The production of specialist products aside, the producer is at the bottom of the food chain, always the price-taker - the victim of market volatility and of market power.
In the food department, France has two systems and two associated cultures (albeit overlapping). One system has multiple dimensions.
There is the food locally produced, sold in town markets. There is the produce of family farms delivered into the broader market via collaboration through farmer cooperatives. There is the specialty branded products sector; and so on.
The other system is the agro-industrial complex - the panoply of large-scale production, corporate dominated, chemicals and bio-chemical modification in abundance, formal standards inadequately policed, mass processing and packaged heat-and-eat delights for the busy and price-conscious consumer in France's gargantuan supermarkets.
The epidemiological and ecological downside of the latter system, coupled with the powerful lobbies that further its perpetuation, are regularly exposed (as elsewhere) in an instructive column, conflit de canard, in the weekly Le Canard Enchainé.
Industrial food practices exposed
A reflection of the agro-industrial sector's modus operandi is the horsemeat substitution in the frozen 'beef' meals in early 2013. Le Canard, 13 February 2013, highlights the character of the sector and how the substitution 'inadvertently' came to pass:
"The well-known Findus logo, created by the Swedes more than 60 years ago, inspires confidence. No sight of 'cheap and nasty' here. Save that it's been ages that Findus was actually Swedish. After having been owned for a period by the Swiss Nestlé, this king of frozen foods was bought by an American investment fund, then swallowed in 2008 by another investment fund, this time British, Lion Capital, which comes itself to cede two-thirds of Findus to four creditors, including Société Générale and the US investment bank JP Morgan.
"To produce, amongst other things, its bolognaise lasagne, Findus (as do comparable industrials) makes use of the Comigel group. This company, unknown to the general public, is however one of the European champions of pre-cooked frozen meals. Comigel itself was sold in 2007 by a British holding company to Céréa Capital, a French investment fund which generally makes its pile from the catering trade ...
"Each year, Comigel, headquartered at Metz, consigns the production of 17,000 tonnes of moussaka, mince and lasagne to the factory of its subsidiary Tavola, installed in Luxembourg [tax haven central]. So many pre-cooked frozen meals on which the known retail brands attach their labels before selling them across 16 countries.
"One part of the meat 'worked' by Travola in Luxembourg is provided by the company Spanghero. This company in turn belongs to the giant cooperative of France's South-West, Lur Berri, with a turnover of the order of a billion euros, partly known by the brand name Labeyrie.
"To further reduce costs a Cypriot trader was hired, who in turn subcontracted the operation to a Netherlands trader, who sourced the meat from an abattoir outside of Bucharest."
A clash of cultures: France's biggest dairy
Which brings us to a current controversy in rural France, exposing a seminal clash between the two systems.
In mid-2011, there is disclosed a plan to erect the largest dairy facility to date. Apart from the industrial-strength piggeries in Brittany, disasters, there has been nothing like this facility in France. The 1,000-cow factory is now in place, between the communes of Buigny-Saint-Maclou and Drucat-le-Plessiel in the northern Department of the Somme, the region of Picardy.
The cows, chicken-style, will be rooted to a small space (7-10 square metres) and will never roam pasturage. There will be three milkings a day, with the expectations of 8.5 million litres of milk per year.
The vealer by-products will be housed on site (catering for 750). As of early 2013, the average French dairy farm had 40-something cows, with only 2% of farms having more than 100 cows, the largest being 300.
More, the estimated annual 40,000 tonnes of organic waste is intended to be fed into an industrial scale biogas plant (méthaniseur) that will generate electricity and produce liquid fertilizer (digestat). The plant is planned to also process other local waste. The envisaged plant at 1.3-1.5 MW is ten times the size of the typical agricultural biogas plant in France.
The factory needs 3,000 hectares to accommodate the produced fertilizer, so the proponents have been busily trying to round up local farmers to sell their farms or convert them to sub-contractors. The proponents have even had their sights on 5,000 hectares, with a view to expanding the factory capacity to 1,700 milking cows.
Appropriately the progenitor of this scheme. Michel Ramery, is not a farmer but a builder / developer - nationally minor but regionally a major player in France's BTP (bâtiments et travaux publics) sector.
There are some dubious elements in the process.
