France’s uncanny knack of choosing a winner irritates the crap out of everyone
I spend half the year living in a rural area of southern France. I like the people here: they’re not metropolitan when it comes to conversation, but by and large they’re crime free and generous. When they have too many tomatoes, they say I should help myself to the glut. And when my quinces are ready, I say the same to them. There are about 37,000 more things you can do with a tomato than a quince, so I can’t help feeling I do very well out of this system.
But most French farmers are descended from the same canny peasants who chucked out the Bourbons 225 years ago, and we’re not talking biscuits here. Frenchmen know a gift horse when they see one. Fifty years ago, they spotted the Common Agricultural Policy (CAP) – it goes with EU membership – and bought into it sight unseen. As long as you listen to what the Paris planners say about what to plant next year, the CAP is a licence to print gold-backed money for every farmer.
Usually in our area here, the mix of crops is sunflowers, maize and soy. But this year – all of a sudden – it’s wheat dominated. The Ecole Nationale d’Administration, or ENA – France’s elite school for training high-ranking civil servants – has decreed that more wheat will be grown. The CAP in turn decrees that all the crop will be bought at a profit for the farmers. But as this will produce an enormous glut, the retail price of bread will be at worst static – come what may.
The price of bread is an emotive subject in France. Ever since the sans culottes French were advised to eat cake by Louis XVI’s hated Austrian wife in 1787, the price of bread has been a central factor in the judgement of governmental success or failure: had he been born French, Bill Clinton’s sign would’ve read, “It’s the bread, stoopid”. So the ENA folks telling the farmers to plant wheat is an important economic sign for eurozoners.
France is by far the eurozone member State most able to self-subsist: with a huge cultivable land area, high levels of mechanisation, and a relatively low population density, things could go from bad to way beyond worse, and the French Government would still be able to feed its population. But this year, the ever-smart ENA Sorbonniers have had a lucky bounce, because the US wheat crop is not in great shape.
Sometimes, what the reporter sees around him is the starting point for a proper investigation: everywhere I look, there has been wheat. In the past few weeks, Parisian sourced wheat grain has risen 12% in value. The French harvest traded at a premium of $2.44 a metric ton to the U.S. today (Tuesday) and its price has been at consistently record levels…thanks largely to the US drought.
France will reap a whopping 35.2 million tons of wheat this season. Even if the eurozone fails, the EU cap policy will remain in place. Germany is not so well-placed when it comes to agriculture. And its factory orders were down 1.7% in June (versus +0.7% in May) while eurozone industrial orders were adrift by a frigthening 4.9%. With their new best friends Italy and Spain ganging up on Merkel, the French are in a strong position to suffer less than most from eurozone meltdown.
This will only further fuel German resentment. The EU North/South (aka Germany/France) rift is now firmly and irrevocably in place. Whatever Germany decides to do now, 57 years of rapprochement between the old enemies are at an end. I doubt very much if this reality figures highly on Hillary Clinton’s radar. And that lack of awareness isn’t being helped by the ominous silence from Berlin.