In France, no matter how inefficient the business, the proposed solution is typically higher prices rather than to let weak businesses go under.
And so it is again. Hollande's remedy for farmers facing bankruptcy is not to preach against overproduction, inefficiencies, or the inane trade embargo with Russia, but rather to encourage shops to raise prices.
Prices went up, but farmers are upset that middlemen took most of the cut. In response Angry French farmers protest low meat prices with manure, road blocks.
French livestock farmers, furious at falling prices for dairy and meat, used farm vehicles to block access to the tourist hotspot Mont Saint-Michel and two towns in Lower Normandy Monday in a bid to push officials to address the crisis.Total Gridlock
French Agriculture Minister Stéphane Le Foll described the situation as an “agricultural crisis”, stating on Saturday that one in ten of all French livestock farmers (some 25,000 farms), are now facing bankruptcy.
A large protest began Sunday in Lower Normandy, and grew in momentum Monday, with protests spreading across the region and to neighbouring Brittany.
Almost 300 tractors and farm vehicles, including skips filled with manure, blocked access Monday to the cities of Caen and Lisieux, both located in Lower Normandy. Protestors also blocked access to Mont Saint-Michel, one of the most-visited tourist sites in France.
Some protesting farmers in Caen targeted supermarkets, who they accuse of keeping prices low, and left buckets of manure in front of other businesses in the meat production sector, including a slaughterhouse, a distribution company and a meat-processing plant, who they also believe are part of the problem.
Le Foll offered to meet with the Norman farmers on Thursday in Paris after examining a report on the prices of agricultural products but the angry livestock farmers declined the invitation, saying that they are waiting for the minister to come to them.
There are numerous factors behind the low prices of French meat. Supermarkets want to keep prices low and French farmers are facing increased competition from foreign producers, who have lower production costs.
On June 17, retailers and representatives from the food industry agreed to raise the price of meat and dairy so they could pay more to hard-up livestock farmers, enabling them to cover their ever-increasing production costs. However, farmers say they haven’t benefited from the price hikes.
Attendees at the June meeting agreed that a kilo of beef would be revalued by 5 cents a week, yet only 7 cents have been gained in an entire month.
Is buying ‘Made in France’ the answer?
Two days ago, French President François Hollande launched an appeal to supermarkets to “offer consumers quality, and offer farmers a [good] price.” He also announced a new “made in France” label for meat and called on French citizens to do their bit by buying French products.
On July 20, French Prime Minister Manuel Valls called for “dialogue” between the actors and said that he felt for the farmers.
“We understand the anger and distress of the livestock farmers. They must know that the government will stand side-by-side with them as we seek a solution.”
For their part, these angry farmers say they will continue to block traffic and leave buckets of manure on factory doorsteps until someone pays attention.
Agriland reports French farmers block roads as ‘25,000 face bankruptcy’.
French farmers have caused total gridlock in northwestern France in recent days, by blocking the roads with their tractors and machinery in protest against the low prices they are receiving for their produce.The four-point solution to this madness is surprisingly simple.
These protests are not a new occurrence in France, in November last year farmers staged what they called a ‘Grand Mobilisation’ protesting across the country due to poor prices for their produce.
Organised by the French Farmers Union (FNSEA) and the Young Farmers Union (YA), last year the day saw tonnes upon tonnes of manure and rotting vegetables dumped on French streets.
French farmers have been holding protests for weeks, including a national “night of distress” earlier this month.
More manure was dumped outside French supermarkets, tyres were set on fire and roads were blocked.
Easy Solution
- Lift the embargo on Russia that is hurting France as much or more than it is Russia.
- Let small, inefficient French farms go bankrupt.
- Fine farmers dumping manure and blocking streets.
- Charge farmers cleanup costs.
The problem would vanish in a week were France to adopt common-sense measures.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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