The number of farms could decrease dramatically by 2040. Of the current 256,000 companies, only around 100,000 will likely remain, according to an industry analysis by DZ Bank.
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The reason for this is the profound structural change. “Increasing demands due to environmental protection, animal welfare and business management are putting increasing strain on farms,” said Claus Niegsch, industry analyst at DZ Bank. “In addition, there is a shortage of skilled workers and the often unresolved succession planning in family businesses.”
Family businesses are particularly at risk, according to the study. Farms that engage in organic farming or other specializations are likely to be retained, Niegsch said.
According to the study, existing farms will become larger, more capital intensive and equipped with more technology in the long term. The analysts therefore expect that the average size of a farm will increase from 64.8 to 160 hectares by 2040.
Agriculture has lost its importance
According to the study, the agricultural sector has lost considerable importance in the overall economy in recent decades. While the share of agriculture in German gross value added was 3.3 percent in 1970, it was only 1.0 percent in 2022. “The loss of importance in agriculture was therefore more intense than in industry,” the study said.
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Farmers have been resisting cuts in their area for weeks. The traffic light government had recently already made some concessions to farmers. The subsidies for agricultural diesel should not be eliminated in the short term, but gradually over three years. The vehicle tax exemption in agriculture remains in effect.
The number of farms could decrease dramatically by 2040. Of the current 256,000 companies, only around 100,000 will likely remain, according to an industry analysis by DZ Bank.
The reason for this is the profound structural change. “Increasing demands due to environmental protection, animal welfare and business management are putting increasing strain on farms,” said Claus Niegsch, industry analyst at DZ Bank. “In addition, there is a shortage of skilled workers and the often unresolved succession planning in family businesses.”
Family businesses are particularly at risk, according to the study. Farms that engage in organic farming or other specializations are likely to be retained, Niegsch said.