Honey pots
24 October 2014

Competitiveness in the agrifood sector

The French agrifood sector is the leading manufacturing sector in terms of jobs employing 426,000 persons, and turnover representing €165 billion. It is a vehicle for internationally promoting the French agricultural and food models, as shown by the success of the 2014 Salon international de l’alimentation (SIAL - International Food Exhibition: 6,300 exhibitors from 150 countries).
 
Although the agrifood sector was less affected by the 2008 crisis compared to other sectors, the sector nevertheless suffers from strong international competition and a lack of competitiveness. The measures introduced by the Responsibility and Solidarity Pact provide an adapted solution to the diversity of the sector. Indeed, this sector includes both international “champions” and very small enterprises and small and medium enterprises (SMEs). It covers a very varied range of products, which must closely follow changes in consumer behaviour. As a result, reductions in social contributions can encourage, depending on the case, strategies aimed at growth, job creation, investment, modernisation or innovation, export market share gains or resistance to competition.
 
78% of the sector wage bill is impacted by the tax credit to encourage competiveness and employment, which places the agrifood sector just behind the catering, construction and transport sectors. In total, the impact of the various measures results in additional reductions in social contributions amounting to €431 million in 2014 compared to 2012. In 2017, reductions in social contributions will represent an additional €1.1 billion compared to 2012. In the scope of the Responsibility and Solidarity Pact, the Minister of Agriculture, Agrifood and Forestry and the Minister of Labour, Employment, Vocational Training and Social Dialogue established an employment monitoring committee in the agricultural and agrifood sectors to monitor the implementation of mutual commitments and the performance of the agreements signed in these sectors since 2012. This includes the project in the process of being finalised on quality of life in the workplace, which is considered by the food sector to be a significant lever for competitiveness.
 
The granting of EU, Government and regional funds in the scope of the scheme aimed at encouraging competitiveness and farm business adaptation or the measures aimed at speeding up the procedures relating to setting up classified establishments for breeding, which were launched one year ago, will increase the competitiveness of farm businesses.
 
In addition, the agricultural and agrifood sector will benefit from a special budget of €120 million in the form of subsidies during the period 2015 to 2017 to encourage technological innovation and investment forming part of the future strategies of these sectors. At the same time, a call for projects backed by €20 million to create new food products adapted for special diets (senior citizens, children, athletes, etc.) will be launched in early 2015. This is one of the five priorities of the agrifood industrial initiative in the scope of the 34 sector-based initiatives (Nouvelle France Industrielle).
 
Competitiveness involves simplification. Beyond transversal measures benefiting the sector (“Tell Us Once” project - « dites-le nous en une fois »; simplification of pay slips), the Government has taken into account the concerns of the agrifood sector relating to the introduction of the labelling scheme informing consumers about waste recycling recommendations (Triman).
 
The introduction of the Consumer Act of 17 March 2014, including the publication of decrees relating to the sanction mechanism and implementation of a clause obliging players to take into account the price volatility of raw agricultural and food materials, will enable improved supervision and greater transparency of relations with mass distribution, which will also contribute to the competitiveness of the sector.
 
Finally, the Government will continue to provide support to the sector in the field of export, through the finalisation of the digitisation of export certification procedures, and the streamlining of export assistance carried out by Sopexa and Ubifrance. As a result, a “consensus-builder” for agrifood export, who will act as the interface between companies and operators, was appointed at the beginning of October. One year ago, the Government also implemented a special mechanism aimed at providing individualised long-term support with exports to SMEs in the agrifood sector, with export development loans under very advantageous conditions, export development guarantees via Coface, and an individualised support initiative provided by Bpifrance. This initiative, which aimed to provide support to 250 enterprises, has already helped 120 SMEs. The Ministry of Agriculture, Agrifood and Forestry will strengthen this individualised support initiative by relying on French foreign trade advisors and Ubifrance.
 
All of these measures have been implemented in the scope of a sector-wide contract signed in June 2013 by all of the players in the food industry and the public authorities.