The wonderful thing about the Brandenburg Gate is that it is not just Germany’s most popular tourist attraction, it is also the country’s central place of protest.
I live in a small village (2500 people) that has 4 farms, 2 are milk producing including 1 is a bio-gas producer and 2 are only grain, hay and straw producers. Between those 4 farms are 11 large tractors with various sized trailers attached. Those tractors drive on all the state and local highways with no regard for speed limits or load capacity. I have little empathy for these farmers, they are a long way from being poor!
Great article explaining both the current protest and the history of it. I don't disagree that subsidies should be phased out, but there are three nuanced points to observe here, which I would like to point out.
(1) Normally subsidies are phased out over time with a longer time horizon, since purchasing more fuel-efficient tractors and agricultural equipment requires a significant investment of capital and the manufacturers need to scale up production so that such equipment is available (and manufacturers need to know that it will be required, so the required design changes. can be made, tested, and implemented, along with the capital investments). As an example, the change to Euro 7 standards for automobiles was announced years in advance, and everyone knew what was coming. Combustion engine automobile phase-outs are announced 12 years in advance.
(2) Many subsidies are indexed to income, business size, etc. Subsidies to small or family farms (which could be defined in terms of turnover, hectare size, or ownership structure, or some combination) might be more politically acceptable, and could also serve as an interim bridge with a time-announced phase out, since these cuts disproportionally effect smaller operations.
(3) Since Germany has announced policy goals that emphasize rapid scale-up of biogas production, and many farms have implemented it, an alternative would be to rapidly implement subsidies for conversion of agricultural machinery and tractors to run on biogas. This has already been done in some parts of Europe, and some farms operate all their equipment and (even electricity) from own biogas production. That would be a one-time charge which would then reduce forward operating costs for those operations and would allow easier removal of the subsidies.
Hi Eric, thanks for this insightful comment. On point 3, I read recently that Denmark is making huge strides on replacing natural gas with biogas made with dung from their pig farms. would certainly seem like a logical step for Germany to move in that direction at least for farm vehicles.
I live in a small village (2500 people) that has 4 farms, 2 are milk producing including 1 is a bio-gas producer and 2 are only grain, hay and straw producers. Between those 4 farms are 11 large tractors with various sized trailers attached. Those tractors drive on all the state and local highways with no regard for speed limits or load capacity. I have little empathy for these farmers, they are a long way from being poor!
Great article explaining both the current protest and the history of it. I don't disagree that subsidies should be phased out, but there are three nuanced points to observe here, which I would like to point out.
(1) Normally subsidies are phased out over time with a longer time horizon, since purchasing more fuel-efficient tractors and agricultural equipment requires a significant investment of capital and the manufacturers need to scale up production so that such equipment is available (and manufacturers need to know that it will be required, so the required design changes. can be made, tested, and implemented, along with the capital investments). As an example, the change to Euro 7 standards for automobiles was announced years in advance, and everyone knew what was coming. Combustion engine automobile phase-outs are announced 12 years in advance.
(2) Many subsidies are indexed to income, business size, etc. Subsidies to small or family farms (which could be defined in terms of turnover, hectare size, or ownership structure, or some combination) might be more politically acceptable, and could also serve as an interim bridge with a time-announced phase out, since these cuts disproportionally effect smaller operations.
(3) Since Germany has announced policy goals that emphasize rapid scale-up of biogas production, and many farms have implemented it, an alternative would be to rapidly implement subsidies for conversion of agricultural machinery and tractors to run on biogas. This has already been done in some parts of Europe, and some farms operate all their equipment and (even electricity) from own biogas production. That would be a one-time charge which would then reduce forward operating costs for those operations and would allow easier removal of the subsidies.
Hi Eric, thanks for this insightful comment. On point 3, I read recently that Denmark is making huge strides on replacing natural gas with biogas made with dung from their pig farms. would certainly seem like a logical step for Germany to move in that direction at least for farm vehicles.
Thanks for this. Really good writing!