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French government offers €600 m for farmers

The French government has proposed to invest €600 million in order to aid the country’s pig, poultry, beef and dairy sector, which is going through what is called the deepest crisis in decades.

After days of ongoing protest, the French president François Hollande met farmers' representatives on Thursday in Dijon, in eastern France, to explain about the government's proposals. He called for supermarkets, food processors and meatpackers to help increase meat and dairy prices for farmers.

He said, "We have to act on the subject at hand – the price of milk as well as meat. And I'm thinking of the whole industry: pork, beef and others too."

Problems facing French farmers

French farmers have many reasons to grumble. In general there is lower meat consumption, demand from China has come down and on top of this all there is a Russian ban on EU food imports.

This all happens against a background of reconstructing the Common Agricultural Policy (CAP), in which direct European aid has been gradually reduced. In addition, minimum prices have ceased to exist and oversupplies are not stored anywhere. Last but not least, competition from middle and eastern European countries is growing.

Farmers facing bankruptcy

According to the French left-wing government, as many as 10% of French farmers could be facing bankruptcy.

Last month ministers urged the food industry to increase the prices it paid to farmers. Pork producers, however, are still being paid below the target price of €1.40 per kg, while dairy farmers complain they are being paid €300/tonne of milk. They say they would at least need €340 to break even.

Detailed plan for agricultural industry

On Wednesday, the French government presented a 24-point plan to ease the farming crisis. The following elements jumped out:

€500 million to be set aside to allow farmers more time to pay taxes and other debts;€100 million of taxes to be annulled;Fund to help farmers restructure their debts up from €8 million to €50 million; Public investment bank to guarantee €500 million in loans to agricultural industry.

Blocking roads in protest

So far, it is not clear whether the government initiatives will make any difference. Over the last week, protesting pig, poultry, beef and dairy farmers have been blocking highways in France, obstructing holidaymakers heading south and west.

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