Agricultural grants for crop failures

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The prolonged heatwave and drought conditions in Germany have resulted in substantial crop failures for many farmers. On 13 August 2018, the ...

The prolonged heatwave and drought conditions in Germany have resulted in substantial crop failures for many farmers. On 13 August 2018, department heads in federal and regional state ministries of agriculture convened to discuss potential relief measures. The 2018 crop report shows that Schleswig-Holstein has been hit hardest by the drought, with grain production there falling by 33.7% in comparison with the three-year average. Estimates from the regional states suggest that a total of around 10,000 farms across Germany are so badly affected that their very survival is in doubt.

The Federal Minister of Agriculture described the weather conditions experienced in the preceding months as an exceptional weather event of national proportions, and proposed a federal-state aid programme of around 340 million euros for farms facing collapse. Fourteen states are expected to take part in the federal-state programme, which will compensate affected and eligible parties for up to 50% of their losses; the federal and regional state authorities will each contribute half of this amount. Funds will be allocated in the form of non-repayable cash grants. The corresponding administrative agreements concerning the federal-state aid programme are expected to be in place by mid-September 2018.

What conditions will be attached to the relief payments?

The agricultural relief will be based on the “National framework directive for granting state allocations to manage agriculture and forestry losses caused by natural disasters or adverse weather conditions”.

Affected farmers can apply to the relevant awarding authority for state aid, provided they are able to prove that they have lost more than 30% of their average annual production due to this year’s weather conditions, and that they are in need of assistance. However, there is no legal entitlement to the funds. States may grant payments in advance of final approval if urgent assistance is required.

What types of loss are compensated?

The aid programme is designed to compensate for losses incurred as a direct consequence of the adverse weather conditions, including unforeseen expenses such as buying cattle feed, repair costs including clearing of production areas and buildings, and maintenance of supply equipment.

Total losses are calculated by adding up the overall reduction in income with any damage to buildings, facilities and plant, agricultural and forestry infrastructure, machines and equipment, and of herd and grain stocks in agriculture. Insurance payouts must be offset against compensation payments.

Dr Johannes Badenhop