larger than the average, but he is dependent on subsidies. Without them, his farm would not be viable. Even with subsidies, he has trouble balancing his budget. Smaller farms have an even more difficult time.
As in other European countries the whole fabric of rural society is dependent on subsidies. Without them, there would be a massive exodus from the country and very serious social unrest, even riots.
I think it is utterly useless for Australian producers to try to influence European countries to risk the social consequences by instituting significant reductions in subsidies. Europe is wealthy and can afford to subsidise its farmers.
Hereabouts, sheep farmers receive a subsidy of 140 francs (A$35) per ewe run. In poorer or hillier areas, this could be double or even treble.
Wheat is subsidised from about 2300 francs (A$575) per hectare for soft wheat to 3250 francs (A$812) per hectare for hard wheat.
This may vary in other areas.
The average farm labourer is at present paid 42 francs (A$10.50). Social security tax adds about 60 per cent, a small part of which is paid by the recipient.
Most workers have to retire at 60-65 years of age when they will receive the State Pension which, as in other countries with ageing populations, is causing some concern.
As mentioned, France is a high tax country, but in return, Social Security benefits are generous.
Roads are excellent, maintained by the Regions, Departments and Communes. In addition, auto routes - which are privately constructed and charge tolls - cover most of France.
The old National Highways are still maintained and can be used to avoid paying tolls.
The trains are excellent - fast, comfortable, clean and reliable. It is most unusual for a train to be late; but it can happen.
The health services are excellent. Competent country doctors are always available both at the surgery or at one's home.
In the larger towns there are both privately-run and state-run hospitals. The medical benefit payable can now be applied to either. It is a matter of patients' choice.
There are a number of concessions for the aged. Someone aged 70-plus requiring help in the home pays a lower Social Security tax than that mentioned above, and there are further concessions for ambulances, train travel, etc.
Postal services would be the envy of all Australians, deliveries here early morning six days a week. Letters posted here before 4 pm will be delivered in Paris the next day (250 kms away). I received a package this morning mailed in Paris yesterday afternoon.
I hope the above information will be of some interest and perhaps help to soften those who so ardently seek to influence subsidy level in Europe or, even, Japan.
Subsidies are the essence of the fabric of rural life. No country would willingly risk the adverse social consequences of placating a small group of Australian farmers. The United States pays lip-service to abolishing subsidies, but at the same time assists its primary producers.