ECONOMIC ANALYSIS OF GRAIN PRODUCTION IN FRANCE

This study analyzes grain production in France. France is the major grain producer in the European Community (EC) and one of the leading producers in the world. France is also a major grain exporter and, thus, competes with the United States in world markets. The United States is pursuing a policy of lower world prices to regain market share. Large grain surpluses in the EC have resulted in increased budget expenditures to support grain farmers and pressures to lower prices. What are the implications of lower prices on French grain production? Our results suggest that French grain area is price elastic. However, supply response also depends upon yield, which is not sensitive to changes in output prices in the short run. French products receive preferential treatment within EC markets, and their exports to nonmember countries are subsidized, enabling France to increase exports and market share. French competitiveness has also been enhanced by technological improvements, relatively high and stable prices, and structural change