Why German Farmers Are Protesting: The Flaws and Fallout of Agricultural Subsidies
At the peak of the demonstrations in mid-January, over 30,000 farmers drove more than 5,000 tractors from across Germany to protest in Berlin. The direct trigger for these protests was the German government’s announcement at the end of 2023 to scrap the agricultural diesel tax rebate.
Similarly, under the twin pressures of the energy crisis triggered by the war in Ukraine and the European Green Deal’s agenda to “reduce subsidies for fossil fuels”, Greece and France also announced at the start of the year that they would eliminate diesel subsidies. However, both quickly backtracked in the face of massive farmer demonstrations, announcing delays or suspensions to the subsidy cuts.
These concessions did little to satisfy European farmers. Their anger over the diesel subsidy cuts quickly ignited a broader fury against other food and farming policies: cheap food imports from non-EU countries, the Green Deal’s pledge to halve pesticide use by 2030, and the requirement to keep 4% of agricultural land fallow…
Portrayed in some media reports as opposing the transition and green development while demanding subsidies and protection, European farmers are once again being labelled “conservative” and “far-right”. Yet this reductive narrative obscures the complex realities behind their discontent.
Why did cutting diesel subsidies spark such widespread discontent among European farmers? How do grievances over specific policies point to deeper systemic injustices? To understand, we must begin in Germany, where the protests first erupted.
I. Agricultural Subsidies: Easy to Introduce, Hard to Withdraw
Alongside the proposed cuts to this diesel subsidy, the agenda now includes scrapping an exemption from vehicle tax for agricultural machinery. Dating back to the 1920s, this policy currently means farm equipment is not liable for vehicle tax. Should it be abolished, each machine would face an average annual bill of €2,500.
Serving as vital tools for driving food self-sufficiency and agricultural modernisation in post-war Germany, these two measures boast a combined history spanning more than 170 years. They cost the federal government an average of €920 million (roughly 7.187 billion RMB) annually. The pressure of abruptly overhauling such long-standing policies is readily apparent.
Under pressure from mass farmer protests, the German government has already conceded, retaining the tax exemption for agricultural machinery and instituting a three-year transition period before phasing out diesel subsidies. During a public hearing at the German parliament in January, Friedrich Heinemann, Professor of Economics at Heidelberg University, lamented this development.
Heinemann maintains that the diesel subsidy ought to be scrapped. By providing strong price incentives, the policy encourages farmers to rely on diesel and diesel-powered machinery. As a result, farming practices that could reduce diesel consumption have been overlooked, and manufacturers of agricultural equipment have lacked the incentive to develop machines that are more energy-efficient or run on alternative fuels.
Nevertheless, the policy did achieve its original aim of enhancing the competitiveness of German agriculture. Backed by stable subsidies for farm machinery and energy, alongside land consolidation measures, German farming smoothly advanced towards mechanisation and modernisation, capitalising on a range of policy benefits.
By the 1970s, agriculture in East Germany had already largely achieved mechanisation, ranking first in Europe for the average number of tractors per thousand hectares of farmland. Today, Germany remains one of the world’s largest exporters of agricultural machinery. In its official agricultural white paper, the government proudly states that “one German farmer can feed 140 Germans”.
Yet behind this highly mechanised agriculture lies a steady rise in the energy demands of food production, and a deep entanglement between the food system and fossil fuels.
The Netherlands, another major European agricultural power, serves as a case in point. Jan Douwe van der Ploeg, author of *The New Peasantry*, has cited research by Smit on energy consumption in Dutch food production: in 1950, Dutch farms required just 81 kilojoules of fossil energy to produce 100 kilojoules of food; by 2015, that figure had risen to 225 kilojoules—meaning energy inputs for producing the same amount of food increased by nearly threefold.
Professor Vanderploeg explains that the structural shift towards high-yield, energy-intensive food production, alongside the transition from traditional smallholder farming to “entrepreneurial agriculture”, has been accompanied by the displacement of labour by capital. Put simply, human labour has been supplanted by energy-hungry agricultural technologies and the farm loans designed to incentivise their adoption.