The Ramery Group was found to have engaged in 2007 in secret payments (involving bank accounts in Luxembourg) involving the then mayor of Henin-Beaumont, a rising Parti Socialiste figure.
In 2012, the Rameny Group's chairman was indicted (with the principal of another regional BTP company) of using a combined €4 million in company funds in 2010 to bribe the president of the local RC Lens football club (the two companies in turn got the job for renovating the club's stadium).
Par for the course? - the BTP sector nationally is mired in comparable dirty business.
Following large-scale local opposition, the creation of an opposition group Novissen (acronym for 'our towns care about their environment') and a negative decision by the Drucat municipal council, the Departmental Prefecture in February 2013 decided for the project, albeit with a limit of 500 cows.
However, the Rameny group obtained a building permit in March 2013 that facilitates accommodation of 1000 cows.
The mayor of the other relevant commune Buigny has been supportive of the project. He landed the job as architect of the building plans, being paid a sum apparently of the order of €30-40,000, although he possessed no expertise in animal husbandry buildings.
The Departmental administrative tribunal, in March 2014, declined to intervene to stop the building proceeding (begun mid-2013), following an appeal from opponents regarding irregularities in the building permit.
One irregularity claimed is that there had been no prior environmental impact study performed. Yet the buildings and bitumenized surfaces extend for 7.5 hectares. It is the largest dairy 'farm' ever constructed in France, as is the mooted bio-gas plant.
The water demands, already under pressure in the area, are estimated at 40,000 cubic metres per year. The truck movements, to the biogas plant and to the extended pasturage, will be considerable. The animal feed will almost certainly be chemically modified because of the demands of an enclosed bestiary.
And it is in the catchment area of the Bay of Somme (incorporating the Marquenterre reserve), a site of enormous ecological importance.
By late 2013, it became clear that the construction was not consistent with the details of the building permit. The work in place had built over an area reserved for archaeological excavations. An expert report ordered by the Prefecture confirmed the protestors' claims.
The promoter has claimed that the divergence between the plans and the reality are common practice, and that rectification will follow eventually. By May 2014, no such rectification had occurred. The builders also illegally connected the development to a public water mains.
This flouting of planning laws and permits has long been practised, successfully, by the politically powerful and ever-expanding supermarket chains.
Formally, Ramey also falls foul of the French 1979 Code rural. His agenda fails the criterion 'of a nature to contribute to the protection of the natural environment and of the soils as well as the safeguard of social life' (Article 113-2).
He is not a licensed farmer, and thus formally falls foul of the Code's III.III.I (Article 331, the control of structures of agricultural holdings).
Yet this section has been rendered ambiguous by a 2006 liberalization (an EU directive) of the Loi d'orientation agricole (with subsequent modification of the Code), aimed at creating 'genuinely commercially oriented enterprises' on the land in the face of globalization, especially through new financing vehicles, factilitating increased employment opportunities, blah blah blah.
Driving a bulldozer through the law
The role of the French SAFER NGOs (Sociétés d'aménagement foncier et d'établissement rural), established precisely to inhibit financialization of the land, has been undermined by this legislation.
Ramery, the non-farmer, has thus been enabled to amass disparate holdings and establish control over an extended area by having formal authority parcelled out to other entities. The 2006 legislation has thus fostered the ambiguities in the Code through which convenient hole M. Ramery has driven his bulldozers and land amalgamation for his 1,000 cow factory.
The tolerance of the authorities for the developer's persistent insouciance contrasts with their intolerance towards the dissenters.
In September 2013, protestors invaded the building site (more protests and occupations followed in 2014), deflating vehicle tyres and scarpering with key milking machinery components.
'Terrorism pure and simple' ?
The project's overseer, Michel Welter, called the action "terrorism pure and simple". Leaders were arrested and charged with gang robbery and possession of stolen goods. Novissen highlighted the contrast in a letter to the local prosecutor:
"The facts that we raise in our court action [concerning Mr. Ramery] ... show themselves sufficiently serious and organised to justify an inquest from your office, at minimum to verify these facts and then to pursue them.
"These facts point to secret deals involving public markets on a grand scale, coupled with the existence of a network of connivances to garner subsidies and other administrative decisions, the all on a base of systematic and protected tax evasion and money laundering in order to monopolize the lands of our farmers.
