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How the taxation of agricultural land weakens the combat in opposition to land take

The overtaxation of agricultural land in France may jeopardize the target of zero internet artificialisation that it has set itself. That is what emerges from an evaluation carried out by the Basis for Analysis on Biodiversity.

Can the heavy taxation weighing on French agricultural land hinder the coverage of combating artificialization now enshrined in regulation, with the target of zero internet artificialization (ZAN) in 2050? That is recommended by the examine on the taxation of agricultural land in Europe revealed final September by the Basis for Analysis on Biodiversity (FRB). An fascinating conclusion to contemplate because the Prime Minister launches her environmental planning work. Among the many seven cross-cutting tasks of his France Nation inexperienced plan, offered on October 21, there’s additionally taxation, recalled the Minister for Ecological Transition, heard on November 16 by the Senate’s Financial Affairs Committee.

Tutorial work reveals that the urbanization of agricultural land is hindered by the profitability of agriculture and when the value of agricultural land is excessivereviews the examine. The taxation of agricultural land influences these elements. Whether it is too excessive, it could cut back the profitability of agriculture and subsequently facilitate the urbanization of agricultural land. Equally, for the reason that value of an asset is usually the discounted sum of its future earnings, if heavy taxation of agricultural land reduces its annual earnings, this can drive down its value and promote its urbanization.

Land extra taxed than in different nations

Nonetheless, agricultural land is taxed extra in France than in different European nations. And with a larger differential than that which the FRB had beforehand highlighted for forest taxation. The examine identifies, as well as two annual income-related taxes, 5 taxes which aren’t associated to it. As well as, whereas in a number of European nations the current abolition of sure taxes has diminished the tax burden on agricultural land, the taxation of French agricultural land has elevated lately. notes the examine.

The taxation of French agricultural land has elevated lately

One other lesson of the comparative evaluation: this heavier taxation is accompanied by rents of renting undoubtedly decrease in France than the common of the European Union, 140euros per hectare (€/ha), for 350€/ha in Germany. In France, rental rents are certainly regulated and would most likely be doubled in the event that they have been set freely. And their evolution isn’t transferring within the path of a greater profitability of agricultural land. In France, since 1950, farm rents have elevated extra slowly than inflation. They fell by round 1.2 1.3% per yr in fixed euros reviews the examine.

Lastly, France is characterised each by low rental rents, a excessive stage of taxation of agricultural land and its earnings, and a major proportion of those taxes which is unbiased of land earnings summarizes the examine. Such a mixture tends to end in zero or damaging after-tax profitability. , concludes the evaluation. Nonetheless, the house owners of an asset that’s structurally at a loss are inspired to do away with it. And they’re all of the extra so, underlines the examine, that the state not directly helps the earnings paid to landholders agreeing to artificialize it by ground-based photo voltaic power and onshore wind power operators .

Given the correlation of the value of products with the earnings that one is prone to derive from them, the costs of agricultural land are very low in France: 6,000 euros per hectare, when the land isn’t rented, in opposition to 21,000 euros in Germany. In addition to the truth that this differential favors the acquisition of French land by foreigners, their low value additionally favors their artificialization. And the evolution of those costs doesn’t go within the path of their conservation. Immediately, the common actual value of an agricultural hectare remains to be greater than a 3rd decrease than its 1978 worth and is not more than in 1965. Half a century later, its value subsequently stays the identical. reviews the examine.

Incentive to urbanize

This results in a debate that has not but been raised in France, however which might be raised an increasing number of: ought to farm rents stay low to favor farmers? Or ought to they be raised to make sure a greater minimal return to the land, and subsequently to ecosystem providers and nature-based options, and to curb land take in keeping with ZAN and 2031 targets, now set in French regulation? asks Guillaume Sainteny, trainer on the Ecole Polytechnique and co-author of the examine.

The regulation of farm rents had been put in place within the post-war interval, with the intention to promote agricultural earnings and to permit farmers to put money into the modernization and intensification of their farming, somewhat than in land. However, in line with the examine, on the one hand, this method has given rise to a damaging profitability of agricultural land, and however, it results in perverse results for the farmers themselves. The very low rental rents and their very excessive taxation encourage retired farmers, who now not profit from the diminished taxation of lively farmers, to promote or urbanize this land to finance their retirement and to not hire it to maintain it for agricultural use. clarify the authors.

They’re additionally shocked that the system, established at a time when concerns associated to the artificialization of the soil didn’t come up, isn’t re-examined with regard to this query and the consideration of the surroundings in a extra broad. This query could be all of the extra justified for the reason that drop within the gross return on agricultural land goes within the precise wrong way to the demand for funds for environmental providers. notes the examine.

Whereas the system could have initially benefited farmers, the brand new distribution of added worth it induces now has many damaging results for his or her earnings and for the surroundings. The financial savings generated by farmers because of a really low price of entry to land have been, as deliberate, invested within the modernization of farms, analyze the authors. However this resulted in pricey over-equipment and over-intensification of manufacturing. A phenomenon that may result in the damaging profitability of agricultural land and to the financing of processes which can be dangerous to biodiversity. Earlier than the struggle, a part of the added worth was collected by rural actors who didn’t artificialise. Immediately, it’s perceived by actors who artificialize (supermarkets, logistics, and so on.) or who produce inputs which have a damaging influence on agricultural soils , factors to the examine. And to conclude: A part of the farmers’ cash subsequently serves, paradoxically, to cut back the amount of their main issue of manufacturing: land.

Switch rights on the artificialization passage

Confronted with these findings, the authors make a sequence of suggestions. With a view to put an finish to a really low gross return on land and its very excessive taxation, incompatible with the ZAN goal, they counsel decreasing the tax price of carrying agricultural land, i.e. making land out there agriculture to farmers by non-farmers. In response to them, this discount ought to permit farmers to proceed to learn from this service offered to them and () be sure that landholders hold an asset that isn’t systematically at a loss and generates low however minimal profitability, with out being compelled to vary its vacation spot .

A monitor that the federal government may examine within the undertaking dedicated to environmental taxation that it has introduced. The work of Senator Blanc conjures up me on financing instruments , declared the Minister of Ecological Transition earlier than the Financial Committee of the Higher Home. The senator revealed, in June 2022, a report on the monetary instruments permitting the achievement of the ZAN goal wherein he underlined that this goal had not but discovered its financial mannequin.

Christophe Bchu lifted the veil a bit on the state of his considering on the matter. The extra we are going to tighten the rule, the extra we are going to create worth for what is going to develop into constructible, in a totally arbitrary manner. A type of annuity. There’s a surplus revenue linked to the truth that, once you promote your land (), the worth is multiplied by 100 or by 1000 when it turns into constructible. That there, we now have particular switch rights on the passage to artificialization which permits us to accompany a part of virtuous measures, that may not shock me mentioned the consultant of the federal government.

Article revealed on November 22, 2022


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