Within arable farming, the surge in energy consumption stems primarily from chemical fertiliser application and the use of diesel-powered machinery. Research into European open-field crop production reveals that these two inputs account for 50% and 30% of the average total energy used in production, respectively. In livestock farming, the rise in energy use manifests in the reliance on non-native high-yield breeds, protein-rich concentrates, and the associated machinery and automated systems for housed livestock. As technology constantly evolves and fixed investment costs climb, farmers become inextricably locked into the mainstream market system.
II. Why the Protests? Profit for the Large, Survival for the Small
According to available figures, a medium-sized German farm consuming over 8,000 litres of diesel annually receives a diesel subsidy of €1,700 (approx. RMB 13,183.2) per year.
Given that the average annual agricultural income for a full-time German farmer stands at €82,000 (roughly RMB 640,000), several economists have noted that the additional costs from the subsidy cut will not materially disrupt farm operations. After all, half of German farmers’ income is already underpinned by public subsidies from the EU and the German government.
Yet, as is widely acknowledged, the bulk of agricultural subsidies are allocated based on farm size in hectares. A staggering four-fifths of payments under the EU’s “Common Agricultural Policy” end up in the pockets of large estates and agribusinesses. These entities are the vested beneficiaries of the current system and continue to pursue every possible advantage within it. The genuine crisis is faced by smaller family farms, which are highly dependent on machinery and energy inputs.
Rather than attributing smallholders’ anger solely to the diesel subsidy cut, it is more accurate to say they are acutely feeling the pitfalls of energy-intensive industrial agriculture amidst a cascade of cost crises.
Thirty-seven-year-old German farmer Marc Bernhardt is a prime example. Based in Saxony in eastern Germany, he and his father run a family farm passed down through the generations, keeping around 100 dairy cows and growing cereals and maize for animal feed.
Though the farm is not large, it operates entirely automatically: the cows find the milking robots without human guidance, and the regular mucking out is handled by automated cleaning robots rather than manual labour.
Speaking to the German edition of The Local, Bernhardt noted that scrapping diesel subsidies would cut his subsidy-derived income by 10–15 per cent. This, however, is just a fraction of the cost crisis farmers have faced in recent years. Since the war in Ukraine began, overall farm production costs have surged by 40 per cent, with electricity bills alone jumping by 50 per cent. Recently, prices for many German agricultural products, including fresh milk, have begun to fall.
“We are producing the same amount of food but earning less, which is simply unfair,” Bernhardt said. To weather the crisis, he must also find ways to diversify his revenue streams.
Although the German government claimed that farm profits grew by 45 per cent year on year in 2022/2023, Martin Odening, professor of agricultural economics at Humboldt University, argues that the average short-term profit increase offers little meaningful insight: “For many farms, particularly smaller ones, increased profits do not necessarily cover rising costs.”
Fluctuations in energy and food prices, alongside yield losses from extreme weather, can severely impact farm profitability. Collectively, these factors are proving to be the final straw that is crushing smaller farms.
To survive, small farms face a binary choice: scale up to achieve economies of scale, or exit the industry.
Fewer farms, larger plots – this perfectly encapsulates the trajectory of German agriculture over the past half-century. Data shows that between 1970 and 2016, the average farm size in Germany expanded from 11.1 hectares (166.5 mu) to 60.5 hectares (907.5 mu), while the number of farms plummeted from 1.1469 million to 275,400.
With unprofitable small farms disappearing, those that remain are steadily increasing their investment in machinery and energy, meaning more labour will inevitably shift out of the agricultural sector.
Over the past two decades, the number of full-time farmers across the EU has fallen by a third, equivalent to the loss of five million agricultural jobs across the region—160,000 in Germany alone.
