1 As a reminder, France’s foreign trade balance has, year after year, recorded a growing deficit from its 2003 equilibrium.
While France posted a record-setting foreign trade1 deficit of €37.5 billion in the 2011 first half, the positive balance of agricultural and agri-food foreign trade––along with that of transportation, pharmaceuticals, chemicals and cosmetics––contributes to curb the degradation of its trade balance.
More specifically, the agricultural foreign trade surplus reached €5.3 billion during the 2011 first half, with €2.57 billion for raw products and €2.74 for processed products. This represents a 70 percent increase as compared to the 2010 first half figures.
French agricultural exports, which are based on two leading items, “grains” and “wines and spirits”, have gained from Russia’s withdrawal from the global market. But the country’s return2 to international trade might alter the situation in the upcoming months. In addition, some observers are noting that the impact of the global financial depression is starting to be felt on the French sales surplus of wines and champagne.
The future therefore might prove to be less positive for the French trade balance and economic growth3, and still more difficult for agriculture. Even more so since French farmers are currently going through uncertain times that jeopardize the long-lasting survival of farming. Indeed, price volatility, growing indebtedness and products costs that no longer cover sale prices, are all key ingredients for an explosive cocktail.
France’ foreign trade solid performance must not hide the fact that farming, whose first objective is feeding mankind, is at risk. Look no further for proof that a significant number of farmers are filing for RSA assistance (Revenu de Solidarité Active or earned income supplement) to survive. Yet, French agriculture is not short of assets. But it requires a political framework enabling to improve its competitiveness and provide adequate visibility to farmers.
2 Please see momagri’s article “Russia putting pressure on world wheat markets” in the A Look at the News section of its website.
3 Every year, the French foreign trade deficit costs one percentage point of economic growth.