Fall in incomes and downturn in productivity in French agriculture since 1998

The first years that followed the implementation of the CAP reform of 1992 showed a favourable trend in farming incomes per capita (graph 1) in real terms. Towards 1998, they were followed by a trend reversal coupled with an erosion of incomes. These tendencies were not similar in all the types of farming and, for instance, a better maintenance of incomes was observed in the bovine-meat orientation than in the large-scale field cropping orientations. What are the determining factors of these trends? Are they due to the decrease in product prices? The increases in factors prices? The system of direct compensation payments? The drops in productivity gains? How did these different elements combine in the formation of incomes and why did they not work the same way in the different orientations? This research aims to provide some answers to these questions by analysing the evolution of the prices of products and factors, subsidies and productivity gains between 1990 and 2004, using the accounts per farming orientation prepared by the SCEES (French Central Service of Statistical Inquiries and Studies of the Ministry for Agriculture and Fisheries)