French savers seek to milk cows for cash

Tue Sep 1, 2009 9:30am EDT
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By Noemie Olive

LA TOUR-DU-PIN, France (Reuters) - With interest rates at record lows and banks still tarnished by the financial crisis, some French savers are returning to grass roots and pumping money into cows.

While France's most popular savings account, the Livret A, offers returns of little more than 1 percent, cow owners can expect yields of 4-5 percent a year for an initial investment of around 1,200 euros ($1,700) per animal, promoters say.

Unlike the stock market, this particular cash cow is presented as low-risk, with gains based on the sale of the herd's calves.

Pierre Marguerit, director of Gestel, a company in southeastern France that manages some 30,000 animals on behalf of 1,000 investors, said sales have doubled in the past year.

"You buy one or more cows, which are rented out to professional farmers. Your herd then increases as the years go by. A herd of 20 cows will bring you one extra cow every year, that's roughly 4-5 percent," said Marguerit.

Although the birth rate within the herd is higher, a portion of the offspring will make up for deaths, while others are sold off to cover the costs of rearing the animals.

However, in a particularly fertile year, the net increase can run as high as 7 percent.

Investors can choose to sell the new cows and take the cash, or allow their herd to build up over the years by keeping the offspring, then draw a regular income at retirement.   Continued...

<p>A Holstein cow grazes in a pasture near the Capron family farm in Rebreuve sur Canche, northern France, July 29, 2009. REUTERS/Pascal Rossignol</p>