For the first time, the annual economic forecasts by the German Economic Institute (IW) have also included the agricultural sector. The German Farmers’ Association (DBV) was one of the trade associations consulted and said it was “cautiously optimistic” for 2019. EURACTIV Germany reports.
German farmers thus had a position that was consistent with the overall summary of the Cologne-based IW. The head of the research group Michael Grömling described mixed feelings from the trade associations.
While a year ago, 26 of the 48 trade associations said they were in a “better mood,” only seven did so this time. The main causes were “political uncertainty, such as the trade disputes with the USA and the haphazard Brexit.”
It was political uncertainty that also led to the farmers’ rather modest expectations.
“Because of Brexit and the USA’s trade disputes, uncertainty on agricultural markets is rising considerably,” stated the DBV deputy secretary general, Udo Hemmerling. “Stricter conditions create additional costs and pressure to adapt. Farmers need stable policy framework and long-term planning certainty,” he continued.
Added to the risks from the global economy was a source of uncertainty from inside the EU, namely the common agricultural policy (CAP) reform and the related debate about the EU budget for the period after 2020.
The only thing that seems clear is that the agricultural sector will have to prepare for a decrease in public funding. But who will be affected by this, and to what extent, is uncertain for the time being.
No rapid progress is expected initially in the coming year due to the upcoming European elections and the subsequent formation of a new European Commission.
Last year’s long drought in the summer also had negative knock-on effects, according to DBV, which said there would be a return to normality in 2019. Following the serious economic damage, German farmers first have to accumulate liquidity again.
Nevertheless, the DBV believed that there would be somewhat greater investment in the agricultural sector in 2019. However, there was no expectation of greater employment. On the contrary, the DBV considered that the current trend would continue, meaning that fewer people overall will be employed by the agricultural sector in 2019 than in the previous year.
In total, 28 of the 48 consulted trade associations expected there to be higher production in 2019 than in 2018. However, ten of them expected there to be either consistent or declining production in 2019. There were 22 trade associations which expected greater investment for 2019, while 21 anticipated the same level of investment and five believed there would be a decrease.
The overall assessment for employment prospects in the sector was more negative, with only 18 trade associations expecting an increase in the number of jobs, 22 anticipating stagnation and eight thinking there would be a reduction. The DBV was one of the latter.