East German agriculture still reeling, 30 years after reunification

A spinach farm in Golzow, Brandenburg. The prices for agricultural land are rising, but the yields are falling. [EPA | Patrick Pleul]

The effects of Germany’s 1990 reunification have been particularly felt by farmers in eastern Germany whose land was suddenly privatised and left to market forces. Some problems persist to this day, 30 years later, and new ones have since cropped up. EURACTIV Germany reports.

Land prices in rural areas are rising. Those who want to expand their own agricultural operations usually have to spend large sums of money, which many farmers do not have but large investors do.

The problem of rural privatisation is not the only East German challenge. But it does have a history in the period shortly after reunification, when more and more West German farmers, armed with loans, bought up cheap agricultural land in the former East German states.

Competition for farmland

The path from a planned economy to a market economy was taken without the participation of the people in the regions, Brandenburg farmer Julia Bar-Tal said at a EURACTIV event on German agriculture 30 years after reunification.

Speaking about the privatisation of agricultural land, she said that process had happened over the farmers’ heads: “That was public property. That belonged to everyone in society.”

The privatisation of agriculture meant that land became available on the free market and suddenly found itself in competition with other uses of land – for settlements or transport corridors for example.

The consequence of this competition is an increase in the price of agricultural land that is out of all proportion to the usual yields in agriculture. But as the prices of land purchase increase, so do the prices of leased farmland as well.

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Unable to expand

The fact that farms decide to expand is becoming less and less economical and therefore less likely due to the price increase. Instead, investors with large capital are taking over agricultural land. Bar-Tal complained that there is a lack of political leverage and will for land to be returned to the public.

She was supported by Andreas Tietz of the Thünen-Institut, which advises the Federal Ministry of Agriculture. Tietz also believes that there is a political need to catch up in terms of large investors, because politicians lack an overview of who owns the land:

“Agricultural subsidies look at the individual farm, but the structures behind them are not recognised and not recorded.”

Whoever wants to make agricultural structural policy must, however, know these structures, he stressed.

Agricultural structure law as a solution?

To prevent this sale of farmland to larger investors, Prof. Dr Claudia Dalbert, agriculture minister of Saxony-Anhalt (Greens), announced at the EURACTIV event an agricultural structure law for her state.

This law is intended to create a dominant position in the market, both in land sales and in the takeover of entire farms, and to ensure more transparency in the land market.

Bar-Tal, however, said this approach does not go far enough.

She warned that with large investors coming from outside, no part of the value creation takes place in the region. The industry, she said, is not in a good shape anyway because of the low yields. Without subsidies, it would hardly be possible to make a living from agriculture.

She said politicians must go beyond purely financial subsidies and incorporate measures such as contemporary curricula during training, counselling centres for business start-ups, legal advice on land purchase and nature conservation guidance.

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Demographic challenges

Another challenge is demographic change. This affects rural areas in particular, and in the case of eastern Germany, this problem also has a history. Up until the mid-1990s, around 80% of farmers in the former GDR lost their jobs, recalled Johannes Funke, spokesman for agricultural policy for the Social Democrats (SPD) in Brandenburg.

Afterwards many moved away, Funke said: “The farms were the pillars of rural areas. This all collapsed as people moved away.”

Today, this problem no longer exists but the consequences of the demographic development of that time are still having an impact today. “There is a whole generation missing in the villages,” Funke remarked.

The next generation must now take up the burden of the past.

However, the farmers feel left alone in this task, although they are proud of what their colleagues are achieving in spite of the obstacles, Bar-Tal said at the end of the EURACTIV event. But the support to continue providing these services must come from politics, she said.

(Edited by Frédéric Simon)

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