Macron offers tough love for farmers ahead of Paris show

PARIS (Reuters) - French President Emmanuel Macron staked out a middle ground on Thursday ahead of a major farm show, urging farmers to invest more rather than complain about overseas competition, while also promising to protect them from foreign land buyers.

French President Emmanuel Macron delivers a speech to the young French farmers invited at the Elysee Palace before the opening of the 2018 Paris International Agricultural Show in Paris, France, February 22, 2018. REUTERS/Etienne Laurent/Pool

Macron invited hundreds of young farmers to the Elysee presidential palace before the annual Paris farm show this weekend, a politically important event which takes place just after farmers staged protests across France.

The government is facing discontent over issues including trade talks with South American countries and an overhaul of subsidies for disadvantaged farm belts, sapping goodwill created by legislative proposals for fairer farmgate prices.

“Let’s not be naive, we won’t fix our problems in a few months ... but I want to give French agriculture a future,” Macron told the young farmers.

Macron pledged to clamp down on farmland purchases by foreign buyers, highlighting access to land for young farmers as a vital issue as France faced the prospect of 40 percent of current farmers retiring by 2020.

“We cannot let hundreds of hectares be bought up by foreign powers without knowing what the aim of these purchases is,” he said in a speech. “We are therefore clearly going to put in place regulatory safeguards in this area.”

Macron was alluding to land deals in 2016 and 2017 that French farming groups and media have linked to Chinese fuel services group Hongyang.

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While Chinese investors have acquired a number of wine estates and formed partnerships with dairy companies in France, the purchase of 2,600 hectares of cropland in central France over the past two years has hit a nerve.

Hongyang could not be reached for comment.

Speaking in Beijing on Friday, Chinese Foreign Ministry spokesman Geng Shuang said he didn’t know anything about the specific issue, but that the government had always asked Chinese companies to operate in accordance with the law overseas.

“We also hope the relevant parties can create a good atmosphere for Chinese companies local investment and business starting activities, and a fair environment,” Geng told a daily news briefing.

Macron also sought to reassure farmers that he would defend them in trade talks with the Mercosur bloc, negotiations that have raised fears of an influx of South American beef.

He reiterated French “red lines” over food and farming standards and said he would demand a safeguard clause to suspend any trade accord if agricultural markets were disrupted.

But he said existing imports of South American beef at full tariffs showed the French meat industry had failed to modernise, allowing imported beef to claim 70 percent of restaurant demand in France.

“Who can look me in the eye and tell me that Mercosur is the cause of their difficulties?,” he said.

Macron said an election pledge to invest 5 billion euros ($6.2 billion) in agriculture would start being implemented later this year, using financial mechanisms like state-backed loans for young farmers.

Farmers attending the reception reacted cautiously.

“He met our expectations with his message, but there weren’t enough hard figures,” said Paul Chanvillard, a 26-year-old dairy farmer.

Additional reporting by Ingrid Melander, and Ben Blanchard in BEIJING; Editing by David Evans and Mark Potter