Every year, the European Commission distributes more than 50 billion euros in agricultural subsidies to the countries of the Union. After France and Spain, Germany benefits the most. But most of the money is not taken by small farmers, but by a few big beneficiaries. In Germany, the coalition agreement provides for a review of the current strategy and payment according to different criteria than now.

Problematic trends in the current formula for agricultural subsidies can be seen across Europe. In the eight countries studied, large companies and public institutions are the main beneficiaries, according to an evaluation of the Agricultural Subsidies Project database by the Süddeutsche Zeitung (SZ) and the television stations NDR and WDR. .

In all the countries analyzed, a few big beneficiaries take most of the money. The distribution is often even more unequal than in Germany. The highest percentage of beneficiaries receive more than a third of all subsidies in Europe.

It has been proven time and time again that investors and institutions outside the industry actually benefit from agricultural subsidies. “In Austria and Poland, for example, a lot of money goes to the Catholic Church,” German journalists write.

Subsidized energy and chemistry

More than 400,000 beneficiaries in Germany have received €53 billion since 2014. The analysis noted that the gap is wide: while the first percent of beneficiaries received almost €30,000 per company per month, the subsidy for the bottom half, small farms and farmers, is only €200 per month per company.

Energy group RWE has received more than three million euros since 2014. In response to a question, a spokesperson wrote that RWE reclaims land that was previously used for mining for agriculture.

Bayer AG and BASF received about one million euros.

The chemical concern BASF manages the “Rehütte estate”. According to a BASF representative, the “estate” is a classic agricultural operation. For stable and economical work, subsidies provide its material support.

And Bayer AG is engaged in the production of animal feed, on its own or leased land. The chemical and pharmaceutical concern also used it for mandatory testing of plant protection products before obtaining a permit – this is how the company explained to German journalists.

Money for former SAPs and farms with environmental problems

Uneven distribution at the regional level as well. The subsidies went mainly to Bavaria and Lower Saxony, which together received about a third of German subsidies in recent years.

In Germany, state-owned companies of the former GDR are given special attention and generous funds. After the unification, the so-called agricultural production cooperatives were privatized, large areas of which went to individual private entrepreneurs.

According to the analysis, at least 24 producer cooperatives from the former GDR are among the top 100 recipients of European agricultural subsidies for Germany.

Seven of the ten largest meat producers have received farm subsidies in recent years, and among the beneficiaries are farms that have violated the Animal Welfare Act.

“Contrary to the climate policy goals of providing agricultural subsidies, the database also includes a number of large companies that contribute significantly to the climate crisis with high greenhouse gas emissions,” the analysis said.

Agricultural funds for foundations

A lot of money also went to big investors and funds. In 2020, the federal government released a list of farms that are now owned by large holdings. NDR, WDR and SZ compared this information with the new database. According to her, the companies included in the DAH holding, the family fund of entrepreneur Zech, have received at least 21.5 million euros in agricultural subsidies since 2018.

As of 2019, the Lukas Foundation, which owns the Aldi-Nord group of companies, received around €2.7 million, the Lindthorst Group almost €12.5 million, and the Steinhoff family holding at least €11.6 million. Lindthorst Group and the Steinhoff family holding did not comment on the issue.

When asked, both the DAH Group and the Lukas Foundation emphasized that the agricultural subsidies will go to the respective farmers. “I think that the form in which mergers take place should not matter for financing. Whether it’s a free merger, a group of companies, a service provider or the principle of cooperation,” notes Felix Kolsman, managing director of DAH Group, referring to the fact that management is only possible through subsidies.

Eco-reform of agricultural subsidies?

“It’s just an insane amount of tax money being spent there. And it’s mainly the big landowners who will benefit,” says Carl Behr, a deputy from the Green Party. Therefore, Baer proposes to completely abolish the basic premium, which is simply distributed among farmers on a per hectare basis. Instead, the money should be directed to projects related to specific environmental requirements.

The Ministry of Agriculture says that in the future it is working on “a model that changes course and increasingly rewards the services of small and medium-sized enterprises for the common good.” The ministry calls this measure “income redistribution support.”

However, the fight for money and various interests is so fierce that recently the reform of agricultural subsidies had to be postponed for two years. The rules will now change in just a few weeks, instead of early 2021 as planned. On the one hand, the basic allowance will decrease, that is, the amount per hectare will decrease. However, farmers can apply for special green subsidies.

On the other hand, individual countries can now define their own priorities through national strategic plans. The respective national plans have recently come under fire from many quarters in Brussels. The directorate responsible for agriculture in the EU, at the request of German journalists, writes that national strategic plans support more ecological agriculture. However, there are no specific guidelines for achieving specific goals. This is left to the discretion of the Member States.

In Germany, the coalition agreement stipulates that by the middle of the legislative period it will be checked whether the current strategy really leads to the promotion of organic farming. From 2027, the federal government wants to introduce a concept that replaces previous direct payments for clean farm land with rewards for meeting climate and environmental goals.

Photo: Dreamtime