Critical of the budget agreement, Agriculture Minister Özdemir voiced concerns over agricultural cuts, stating they would place German farming at a disadvantage compared to other countries. The agreement, announced by Chancellor Scholz, Habeck, and Lindner, aimed to fill the 2024 budget gap caused by the Federal Constitutional Court's ruling and adhere to the debt brake.
Notably, environmental harmful subsidies, including the motor vehicle tax concession for forestry and agriculture, were earmarked for reduction. This tax concession, worth approximately 480 million euros annually, was questioned, with no immediate information provided on the savings potential of scrapping agricultural diesel subsidies.
Özdemir, holding responsibility for agricultural diesel subsidies and vehicle tax exemptions for agricultural and forestry vehicles, anticipated proposals from the Federal Ministry of Finance to aid farmers. Potential support mechanisms were suggested, like permanent funding for animal husbandry conversion or enhanced incentives for innovation and future development.
Joachim Rukwied, President of the German Farmers' Association, deemed the leaders' decision a "declaration of war" against German agriculture and farming families. Rukwied's concerns were echoed by Jan Plagge, President of Bioland, the organic farmers' association, who feared the proposed cuts would expedite the demise of farms, especially those already enduring financial strains.
Compensation, in Plagge's view, could stem from better remuneration for the environmental services provided by agriculture. Reacting to the criticism, the German Federal Ministry of Finance acknowledged the farmers' concerns and pondered alternative measures, such as gradually phasing out the diesel tax reduction, maintaining the vehicle tax exemption for agricultural and forestry vehicles, and fostering dialogue between all parties involved.
