German Meat Tax Not a Question of If, But How and When....

German Agriculture Minister Julia Klöckner (CDU) has presented three funding proposals for a multi-billion-euro transformation of German livestock farming. This could be financed by increasing the price per kilo of meat by about forty cents, significantly raising the VAT on animal products, or through a general tax increase.

For more animal welfare in German livestock and agriculture, almost ten billion euros will be needed over the next ten years, it has been calculated. Klöckner's proposal includes not only adjustments to barns, cubicles, and chicken runs but also more environmental protection and biodiversity.

A VAT increase from the current seven percent to the standard rate of 19 percent is in principle feasible. According to Klöckner, this method is “preferable” due to the low administrative costs. “Society wants more animal welfare; that doesn’t come for free,” Klöckner says. “It won’t work without government guidelines.”

She now wants to discuss with other parties which proposals will be implemented and how. She said it is no longer a question of if there will be a meat tax, but how. She did not specify when.

It is now up to German politicians to choose from the three payment options. If the Bundestag wants to decide on this before the autumn elections, the bill must be processed by June at the latest (before the recess).

The agricultural reform is a ‘hot topic’ in German politics, not only between CDU, SPD, FDP, and the Greens, but also among government agencies at the federal level and in the states.

Each of the three payment methods launched by Klöckner has pros and cons, as became clear yesterday afternoon at the presentation of the long-awaited feasibility study. For example, a meat tax per kilo probably has the greatest effect on shoppers’ purchasing behavior, while a general tax increase affects all Germans.

According to the newly presented study, a VAT increase could yield up to 6.3 billion euros annually. A tax of 47 cents per kilo of meat and two cents per kilo of milk could generate 4.2 billion euros.

Klöckner described the study as “a tailwind” for more animal welfare. According to her, a “broad political consensus” is now required. The German Farmers’ Association (DBV) urges in an initial response for a “quick” and full implementation of the proposals.

Above all, earmarking is necessary in the long term. “The money must definitely go where there is more animal welfare, namely to the farmer,” explains the DBV. Lawyers state in the feasibility study that ‘earmarking’ of tax revenues (‘meat tax one-to-one to farmers’) is not permitted.