It is imperative that the CAP up-coming reform creates favorable conditions for the long-lasting recovery of agricultural investment

Experts are indicating that the agricultural market uncertainty since 2008 had a significant negative impact on investment, thus impeding the long-term competitiveness of French agriculture.

For Thierry Pouch, Head of the Economic Studies Division at France’s Permanent Assembly of French Chambers of Agriculture (APCA), “since the 1970s, investment operations have been closely dependent on farmers’ revenues,” to the extent that many farming equipment manufacturers are now planning their budgets according to agricultural price forecasts for the coming months. Consequently, “investment in farming dropped by 14 percent in 2009 and by 17 percent in 2010,” after the drop in prices and revenues.

While the recent rise in prices has made it possible to resume investing, the rebound remains nevertheless cautious and much lower than the adequate levels to cope with the French and European growing agricultural challenges.

Hence, it is imperative for the post-2013 CAP reform to provide measures that simultaneously curb market uncertainty and stabilize agricultural commodity prices––both essential conditions to promote the sustainable development of agricultural investment.