VZCZCXRO1075
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHFR #0326 0641712
ZNR UUUUU ZZH
R 051712Z MAR 09
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 5687
RUEHRC/USDA FAS WASHDC
RUEAUSA/HHS WASHDC
INFO RUCNMEM/EU MEMBER STATES
RUEHGV/USMISSION GENEVA 3004
RHEHAAA/WHITE HOUSE WASHDC

UNCLAS PARIS 000326 
 
SIPDIS 
 
BRUSSELS PASS USEU FOR AGMINCOUNSELOR 
STATE FOR OES; EUR/ERA; EEB/TPP/ABT/BTT (BOBO); 
STATE PASS USTR FOR MURPHY/CLARKSON; 
USDA/FAS FOR OA/HALE/ROSADO; 
OCRA/NENON; 
ONA/RIEMENSCHNEIDER/YOUNG/DENNIS; 
OFSO/YOUNG; 
EU POSTS PASS TO AGRICULTURE AND ECON 
GENEVA FOR USTR, ALSO AGRICULTURE 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD EU FR
 
SUBJECT: FRANCE SHIFTS AG FUNDING FOCUS UNDER HEALTH CHECK REFORMS 
 
¶1. Summary: Following the 2008 CAP health check, France will shift 
some financial support from arable crops to support livestock 
producers; increase support to vegetable and protein crops; increase 
support for organic farming, and, add new risk management schemes. 
Farmer reactions were mixed: cattle and sheep producers (who have 
consistently called for more government aid) and organic farmers 
were satisfied. Arable crop producers condemned the lowering of 
their public support, despite high commodity prices last year.  End 
summary. 
 
¶2. In 2007/2008, arable crop farmers in France had strong revenues, 
based on high commodity prices and significant EU farm supports. At 
the same time, French sheep and meat goat producers, suffering from 
low prices and limited EU farm support, have repeate$ly called for 
more government aid. Grass-fed cattle producers denounced the 
inequity between their modest financial support and the EU corn 
subsidy which benefits corn silage-fed cattle producers. 
 
¶3.  Under the recent health check reform, member states gained more 
flexibility to redistribute their EU farm payment budget to specific 
programs. To bring more balance to its farm support, France has 
decided to reallocate 18 percent (1.4 billion euros / $1.75 billion) 
of its EU farm payments (9 billion euros / $10 billion). 
 
The funds will be distributed as follows: 
 
a. 950 million euro / $1.2 billion to establish a new fund for 
grass-fed cattle:  This new program will be payable, per head per 
hectare, to producers of grass-fed cattle. 
 
b. 265 million euros / $326 million to encourage the farm economy 
and employment across France: These funds will be used to boost 
existing and establish new programs, including: 
a. Support to sheep and goat producers (135 million euros / $169 
million); 
b. Support milk production in mountain regions; (45 million euros / 
$56 million); 
c. Support field vegetable production (30 million euros / $38 
million); 
d. Increase the compensatory payments for farmers in difficult and 
mountainous areas (42 million euros / $53 million). 
 
c. 129 million euros / $162 million to support the development of 
sustainable agriculture. These funds will be targeted, for example, 
to increasing the production of protein crops (peas, alfalfa) to 
reduce imports of protein sources for feed (i.e. meals); to 
encouraging a tripling of organic farming by 2012; to improving the 
energy self-sufficiency of farms, developing farm-based energy 
production, reducing water use and pollution and to increasing 
bio-diversity. 
 
d. 140 million euros / $175 million to develop more risk management 
tools. The Ministry will expand the crop insurance subsidy scheme 
and create a fund to cover losses to crops or animal production in 
case of phytosanitary or epizootic events. 
 
¶4. A reduction in direct payments to arable crop farmers and a small 
deduction on all direct payments (including animals) will be the 
primary funding source for these programs. 
 
¶5. Ag Minister Barnier stated that the budget reallocation was 
necessary to maintain public support for a strong, but equitable, 
farm policy particularly given that France is expected to become a 
net contributor to the EU budget by 2010. 
 
¶6. Farmer reactions were mixed: Organic and livestock producers, who 
will receive almost 69% of the reallocated funds, supported the 
government's new programs while arable crop producers, who will lose 
the most in public support, condemned the changes.