Food Fight
French Resistance
To Trade Accord
Has Cultural Roots

 

WTO Talks Promise Benefits
But Farmers Retain Hold
On the Nation's Stomach

'Politicians Are Frightened'

 

By SCOTT MILLER
Wall Street Journal, May 16, 2006; Page A1

POITIERS, France -- Earlier this year, British sheep farmers Ruth and Richard Thomas left their struggling farm in Wales for what they saw as the promised land of agriculture. They moved to France.

Across the English Channel, the Thomases are earning two to three times what they used to get in the United Kingdom. Joining a small exodus of British farmers setting up shop in France, they qualified for a $23,000

"Here, people care about food and the system takes care of farmers," said Mr. Thomas, stroking a sheep dog in front of his old stone barn in this region of green rolling hills in central France.

France's passion for food culture and its policy of coddling farmers lies at the heart of a current deadlock in the World Trade Organization's global trade talks. The so-called Doha round of talks, which began in 2001, were designed to boost developing nations; among other things, they want lower barriers to their agricultural exports. France has vowed to veto any deal that doesn't protect its farmers. A pivotal missed deadline April 30 has led to predictions the talks could die by summer if countries including France don't change their stance.

The standoff shows how cultural and emotional factors can combine with politics to stifle free-trade goals that most economists believe would provide a net benefit to the world. The tariff cuts envisioned by Doha would not only help developing countries sell their minerals and food products, but would also lower barriers to the industrialized world's exports of goods and services. The World Bank calculates that Doha would boost the global economy by around $100 billion.

Overall, France itself likely would be a major economic gainer from a global deal. Though it's the world's second-largest agriculture exporter after the U.S., farming accounts for just 2.5% of the French economy. World-class manufacturing and service companies, such as car maker Renault SA and insurer AXA SA, are larger engines of the French economy. France could gain more income than it would lose in opening its agricultural markets to budding farm superpowers like Brazil.

Even in agriculture, France can be a formidable competitor, notably in products such as wine and cheese. Its brand is well-known the world over. And its farms are increasingly home to capital-intensive agribusiness companies, not just small family producers. Most of the $11.5 billion in European Union subsidies that France receives each year goes to the largest, most commercially viable farms.

WTO chief Pascal Lamy, a Frenchman, says he doesn't understand France's position. "As an efficient farm producer, the strategy should be to reduce subsidies and prices, because others won't be able to compete with you," he said in a recent interview.

But taking on small farmers -- who are most vulnerable to imports -- is anathema for French politicians. Farmers were for centuries nurtured by the French monarchy as a stable, conservative segment of society, less prone to revolution than city dwellers. Even after the French revolution, Napoleon needed farmers to man and feed his massive land armies. So while the U.K., a sea power with an empire to feed it and a small standing army, cut price supports that protected English corn from cheap imports in 1846, France continued protecting itself with walls of high tariffs. When the European Community, precursor to the EU, was formed in 1957, France made sure a common program to support farming was written into the founding treaty.

Claude Soude, who handles international affairs at France's biggest farm union, boasts that on any given Saturday morning, his union can put a farmer on the doorstep of every member of the country's 577 member legislature, the National Assembly. But farming is such a sacred cow in French politics that the union rarely has to use that muscle. "Politicians are frightened," said Christine Chauvet, France's trade minister in the mid-1990s.

Paris's annual farm show, the Salon International de l'Agriculture, is the French political equivalent of the opening of the baseball season in the U.S. This spring, French President Jacques Chirac stroked cows and nibbled roast chicken at a booth for young farmers, and then clasped hands with visitor Peter Mandelson, the EU's top trade negotiator. With cowbells clanging in the background and the aroma of a particularly well-cured cheese hanging in the air, Mr. Chirac thanked Mr. Mandelson for defending European trade interests.

Bernard Layre, who grows seed corn, green beans, peas and kiwi fruit on his farm in the southwest of France, says he believes that without trade protections French farmers would be unable to compete with their low-cost Brazilian counterparts. "The WTO is a 'disorganization.' What we need is an organization that provides rules."

The WTO and globalization in general have been favorite targets for France's greatest celebrity farmer, José Bové, an activist who raises sheep. In the late 1990s he trashed a McDonald's restaurant near his home in France; he has also destroyed fields of genetically modified crops, protests that have played widely in the French media.

France boasts 26,000 local farmers markets, where twice a week food growers sell their wares. The U.K. -- a leading proponent of cutting farm subsidies within the EU -- has 500. Paris has twice as many Michelin three-star restaurants as New York and London combined. One of France's biggest TV hit series in recent years was a reality show in which celebrities were parachuted onto a 19th century farm to see how they coped.

