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Weekly Overview: Concern over State of French Agriculture

20 December 2012

ANALYSIS - The French farming union is warning about a further worsening of the state of the nation's agriculture next year. The latest report on the Australian poultry industry, on the other hand, shows considerable improvements - in 2001, at least. The deaths of thousands of poultry on Java have sparked warnings about possible further bird flu outbreaks in Indonesia.

Rising production costs in the agricultural sector in France have more than countered the improvement in prices and next year the situation is expected to get worse.

The French farming sector is concerned that the price volatility that has affected production costs since 2006 is set to continue and analysts at the French farming union, FNSEA, are warning that the recent improvements in income should be regarded with extreme caution.

There is also concern over the proposed changes to the Common Agricultural Policy, which the FNSEA believes has stopped acting as a regulator and has relinquished its market management instruments.

French farmers are also worried that where the old intervention process to support market prices has been retained, it is only kept as a safety net.

The FNSEA has called on the French and European governments to reinstate the regulatory tools as a matter of urgency in accordance with the EU's G20 commitments.

The concern is that continuing rise in costs is weakening farms in a scenario of volatile commodity prices.

For the French farmer energy costs have risen by 60 per cent over the last three years, fertilisers have gone up by 35 per cent in two years and feed costs have risen by 25 per cent in two years. Such rises have hit all the agricultural sectors but livestock production most severely.

Despite some rises in prices across the farming sector, such high input costs are threatening to force further cuts on the French farmer next year.

Farmers want to see a more flexible aid structure with instruments for crisis management within the changes to the CAP.

In Australia, the volume of poultry meat produced in 2011 was 8.7 per cent higher than the previous year, according to an ABARES report, while the value of this output was up slightly at A$2,078.1 million.

At 546.8 million, the number of poultry slaughtered in 2011 was 6.8 per cent higher than the previous year. Average dressed weight was up slightly so total production increased 8.7 per cent to exceed one million tonnes for the first time. Annual average per-capita uptake increased from 40.8kg to 43.3kg.

Turning to bird flu news, the authorities in Indonesia have issued warnings following the as-yet unexplained deaths of thousands of poultry on Java.

Jackie Linden

Jackie Linden

Top image via Shutterstock

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