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France unveils plan to boost farm income

France’s agriculture minister unveiled a 250-million-euro plan to boost falling farm income Nov. 12, including significant subsidies for sheep breeders and tax relief for the sector as a whole.

After reaching record prices last year, prices for agricultural products such as milk and grains have now fallen back sharply, prompting thousands of worried farmers to take to the streets recently to call for financial help.

Farmers have said they are also being squeezed by rising input costs, notably for fertilizers, and increased pressure from retailers to sell at lower prices after legislation this summer liberalizing price negotiations in France.

“French farmers’ incomes have shed between seven and 15 per cent this year, depending on sectors, and this is the second consecutive drop,” Agriculture Minister Michel Barnier said.

Of the total budget, 50 million euros would go to sheep breeders, particularly hit by the surge in animal feed prices, of which half would be paid by the European Union, while tax relief measures would cost the 2009 budget another 75 million euros.

France would also extend the tax reduction on fuel for farmers (TIPP) to the second half of 2008 and support energy-saving investments for a total of 75 million euros, the ministry said in a statement.

Other measures would include tax exemptions for young farmers and the launch of a price-monitoring watchdog.

In total, France would finance 179 million euros and Europe 25 million, leaving 46 million euros to banks and mutual insurance companies, notably through preferential loans, the ministry said.

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