Thibaud Hue / Photo credit: Ludovic MARIN / POOL / AFP 10:02 a.m., February 25, 2024
During the first day of the Agricultural Show, Emmanuel Macron made several announcements to calm agricultural anger.
Among them, the establishment of floor prices.
Demanded by some farmers, this measure could also create losers, both for farmers and consumers.
Despite a very tense first day at the Agricultural Show, Emmanuel Macron tried to calm the anger of farmers after a meeting with agricultural unions.
The Head of State notably announced a meeting in three weeks with all agricultural sectors, an emergency cash flow plan, as well as the establishment of floor prices fixed on the production cost of each sector.
A measure demanded by some of the farmers and which was very well received by the agricultural unions.
Beware of the “ceiling price”
Some welcome what would come close to a universal income for farmers.
On paper, the measure would of course be beneficial for the purchasing power of operators, but this floor price would also present some risks.
“This floor price can also become a ceiling price,” explains Pascal De Lima, chief economist CGI business consulting.
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"If we charge 10 euros for a kilo of tomatoes in France to pay the farmers and when it arrives at mass distribution, it's 3 euros, prices must rise at the end of the chain in mass distribution, otherwise we have to subsidize everyone. It is not a market price, so the whole chain must respect the principle. It is far from being won because in France, we have a tripartite negotiation which is tense,” adds the specialist.
The consumer could lose out.
To benefit farmers, while preserving the margins of mass distribution, prices will be automatically revised upwards.
If the measure is adopted, we should expect a higher price tag for the basket of fruits and vegetables produced in France.