All of this has left Nathalie Diebow, a 26-year-old German farmer, feeling bewildered and pessimistic; she struggles to see what purpose small farms still serve. As a key figure in the next generation of German agriculture, she too joined the farmers’ protests in the eastern city of Cottbus.
III. The Future of Agriculture
Recently, the European non-profit organisation the Agricultural and Rural Coalition (ARC) published an opinion piece entitled “Blame the System, Not the Farmers!” in defence of the protestors. The piece states: “European farmers are by no means exclusionary nationalists. Rather, they feel betrayed by the very system that first compelled them towards expansion, industrialisation, and multiple dependencies, only to now demand they foot the bill for its own failures.”
Almost simultaneously with the German farmers’ tractor protests, on 15 and 20 January this year, nearly 10,000 conventional and organic farmers, hospitality workers, consumers, and activists gathered in the streets of Berlin to launch the 2024 ‘Enough is enough!’ (Wir haben es satt!) demonstration.
In response to the scrapping of diesel subsidies, rally participants called for ‘cutting harmful subsidies without dismantling farms’, emphasising long-term support for German family farms through measures such as guaranteeing fair prices and introducing a land transaction tax. Furthermore, opposing the EU’s deregulation of GMOs and backing pesticide reduction remain core demands aimed at fundamentally advancing climate transition and food justice.
Both perspectives attempt to situate the protests within a wider, more complex picture, yet another viewpoint reduces the phase-out of subsidies merely to technical feasibility. This argument holds that current alternatives remain inadequate: biofuels, biodiesel, and vegetable oils carry prohibitive costs, while electric machinery, constrained by limited battery capacity, struggles to fully replace diesel-powered agricultural equipment.
These technical hurdles are undeniably real, but they all take for granted the rationale behind the prevailing agricultural model. It amounts to claiming: how can large-scale farm machinery function without diesel power? It fails to consider that lower-energy farming systems are not only viable but are increasingly demonstrating their distinct advantages.
Lars feeds his flock a more expensive organic diet, and his poultry products are sold primarily to the hospitality sector and private clients, ensuring that all added value stays on the farm. Although the farm’s current financial position sits below €100,000, the absence of heavy capital outlay for technology and housing structures, alongside lower energy demands compared to conventional operations, means there is no financial strain. Consequently, he sees little reason to take to the streets in protest.
In Lars’s view, farmers should be directing their protests at Germany’s big four supermarket chains: Edeka, Aldi, Schwarz, and Rewe. Over the past few decades, farmers’ returns have steadily eroded under the stranglehold of supermarket dominance.
He also urges the German government to overhaul its subsidy framework, directing support towards more sustainable farming practices and small family holdings. Marketing should be more closely tied to individual farms, ensuring that added value genuinely returns to the producers. In the longer term, he argues for reducing farmers’ dependence on state aid to bolster their operational autonomy.
For Sebastian Abis, an agricultural expert at the French think tank IRIS, a successful long-term transition requires more than just new incentive schemes from the government; it demands active engagement from consumers and citizens alike. “European consumers need to think logically: supporting European agriculture means buying European produce and paying a fair price for it,” he argues.
As things stand, the rollback of diesel subsidies across European nations is merely the opening act in a protracted transition for both energy and food systems. A truly sustainable future will inevitably demand fundamental change on multiple fronts—a shift from which no one can remain insulated.
[2]https://www.instagram.com/p/C11-mdGsIwd/
[3]https://www.thelocal.de/20240116/german-family-farm-struggles-fuel-protest-discontent
[4]https://www.sciencedirect.com/science/article/pii/S1364032122000284
[8]https://www.arc2020.eu/blame-the-system-not-the-farmers/
[9]https://www.ft.com/content/cd2cd90f-9161-4ae1-96a2-c563dee6c60d
[11]https://foreignpolicy.com/2024/01/18/germany-farmers-protest-subsidies-cuts-populism/
[14]https://www.tandfonline.com/doi/full/10.1080/03066150.2020.1725490
Editor: Kerry