Study: EU Agricultural Reform Disproportionately Burdens Eastern Germany

Large Farms Shape the Agricultural Structure of Eastern Germany

Unlike in many western German regions, large agricultural enterprises frequently shape the landscape in Brandenburg, Mecklenburg-Western Pomerania, Saxony, Saxony-Anhalt, and Thuringia. The reason is primarily the large farms widespread in Eastern Germany, which under the EU Commission's plans would have to reckon with lower direct payments. The reform would thus intervene most strongly precisely where the average farm size is already above the European mean.

The researchers also see a problem in the planned financing architecture. According to this, programs for rural development and environmental protection would in future have to be co-financed to a greater extent by the member states themselves, while income support would continue to flow entirely from the EU budget. Countries and regions with tight budgets would thus come under additional pressure, according to the study.

Risks for Environmental and Climate Protection

In the researchers' assessment, the consequences would be far-reaching. If their direct payments are cut, this could burden not only individual enterprises but also employment, regional value creation, and income in rural areas. Declining revenues could reduce their willingness to participate in complex funding programs.

At the same time, the authors fear consequences for environmental and climate protection measures. Many agri-environmental programs have so far been carried by larger farms. Precisely because these programs require personnel, technology, and land, the collapse of direct payments would jeopardize the sponsorship of such measures.

The Researchers' Recommendations

The researchers recommend not implementing the cuts for large farms in their currently planned form. Instead, exceptions should be created and it should be ensured that the funds saved remain in the affected regions. They also advise further developing existing environmental programs and securing their long-term financing.

240 Million Euros Additional Need for Saxony

The study provides a concrete calculation example for Saxony. For Saxony alone, the study puts the additional financial need at around 240 million euros in order to maintain the previous level of funding. This amount would have to be raised from state or federal funds if EU funds were cut as planned and Saxony wanted to compensate for the loss through its own programs.

Under the reform plans, member states are to receive more leeway in designing their funding programs. The IAMO researchers see this as an opportunity, but also a risk: countries with well-established administrations and their own financial room to maneuver could absorb the transition better than structurally weak regions. Eastern Germany, where public budgets are under pressure in many places, would accordingly be particularly dependent on additional federal funds or EU exemptions.