Germany's coalition parties have reached agreement on a promised aid package for agriculture, which includes tax measures and less bureaucracy. Berlin wants to introduce a number of relaxations allowed by the European Union this year. The CDU opposition and the German Farmers' Union call the aid package "too small and too late".
The package is a response to farmers' protests that started last year over the phasing out of tax breaks for agricultural diesel. The federal government has withdrawn a number of austerity plans and extended the abolition of discounts on agricultural diesel to three years. The measures must now be approved by the Bundestag to take effect.
The aid package includes measures such as the phased abolition of cheap agricultural diesel and the reintroduction of the tax “flattening” of agricultural income, which was abolished in 2022. This allows farmers to spread their income over several years, which should provide them with greater financial stability in years of variable harvest results.
An important measure in the package is aimed at strengthening the position of agriculture and livestock farming in the national food chain. This is aimed at through better price and production agreements with large German supermarket chains. This should ensure that farmers receive fairer compensation for their products.
The coalition wants to discuss the plans in the Bundestag next week and determine some of them before the summer holidays. Agriculture Minister Cem Özdemir (Greens) called it a “strong package” that will reduce the burden on farmers and strengthen their market position. Finance Minister Christian Lindner (FDP) added that the competitiveness of agricultural companies should not be unnecessarily limited.
The farmers' association has had mixed reactions to the package. DBV chairman Joachim Rukwied called it a “not enough step far too late”. The CDU opposition speaks of a 'small plaster on a big wound', while the Greens emphasize that not all the damage caused by many years of CDU agricultural policy can be repaired at once.
Last week, the three coalition parties SPD, Greens and FDP failed to agree on their draft budget for next year. This should be ready before the summer recess. The ruling parties are under increasing pressure after voters delivered them a drubbing in June elections for the EU parliament. FDP Minister of Finance wants to restrict expenditure by all ministries (except Defense).