22 August 2001

CTE scheme backfires

Modulation is hitting French farmers hard as Debbie Beaton finds out on a farm near Agen

JEAN-CLAUDE LIBITS wheat harvest finished on 5 July. His 230ha arable farm is large by French standards and his yields are way above the average for the Haute Garronne region. This year his wheat came in at 8t/ha and high quality durum wheat, just under 7t/ha. The regional average is 5.5 and 4.5t/ha respectively.

This alone signals that Jean-Claude Libit is in the top league. So being a one-man band you might expect him to busy preparing the ground for next seasons crop in order to seize an early drilling advantage. Not so. Drilling does not commence before 20 October.

In any case he has other much more important matters to preoccupy him. In between harvesting sunflowers and maize, he will be shut in his office filling in form after form to claim back some of the money that the government has just taken away from him in the form of modulation.

He used to receive £68,000 in area aid, but this figure has been cut – or modulated – by 15% to £57,000 this year. The calculation to identify his modulation is horribly complicated and based on the gross margin figures he achieved for his cropping in1999.

But the French government will give some of that back – up to £3,870 a year for a total of five years – if Mr Libit carries out measures that will either encourage rural employment, improve the quality of his produce or enhance the environment.

The government scheme – Contrat Territorial dExploitation (CTE) – funds 40% of any investment necessary to achieve its rural and environmental goals. It also provides annual payments for farming practices that achieve those same objectives. In total a farm can, therefore, receive £20,000 over five years.

But the scheme is backfiring. "The irony is that it is only the larger farms that are applying for CTEs in an attempt to recoup lost area aid," says Mr Libit. "This, of course, goes against the main objective of the French government which was to protect smaller farms at the expense of the larger units."

He points out that there are 6,000 arable farms in Haute Garonne, but only 250 are signing up to a CTE – all of them being larger units. There are fears that the scheme will run out of money because the large farms are claiming their maximum.

The scheme varies for each French region. Many farms, such as those in the Loire region, will receive more in CTE than they have removed by modulation. Unfortunately larger farms with combinable cropping, such as Mr Libit, will not be one of them. He will receive £10,142 less this year and can only recoup a maximum of £3,870 back.

That leaves him with a shortfall of £6,278. It will be much more if he doesnt sign up to measures that will enable him to claim the full £3,870 a year on offer.

He has already been out shopping to claim 40% of the purchase costs back under CTE. So far the compensation totals £7,000 on the following purchases:

&#8226 a new direct drill (Gespardo)

Costs £14,500 (£5,795 compensation from CTE)

&#8226 Computer software

Costs £966 (£386 compensation from CTE)

&#8226 Automatic irrigation system

Costs £2,900 (£1,160 compensation from CTE)

He will also be carrying out various farm practices to obtain annual payments under the CTE scheme. Sowing grass strips to prevent nitrate run-off in to watercourses, direct drilling, maintaining ditches, sowing green cover crops after maize, adopting integrated crop management and record keeping are just some examples. If you did all of those you could potentially collect £4,350 a year, explains Mr Libit.

But there is still a cost to adopting such measures. He estimates that the measures he will be adopting – ditch maintenance, reducing fertiliser use and sowing green covers – will cost him about £966 to £1,450 a year.

Is he happy with the scheme? "I would much prefer to sell my produce fair and square on the market, rather than be seen to find ways to obtain grants to keep my business profitable. Unfortunately I need to sign up to CTE to stay in business."

"The agricultural unions fought hard to resist the CTE because it does not correspond to the way farmers work. It has started very slowly because it is so complicated to administer; 40% of the budget for CTE goes towards administering it."

So where does Mr Libit go now? "Only half the area I farm is irrigated, so my cropping options are limited. I must therefore control costs, adopt tighter crop management and expand if possible through share or contract farming. "Taking on more land is not an option, since it would mean more labour," he says.

He admits to being over-mechanised, but the two farms are 12km apart and being a one-man band means he has little spare time to take equipment from one to the other.

"I also need to work fast because the drilling and harvest windows are narrow. Trying to share machinery is impossible because everyone needs the machine at the same time," he explains. Where there is irrigation for grain maize, it is fully automatic and controlled by his mobile phone.

*NB. £1 = FF10.35