IREF - Institute for Research in Economic and Fiscal issues
Fiscal competition and economic freedom
Without any preliminary consultation with the Parliament, the French President Sarkozy announced a subsidy of 1.65 € billions for the agricultural sector. It is hard to imagine where Sarkozy will find this money, given the current economic context and the quasi bankruptcy of the French government. But it is more interesting to question the utility of this subsidy, which amounts for some 2 750 € per farmer.* It is a considerable amount for the state budget, but a highly insufficient one when it comes to the investment that each farmer can realize with it.
We cannot help but think that this is rather a marketing strategy for the government, than a real rescue plan for French farmers. *There are about 600 000 farmers in France (source : INSEE).