PARIS, France (Reuters) — French wheat growers need to slash costs, notably in transport, if they want to stop selling at a loss and regain international market share lost to Black Sea producers and others, their industry association said.
The European Union’s biggest wheat producer must also modernize to the tune of 14 billion euros (C$21 billion) over 15 years, the French wheat growers’ group AGPB said.
A global grain glut and competition from producers such as Russia and Ukraine have weighed on French wheat prices since 2013. In addition, bad weather last year caused the lowest French harvest in 30 years.
“Never before has such a difficult situation lasted so long,” said AGPB chair Philippe Pinta, adding that 40 percent of French grain growers had lost money last year.
“What we can act on to regain competitiveness are costs,” he said. “In the medium term, our objective is to be competitive at a wheat selling price of 140 euros ($214) per tonne, which would still give farmers an income.”
But he said this could take 10 years because savings were required in many areas.
French growers currently produce wheat at around 175 euros ($265) a tonne, but have been selling at around 130-135 euros, Pinta said.
Logistics will be one of the main ways to improve French wheat’s competitiveness, he said. He urged the government to improve rail freight, which was cheaper than the roads, and said better transport could knock five to 10 euros off the price of a tonne of wheat.
He also asked for lower taxes, after agriculture minister Stephane Travert this week announced a review of farm taxation.