CChristian Lindner was almost hoarse at the end because he had to speak so loudly against the background noise in front of the Brandenburg Gate on Monday. “I cannot promise you any more state aid from the federal budget today,” shouted the Federal Finance Minister and FDP politician in the direction of the noisy peasantry.
The farmers have already been successful with their protest. The agricultural machinery would continue to be exempt from motor vehicle tax, “the green license plate remains”. The concession for agricultural diesel will only be phased out gradually. The traffic light originally wanted to cancel the two subsidies immediately in order to reduce the burden on the federal budget by almost 1 billion euros this year.
Lindner called for us to work together to find other ways to keep local agriculture competitive. On the one hand, he mentioned the reduction of bureaucracy, and on the other hand, he announced that he would examine improvements to income tax. The finance minister spoke about tariff smoothing, which existed until 2022. At that time, taxable income from agriculture and forestry was considered over three years. If the fictitious tax burden determined in this way was lower than the actual one, the tax for the last year of this period was reduced by this difference. The minister also says that a tax-free risk reserve is conceivable. Farmers could then also reduce their tax burden.
Federal Agriculture Minister Cem Özdemir (Greens) has other priorities. In the past few days he has repeatedly brought up the introduction of an animal welfare tax on the purchase of animal products. Farmers should use the income to convert their farms towards greater animal welfare and sustainability. Just a few cents more per kilogram of meat would be enough, said Özdemir.
Support for animal welfare tax
He received support from his coalition partners. “We are open to this idea,” said FDP General Secretary Bijan Djir-Sarai after a meeting of the party executive committee. But there also needs to be talk about reducing bureaucracy and setting aside land. Representatives of the SPD also did not react unfavorably to Özdemir's initiative, even though it would make food more expensive. An animal welfare tax is “the right way, as it is the fairest inclusion of all forms of husbandry,” said Susanne Mittag, nutrition policy spokeswoman for the SPD parliamentary group in the Bundestag.
The idea of an animal welfare tax is not new. In spring 2020, an expert commission set up by the then CDU Agriculture Minister Julia Klöckner advocated that farmers should be reimbursed for the majority of the costs for the desired change towards greater climate protection and animal welfare. Consumers should pay this: 40 cents per kilogram of meat and sausage, 15 cents per kilogram of cheese and butter and 2 cents per kilogram of dairy products and eggs was suggested by the so-called Borchert Commission. This should bring together 3.6 billion euros annually.
A feasibility study commissioned by Klöckner later came to the conclusion that an animal welfare tax, a higher VAT for animal products or an animal welfare solidarity surcharge were generally conceivable. The lawyers also pointed out hurdles under European law.
The difference between talking and acting
If a tax is intended to make both domestic and imported products more expensive – which would probably be the political goal to prevent consumers from buying cheaper goods from abroad – the revenue should not only benefit German farmers, it was said at the time. Klöckner refrained from making a proposal for implementation during her term of office.
In surveys, consumers repeatedly confirm how important sustainability is to them. In a representative survey initiated by the Ministry of Agriculture, 65 percent of citizens said they “always or most of the time” follow an animal welfare label. However, market data paints a different picture. The organic share in meat production is still close to 5 percent.
The dairy industry association spoke out against an animal welfare tax on Monday. He fears a high administrative burden, disadvantages compared to foreign competitors – and that passing the tax on to consumers will ultimately be difficult.
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