The SAFERs, an original land market regulation mechanism that is operated by the State and farmers’ organisations in France

In France, there is a system for regulating the land market that relies on the collaboration of the State and farmers’ organisations. This system, little known outside of this country’s borders, is called the Land Development and Rural Settlement Associations (Sociétés d’Aménagement Foncier et d’Etablissement Rural, SAFERs) and constitutes one of the key components of French « structures policy”. Under this “structures policy” umbrella falls not only all the policies for agricultural modernisation, but also policies aiming to preserve the family farm model by providing farms with enough land to meet contemporary technical and social demands.

The structures policy in France: review of main clauses

• A retirement pension encourages older farmers to yield their land for the benefit of young farmers.

• Land Development and Rural Settlement Associations (SAFERs) regulate the land market (theme of this document)

• Multiple farm ownership is prohibited in order to avoid excessive land concentration. Likewise, changes in farm sizes are restricted by locally-determined2 criteria that establish the maximum legal surface area, a value which ranges from 1 to 3 times greater than the minimum farm surface area required in order to obtain agricultural subsidies.

(There are also laws which regulate tenant farming and guarantee growers’ rights, which are not dealt with here).

The creation of SAFERs with the agricultural act of August 1960 responded to the demands of farmers ¹ in a context where there was a high demand for farmland. The government and the young farmers’ unions shared a common goal: preparing the French agricultural sector for entry in the common market of the six-member European Union (France, Italy, Germany, Luxemburg, Belgium and the Netherlands). At this time, French farms were numerous, small, and parcelled out. There was a political will to modernise family farming and revamp the agricultural sector at a time when Europe was importing more food products that it was exporting. The SAFERs were designed to purchase farmland and main agricultural centres in order to achieve the following goals: to equip and settle young farmers; to reorganise land parcels and to enlarge farms that were below the threshold of profitability. Given the considerable increase in rural real estate prices, which was related to the increase in farming revenues due to guaranteed prices regardless of the quantity produced, the young farmers’ organisations wanted the SAFERs to be able to redirect part of the assets that had been put on the free market toward priority beneficiaries of the structures policies. Thus, the 1960 act was modified two years later, when SAFERs were granted pre-emptive rights, which had not been originally granted. ²

The SAFERs’ purpose is « to ameliorate agricultural structures, increase the surface area of certain farms and assist farmers as they settle in and begin to cultivate the land ».

These 29 non-profit anonymous limited companies are spread throughout the whole territory, including the overseas départements (DOM). They are managed by a board of directors made up of diverse shareholders (the agricultural bank (Crédit Agricole), the local Chambers of Agriculture (Chambre d’Agriculture) collective investment companies, local authorities, professional farming associations including trade unions ³).

SAFERs are entitled to purchase, yield and exchange land, farms (land and/or buildings, equipment, livestock), or cultivated forests. They have the obligation to sell the assets acquired within 5 years, with the possibility for prolongation under certain circumstances (land regroupings, planting, reforestation).

SAFERs’ interventions are based on the principles of:

• motivation: SAFERs must declare a motive for their pre-emption and yield actions lest they be declared invalid.

• announcement: The transparency of their operations is ensured by the fact that they are made public knowledge. Disrespect of this requirement automatically annuls any acquisitions or yields.

• Right to disassemble existing farms.

Among the SAFERs’ activities, pre-emption is the one that has provoked the most criticism and the most lawsuits, even though it is not the activity carried out the most often.

Pre-emptive rights mean that a SAFER may take the place of the purchaser of farmland located in the territory over which it presides.

In order for this system to work, the appropriate SAFER must be officially notified of any sale of farm real estate or of lands to be used for agriculture that are located within the area where that SAFER may exercise its pre-emptive right. Such notification can be considered as an offer to sell the assets at hand to the SAFER. This obligation turns SAFERs into privileged real estate watch agents and enables them to act against real estate speculation.

This pre-emptive right is neither generalised (numerous exceptions), nor automatic or absolute. In practice, it is exercised on average for only 1 to 2% of farmland for sale on the real estate market.

