France to support grain farmers after crops hit by weather

Reuters News
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Posted: Jul 27, 2016 9:46 AM

By Sybille de La Hamaide

PARIS (Reuters) - France will help grain farmers cope with an expected plunge in revenue after torrential rain and a lack of sunshine in late spring hit the country's cereal crops.

First results of the still ongoing harvest point to a crop of soft wheat, the most cultivated cereal in France, at some 30 million tonnes this year, growers group Orama said on Wednesday.

This would be down more than 25 percent on last year's record for European Union's largest producer.

The fall in production, which also affects grains such as barley and rapeseed, comes at a time of low prices due to ample global supplies, with plentiful wheat crops expected in top producers such as the United States and Russia.

Agriculture Minister Stephane Le Foll presented new measures to help grain farmers at a cabinet meeting, including tax rebates or deferrals as well as a speeding up in the repayment of value added tax (VAT), minutes of the meeting showed.

Pointing to adverse weather conditions in the spring that damaged crops and fueled plant disease, he also extended existing aid such as public loan guarantees and the possibility of postponing loan repayments.

"These are initial emergency measures for farmers' cash flow so that they can start their crops for next year," a farm ministry official said.

Total costs were still unknown because so were the scope of the damage and the number of farms which would claim, she said.

"The situation we are experiencing is extremely serious and totally unprecedented," Orama President Philippe Pinta told reporters ahead of the government plan. "The figures (for soft wheat) that we are getting are so bad it's hard to imagine."

Separately, in response to several farm unions' demands, Le Foll is envisaging a change in France's application of the EU Common Agriculture Policy as part of a review due by July 31.

Paris could slow down the implementation of extra aid for small farms, which lead to a transfer of EU subsidies from large grain farms to smaller livestock ones, the official said.

Oilseed crops were also hit by adverse weather conditions although to a lesser extent, Orama said. First results pointed to a French rapeseed yield between 2.8 and 3 tonnes per hectare compared to a ministry estimate of 3.5 t/ha in 2015.

($1 = 0.9088 euros)

(Writing by Gus Trompiz and Sybille de la Hamaide; Editing by Susan Thomas and Alexander Smith)