EU Agrarian Reform Could Hit Eastern German Farms Hardest, Study Warns

Large agricultural businesses in eastern Germany face a potentially significant impact from the European Union's planned agrarian reform, according to a new study by the Leibniz Institute for Agricultural Development in Transition Economies (IAMO) and the University of Rostock.

The reform, intended for the 2028-2034 funding period, proposes reducing direct payments for larger farms and reallocating them to smaller ones. This shift could have far-reaching consequences in eastern German states like Brandenburg, Mecklenburg-Vorpommern, Saxony, Saxony-Anhalt, and Thuringia, where large agricultural enterprises are prevalent. Researchers warn that cuts to direct payments could not only strain individual businesses but also affect employment, regional value creation, and income in rural areas.

Furthermore, the study raises concerns about the potential impact on environmental and climate protection measures. Many existing agri-environmental programs are currently supported by larger farms, and reduced revenues could diminish their willingness to participate in these initiatives. The reform also shifts more financial responsibility for environmental and rural development programs to member states, potentially increasing pressure on regions with tight budgets.

For Saxony alone, the study estimates an additional funding requirement of approximately 240 million euros to maintain current support levels. The researchers recommend that the planned reductions for large farms not be implemented as proposed. If implemented at the EU level, they suggest creating exceptions and ensuring that reduced funds remain within the affected regions. They also advocate for the continued development and long-term financial security of existing environmental programs.

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Large agricultural businesses in eastern Germany could be particularly affected by the planned EU agricultural reform.