C
he morning took place the long-awaited meeting by the entire French wine industry. And if there were words, they were obviously not in the air. The Minister of Agriculture Marc Fesneau confirmed to the representatives of the sector his agreement for the financing of a cyclical distillation of wines, the possible mobilization of funds for a structural uprooting for the basins which require it, as well as an opening of the Ministry of Finance to the possibility of extending the repayment of state-guaranteed loans taken out during the Covid health crisis from 6 to 10 years.
“As of now, and within the limits of the amounts authorized by European provisions, it is 40 million € (M€) of national credits supplemented by 40 million from the envelope of European funding (EAGF) dedicated to the wine sector which enable a distillation campaign to be launched this summer. A second distillation campaign could be organized from October according to the same distribution between national and European credits to reach a maximum of 160 million euros in 2023., announces the office of the Minister of Agriculture following this sector meeting. By spreading the financing effort over two successive years of the wine CMO (from October to October), the ministry provides a coherent financing response to the sector. The distillation is therefore officially announced “but there will be no agreement if we do not reach the floor of €200m in overall financing for this, I firmly insist on that”nevertheless rebounds Jérôme Despey, president of the specialist wine council of FranceAgriMer.
Discussed in a meeting, this extension of at least €40 million required should find its source of financing “in the European Commission’s crisis reserve fund, supplemented each year to the tune of €450 million, available for all countries and sectors”, he continues. But on this extension that the president of the specialist wine council of FranceAgriMer announces is essential, no answer to be hoped for before March and the meeting of the ministers concerned. “€200 million makes it possible to arrive at a financing plan similar to that of the previous crisis distillation of 2020, which mobilized €211 million for 2.6 million hl. It is then up to the sector to work together to establish the methods of segmentation between categories of wine and the distillation needs by basin, because we will not be able to go for prices higher than those which currently guide the market.continues Jérôme Despey.
“But the account is not there”yet Gérard Bancillon, president of the confederation of IGP wines of France, decides, “because the feedback from the various inter-professional organizations makes us recognize a need for distillation of 3 million hectoliters on a national scale, i.e. a need of 240 M€ for an average value of 80€/hl”. While a segmentation by wine quality and perhaps by color was mentioned before the meeting, the tensions of the white wine market keep them away from this distillation measure. “It is up to the sector to make its choice between the volume to be distilled and its remuneration, it is now our job to propose a coherent distribution plan adapted to this financing”, continues Jérôme Despey. If the door is not closed, the use of private storage aid will require further discussion, “because unlike distillation, there is currently no regulatory mechanism for this measure at the scale Europe”, specifies the president of the specialist wine council of FranceAgriMer.
Oxygen for cash
Dear to the federation of independent winegrowers, the subject of the repayment of loans guaranteed by the State (PGE) has also been the subject of progress deemed constructive. “The government is supplementing the business credit mediation system by creating a ministerial task force placed within the ministry in charge of agriculture, to support farmers and direct them towards the solutions best suited to their situation”announces the Ministry of Agriculture in a press release. “While the Minister of Agriculture and the Prime Minister showed us their agreement on our demand for exemption to extend the reimbursements of PGE from 6 to 10 years, it blocked the finance side at Bercy. The creation of this task force, which will study companies’ files on a case-by-case basis, finally allows us to consider an opening on this point.”validates Jean-Marie Fabre, president of the National Federation of Independent Winegrowers (VI).
A meeting of representatives of the wine industry, the ministry and the federation of banks is also on the table. “in order to find the most suitable tool for us to achieve this solution for extending the reimbursement of PGEs”, adds Jean-Marie Fabre. The Fitou winemaker emphasizes that “help oxygen for cash flow” that can be brought to companies today “represents even less resources than what will be needed in a few years if these companies go out of business, not to mention the contributions they make to the economy for the need to finance future pensions”.
Last major part of today’s meeting, the structural uprooting measures, particularly awaited by the Bordeaux basin. “Areas are being studied around the mobilization of EAFRD tools on agricultural diversification, the renewal of generations, and sanitary uprooting within the framework of an interprofessional program to eradicate flavescence dorée. Work must continue so that these levers can be made operational from 2023. The State will be alongside the Nouvelle-Aquitaine region and the Bordeaux inter-professional organization to respond together to the challenges.”, presents the press release from the Ministry of Agriculture. If no amount is announced, these two sources of financing validated by the ministry seem to satisfy the managers of the sector. “The FMSE health and environmental fund, used until then in a curative context, for example for flavescence dorée, would then be implemented in a preventive context by removing abandoned vines from the landscape”locates Jérôme Despey.
Aiming preferentially at vines that have been abandoned or are at the end of their development, this funding orientation would open a way out for operators in great difficulty who wish to withdraw. On the other hand, the mobilization of the EAFRD, involving counterparts in agri-environmental measures, would be carried out jointly by the state and the regions. “For the time being, only the Bordeaux basin has quantified uprooting needs. The state’s commitment alongside the regions makes it possible to relieve them of an excessive financial burden. The work of precise quantification must be carried out quickly because concrete responses for implementation are planned for the holding of the agricultural show »summarizes Jérôme Despey.
Minister Marc Fesneau also asks FranceAgriMer to continue its work on the prospect of temporary uprooting, essential to maintaining the production potential of the basins. Finally, the decision was made to use “the remainder of €40 million from the insurance system from the 2021 freeze”, explains Jérôme Despey, so that FranceAgriMer will launch a call for investment aid projects in the face of climatic hazards. “Two new assistance offices for protection investments in the face of climatic hazards, each endowed with €20 million, including one reserved for policyholders, i.e. a total of €40 million to better protect all farms, will open in the coming days”communicates the Ministry of Agriculture. “The remaining €20 million should rather be earmarked for adaptation to drought”completes the president of the specialized wine council of FranceAgriMer.