CAP reform hits French tractor market
By FWi staff
TRACTOR sales in France are expected to fall because farmers there are worried that reform of the Common Agricultural Policy (CAP) will result in lower incomes.
After five years of buoyant sales, the French farm machinery industry is preparing for tougher times, visitors to the SIMA machinery show in Paris were told today (Monday).
Sales could be hit by static farm incomes and fears about the effects of CAP reform, said Dominique Opillared, of the machinery manufacturers association SYGMA.
Mr Opillared forecast that tractor sales will decline this year by about 7% to 35,500 units. Sales of other machinery will fall by 5-10%, he added.
The French have much to lose from CAP reform which is aimed at reducing the proportion of the European budget which is swallowed up by agriculture.
France is the biggest single beneficiary from the CAP and its farmers receive much more money in subsidies than the country contributes to Brussels in payments.
French agriculture minister Jean Glavany confirmed his belief that French farmers were reluctant to buy more machinery in the face of an uncertain future.
“Many farmers have frozen their investment in farm machinery until they know the likely impact of CAP reform on their incomes,” he said.
If the French machinery market does go into recession, it will do so against an unexpected rise in sales in 1998.
Tractor registrations last year totalled 38,000, with sales in December reaching 7833 units – more than twice the monthly average and 16.6% higher than December 1997.