Market Focus : Farmers Have a Message for French Government: HELP! : Drought and cheap imports have put family farmers in a difficult spot. Now, the farmers are revolting and the implications of their protest may extend to the proposed economic union of Western Europe.

By recent standards, last week’s demonstration by 10,000 down-on-their-luck farmers in this central French city was downright peaceful.

The farmers, most of them cattle raisers, burned a few old tires--not live British sheep, as some French sheep farmers did recently. Their pistols fired firecrackers, not bullets. They hurled empty wine bottles at some of the several hundred local and national police who dogged their steps, injuring 14 of them before some well-placed tear-gas canisters broke up the crowd.

But despite the standoff, the demonstrators’ message was unmistakable: French farmers, under siege from a combination of drought and cheap imports from the British Isles and Eastern Europe, want more government help, and they want it now. “We’re tired of starving,” said Louis Soulier, who raises cattle in Beaulieu, about 40 miles north of here.

At stake, according to the protesters, is not only the family farmer but the very fabric of rural French society. And the implications of the farmers’ revolt reach far beyond the picturesque French countryside, to the proposed economic union of Western Europe and the outcome of the current round of international trade negotiations.

Europe’s agricultural distress could make more difficult the already dicey effort to liberalize trade between most of the world’s nations.

By far the thorniest issue is the U.S. demand that Europe dismantle its costly and complex system of financial support for small farmers, whose operations, if unaided, would probably prove too inefficient to survive global competition.

But if the Europeans cannot even get along with each other, some analysts wonder, how will they be able to agree with Washington on a formula for bringing down their cherished farm subsidies?

“The more restless the farmers, the harder it is for the negotiators to give ground,” said Harald Malmgren, an international business consultant based in Washington. “This just complicates everything.”

And here in Europe, the violent protests by French farmers against sheep imports from Britain and Ireland make some officials wonder whether the planned elimination of trade barriers between the 12 nations of the European Community will come off as planned at the end of 1992.

“Beyond these immediate losses and cruelty to animals lies . . . the principle of the free movement of goods throughout the member states,” said Raymond MacSharry, the Irishman who is the commissioner of agriculture and rural development for the Brussels-based European Community. France, Britain and Ireland are all members of the community.

Here in Nevers, 150 miles south of Paris, these concerns seemed remote. Gilles Protat, whose cattle farm in the nearby town of Soligny has been in the family for six generations, dreads the day when the French family farm gives way to giant corporate enterprises.

“If this keeps up,” he said with distaste, referring to this year’s price squeeze, “we’ll be like the United States.”

The 1990 U.S. Census found that only 23% of Americans live on farms or in small towns, down nearly one half from 44% in 1950. The trend here is even more stark. In the six original nations of the European Community (France, West Germany, Italy, Belgium, the Netherlands and Luxembourg), the farming population plummeted from 15.2 million in 1960 to 5.2 million in 1987.

Soulier, whose farm in Beaulieu has been in the family for at least 100 years, said that compared with the 15 farmers who lived in his village 25 years ago, there are only five today. His 20-year-old son, Denis, is an agricultural technology student who has sought to assure himself a means of livelihood if the family farm becomes unviable.

“I don’t know what will happen to the farm,” said the elder Soulier. “If you consolidate two poor farms, all you get is one poor farm.”

At issue is more than the fate of family farmers such as Soulier. As the French see it, the farm economy is the glue that holds rural life together.

“Pas de paysans, pas de paysages,” proclaimed one of the banners carried by last Thursday’s demonstrators. “No countrymen, no countryside.”

In Europe, that matters to everyone, not just the farmers.

“The production of food and raw materials is only one aspect of European agriculture,” says a recent European Community pamphlet on agricultural policy. “Over large areas of the community, agriculture plays a fundamental role in maintaining balanced social and economic structures and in providing a healthy natural environment.”

The forces squeezing rural Europe and rural America are the same. From artichokes to veal, farmers today can produce far more than the public can consume.

Something has to give, but French farmers, particularly sheep raisers, are determined that it will not be them. Elsewhere in France in recent weeks:

* Some 30 farmers in the Deux-Sevres region ambushed a British truck carrying 219 lambs and set it afire, burning the lambs alive.

* Twenty farmers near Poitiers stopped another British truck, slaughtered its 386 sheep, poured diesel fuel on the carcasses and burned them.

* On the Atlantic coast, farmers poisoned 94 sheep that had recently been transported from Britain.

“Highway thuggery,” British Agriculture Minister John Gummer branded the actions by the French farmers. British Atty. Gen. Patrick Mayhew, upset that French authorities had taken no legal action against the perpetrators, threatened to take France to the European Court of Justice in Luxembourg. British retailers and consumer groups organized boycotts of French products.

Beyond the general oversupply of farm products, the French farmers face some unusual woes.

This year’s hot, dry summer has added to the expense of feeding their herds. Farmers who have not been able to feed their animals have put them to slaughter earlier than usual, adding to the glut of cattle and sheep on the market.

Farmers are accustomed to the vagaries of the weather. More difficult to deal with has been competition from some unaccustomed quarters.

For sheep farmers, the villains are across the English Channel. British sheep farmers, unlike their French counterparts, benefit from a form of subsidy known as a “variable premium”--a payment that makes up the difference between the market price and a target price fixed by the European Community.

With that incentive, the British sheep flock grew from 30 million in 1980 to 44 million this year. Ireland offered a similar subsidy, with similar results. The overflow is inundating France, with sometimes violent results.

For cattle raisers, the bad guys are in Eastern Europe. The protesters in Nevers complained that cheap Polish cattle were reaching France by way of what used to be the closed border between East Germany and West Germany. Roger Gateau, from the small village of Charolet, said Eastern European cattle--he derisively called them “skinny”--were flooding the market for about 70 cents a pound, compared with the $1.15 that he seeks.

On top of that, the U.N. economic embargo on Iraq and Kuwait shortly after the Iraqi invasion of Kuwait on Aug. 2 has deprived Europe of one of its major foreign cattle markets.

But to some of the cattle raisers who gathered here to beseech their government for help, their ultimate fate seemed inevitable.

“The world has too many farmers producing too many goods,” said Philippe Cabarat, who raises cattle in Champigny, 25 miles north of Nevers. “I don’t blame the English or the Germans. Each country has its own problems.”