Food - Is there movement on VAT for meat?
Federal Agriculture Minister Cem Özdemir advocates for a slight increase in the Value-Added Tax (VAT) on meat to finance the transformation of animal husbandry to higher standards. At the German Farmers' Day in Cottbus on Thursday, Özdemir supported a proposal from the Farmers' Association: "I am ready for that." This is not about raising the tax on the full amount, but about raising it by a few points. At the same time, politics should reach an agreement that this money will only be used in animal husbandry for the transformation of the stables, for higher animal husbandry standards. The response from consumer and environmental protection groups was divided.
For the Minister, it was not an easy appointment. Months after the large farmers' protests against the end of Diesel subsidies, discontent with agricultural policy still simmers. Özdemir used the opportunity for another attempt to promote a major issue of the industry: How can farmers not bear the additional costs for more animal welfare alone? The traffic light coalition has reserved a billion euros for pig farmers as a starting point. However, what is sought is a permanent model for the entire animal husbandry - so far in vain.
The idea is not new
Since 2020, a concept of a commission chaired by former Agriculture Minister Jochen Borchert has been available, which proposes a higher VAT or an animal welfare levy on animal products. During the farmers' protests in winter, Özdemir tried to seize the moment and advocated for a "animal welfare center," which could also be smaller than the levy proposed by the commission with a reasonable surcharge of 40 cents per kilogram of meat. However, the idea hit a dead end in the coalition, as the finance ministry led by the FDP did not pick up the ball.
Farm President Jochim Rukwied had hinted before the Farmers' Day that farmers were "totally disappointed" with this. "The ball was on the penalty spot, and the goalkeeper rejected it at the post. But so far, nothing has really happened. The previous government could have sunk the ball." Rukwied added that the VAT could be increased by measured seven percent by two or three points - but not to the full 19 percent, so that people with lower incomes could still afford to buy meat.
Özdemir said in Cottbus: "That is a clever proposal." He understood it as a compromise offer, behind which the entire industry stands. "What if we accept this proposal together in the Bundestag, inter-factionally?", Özdemir also addressed the Union approximately. This would create more animal welfare, an economic basis, and strengthen consumers. "Let's make it happen."
Mixed reactions to Özdemir's proposal
Consumer organization Foodwatch stated: "Higher value-added tax on meat, lower on fruits and vegetables: That's what Cem Özdemir should focus on now." A higher tax on meat is not only good for climate-, animal- and environmental protection, but also for promoting healthy nutrition. However, Greenpeace criticized this: "Özdemir is going too far with the farmers' association." Another value-added tax increase for meat would be a lazy compromise, the system would only become more opaque. Climate- and environmentally harmful animal products would continue to be subsidized. Instead, a tax exemption for plant-based products would be better.
A new dynamics is emerging and it remains to be seen how it will manifest. Before the Farmers' Day, there were already signals from the FDP that food prices had significantly increased due to inflation and should remain affordable for the broad population.
Özdemir also appealed to farmers for support for the relief package that the coalition wants to pass quickly in response to farmers' protests. The first drafts are expected to be submitted to the Bundestag on this Friday. The minister defended the proposed stricter animal welfare regulations against industry criticism. However, he is open to dialogue on regulations that lead to less chemical plant protection on fields.
A farmer as a head of government
In one point, Özdemir also distanced himself from Chancellor Olaf Scholz (SPD), who at the Farmers' Day the day before crossed swords and tasted a Bratwurst. "And no overbidding in politics, whoever demands a higher minimum wage," Özdemir said without mentioning the SPD and Scholz, who had recently announced an increase to 15 Euros.
Brandenburg's government head Dietmar Woidke came beforehand and expressed support to his colleagues. The decision to abolish diesel subsidies was wrong. "I'm still with you," Woidke said and touched a nerve among farmers in Cottbus. The Diploma Engineer in Agriculture then also quoted a slightly altered quote from King Frederick II of Prussia - called Old Fritz: "Agriculture is the first of all arts, without it there would be no poets, philosophers, minister presidents and federal ministers for agriculture."
Farmers' Day 2024 in Cottbus
- During the discussion about the proposed VAT increase on meat, Federal Agriculture Minister Cem Özdemir received support from the Farmers' Association in Cottbus, stating, "I am ready for that."
- The idea of increasing the VAT on meat or implementing an animal welfare levy has been suggested by a commission chaired by former Agriculture Minister Jochen Borchert since 2020.
- In response to Özdemir's proposal at the German Farmers' Day, Consumer Organization Foodwatch suggested focusing on a lower VAT on fruits and vegetables instead of raising it on meat.
- Greenpeace criticized Özdemir's proposal, stating that an additional VAT increase for meat would make the system more opaque and continue to subsidize climate-harmful animal products.
- Brandenburg's government head Dietmar Woidke supported the farmers at the Farmers' Day, saying, "I'm still with you," and quoting King Frederick II of Prussia: "Agriculture is the first of all arts."
- At the Farmers' Day in Cottbus, Minister Özdemir also appealed for farmers' support for the relief package the coalition wants to pass in response to farmers' protests.