The French population's food obsession is also partly a result of the country's varied geography and climate, says celebrated chef Alain Ducasse. Olives thrive in the hot, dry climate along the Mediterranean, wine grapes throughout central France and wheat in the east. In the cool, wet northern plains, dairy cattle produce some of the country's most-famous cheeses. "The exchanges between each region, with everyone comparing and competing to be the best, most likely encourages quality," Mr. Ducasse said.

There's a word in French for this regional focus: terroir. Farmer Philippe Monnet is the living embodiment of the concept. He cares for 60 Montbeliarde cows on the lower slopes of the Alps near the Swiss border. Only milk from a cow of that breed, raised in that region, can be used to make certified Comte cheese, which is noted for a slight hazelnut taste. "When you take a bit of Comte and close your eyes, you should be able to see the mountains, smell the air," he says.

That's a pitch that French consumers buy. Christine Lagarde, France's trade minister, says that before she returned to Paris last year from Chicago, where she had been a high flyer at law firm Baker & McKenzie, she didn't pay much attention to local food tags. But once back in Paris, she again started lingering in grocery-store aisles in search of regional labels; she's proud that her children do the same. "We French all have a little farmer inside us," she says.

French devotion to its own farm products sometimes forces the transplanted British farmers to rethink how they raise livestock.

Shortly after they settled on their farm in January, Mr. and Mrs. Thomas, the Welsh sheep farmers, were surprised to get a knock on their door from the local Poitou Ovin farm co-operative, which buys their sheep, slaughters them and sells them on to retailers. The man offered advice on how to deal with French consumers' insistence on eating local French lamb all year round. He took Mr. Thomas and his daughter, a veterinary student, out to the barn to show them how to use a hormone treatment to trick ewes into thinking it was the mating season. The technique allows French farmers to produce lamb meat year-round. Back in England, many farmers tend to let nature take its course. Out of season, British consumers just eat more imported lamb, mainly from New Zealand.

About half an hour's drive from the Thomas farm, fellow Britons Roger and Annie Leadbeater say they too were pleasantly surprised by the approach of the local co-operative when they arrived here three years ago. At his old farm in Gloucestershire, Mr. Leadbeater sold his cattle in multiple lots at large auctions. In France, his local co-op representative travels to his farm to grade and price each animal individually. "They are looking for quality here in a way that the Brits don't," said Mr. Leadbeater.

The Leadbeaters now have a herd of 80 cattle on their farm in France. Although they arrived with little French, the couple has improved to a conversational level and have nothing but praise for French agriculture. In Britain, said Mr. Leadbeater, he raised crossbred cattle, which are cheaper than purebreds and mainly what supermarkets, which dominate meat sales in the U.K., are looking for. In France, he raises only Limousin cattle, for which the region in which he now lives is famous. He gets about twice the price per head that he used to get in England.

The French rural tradition, however, is changing. Between 1993 and 2004, the number of arable farms fell by nearly a third. Wide swaths of neglected land are now home to unsightly scrub, and the farms people see as they drive down France's immaculate highways are often parts of major business enterprises. Oxfam says as much as 60% of subsidies went to the richest 15% of French farmers in 2004, the latest figures available.

Oxfam believes the EU's tariffs and farm subsidies, which total over €40 billion annually, are harmful to the world's poorest countries. High customs duties keep products from poor nations out of the wealthy EU market. At the same time, EU farmers overproduction is dumped cheaply abroad, driving down global prices and harming farmers in the developing world.

The EU counters that it has already made a profound change: Since 2003, many EU countries are changing what farmers must do to receive state aid, shifting from production-linked payments to payments for fulfilling other criteria, such as protecting the environment. The amount of money the EU spends on farmers has not fallen, but it has been capped and is being shared between more farmers now that the bloc has expanded to 25 countries from 15. The European Commission last autumn proposed reductions to many of its farm tariffs, but wants to exempt nearly 200 "sensitive products" -- those with strong political backing, such as dairy and meat -- from the deepest cuts.

France isn't the only stumbling block to an accord. Brazil and India have refused to make fresh proposals to cut tariffs on manufactured goods. Japan keeps a tariff on rice of nearly 500%. The U.S., too, is under pressure to make further offers to cut farm subsidies.

Pressure on the EU and France to do more is intense. While other countries say they could be tempted to make concessions, Ms. Lagarde, the French trade minister, says there is no way that France would allow any cuts to EU farm subsidies beyond what is already on the table. She says further concessions would endanger the future of European farming. "We are not going to accept that, it's as simple as that," she said.