Traffic light reduction plans
Farmers’ association warns against intensifying structural change
January 14, 2024, 4:48 a.m
While Chancellor Scholz defends the compromise on agricultural cuts, farmers want to increase the pressure on the government with a large demonstration in Berlin on Monday. The farmers’ association doubts that the amount of diesel fuel will decrease as a result of the abolition of subsidies.
With a view to the planned abolition of tax concessions, the German Farmers’ Association has once again warned of negative consequences for agriculture. This could lead to a “significant intensification of structural change,” according to a statement from the farmers’ association at a hearing on Monday in the Bundestag’s finance committee. In particular, farm succession as part of generational change is increasingly at risk, as planning security with regard to farmers’ income situation continues to deteriorate significantly, warns the association.
The hearing is about the planned budget financing law, with which the federal government wants to implement planned budget cuts. Due to a ruling by the Federal Constitutional Court, billions in holes have to be filled. The federal government wants to gradually abolish tax breaks for agricultural diesel. According to the federal government, a loss of this benefit would mean an average additional cost of around 3,000 euros per year per company.
The fact that the government coalition has withdrawn part of its austerity plans is not enough for the German Farmers’ Association. Thousands of farmers are expected in the capital on Monday at the climax of a week of farmers’ action. The farmers’ association’s statement goes on to say that the argument that abolishing the tax concession for agricultural diesel would make a contribution to reducing environmentally harmful subsidies is incorrect. The current range of alternative drives for agricultural and forestry tractors and work machines is, “to put it cautiously, extremely manageable,” it is said. “The amount of diesel fuel used will therefore not be reduced and the positive climate impact suggested by the deletion will not occur.”
Scholz defends “good compromise”
Chancellor Olaf Scholz (SPD) has defended his government’s approach to cutting subsidies for farmers. On Saturday, he spoke of a “good compromise” with a view to the partial reversal of the cuts and emphasized that subsidies could not remain in place “forever”. Federal President Frank-Walter Steinmeier called for talks with farmers.
In mid-December, the federal government initially announced that the vehicle tax exemption for agricultural machinery and the subsidies for agricultural diesel would be abolished. In view of massive protests, it withdrew the end of the vehicle tax exemption at the beginning of the year and gradually extended the abolition of agricultural diesel benefits until 2026. But this was not enough for the farmers, who have been protesting against the cuts since Monday with large demonstrations and blocking motorway entrances protest.