The federal government is reacting to massive farmers’ protests against planned subsidy cuts. The coalition wants to forgo the abolition of the vehicle tax exemption for agriculture. The abolition of the tax relief for agricultural diesel is to be extended and implemented in several steps, as the federal government spokesman announced in Berlin. However, the German Farmers’ Association considers the measures to be inadequate – and is sticking to a week of action planned from Monday.
Traffic light reverses
Federal Chancellor Olaf Scholz (SPD), Vice Chancellor Robert Habeck (Greens) and Federal Finance Minister Christian Lindner (FDP) agreed on changes to the original plans. The abolition of preferential motor vehicle tax for forestry and agriculture will be waived in order to avoid the “sometimes considerable bureaucratic effort” for the companies affected.
The tax relief for agricultural diesel is to be eliminated in several steps. This should give the affected companies more time to adapt. According to the federal government, the relief rate will be reduced by 40 percent in 2024 and a further reduction of 30 percent in 2025 and 2026. There will no longer be any subsidies for quantities consumed in 2026. The reimbursement of the quantities consumed in 2023 in 2024 will remain unchanged.
Habeck said: “We have spoken intensively to each other in the last few days because we see the burden on farmers.” We managed to find a solution that would help farmers. Agriculture Minister Cem Özdemir (Greens) emphasized that a disproportionate burden on agriculture and forestry had been averted. The ministry has made its own proposals for gene financing.
FDP parliamentary group leader Christian Dürr spoke of a fair solution for farmers. FDP parliamentary group vice-president Carina Konrad said: “The savings proposals discussed would have hit farmers hard, which is why they definitely would not have been able to approve them in that form.” SPD parliamentary group vice-president Achim Post made it clear that the savings in the budget must be balanced overall, without placing too much of a one-sided burden on individual groups.
Massive protests against plans
In mid-December, Scholz, Habeck and Lindner agreed on a package of measures to plug billions in holes in the federal budget following a budget ruling by the Federal Constitutional Court. This also meant that the so-called agricultural diesel and the vehicle tax exemption for farmers should be canceled. The plans had triggered massive protests from farmers and were also controversial within the traffic light coalition.
Specifically, it is about the regulation that farms can have the energy tax for diesel partially refunded – with a compensation of 21.48 cents per liter. It is also important that agricultural and forestry vehicles are exempt from vehicle tax. The abolition of the tax relief in the motor vehicle tax for forestry and agriculture should generate additional revenue of 480 million euros, and the abolition of the tax relief for agricultural diesel should generate additional revenue of up to 440 million euros.
Farmers President Joachim Rukwied described the cuts plans as unreasonable. Regarding the planned changes, he said: “This can only be a first step. Our position remains unchanged: both cuts proposals must be removed from the table.” It is also about the future viability of the industry and the question of whether domestic food production is still desired. “We are therefore continuing to hold on to our week of action.”
The German Farmers’ Association has called for a week of action against the planned cuts starting on Monday. A large demonstration is planned in Berlin on January 15th.
Criticism came from Greenpeace. “The climate-related flooding is currently flooding fields and pastures all over Germany and the German Farmers’ Association wants to continue protesting against climate protection – that is incomprehensible,” says agricultural expert Martin Hofstetter. The massive use of fossil fuels in particular is and remains harmful to the climate.
Less relief in the household
After the Karlsruhe budget ruling, Scholz, Habeck and Lindner had to plug a financial gap of around 30 billion euros in the core budget and in the climate and transformation fund. According to the federal government, the changes that have now been announced will lead to less relief in the federal budget in 2024. But these could be compensated for. Income from an offshore wind tender should be used more broadly. The Federal Ministry of Agriculture will make an additional savings contribution of 100 million euros.
Reference was also made to the scope that would have resulted from updated economic and budget data in the federal budget. The 2004 federal budget should be approved by the Bundestag at the end of January.
