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France: Inflation and oversupply plunge organic farmers into crisis

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In France, organic food has become a real bestseller in recent years. But now the success story is coming to an abrupt end. Inflation and oversupply cause the market to collapse, and the government is reluctant to react.

Organic farmers in France are sounding the alarm: the market for organic products in neighboring Germany has been growing steadily for years. But that could now be over for the time being: As the industry magazine “agrarheute” reports, the French organic market is in a serious crisis: In recent years, more and more producers have jumped on the organic trend, more and more products have been made according to organic guidelines produced. But now sales are falling. The result: the organic shelves remain full. A success story becomes a slow seller.

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France: The temporary end of the organic trend

Unlike in Germany, French customers are actually known for digging a little deeper into their pockets for groceries. Not the price, but the quality is the top priority for many when making a purchase decision. In order to guarantee this quality and at the same time meet the desire for sustainable products, more and more farmers decided to convert their farms to the highest organic standards.

And business was booming for a long time: according to the agency for organic farming, the organic market had grown in double digits every year since 2014. But in 2021 the trend turned. The numbers were declining, fell by 1.3 percent to almost 12.7 billion euros in sales.

At the same time, however, the area under organic cultivation continued to increase rapidly. Today, the proportion in France is almost eleven percent. A particularly large number of dairy farmers switched to organic production, making the country the largest producer of organic milk in the EU today.

The offer grew extremely quickly within a short time. But customers are holding back. No sales figures are known for 2022, but experts assume that inflation and rising energy prices in particular will mean that even fewer customers will have resorted to the more expensive organic versions of milk, cheese and the like. The implications for farmers are absurd:

Large dairies mix organic and conventional milk

Large dairies such as Lactalis and Sodiaal started adding organic milk to their conventional milk last year. According to “agrarheute” it is assumed that on average 40 percent of organic milk in France is not marketed as such.

In some cases, the dairies even paid the organic farmers lower prices than the conventional producers in order not to create incentives to switch to organic production and thus curb growth.

Government promises ten million euros in aid fund – farmers are demanding more than ten times as much

The French government had actually imagined it differently: the original plan was to convert 18 percent of the acreage in France to organic by 2027. But the current development could ruin this strategy. After all: under pressure from the umbrella organization for organic farming (FNAB), Prime Minister Elisabeth Borne promised the farmers help. But the measures finally presented by Agriculture Minister Marc Fesneau disappointed farmers. First of all, an aid fund of ten million euros is to be made available. In addition, “working groups are to be set up with the aim of increasing the proportion of organic products in communal catering to 20 percent.”

Far too little for the FNAB. The association announced that ten million euros would mean around 166 euros per company. Mathieu Lancry, President of the organization Forebio, explained: “In the face of the organic crisis, we need 150 million euros just for the pig, dairy and fruit and vegetable sectors.”

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Source: Stern

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