The law determines the ends to which a SAFER can effectuate a presale:

• Settling, resettling or helping farmers. This is one of the SAFERs’ fundamental objectives.

• Enlargement of existing farms. This is also a fundamental principle of SAFERs given the context of their creation when the majority of French farms were too small.

• Helping farms survive if some of their land is expropriated for a public works project.

• Preserving the family farm

• Fighting against real estate speculation.

• Assisting in the event that a viable farm is endangered because its buildings and land are separated; - using and protecting forest areas.

The motivations for each presale must be filed at two government Commissariats, one representing the Ministry of Agriculture, the other the Ministry of Finances. These two commissariats must explicitly approve the presale. Representing the State, they each have a veto on all of the SAFERs’ decisions. Each presale must result in a better arrangement than would have resulted if the matter had been left to the free market.

When a SAFER purchases through presale, its purchase follows some conditions, such as the price indicated in the notification. The SAFER replaces the ousted buyer, purely and simply. The seller is obliged to sell to the SAFER.

Nevertheless, if the SAFER deems that the price indicated in the notification is too high as regards to the normal market, it can exercise its pre-emptive right after price revision. The SAFER proposes a reduced price to the seller, who then has the right to either accept or decline by taking the asset off the market.

Each time a SAFER attributes real estate, an application must be filed. Applications are looked over, when applicable, by local commissions made up of union members and sometimes elected officials, which formulate their recommendation. Next, a local technical committee (made official in 1999) looks it over. The local technical committee is composed of farm unions, representatives of local elected officials and qualified individuals, which formulates their recommendation. It is up to the Board of Directors to make a final decision. Nevertheless, the Board of Directors’ decisions must never be put into effect prior to the approval of both government Commissariats. One Commissariat’s refusal makes it necessary to formulate another decision.

In order to be the appointee to whom a SAFER attributes an asset, one must be in possession of the required finances. If a bank refuses to grant a loan, the initial decisions of a SAFER may be re-examined. The effectiveness of a land policy thus depends also on the candidates’ varied means of obtaining loans ⁴.

In general, the established system proved somewhat effective in fulfilling its mission. One must however bring up the fact that numerous critiques have arisen, largely because trade union pluralism was not recognised until 1981 and because each time a SAFER attributes to one appointee, it is satisfying that person and disappointing the other candidates that were not approved. The influence of agricultural unions, the FDSEA and particularly the CDJA (the young being the most affected) at the local level (départements) was of crucial importance for the extent and manner in which land policies were implemented. As union positions varied strongly depending on the farm region, the laws were applied in a very uneven manner.

Since their inception, the role of the SAFERs has changed along with rural land issues, and the law has been adapted accordingly. Although they were originally designed to put into place new farming structures, they are being used more and more as an instrument of territorial development. Since they are able to anticipate expropriations and the displacement of certain farms, SAFERs permit local administrators to better manage public development operations. SAFERs do indeed participate in rural land development operations: they can help create authorised trade union associations; they can redirect land, buildings or farms toward non-agricultural uses, in view of favouring rural development; they can contribute to the protection of nature and the environment; they can also give technical assistance to national parks and territorial bodies.

Today, SAFERs have a public service mission. They put the land distribution aspect of central and local public policies into effect, in order to support the development of farming and forestry, to conserve landscapes and the environment, to promote local development (road and highway infrastructures, high-speed railways, canals).

Since 1999, they are able to exercise their pre-emptive rights not only for agricultural reasons, but also for environmental ones. It is noteworthy that 90% of their interventions are carried out without discord.

After having been perceived for a long time as uniquely a tool for securing the harmonious evolution of agricultural structures and avoiding monopoly and over-speculation, SAFERs have turned out to have an important role in rural, local development as they possess perfect information concerning the land market since they are notified of all real estate sales.

¹The criteria are fixed by a decision-making body in each of France’s 95 départements.

² The CNJA (National Centre for Young Farmers) and the JAC (Young Catholic Farmers) played a central role at this level.

³ These two first laws would be completed following several amendments modifying texts establishing the main principles of the functioning of SAFER.

⁴ Up until 1981, only one school of unions was officially recognised in France, the FNSEA and the CNJA.