Pulse industry pundits are nervous that a new French crop subsidy could limit Canadian edible pea exports to India and feed pea exports to Spain over the next three years.
France’s lucrative new subsidy will go to French pea, bean and forage legume producers starting in 2010.
The support will be worth up to $97 per acre in 2010, $81 in 2011 and $64 in 2012. That is in addition to a $35 per acre protein subsidy that all European pulse crop growers already get.
“That’s a very, very hefty support payment,” said Marlene Boersch, managing partner of Mercantile Consulting Venture Inc., a Canadian agribusiness market intelligence firm.
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She said it could result in a dramatic increase in French yellow pea production, which was 271,700 acres in 2009.
“We know they have the capacity to ratchet it up much more than that,” said Boersch.
In 2000, French growers planted a little more than one million acres of the crop, so the precedent is there.
Peter Kendall, president of the British National Farmers Union, wrote a letter to the European Commission’s head of agriculture complaining about the subsidy.
Kendall claimed it will triple France’s pea and bean crop area.
Carl Potts, Pulse Canada market development director, said it’s easy to see that type of growth. The French government has stated it would like to see 660,000 acres of peas.
In recent years, French peas have returned about $64.78 per acre less than competing cereal grains. The net effect of France’s new coupled subsidy program is about $97.17 per acre. Suddenly peas are the better bet.
“That would signal a fairly strong shift in incentive for growers to increase the level of production of protein crops in France,” said Potts, who added Pulse Canada is closely monitoring the situation.
France wants to lower its reliance on imported corn and soybean meal, which have been disrupted by the EU’s zero tolerance policy on unapproved genetically modified crops.
Boersch fears the subsidy could increase French pea exports to the Indian subcontinent, at the expense of Canadian pea growers.
But a recent blog by Phillip Clarke, a British agriculture journalist, said the subsidies will go only to farmers whose crops go into animal feed.
Boersch said that could spell trouble. Canadian peas went to edible markets recently but there is a history of them going to the Spanish hog industry. In 2005-06, Spain consumed 837,100 tonnes or 78 percent of Canada’s bulk pea exports.
France has a competitive freight advantage and can ship peas to its next-door neighbour at a relatively low cost.
