Agrifrance Report 2021: the renewal of younger generations
#Vineyards — 08.06.2021

AGRIFRANCE publishes its 2021 annual report on the renewal of younger generations

Benoit Léchenault, Director of Agrifrance

Focus on the renewal of younger generations in rural areas.

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.

Since the 1960s, the decline in the number of farmers has been steady, and contrary to popular belief, France is not an isolated case. The European Union is undergoing a major structural change. In these circumstances, setting up young European farmers is a real challenge! In France, the situation is less negative than it seems, because land is often cheaper than abroad and production is extremely diversified. Solutions exist for setting up young farmers or winegrowers. Rural areas simply need to evolve and continue to adapt."

Benoit Léchenault

Director of Agrifrance, BNP Paribas Wealth Management

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 7th 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.

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About AGRIFRANCE

Within BNP Paribas Wealth Management, AGRIFRANCE is the department specialising in the rural land market: wine-growing properties, prestigious houses, agricultural estates and forest estates. With more than 45 years of experience in this field, AGRIFRANCE supports its clients in their patrimonial approach. Through a network of recognised professionals, AGRIFRANCE is able to provide complementary services, such as expertise or management of rural properties.

For almost 20 years, AGRIFRANCE has published an annual report that provides insight into rural land investment. This year’s study proposes a focus on generational renewal in rural areas.

AGRIFRANCE is part of BNP Paribas Wealth Management’s Private and Alternative Investments offering in the same way as Private Equity and Real Estate.