Future of agriculture: “Consider whether subsidies are still appropriate”

The farmers are resisting too much bureaucracy and the cuts in subsidies. Folkhard Isermeyer from the Thünen Institute in Braunschweig explains what modern, environmentally friendly agriculture could look like tagesschau24.

tagesschau.de: We all want high quality food. These should be our products from the field, but also our animal products that we eat or that come from animals. For example, eggs or milk. How can these products be of high quality?

Folkhard Isermeyer: When we ask the German population what is particularly important to them about agriculture, most of them say: proper treatment of farm animals. And if we then ask, where do you see the biggest deficits in agriculture? Then they say: When dealing with farm animals properly. This actually means that animal welfare is a central issue. And here we are all little sinners. This means that in the morning we grab the cheap thing in the supermarket. And when we see the conditions in today’s animal husbandry on television in the evening, we are not satisfied. We have to get out of this dilemma somehow.

Agriculture in international Competition

tagesschau.de: How do we get out of the dilemma?

Isermeyer: Maybe we’ll first think about how not to do it. So simply increasing animal protection laws doesn’t work because here in Germany we operate with open agricultural markets. This means that our farmers face international competition. If we unilaterally tighten animal protection legislation, animal husbandry would move away. The labeling of the products partially works. You can buy virgin land, you can buy organic, you can buy animal welfare labels and much more. However, the analyzes show that only a small part of the population is really willing to voluntarily dig deeper into their pockets. The majority of the population buys based on price.

We have developed a third way in science. The starting point is that farmers need planning security. Animal welfare stables cause production costs that are at least 30 percent higher than what is the case with normal, world market-oriented production. And no farm can afford to invest in this direction just like that.

This means that these companies need an animal welfare bonus promised by the state, i.e. a fee for this special animal welfare service. And not just one, two or three years, but at least ten years, and if possible 20 years, contractually guaranteed. If it is set up like this, then many companies and ultimately all companies will move towards greater animal welfare.

Animal welfare cents can be a solution

tagesschau.de: That sounds a bit like you want to change subsidies.

Isermeyer: There are no changes to subsidies. It is an attempt by society to use money to encourage agriculture to do something that cannot be achieved without money. It’s actually about the state purchasing the socially desirable service of animal welfare.

This is not something that can be had for free, but we have to think about where this money is going to come from. Ultimately, we would need up to four billion euros per year to bring all German livestock farming to a high level of animal welfare by 2040. That’s why we’re discussing counter-financing. And of course it makes sense to ask consumers of meat and dairy products to pay. So there is now a social discussion about introducing an animal welfare cent.

There are two options: Either you actually charge an animal welfare cent, say two euro cents per liter of milk, four euro cents per 100 gram packet of sausage. However, this has the disadvantage that a considerable amount of bureaucratic effort has to be undertaken. We have to create official conditions in order to collect these funds appropriately.

The much simpler option would be to change the VAT. At the moment we generally pay seven percent for agricultural products. You could reduce the plant products to zero percent, then increase the animal products to the standard tax rate of 19%, and on balance we would then have a few billion euros more in the federal budget or the state budgets. This could then be used to pay the animal welfare premium for farmers.

Less external regulations

tagesschau.de: There are many subsidies from Europe and there are subsidies in Germany. If you look at the current situation, is this the right path that politicians are taking with the subsidies – or does something fundamentally need to be changed?

Isermeyer: I believe that farmers are increasingly having doubts at the moment as to whether the path is still the right one. We have billions in subsidies that we distribute. But the basic principle is that the big windfall is basically distributed first and then a lot of conditions are linked to these subsidies. A level of regulation has now been reached that is overwhelming both the individual farms and sometimes the authorities who have to implement the whole thing.

We must always remember that farming takes place in the open air. Farmers must be able to react quickly to changing weather conditions, pest infestations and much more. And they can actually judge this better on their farms than anyone else. That’s why it annoys farmers when they are regulated in such detail, both through regulatory law and through the structure of subsidies.

Classic subsidies are on the decline

tagesschau.de: What must subsidy policy for agriculture look like so that it can continue to exist and be environmentally friendly?

Isermeyer: We should first consider whether this basic idea of ​​subsidizing agriculture in general and then linking many conditions to the subsidies is still relevant. The money that is simply paid out as direct payments per hectare is particularly controversial in science. It would be worth considering gradually reducing these direct payments. 60 percent of all agricultural land is leased land. For these areas, direct payments ultimately have no different effect than a landowner subsidy. It makes no economic sense at all to tax landowners with property taxes on the one hand and to subsidize them with agricultural policy on the other.

That’s why I would actually put these classic subsidies on a downward trend. Of course, this is only possible with longer adjustment periods, because many people have adjusted their life planning to the availability of these funds. But in the future, we should let this be phased out and then actually buy the ecosystem services that society expects from agriculture from agriculture. So don’t subsidize and regulate things, but buy exactly what is needed to beautify, improve and green our agricultural landscapes.

“In the long term, the system is too fragmented, too bureaucratic”

tagesschau.de: So how does a farmer set himself up to be truly viable?

Isermeyer: At the moment, farmers have to live with the conditions they find. These are the many small morsels that the current agricultural policy model of the European Union offers you. And that’s why “Farm the Program” is the strategy right now.

This means that farmers consider which elements they should include in the programs, i.e. whether they grow protein crops, whether they make flower strips and the like. Farmers can’t help but join this policy at the moment and take whatever subsidies they can with them.

But in the long term the system is too fragmented and too bureaucratic. That is why my recommendations are not aimed at agriculture at the moment, but at those who are responsible for future agricultural policy.

The interview was conducted by Anja Martini, science editor tagesschau. It has been edited and shortened for the written version.