On the 11 March, DCZ experts participated in a webinar organized by IAK Agrar Consulting to inform practitioners about the impact of the coming reform of the EU Common Agriculture Policy (CAP) on their enterprises.
The webinar was held by Dr. Tanneberger, head of the IAK regional office in the state of Brandenburg and part-time farmer himself.
Currently, within the framework of the EU Trialogue between the EU Commission, the EU Parliament and the EU Council, a reform of the support mechanism for farmers in the EU is discussed. As in many EU countries these subsidies comprise more than 50% of farmers’ total income, reforms of subsidies have a strong influence on the viability of many farms.
Under consideration is the introduction of a ceiling of subsidies per farm of approximately 100,000 EUR per year which would have a considerable effect on all large-size farms in the EU and raises the question whether time and effort to apply for the various subsidies is still worth the effort. The ceiling of subsidies would be particularly damaging to farmers in East Germany where at the moment the average acreage per farm is more than 250 ha. As the costs to elaborate the applications for subsidies can be quite substantial, they might outweigh the financial benefit if such a ceiling will be put in place.
Dr. Tanneberger argues that it is very unlikely that such an upper limit for subsidies will actually come into effect as this would mean that – due to the farm size in Eastern Germany – more than 70% of the arable land would be ineligible for subsidies and the EU would have limited leverage on these areas with their policies regarding environmental conservation. In light of the increasing efforts to change the agricultural production in the EU towards a more sustainable and climate friendly way, such a move would be counterproductive to this end.
However, Dr. Tanneberger advised the farmers to be prepared for the coming trends of the EU agricultural subsidies. A shift to a more sustainable agricultural production (EU Green Deal) is clearly one of the main issues in the coming years. Agricultural production has to be more focused on
- Increasing biodiversity
- Reducing the CO2 footprint
This will for example result in an increasing share of organic farms. Conventional farms should embrace these changes and try to seek new opportunities either through increasing their share of organic production or by implementing some measures to restore acceptance of modern farming methods among the general public. An increase in cooperation agreements with other farms might well be another coping strategy to prepare for a likely decrease in subsidies.