BNP Paribas Wealth Management subsidiary Agrifrance has just published its annual report on France’s rural economic situation.
The first section of the report describes the main trends in France’s rural milieu over the last year.
2013 was an unusual year. The agricultural, viticulture and forestry markets were impacted by capricious weather conditions, which added to an already difficult economic climate. Fortunately, French producers showed their adaptability, seeking new outlets in export markets.
From an investment perspective, French rural real estate remains a useful asset in a diversified portfolio, as average prices have been rising steadily for the last 15 years. There is sustained demand for high quality properties, given the limited availability for sale.
The second section of the report focuses on the need for young blood in the agriculture and viticulture sectors. In France as in many European countries, the age pyramid and the consequent need to help the younger generation to settle into farming and winegrowing represents a crucial challenge. The number of farmers and winegrowers in France and across Europe is diminishing and at the same time the working population is growing older, with 50% of the sector workforce currently over 50 years of age. So far, technical advances have led to an increase in the land area worked by each member of the workforce, a development which has compensated for the continuous drop in the number of farms and winegrowing businesses, but will that trend continue over the next 50 years in all rural sectors?
The world’s population is expected to rise from its current 7.14 billion to reach 9.7 billion by 2050, i.e. over 2.5 billion extra people to feed. Meanwhile, the agricultural sector is faced with new challenges and opportunities. It will need to work for the sustainable use of natural resources, while also expanding into such areas as green fuels and maintaining its stewardship of the countryside and care of the rural environment.
In the coming decades, the main challenges for the European agricultural sector will be to produce more and produce better, exporting more foodstuffs and adjusting in order to take advantage of the new outlets.
These changes will also have the effect of increasing the pressure on the rural property market. All this means that rural real estate, a low-risk investment whose performance is decoupled from the financial markets, is looking more than ever like a good and safe store of value.
For more information, see brochure opposite.
Agrifrance is the specialist rural property section of BNP Paribas Property SNC, a BNP Paribas Group real estate subsidiary.
Agrifrance offers clients seeking the right investment and wealth management solutions the benefit of its 40-year experience in the viticulture, farming, forestry and prestigious homes markets. With a network of recognised professionals, Agrifrance is also able to provide complementary services such as expertise in and management of rural properties.