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French minister disputes EU's hefty subsidy payback

Video by Richard TOMPSETT


Latest update : 2009-08-05

French Agriculture Minister Bruno Le Maire has contested the hefty 500-million-euro sum the EU wants France to recoup from fruit and vegetable farmers for past subsidies now deemed illegal. France said it would take its time with a prolonged audit.

REUTERS - France has disputed the hefty sum the EU wants it to claw back from fruit and vegetable farmers for past subsidies that are now deemed illegal, and promised on Tuesday to take its time with a prolonged audit.

“The first step of this process is an audit that will be lengthy,” Bruno Le Maire, the country’s farm minister, told reporters after a crisis meeting with sector representatives.

Le Maire said France would negotiate with the European Commission over the total sum owed by growers, which the European Union executive has put at about 500 million euros ($719.5 million), including interest charges.

“I formally contest this figure of 500 million euros,” he said.

The minister had angered farmers, already protesting against falling prices and income, by saying on Monday he had accepted the EU’s demand that France recoup certain subsidies paid between 1992 and 2002. [ID:nL3412537]

The EU ruled in January that the state aid given to support producer prices and incomes had contravened European farm policy. [ID:nLS582715]

Union representatives reiterated their opposition to the idea of reimbursing subsidies paid years ago to farmers.

“We’re not going to start looking for money seven or 10 years after the event,” said Jean-Bernard Bayard, co-general secretary of the FNSEA, France’s largest farm union.

The decision to acknowledge the EU’s ruling was taken before an end-July deadline to avoid incurring a fine, Le Maire said.

The move also represented an effort to strengthen France’s position before negotiations start in 2010 on the future of the bloc’s Common Agricultural Policy beyond 2013, he added.

“We’ll have a stronger negotiating position when we have settled certain problems that now date back several years.”


To help struggling growers, Le Maire said he would propose a short-term aid package, including tax breaks, that would be detailed at a further meeting with sector representatives on Thursday.

After Europe’s largest farm economy saw heated price negotiations this spring in the dairy sector, fruit and vegetable growers have stepped up protests in recent weeks against a recession-linked drop in demand and growing competition from other European countries.

Producer prices for fruit and vegetables fell 3.1 percent in June, putting them down 17.6 percent year-on-year, according to latest data from French statistics office Insee.

The French fruit and vegetable sector, the third-largest in Europe, also says it faces rising volumes of cheaper produce from fellow EU countries that have lower labour costs.

Le Maire said production costs would be one of the issues on the table at a September meeting on the long-term competitiveness of the sector.

He said he would also discuss the sector this month at a meeting of French and Spanish officials. Spain is the largest exporter of fruit and vegetables to France and its produce has been targeted by protesting French growers.

Date created : 2009-08-04