Agriculture is a key sector for the French economy

In early November, the credit insurer Coface released a study on the state of the global food industry that particularly highlighted the importance of this sector in the French economy.

With business up 3% in 2010 reaching almost 150 billion euros in sales, the agri-food sector is the first industry of the French economy and the second employer. Totaling more than 7% of French exports, it is one of the few sectors to have a trade surplus and helps to limit the weakening of the trade balance1. According to figures recently released by the Ministry of Agriculture, the agricultural trade surplus reached 4 billion euros in the first nine months of the year.

These figures confirm the findings made by Christian Jacob, Deputy Mayor of Provins and Chairman of the UMP (center right political party) at the National Assembly, in an article we recently published on our website2: “maintaining a strong agricultural sector is a crucial issue for France”, especially since it has resisted well during the crisis.

In an increasingly turbulent context, the issue is pressing. In recent years, price volatility and the financialization of agricultural markets have increased dramatically, putting the sector under more and more pressure. If the Coface study points out that the food industry is still strong, it insists on the major risks that agricultural price volatility may pose, in time, to this sector and more generally to the French economy. Remember that the competitiveness of the French food industry depends on the steady supply in quantity and quality that the French agricultural sector has been able to provide them with thanks to the visibility provided by the CAP. A visibility now seriously threatened...

It is therefore important for France but also for Europe, to implement adequate regulatory mechanisms to cope with the increasing market risks to which the agricultural and food sectors are exposed, without affecting their competitiveness in international export. This is the challenge for the CAP reform after 2013 currently under discussion in Brussels.

1 See momagri’s article “Agri-food products are curbing the degradation of France’s foreign trade deficit”: http://momagri.fr/UK/a-look-at-the-news/Agri-food-products-are-curbing-the-degradation-of-France-s-foreign-trade-deficit_972.html
2 See momagri’s article “France has always been an agricultural nation”: http://momagri.fr/UK/editorials/France-has-always-been-an-agricultural-nation_1001.html