A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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Beef sectors: France and Germany do not play with the same rules

Article published in Terre-net Magazine (No. 14)

Both have equivalent technical and economic performance, but flexible regulation and advantageous policy choices make German cattle farmers more competitive than French producers.

Cheap labour, “friendly” succession duties, strong investment policies ... German cattle chains have a distortive comparative advantage compared to France.

In Germany, with regards VAT, firms may opt for a specific tax regime. Compared with VAT paid on purchases, this regime means they do not pay extra tax collected on sales of agricultural products. Because transactions involve different amounts and tax rates, the firms benefit from additional income, which makes it less vulnerable to falling agricultural prices.

“This is an age-old, solid agricultural benefit, it is almost impossible to bring into question, particularly for reasons of administrative simplicity,” says Anne Mottet of the Institute of Animal Husbandry.

Another example is the transmission of agricultural businesses across the Rhine. In the case of a takeover by a descendant, the value of the business, estimated in function of generated income, is well below its market value. Admittedly young German farmers do not receive any help when starting-up, but they have much less debt than in France.

Social dumping

With farm buildings too, Germany again has a distortive advantage over France, where the average subsidy does not exceed 8%.

“The two countries have implemented the same European policy tools with a radically different approach: “scattering” on a larger number of farms in France; concentration and expansion of the already major agricultural businesses in Germany, especially in the north” , notes Anne Mottet.

The differences are also significant with wages. In Germany, there is no minimum wage. In the meat industry, cheap labour, often foreign, promotes the agri-food industry’s competitiveness for export. “This strategy, sometimes called wage dumping, is criticized by other member states including France” who want to return to being the EU’s largest exporter of agricultural products.

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Paris, 26 April 2019