However, there are large differences between sectors. Livestock farming carries more debt compared to, for example, crop cultivation. Pig farmers often face higher production costs and greater pressure from fluctuating market prices. On the other hand, crop products have lower costs and more stable returns.
Regarding the debt position of agriculture, we have seen a decline in total debt since 2018. Last year, total debt amounted to 263 billion kroner, a significant decrease compared to the peak year 2010, when debt was 355 billion kroner. This decline is mainly caused by low interest costs and refinancing fixed loans with variable interest. This enables many agricultural businesses to reduce their interest expenses and lower their debts.
The annual overview of rising incomes comes at an unfavorable time for Danish agriculture and livestock farming. At the political level, there is currently debate about the level of a future CO2 tax on agricultural products. This new levy is intended to reduce air and water pollution and lessen climate impact.
Although this CO2 tax is viewed as essential from an ecological perspective, the measure faces resistance in the agricultural sector. Farmers say it will increase their production costs and weaken their position. Agricultural organizations advocate for full compensation for future depreciation of farmland and farms that must downsize.
Critics point out that agriculture and livestock farming have done little for environmental protection and nature restoration over the past decades, and partly because of this have been able to build and increase their wealth. According to them, the new figures show that farmers can indeed afford this new CO2 tax.