Farmers can anticipate noticeably decreased earnings.
The financial standing of numerous farms has relatively improved recently, with farmers gaining from high costs during the past years. However, they are now readjusting to deteriorating profits once more. The farmers' association anticipates a possible 50% reduction in revenues.
The condition of farmers' businesses is worsening after recent notable earnings in the past. "Our farms have again sailed through more challenging economic waters," commented Farmers President Joachim Rukwied. For the current financial year 2023/24, set until the end of June, revenues are forecasted to decrease by between 30% and 50% when compared to the previous year – when incomes had significantly increased due to higher costs. German Agriculture Minister Cem Özdemir is also bracing for lower yields as a result of lower costs and wishes to maintain steadiness in the sector. During the previous marketing year 2022/23, this yield skyrocketed to a record level.
As per the data unveiled by Özdemir in Berlin, the average earnings scaled up to €113,900, rising by 39% compared to the year before. According to the department, an upsurge in prices for nearly all products was the primary cause of this, which intensified due to Russia's aggressive war against Ukraine. Subsequently, almost all farms managed to move beyond considerable spikes in energy, feed, and fertilizer costs.
As per its data, the farmers' association had already foreseen an average profit of €115,400 for the preceding fiscal year. However, reimbursements for investments and other expenses were still required. In general, farms often experience great fluctuations, like those caused by changing weather, prices, and the international markets.
Rukwied revealed that producer costs for the important agricultural products have plummeted substantially.' Özdemir mentioned that these fluctuations were similar to a "roller coaster ride" for the farms. While it's encouraging that many farms obtained strong operational results for the second time, Özdemir stressed," we shouldn't delude ourselves." For the authorities, it's about providing dependability and reliability for the diligent work of farmers.
Relieving Bureaucratic Demands
Following national demonstrations by farmers at the beginning of the year caused by the cancellation of agricultural diesel support, the coalition administration promised the domain some relief - including lessening bureaucratic mandates and tax norms, to be carefully executed before the summer. Özdemir reaffirmed that there needs to be unwavering funding for converting livestock farming to advance standards so farms don't need to cover the additional costs. This cannot be accomplished with the present retail prices.
The Minister advocated again for measures like higher VAT or an animal welfare tax on animal products. None of the three coalition partners have eliminated this possibility at the upper level, and discussions will continue. Within the coalition, the FDP mostly protested against this approach. Özdemir reinforced that the origin of German agriculture was to "make a reputation with quality on the market." Meanwhile, the federal government has reserved €1 billion to improve stable conditions, but this is only designated for pig farmers.
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Despite the recent financial improvements in farms due to higher costs, they are now facing a significant decrease in earnings. According to the German Farmers' Association, revenues for the current financial year are projected to decrease by between 30% and 50%, with Cem Özdemir, the German Agriculture Minister, also bracing for lower yields.
Source: www.ntv.de
