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German Farmers Demand End to Sanctions Against Russia

According to data from the German Farmers Association the sanctions are hitting German agriculture hard 

This post first appeared on Russia Insider

Originally Appeared at RT Deutsch. Translated from the German by Werner Schrimpf

Mr. Joachim Rukwied, President of the German Farmers Association (DBV), is urging an immediate repeal of EU sanctions against the Russian Federation. The German Farmers Association represents the associated membership of more than 90 percent of approximately 380,000 German farmers and is therefore regarded as a quite influential organization within Germany. During a press conference held in Berlin, DBV President Rukwied warned of dramatically eroding profits, declining prices for agricultural products, and the loss of important markets for German goods. The agricultural branch of animal husbandry is especially hurt by EU sanctions.

During the last fiscal year running from July 1st to June 30, 2015, average profits of German farmers declined by one third, according to Mr Rukwied.

The main reason for the decline are the sinking agricultural producer prices; i.e., prices for meat or grain per kilogram, or price of milk per liter. The producer price per liter of milk at just 25 to 27 euro cent forces dairy farmers into subsistence farming, because they are unable to generate any profits at this price level. The only exceptions to this trend are winegrowers who have benefitted from a mild climate. The organic farmers have profited from subsidies and the rising consumer trend towards eco-certified agricultural products.

According to data from the Farmers Association, the average gross income per farmer family amounts to approximately 2,500 euros per month. After deducting dues, taxes, social security contributions, and necessary capital expenditures, the financial leeway of native farmers is shrinking steadily. Dairy farmers suffered a tremendous decline of profits of 44 percent, Mr Rukwied explained. It is highly unlikely that this trend will be reversed soon.  

In the course of the last fiscal year, 5.6 percent of all pig farmers abandoned their farms, according to Mr. Rukwied. In his home region in Southwest Germany, one-third of the farmers have been forced to abandon their farms. In total, the number of active and operating farms went down by 1.7 per cent compared to the previous fiscal year; and in Eastern Germany, there was a decline of 0.2 per cent.

German farmers are heavily hit by the loss of their markets in Eastern Europe, and especially the loss caused by Russia’s ban of EU agricultural products. The ban on imports was Russia’s counter measure to U.S. and EU economic and financial sanctions which were imposed under the framework of the Ukraine crisis. Mr. Rukwied is pushing hard for reestablishing normal and constructive trade relationships with Russia. “Therefore, political initiatives to repeal sanctions against Russia are now called for,” stated Mr. Rukwied.

Besides his criticism of the politics and politicians, Rukwied also criticized the food industry and food traders as well. The food processing industry and discounter chains are the only profiteers of falling prices for agricultural products and enjoy an ever-increasing offer for these products from the global markets.

Farmers are hit by the declining prices under the current system and consumers do not get any benefit from the falling prices. The improved margins are absorbed by discounter chains and the food processing industry. Cartel authorities and cartel legislation have to be urgently improved in this matter, according to Mr Rukwied.

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