France: differentiated agricultural products lead to productivity; precision agriculture is the future
The French have a long history of agricultural competence that goes hand in hand with their reputation for high quality food and drink. Key to these twinned traits is the factor of differentiation – there is an endless variety of livestock, types of farmland, and products from the two combined that makes its way to market in France. Each region seems to have its own bespoke cheeses, breads, breeds of cow and sheep, and local speciality dishes. This differentiation is supported by regulators, and is necessarily labour-intensive.
But, while the drive to produce more bespoke, artisanal, food and drink might not seem like it lends itself to productivity, France’s farmers are amongst the most productive in the world. The reason for this? Individualised products command higher prices.
To sustain an agricultural sector of this size and complexity, France is investing heavily into agricultural research. The country spends over 10% of its total public research and development money on it – a figure that dwarves that of most countries.
It is also prioritizing agriculture over the next decade. A year ago, the French government launched its Agriculture Innovation 2025 plan, aiming at improving the country’s competitiveness on the global agricultural market and minimising the environmental damage the sector causes.
Leading the way in Europe, one of the areas that the Agriculture Innovation 2025 plan details is digitalization and precision agriculture. As well as heavy investment into the area, the French are planning to develop a nationwide pool of agricultural data that can be accessed by agricultural companies, organisations and the public. With luck, this will supply a “rapid diffusion of information and the emergence of potentially radical solutions to agricultural problems.”
So, while the agricultural sector is facing huge challenges globally, France is at least standing up and showing other countries not only how they can become more productive today, but developing the tools we will need to survive over the next century.
Dominion holds a number of companies in the agricultural sector of its Global Trends Managed Fund – such as Syngenta and John Deere – that stand to benefit from increased focus and spending on precision agriculture.
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