The Federal Council has given the green light to reduce subsidies for agricultural diesel. On Friday, the majority of the states voted against referring the relevant law to the mediation committee. At the same time, the federal government announced a package of measures to support agriculture.

Individual points have already been agreed upon, said Parliamentary State Secretary in the Ministry of Finance, Katja Hessel (FDP), in front of the State Chamber. In a protocol statement available to the German Press Agency, ten points were mentioned that needed to be “implemented quickly”.

Tariff smoothing promised

This includes reducing requirements and unnecessary bureaucracy. In addition, the so-called tariff smoothing is to be reintroduced for six years. When calculating income tax, not just one tax year is used, but several. This means that yield losses due to extreme weather, for example, can be compensated for.

The Agriculture Minister of Baden-Württemberg, Peter Hauk (CDU), said that the relief promised by the federal government was not enough. He continued to campaign for the cuts in agricultural diesel to be reversed.

In order to close a billion-dollar gap in the federal budget, the traffic light coalition decided to reduce these subsidies for farmers. So far, companies have been able to get a partial refund of the energy tax for diesel – with a reimbursement of 21.48 cents per liter. This should be reduced gradually. There will no longer be any subsidies for quantities consumed in 2026.

Farmers continue to fight

The cuts triggered a wave of protests from farmers. However, Lower Saxony’s Prime Minister Stefan Weil (SPD) emphasized: “Agricultural diesel was the trigger for the protests, agricultural diesel is not the cause.” The poor situation of farmers should not be reduced to this. Among other things, there is over-regulation: farmers now spend more time in the office than in the fields and stables. The federal government has set out on a hopeful path to change that – now there must be results.

The farmers’ association emphasized that the fight for agricultural diesel is not yet over. It is now essential to provide relief for agriculture to at least the same extent. “Weakening the competitiveness of our domestic agriculture in the European internal market so massively is completely unacceptable,” explained association president Joachim Rukwied. The issue will continue to play a role at least until the 2025 federal election.

The Federal Council’s vote also decided on further measures to consolidate the 2024 federal budget. These include, for example, a higher aviation tax and stricter sanctions on citizens’ money. They are a consequence of the Constitutional Court ruling last autumn, which left a billion-dollar gap in the federal government’s spending plans.