John Lichfield: Our Man In Normandy

Even Sarkozy cannot slaughter subsidies

Pierre, one of my farming neighbours in Normandy, voted for Nicolas Sarkozy in the presidential elections.

There is nothing surprising about that. Two thirds of French farmers voted for him in the second round of the elections in May.

Pierre is still, broadly, a Sarkozy fan. All the same, he, like many French farmers, is struggling to digest the plain – or apparently plain – words which President Sarkozy spoke to a conference of beef and dairy farmers earlier this month. The Common Agricultural Policy (CAP) must be scrapped and replaced by something more suitable to the needs of the 21st century, M. Sarkozy said. Subsidies to farmers can no longer be justified.

These parts of the speech made M. Sarkozy sound like a Margaret Thatcher or a Tony Blair. A French president who wants to scrap farm subsidies? How extraordinary. How refreshing.

The new CAP – which France will propose when it assumes the EU presidency next year – must be built on "an unarguable principle" of preference for European produce, M Sarkozy said. The new CAP should have the "tools" and an "ambitious budget" to make this possible. Farming must be more "productive" to supply growing world demand. Farmers should be able to live from the price of the food they sell. And agriculture must be more environmentally responsible.

Note therefore that when M. Sarkozy said that he means "no subsidies", he means no direct subsidies. He still wants European taxpayers to pay for an "ambitious" system of agricultural support. In many respects, this is a description not of a "new" CAP but of an old CAP. The implication is that France wants to reverse the farm policy reforms of the last 20 years and return to a 1970s-style CAP which excludes, or penalises food imports from the rest of the world and guarantees prices within the European Union.

In terms of world trade policy, and support for farmers in the poorest countries, such a policy would be calamitous. It stands no chance of being agreed by the European Commission or other EU leaders, starting with Gordon Brown.

For all the lip-service to the environment, M. Sarkozy wants to scrap the present system of EU direct subsidies, which is supposed to help the more traditional, less intensive, environmentally friendly kinds of farming. Questioned on these apparent contradictions, French officials said that M. Sarkozy was "starting a debate". The fine-print has not yet been worked out. In any case, they said, the world is changing. Demand for foodstuffs from rapidly developing countries, and for new biofuels, is changing the rules of the game.

We no longer face food surpluses and the need to prop up prices: we face potential shortages and high food prices. The wholesale price of wheat is now ¿300 (£209) a tonne, more than double its price a year ago.

It is possible, the officials said, to imagine a future CAP in which high market prices make subsidies unnecessary. If so, why talk of an "ambitious" CAP budget and "tools" to manage community preference (ie trade barriers)?

The speech to farmers was M. Sarkozy at his best – and his worst. Unlike most previous French governments, he is prepared to abandon the old dogma and embrace the need for CAP reform. But his speech was self-contradictory and stuffed with demagogic appeals to both farmers and the environmental lobby.

Pierre is a small farmer by the new standards of the French agri-industry. He has about 200 acres of land for cereals and beef and dairy cows. Even so, he is farming land which would have supported four or five small farmers in the 1970s.

"Sarkozy is right to say that farmers don't want handouts," he said. "Of course we would prefer to believe we could live from the price of what we sell. Maybe, we are going into a world where food will be scarcer and farmers will be respected again.

"I fear what he is suggesting will make the big farms bigger and the rich farmers richer."