Examination of Witnesses (Questions 760
- 762)
MONDAY 21 MAY 2007
MR CLAUDE MAGNIER, MR BERNARD CLARIMONT AND MR JEAN
FRANÇOIS SOLERE
Q760 Viscount Ullswater:
So there are no environmental concerns about losing vines in one
particular area?
Mr Magnier: Any land that has not found another
use after the grubbing-up procedure will be eligible for aid with
regard to the agricultural conversion policy with regard to maintaining
the land just for fire protection purposes.
Q761 Chairman:
Can I check that I have understood your position on the Fischer
Boel Communication correctly. It seems to me that you are saying
you want control over crisis distillation, you want crisis distillation
to continue, you want a grubbing-up scheme in place, and I do
not quite see whether the initiative on grubbing-up comes from
the producer or you want to control itself, so you can say to
the producer, "No, you cannot grub-up". And on the removal
of the ban on new planting rights I do not think I have heard
what your position is on that.
Mr Solere: With regard to grubbing-up, the profession
was opposed to the grubbing-up policy and, if it accepts this
policy today, it is because it is forced to on a theoretical perspective
of structural adjustment, but we know that the structural adjustment
of the industry remains theoretical and the grubbing-up dynamic,
as it were, will be applied in relation to the profitability of
each estate. With regards to the pricing levels reached today,
we consider that a family estate in Languedoc/Roussillon today
is no longer profitable. Given that the production system at the
present time is very fragile, we consider that in this context
the industry will be very, very reactive with regard to a grubbing-up
policy which will help them get through this current period. With
regards to the professionals who will remain in the sector, the
question remains what level of competitiveness remains for these
producers. This also gives rise to the question of the land use
programme for managing the estates, therefore increasing levels
of productivity and controlling production costs, notably at the
co-operative winery level. Whether the decision to grub-up is
collective or individual, the overall change is to be met by the
entire industry within the production area.
Mr Clarimont: In the market segment curves I
presented earlier, we are in the lower segment of the market.
For our market sector the main challenge is controlling production
costs. When you are in this segment the profitability of your
estate is simply based on controlling costs, which is why we have
taken up the strategy of supporting the investment costs relative
to co-operative wineries. We cannot jump from one segment to another
very quickly, which is why we are concentrating our efforts on
controlling the production costs. With regard to the grubbing-up
procedure, what we want to do is encourage certain producers to
stop their activity but without necessarily grubbing-up the vines,
working towards replanting and redeveloping the vineyards, which
comes within the framework of maintaining the quality potential
which is part of the European Union Directive.
Lord Plumb: The Director said that the
grubbing-up development, if 50,000 hectares was going to be taken
out of production, is very much related to the retirement package
and, therefore, it would not be a question of replanting. If you
are going to grub-up and take the €240 per hectare for grubbing-up,
as you said earlier, surely it does not mean that they want to
be replanting if they are going to retire. What will they diversify
into? The whole of the CAP now is based on cost compliance under
Pillar 1 and Pillar 2. Where does this money come from? Does it
come from the Environment side, Pillar 2, as you see that development?
Or does it come from the payment side, which is for further production?
Q762 Chairman:
That is the last question!
Mr Clarimont: The conversion of the land will
be very complicated, very difficult. In general, in the plains
areas we can envisage restructuring the use of the land, conversion
towards cereal production, for example. There will certainly be
a small proportion of this land which will be converted into fruit
production. What will happen is that, when certain producers stop
their activity, a small portion of their land will be taken over
by other wine producers who wish to expand their estates. Another
factor that we did not express earlier is that many producers
live on their estates, the estates are not farmed by third parties,
and therefore it is their home. That means that, when they stop
their wine-making activity, they will still maintain their estate
simply as part of their personal patrimony. Part of the land will
therefore be transferred into infrastructure, regional development,
and part of the land will be unused and will be left to wait for
a future potential use. At present there are a number of parcels
throughout Languedoc/Roussillon that are unused and are awaiting
future conversion. To be very direct, our major challenges are,
firstly, social with regards to the people involved and, secondly,
environmental. There is also an element relative to the industry,
therefore some efforts will be concentrated on converting into
different types of culture but the primary objectives are social
and environmental. The efforts with regard to the wine industry
in Languedoc/Roussillon are very much based on increasing market
competitiveness through working on the reduction of costs involved
in production, notably at the co-operative winery level. This
is why, with regard to the funds available under Pillar 2, we
have reserved the maximum level of credits available, which is
not enough. We have reserved or set aside €18 million for
the 2007-13 period just for investment into the co-operative sector
further to mergers between different co-operative wineries. We
have also set aside certain sums for reorganising the use of land
further to the grubbing-up policies under Pillar 2. Under Pillar
2, €3 million have been set aside for the reorganisation
of land use. A final figure which is very important: there is
€50 million being made available for the reorganisation of
the vineyards, an annual figure of €50 million by the European
Union, for the replanting of grape varieties in the reorganisation
of the vineyards in the Languedoc/Roussillon.
Mr Magnier: I hope we have been able to answer
your questions. Thank you for being attentive listeners. I wish
you every success with your mission in Languedoc/Roussillon.
Chairman: Thank you very much for giving
us the benefit of both your time and, perhaps more importantly,
your expertise and knowledge. Thank you very much indeed. It has
been a very helpful, useful session. I just have to say I come
from Scotland where, of course, we do not produce wine but we
produce something else that we drink!
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