One in two farmers soon to retire: the government draws up two tax measures to facilitate generational renewal

The government submitted two amendments to its 2027 draft budget on Wednesday to facilitate the transfer of farms thanks to tax advantages for departing farmers and for buyers, young or recently established. This reform is added in the form of an amendment to article 10 of the draft budget, which creates a "Papin Pact" to facilitate the transfer of small and medium-sized businesses, particularly to employees, inspired by the "Dutreil Pact" which fiscally facilitates the transfer of businesses to the children of the manager. The “Papin Pact”, named after the Minister of SMEs Serge Papin, provides for additional depreciation (a tax advantage) of 30% for the purchase of production equipment, in addition to traditional depreciation, which could benefit agricultural businesses.

Additional depreciation allows an additional portion of the sums invested to be deducted from taxes. The first amendment tabled on Wednesday aims to further adapt the “Papin Pact” to encourage farmers close to retirement to transfer their farms. It doubles the amount of the fixed reduction, to one million euros, on the capital gain realized by the transferor at the time of his retirement, when the transfer is made for the benefit of new farmers.

The second amendment proposes to extend the application of the reduced rate of transfer duties for value to 0.1% to acquisitions of rural buildings, for the fraction of the price less than 150,000 euros. This is an incentive measure for farmers wishing to purchase agricultural land, provided that they undertake to use it exclusively for agricultural purposes, to operate it in their own right and to retain ownership.

Access to land The two systems, which constitute the “Genevard Pact”, named after the Minister of Agriculture Annie Genevard, are planned to last until 2029, according to the amendments consulted by AFP. Access to land is considered one of the main obstacles to installation. The public authorities are determined to promote generational renewal since half of the farmers recorded in 2020 will reach retirement age by 2030.

A new single support window (France Services Agriculture) must be deployed in 2027 to facilitate installation and transmission. Other amendments are expected soon to complete the "recovery plan" promised by the government to farmers after an "emergency plan" which followed a catastrophic summer for agricultural production, between drought and repeated heatwaves. Farmers are particularly waiting for measures to access zero-interest loans, finance the purchase of fodder or even support the adaptation of farms to climate change by better equipping livestock buildings, for example.

Machine-translated from French