The working group of authoritative experts presented a more concrete elaboration of their previously introduced proposals last week, this time including a recommendation for their financing. The now-defunct German 'traffic light coalition' of SPD, Greens, and FDP had requested a financially substantiated plan after the coalition itself failed to reach an agreement on its coverage.
The ZKL Commission calls for a comprehensive reshuffling of financing options. The so-called Borchert2 Committee proposes co-financing the renewal of livestock farming with several billion euros, mainly intended for the renovation of barns in dairy and pig farming. Only through larger and more spacious barns can the policy for improving animal welfare be achieved.
So far, the German political parties have differed regarding how much farmers themselves should pay and how much the government should contribute. Moreover, there is the question of whether that government contribution should be funded through higher income tax (=everyone pays), or through a new 'meat tax' (=only meat eaters), or via an increase in VAT on food items (=heavier consumers pay more).
The ZKL Commission now advocates a phased increase of VAT on food products as the most logical additional revenue source for a federal subsidy for the agri-transition. A combination with other financing sources is not ruled out.
Representatives of agriculture are satisfied that the experts in the ZKL Commission have once again reached a broadly supported recommendation. DBV Vice-Chairman Dr. Holger Hennies notes an important change among many farmers: āWe have stepped away from the āagainst modeā; we now want more reliability together.ā
Until now, agricultural policy has involved a division of tasks and powers between the federal government in Berlin and the state governments of the sixteen German federal states. These state governments differ in their political composition. Partly because of this, agricultural policy in Germany is slow and difficult to develop.
The Vice-Chairman of the Farmers' Association sees a role for the federal government in implementing the agricultural transition: it should not only set rules but also be concretely involved, he said. The ZKL Commission proposes to reevaluate this division of tasks between Berlin and the states.
DBV top official Hennies views increasing the turnover tax as a good way to redistribute money for animal welfare. But he warns that first of all, building regulations must be adjusted: farmers and livestock breeders need clarity about their potential new construction or expansion plans. āBusinesses need planning certainty for their investments.ā
The German Nature Conservation Association (NABU) regards the new consensus among the ZKL experts as an important signal: According to NABU, it shows that āeven after the emotional agricultural debates of recent months, differences in opinion can be overcomeā.
The ZKL Commission emphasizes more than in the earlier 2021 advice the importance of aligning with European legislation, both in the Common Agricultural Policy and in the climate and environmental regulations from the Green Deal. The new EU rules for modern business should also be incorporated into the new German policy.
The political reactions to the final report are varied. Agriculture Minister Cem Ćzdemir (Greens) praised the Future Commission as an āimportant forum for fair consideration of interests,ā but also admitted that he āwould have preferred to take more concrete steps himself than was possible in the past government constellation.ā The Minister of Agriculture from the federal state of Lower Saxony, Miriam Staudte (Greens), particularly emphasized the ZKL proposals for a comprehensive reform of the fertilizer law.
Liberal FDP politicians view the recommendations mainly as a confirmation of their market economy approach. FDP members once again reject the idea that āsmall-scale regulations must be compensated with subsidiesā as CDU agriculture ministers long tried with farmers.
The SPD is known to prefer financing agri-subsidies from general funds (income tax), while the Greens lean towards ātargeted leviesā such as a meat tax or higher VAT on food.
In the upcoming election campaign, the stance of the CDU/CSU may be decisive: that opposition party is polling highly and will almost certainly be part of a new German coalition government after February 23. Their party leader Friedrich Merz has not yet expressed a preference for how the money for the billion-euro subsidy should be raised.