Bundestag votes to end tax relief for farmers despite protests

BERLIN – The German parliament agreed on Friday to gradually eliminate tax relief on diesel fuel for farmers despite massive protests in recent weeks. Before it can come into force, the law still has to pass the upper house or Bundesrat. The next regular session of the Bundesrat is scheduled for March 22.

The planned cuts have caused a wave of demonstrations by farmers, some of whom drove their tractors from all over Germany to the Brandenburg Gate in Berlin to partly protest against the planned move.

The president of the German Farmers’ Association, Joachim Rukwied, said on Thursday that there were indications the federal states, which make up the Bundesrat, could put the brakes on the law.

“The tax increase on agricultural diesel must be taken off the table,” he said.

Until now, farms have been able to receive a partial refund of the tax on diesel – with a rebate of 21.48 cents per litre.

Germany’s governing coalition had at first wanted to scrap the tax relief immediately as it scrambled to fill a hole in the 2024 budget caused by a court order saying funds allocated for coronavirus spending could not be used elsewhere.

The government then agreed to a phased end to the tax relief after an initial backlash to the plans, which included Economy Minister Robert Habeck being prevented from leaving a ferry by protesting farmers.

The phasing out of the subsidy would be completed by 2026.

The government also decided to scrap a planned abolition of the motor vehicle tax exemption for agriculture, but even that has not placated farmers, who are protesting generally about working conditions and falling living standards.

The protests have even spread to other EU countries such as France.

The German coalition government now wants to discuss possible other ways of offering relief to the agriculture sector and farmers’ views must be taken into account, a letter from the parliamentary leaders of the Social Democrats, Greens and Free Democrats said.

Dpa saw a copy of the letter on Friday which invites various stakeholders to a “dialogue on sustainable agriculture” on February 21 as part of an existing agriculutre commission.

Topics listed for discussion include reducing bureaucracy and strengthening competitiveness.

The government has promised concrete measures for the middle of the year to counteract the hit farmers will feel by losing the diesel fuel subsidy, but any financial aid is unlikely given the budget constraints.