Agricultural earnings experience significant decline.
Around a year ago, major farmer protests took place in Germany, but the situation hasn't seemed to improve much for them since then. The farmers' association has stated that earnings have significantly decreased this year. The agricultural industry is advocating for a shift in political policies.
In the recent 2023/24 economic year, which ended in June, the industry's average profits were 77,500 euros, a 29% drop compared to the previous year's record level. Except for pig farming, all other operations reported losses. The industry is pleading for a change in agricultural policy before the federal election. Bauernpräsident Joachim Rukwied stated in Berlin, "The engine is really stuttering." Farmers are grappling with high costs for energy, plant protection, and fertilizer. The yields on fields have been on a decline for years, attributable to new pests and climate change – whether it's wheat, rape, beets, or potatoes. The only positive note was pig and poultry farming, which recorded a profit for the second consecutive year, with an average operating profit of 148,000 euros. However, investments still need to be covered. There is a general cautious optimism, particularly for buildings, Rukwied reported.
Farmers' Association Raises Controversial Issue Again
Analyzing bookkeeping records from 6,900 farms, the association painted a mixed picture. Farmer earnings are projected to remain stable in pig farming in the current year, potentially improving slightly for dairy farmers. However, grain prices are significantly lower than the previous year, combined with a smaller harvest in 2024. The wine industry is facing a "market and price crisis." Market volatility and extreme weather risks are increasing. "We need a fresh start," the Bauernpräsident emphasized, with renewed focus on the early federal election on February 23. The necessary change in politics to improve German agriculture's competitiveness in the European market is now expected.
Crucial factors in this change are secure planning and stable framework conditions. However, Rukwied criticized, these weren't present in recent years, particularly under the now-defunct traffic light coalition. A contentious issue that caused nationwide farmer protests just before Christmas 2023 is now being revisited by the association: the gradual phasing out of long-standing tax benefits for agricultural diesel. At least an average tax refund, like those in Europe, should be implemented in this case.
Unusual Circumstances
There should also be harmonization in Germany's national implementation of EU guidelines instead of imposing additional regulations. For animal husbandry in Germany, a promising future is required, Rukwied insisted. The election scenario is unique: The president of the Bavarian farmers' association and federal vice president, Günther Felßner, is running for the CSU and has already been declared the likely agriculture minister if the Union wins the election, led by party leader Markus Söder. Rukwied clarified that the farmers' association remains politically neutral and will not issue any election recommendations.
Farmers' share of supermarket prices is not readily apparent, Rukwied explained. It remains "interesting." Generally, the higher the food processing level, the lower the farmer's price share. For example, the price of wheat does not influence the price of bread and rolls. Instead, energy and labor costs play a more significant role. Even minor increases in farmers' milk prices, say a few cents per liter, should not be viewed as a significant price jump.
The European Union plays a crucial role in this discourse as Germany's farmers are advocating for a change in agricultural policies that can improve their competitiveness within the EU market. The Bauernpräsident emphasized the need for a renewed focus on political changes to address the industry's challenges, implying that the European Union's policies could potentially influence these changes.
Additionally, the farmers' association has highlighted the issue of gradual phasing out of tax benefits for agricultural diesel, a policy decision that is influenced by the European Union's guidelines and taxation policies. Therefore, the European Union's regulations and policies towards agriculture and taxation are significant factors that German farmers are considering as they call for a change in their domestic policies.
