AGRIFRANCE, a specialised department of BNP Paribas Wealth Management, publishes its short-term note on the French rural land market and this year focuses on the issue of young generation renewal in rural areas.

The Covid-19 health crisis reinforced the issues of food sovereignty and access to healthy, local and quality food. Maintaining an agricultural population is therefore a major challenge.

Main trends of the study:

At European level,

• The number of farmers decreased from 2.5 to 3% per year between 2005 and 2016. This decline is expected to continue in virtually all European countries.
• Nearly 70% of European farmers are over 40.
• The average farm size in 2016 was 16.6 ha. This area has been steadily increasing since then and is expected to continue to do so, as one farmer out of three retiring is not replaced.
• The traditional system based on mixed crop and livestock farming is gradually being replaced by hyper-specialized production systems (monoproduction). Today, more than half of farms produce only cereals.

France follows the same trends, but land is often more important and cheaper than abroad. Production is also extremely diversified.

​Settling in agriculture or vineyards is both a social and land development issue. According to the Centre d’Economie Rural (CERFRANCE), by 2030 the agricultural and wine sector should experience a phenomenon of “multipolarity”: large areas, with low production costs and economies of scale, contracting, development of niche markets, short-circuit marketing, pluriactivity, etc.

The second part of the study is dedicated to the French rural land market:

• In 2020, France maintained its position as European leader in agri-food exports. Today, it ranks 7^th in the world.

• Covid-19 affects French production:
  • The market for agricultural raw materials has been increasing over the past year. In order to secure their food stocks, China and the major importing countries have sharply increased their grain imports (surplus of EUR 5.1 billion over the first nine months of 2020).
  • On the other hand, the wine sector is heavily penalized. Volatility in the global wine market, the closure of bars and restaurants, and the drop in air traffic have brought down the value of exports by 18% between January and August 2020, the first time since 2013-2014.
  • The timber market suffered the consequences of the pandemic until early summer 2020. Fortunately, autumn sales were dynamic and helped catch up.

​In a sluggish economic environment, transaction volumes are falling, but French rural land prices have shown great resilience. Values are increasing in the three French rural land markets: agriculture, viticulture and forestry.