France: Revised Budget To Confiscate Assets of Research Associations
By Rick Mitchell
PARIS--A French government plan to force agricultural research associations to foot the bill for increased aid to farmers has set off a messy conflict with several associations. It also sheds light on France’s bizarre system for funding such professional organizations.
On November 17, the council of ministers adopted an adjusted budget for 2003. Among other things, it tacks on 177 million euros to the annex budget for agricultural aid, known as BAPSA. Funds for the increase are to come from a direct levy on the assets of four major agricultural research associations.
The revised budget also adds 150 million euros for expenses linked to last summer’s drought, on top of 249 million euros paid out by advance decree earlier this year and 120 million euros from reserve funds. The so-called drought-victim solidarity effort thus comes to 519 million euros, according to the agriculture ministry.
The government's plan to fund BAPSA with private research money seems odd, until you understand where that money came from. In France, farmers are legally required to belong to professional associations such as ARVALIS, a private plant research group. ARVALIS and the other organizations have the legal right to levy what are called “obligatory voluntary dues,” a term only the French could invent.
Other professions in France have similar associations with their compulsory memberships and obligatory voluntary dues, which are based on sales volume. Businesses and independent professionals must file yearly returns to their respective associations.
The agricultural associations are supposed to use the money to research better ways to farm, thereby improving farmers’ livelihoods. Instead, it turns out that ARVALIS has accumulated assets of some 78 million euros. ONIC, the national inter-professional office for cereal growers, has 57 million euros, and UNIGRAINS, a financial company aimed at cereal growers, has 52 million euros stashed away.
Renaud Dutreil, secretary of state for small and medium-sized businesses, told parliament that the associations should not have such large reserves. "ARVALIS’s substantial assets come from collected dues,” Dutreil said, adding, “They have no business being invested in bonds, which is currently the case. They should be used for immediate needs, those of BAPSA, in a reasonable proportion.”
Trapped in the middle of this tug-of-war are the farmers, suffering through a catastrophic growing season. Francois Lucas, president of the independent National Farmers Coordination Union, says the associations’ assets should be seized and returned directly to farmers, and not through BAPSA.
In an open letter published on the Internet, Lucas contends that the reserves of all the associations combined, divided by the number of farmers they were collected from, comes to 4,550 euros per farmer, which should be returned.
For their part, the associations protest that they are being picked on unfairly, while other professional groups go untouched. ARVALIS characterized the government’s plan as a “holdup” that would force it to cancel several research projects and conduct a drastic layoff program. This in turn would have dire repercussions throughout the research community, jeopardizing France’s progress in agriculture, it said. ARAVALIS employees duly took to the streets in late November, protesting to save their jobs.
Dutreil insisted the levies would leave associations at least one year’s working capital. Thus, research could continue, he said. On December 4, after a long debate parliament adopted the adjusted budget, but only after changing the BAPSA provision against the government’s will.
In particular, Parliament cut the levy on ARVALIS from 79 to 59 million euros, and added a special one-time levy of 10 million euros on the reserves of the French institute for petroleum (IFP) and the same amount from the national institute for industrial patents (INPI).
The draft next goes to the Senate.