"These doings destroy and pollute our territory and its inhabitants. Everybody knows it. How can you ignore it? ... And if you are aware of these facts and allegations, why do you keep silent on this subject, in the meantime pursuing its victims. Are we in a state of law, are we in a democracy? ...
"It seems necessary that Justice intercedes with diligence, genuineness and impartiality. We do nothing other than demand respect for the law."
Liberty, Equality, Fraternity
Well why has Mr Ramery got so far? The reason is that, although the government formally supports the family farmer, sustainability, etc., de facto it supports the Ramery model. The current Ecology Minister, Philippe Martin, is missing in action.
The acquiescence is partly explained by the pro-industrial stance of the umbrella agricultural body, the FNSEA (Fédération Nationale des Syndicats d'Exploitants d'Agricoles). Although, membership-wise, it is broadly representative, FNSEA is now dominated by corporate interests.
This trend led to the creation of a breakaway group, Confédération Paysanne, in 1987. Here is the Confédération to the Agriculture Minister, Stéphane le Foll:
"Today, your discourse and your political mediations are the expression of a choice. You speak of agro-ecology, of employment, but above all, under pretext of a claimed competitiveness, you praise the export-orientation of France, the balance of trade as the ultimate arbiter of your actions. In fact, you act to reinforce the model of the farms / factories typified by that of the 1,000 cows."
The Confédération's orientation diverges:
"We are at a turning point: the industrialization of agriculture becomes more and more insistent, and each year, under cover of modernization, the number of family farmers declines.
"Henceforth, we have no more choice: should we sit by, becoming a de facto agent in the disappearance of farmers? Or should we oppose this development to foster an agriculture that creates employment, regional sustainability, respectful of its environment and of food security and sovereignty - the family farmer based agriculture for which we struggle? The 1,000 cow farm / factory is the symbol of the point of no return."
The dissenters belatedly achieved a meeting with le Foll this September after a year trying. The protestors have managed to have the size of the méthaniseur halved. Moreover, the herd upper limit formally remains at 500.
But anyone that thinks that Ramery will be content with these constraints, especially with a 1,000 milking cow infrastructure, is living in fairyland.
Finanialization and speculation
A 'law for the future of agriculture', long in debate and amendment, finally passed both the Senate and Assembly in September. Formally, there is a lot of high-minded sentiment. In addition to gushing concessions to the environment, the agglomeration bogey gets attention:
"The protection of agricultural land and generational renewal are at the heart of section II, which plans ... to improve the functioning of the control of farm holdings, in order to facilitate new entry and to inhibit the excessive concentration of agricultural land in the hands of a sole proprietor (article 15)."
Words are easier than substantive action. Land prices in the Somme have doubled since 2000, and increased by 40% since 2007. Financialization of the land has contributed to this rise by adding corporate and speculative components to the mix.
A SAFER spokesperson recently noted that a would-be young farmer could be looking at a sum of a million euros for land and infrastructure. The contradictions in recent agricultural legislation and regulation are profound.
But the likely priorities are exposed by another development. Apparently the 'law for the future of agriculture' has also accommodated, after long FNSEA lobbying, just who gets to be defined as a farmer!
The FNSEA has long been pushing for the 'professionalization' of the agricultural sector. Henceforth it will be necessary to preside over a minimum number of hectares or of animals (numbers yet to be determined).
Claims Xavier Beulin, current head of FNSEA (Le Canard, 30 July 2014): "whoever has two hectares, three goats and two sheep is not a farmer."
France had a million farmers in 1990. There are less than half that number now. Beulin wants to further dramatically clean out the stables (and the countryside to boot).
But isn't the dissent a Luddite tilt against the inevitable? The non-farmer Ramery has enlisted as overseer a local farmer, Michel Welter, who is of this view. Welter claimed (in September 2013) that:
"Today, half the UHT milk comes from Germany because it's cheaper. We're in a European market. If we're not committed to lowering the costs of production, others will do it anyway."
According to Welter, the price of milk has hardly moved since 1990 in the face of escalating costs. The average cost of milk production is pushing €400 per cubic metre (~tonne) whereas it sells at between €330-340. The situation is untenable.
