28 June 2002

Young worker granted chance of partnership

As haymaking gets underway and with the cereal harvest

around the corner, thoughts are turning to staffing matters

at Le Mont Hardy. Europe editor Philip Clarke reports

GETTING started in farming in France is made a whole lot easier by the generous system of installation aid for young farmers provided by the French government and Brussels.

At Le Mont Hardy, the sudden departure of former trainee Stephane Gautier at one of the busiest times of year has opened the door for the farms youngest staff member, Gaelle Charbonnier, to enter the partnership, or gaec.

Mr Charbonnier has worked at Le Mont Hardy since December 2000 and, following a spell with the dairy herd, is currently involved in running the pig enterprise.

As a 21-year old, he is entitled to apply for the French "installation" aid scheme, designed to help young people into farming by providing new entrants with low cost loans and grants.

The loans (MTS-JA) are intended to help cover the cost of buying land and machinery or, as in this case, a shareholding in an ongoing business. They can be applied for at any stage during the first 10 years of farming, up to the age of 40.

The grants (DJA), which for single men and women can be worth over k35,000 (£22,600) in some upland areas and k17,300 (£11,070) in the lowlands, are available to help cash flow during the first three years of farming. They are paid 70% up front, with the balance after three years.

To qualify, Mr Charbonnier has to complete a 40-hour preparatory course, which he is currently doing at the nearby Lycées de Sées, plus an extra two-days training covering the legal, financial and human implications of working in a gaec.

He already holds a requisite diploma in farming (a BPA), and has met the requirement to have worked on a farm away from home for at least six months – in his case on a holding in Canada.

The main requirement to qualify for the loans, however, is to draw up a fully-costed five-year business plan, or Etude Provisional dInstallation (EPI).

This plan, which may be prepared with outside assistance, must give details of the condition of the farm, the applicants financial position, his cash requirements and planned investments. It must also state income targets, maximum and minimum, which the business must respect in order to hold on to the grants.

He must also commit to stay in farming for at least 10 years.

Despite being a foreigner, this is the same process that existing partner John Lee went through seven years ago.

"Initially I tried applying for aid to buy some land in the La Manche department further north," he recalls. "I went through all the courses and submitted a business plan based on producing and marketing goats cheese. But this was not accepted by the local ADASEA (the body which handles all new entrant applications), mainly because I had no capital of my own to put into the venture and there was no proven market."

Mr Lee then started working at Le Mont Hardy in November 1994 and tried again to get the installation aids. "I did not have to repeat the pre-installation course, but I did have to submit another EPI, based on me buying a 22% share in the business."

This was needed to purchase the share capital held by fellow partner Benoit Delaunays mother, who was retiring from the business. Approval for the plan was granted in May 1995.

"In total, I borrowed some 420,000 francs (£42,000) on a 15-year loan, with interest charged at a subsidised rate of 3.9% for the first 10 years.

"I am still paying this back at a rate of k488/month (£312)," says Mr Lee. "But, while the interest rate will go up after 10 years, these charges are tax deductible in France."

In addition, Mr Lee got an 84,000 franc (£8400) DJA grant to help with personal cash flow, plus another 20,000 francs (£2000) from the regional authority in central Normandy. "I also got some free artificial insemination vouchers," he recalls.

Mr Charbonnier expects to get a similar deal from the French government, which will enable him to come into the business as a full partner early next year.

For now, however, the emphasis is on getting the winter fodder in at Le Mont Hardy. The first 12ha (30 acres) of silage was made on June 1 in near-perfect conditions, with 32 tonnes of dry matter in the clamp within a couple of days. But haymaking has got off to a more hesitant start.

The first 8ha (20 acres) were cut last week, but only 2ha (5 acres) could be baled before the weather took an unexpected turn for the worst. The 35 big bales that were taken were placed in a barn with a ventilated floor, to blow cold air through them and stop them over-heating.

The remaining 6ha (15 acres) were baled this week, and another 14ha (35 acres) has now been cut. Good use has been made of the new Niemeyer tedder, recently acquired for k5335 (£3415).

Meanwhile, the black and white cows are milking well, yielding 18.5 litres/day off grass alone.

Milk price has also stabilised after two months of decline, with local buyer GIE Laitier dAthis paying a base value of k0.27/litre (17.28p) for 3.8% butterfat, 3.2% protein supplies in May.

But the Le Mont Hardy herd is doing better, having overcome the freak bacterial count problem encountered in the spring. With 4.1% butterfat and 3.29% protein, May milk was valued at k0.30/litre (19.2p). On top of this was a k0.02/litre (1.28p) premium for being in organic conversion.

But the good news on milk price has been tempered by recent information from the processor that only half the organic milk it is being supplied with is actually being retailed as organic. As a consequence, suppliers will have only half their deliveries bottled and sold as organic, with a direct implication for total earnings.

"We are not convinced," says Mr Lee. "There is probably a seasonal peak at this time of year, which may be outstripping demand, but there is a strong suspicion the processors are not doing enough to develop the market."

But, as is often the case with farming in France, things tend to balance out and there is better news on the calf sales front. With numbers getting tighter, and the market continuing to recover from the BSE scare, Friesian bull calves have firmed considerably.

Plain sorts were fetching k260/head (£166) at last weeks calf sale in Briouze, compared with the k127/head (£78) Le Mont Hardy received on average last year. With two bull calves to sell next week, Mr Lee is optimistic of a better return. &#42

FARMFACTS

&#8226 Le Mont Hardy, a 112ha (277 acre) dairy and pig unit near Putanges in the heart of Normandy, France.

&#8226 Farmed by John Lee, in partnership with Benoit and Gilles Delaunay.

&#8226 Mixed soil types, growing 76ha (188 acres) of grass and clover, plus 34ha (84 acres) of cereals.

&#8226 Dairy herd made up of 72 Friesians, plus followers.

&#8226 Pig herd made up of 42 Large White Landrace hybrids, with 800 finishers a year.

&#8226 Dairy currently in organic conversion.

&#8226 Pigmeat sold direct to consumers.