Welter has in mind a price for Ramery's milk at more of the order of €250. Welter was reportedly bowled over by a visit to the Fair Oaks farm in Indiana, reputedly housing 25,000 cows. The sky's the limit.
The 'free market' is subsidy-driven
If the impending Trans-Atlantic Trade Treaty is threatening US-style 'anything goes' in Europe, the immediate pressure is coming from Germany.
Ah, the ironies. The dominant non-military reason for France agreeing to a generalized common market was to harness German industrial prowess. France's 'comparative advantage' would be in agriculture - hence de Gaulle's insistence on the Common Agricultural Policy (CAP). Here is Germany beating France on its seemingly privileged terrain - or shall we say terroir.
But the equation incorporates more than free market and technological imperatives. There's the subsidization dimension. Ramery has organized a subsidization bonanza.
The 'enterprise' was to be underpinned by: an investment incentive public subsidy for the construction of the méthaniseur; ongoing subsidization of the 'green' electricity purchase price by Électricité de France; expected garnering of the local public contracts for collection and processing of green waste; and ongoing subsidies from the CAP.
The current limitations on the planned scale will reduce the scale of the subsidies, but only for the interim while those limitations last.
As for the 'money for jam' CAP subsidies, Xavier Beulin has them very much in mind in trying to wipe out the little guys from eligibility. Beulin is himself a large-scale grain grower, and currently head of Sofiprotéol, a multi-billion euro biofuel company.
CAP payments have long been skewed towards the big players, and FNSEA evidently intends to further reinforce the imbalance.
French dairy farmers have long been under the gun. A swathe of them disappeared in the 2000s, including in Picardy, due to rising costs and European-wide overproduction. But the authorities also contributed to the malaise.
In September 2008, the French competition regulator (internalizing the Brussels mindset) dismantled the industry-wide cooperative negotiations for 'reference pricing' on milk prices, deeming them 'anti-competitive'.
The ignorance and/or venality of competition regulators globally is staggering. They need to be sent back to school to learn how specific markets work; but then those who teach this stuff generally have no idea either. Apparently good sense prevailed (assisted by input from the French National Research Institute in Agriculture), and the cooperative negotiations were restored in 2012.
In November 2008, the CAP 'Health Check' agreement mandated the wholesale deregulation of the European dairy sector, to occur on April 2015, with a ridiculous (if marginal) increase in quotas in the interim. All the better to force participants to respond better to 'market signals'.
The authorities are blind to the innate problems of market volatility. They are also wilfully blind to the structural hierarchy. The production of specialist products aside, the producer is at the bottom of the food chain, always the price-taker - the victim of market volatility and of market power.
Some countries (including Germany and the Netherlands) have already mooted a substantial increase in dairy production post-deregulation. There's going to be a free-for-all. Some 'experts' are advising the necessity to hedge risks through financial mechanisms - a joke.
There will be inevitable regional disparities. There will also follow, inevitably, localized regulatory measures that will be pragmatic, fractured and ultimately to marginal effect.
Driving rural unemployment and depopulation
The opposition, mobilized particularly by Confédération Paysanne, to the Ramery move from building to industrialized agriculture is not going away.
The delayed judicial hearings (late October) on the arrested protest leaders are a focal point for activism. The first cohort of cows was delivered to the Ramery site stealthily in the dead of night, 13-14 September. The first milk deliveries are occurring under police guard. The contracted purchaser, Senoble, is being put under pressure byboycott activism.
The 1,000 cow factory in the Somme offers minimal employment, and that probably precarious (and also, a new trend, probably administered offshore via a subsidiary that facilitates the evasion of compulsory social security contributions). It threatens widespread depopulation of the local area. If it succeeds, more will follow.
The Confédération said to President Hollande (last May):
"We know that rural vitality is not in the calculus of the credit agencies, to which your governments subscribe. We know that you'd be happy merely with the occasional rural pretty picture as window dressing for the travel brochures [and the Tour de France circuit], but wake up to yourself.
The success story of le plateau de Millevaches in your home base of the Limousin shows what is possible - a virtuous circle story rather than the vicious cycle downwards on offer in the Somme."
The fight over the 1,000 cow factory is a David and Goliath battle, and it evidently has a considerable time to run.
Evan Jones is a retired political economist from the University of Sydney. He can be reached at: email@example.com
This article was originally published on CounterPunch.