Tractors rumbling down the streets of the capital and jamming highway interchanges — scenes that are more familiar in neighboring France. But Germany's farmers have been flexing their muscles again over the last few weeks.

Protesters began taking to the streets in late December after the center-left government announced it was planning to end diesel subsidies and agricultural vehicle tax exemptions.

Following the farmers' outcry, Berlin says it will phase out the fuel subsidies within two years and will retain the tax breaks for tractors. Yet this partial climbdown has not satisfied protesters.

So how is Germany's agricultural sector faring?

Rising food prices have benefited German farmers recently. According to the German farmers' association, the DBV, the average full-time farm made €115,000 ($125,000) of profit in 2022/23, a 45% rise within just two years.

Farming is an arduous and round-the-clock occupation. In its report, the DBV points out that earnings are not especially high compared to butcher's stores or bakeries.

On top of that, farms often employ other unsalaried family members. However, even when they are factored in, average profits still appear healthy in comparison with the average wage in Germany.

State diesel subsidies save a full-time farm several thousand euros annually — just a small fraction of those profits.

How important is German agriculture?

Agriculture is not the first thing that springs to mind when you think of industrial powerhouse Germany. Farming only generates just under 1% of the country's GDP — less than in France, to the west, and Poland, to the east.

The country is, however, the EU market leader when it comes to milk, pork and potatoes. And over the last decade, Germany has upped its market share of many other types of produce.

But farming is about far more than economics. Joachim Rukwied, the head of the German farmers' association, argues that not only the future of farming families is now on the line, but the future of the country and its food security.

Why have planned cuts unleashed such a backlash?

The protests are "about much more than agricultural diesel and vehicle tax breaks," according to Karsten Hansen of the German Dairy Farmers Association (BDM). The announcement of the cuts in subsidies was just the straw that broke the camel's back, he says.

While German agriculture seems to be flourishing on the face of it, the picture is more nuanced on closer inspection. Profits range widely according to the type of agricultural business, the region or the size of the farm.

For over a decade now, the number of farms in Germany has been decreasing at a rate of over 1% a year. Most of them are small farms. The number of big farms is growing.

As the German government seeks to plug a €17 billion ($18.6 billion) hole in its 2024 budget, many farmers feel they are being expected to shoulder a disproportionate burden.

The German farmers' association is adamant that the government should roll back its plans to remove all diesel subsidies by 2026. Talking on the sidelines of a meeting of Germany's center-right Christian Social Union in Bavaria, DBV head, Joachim Rukwied, said it would otherwise mean a slow death for German agriculture.

Norbert Lins, a member of the European Parliament for the center-right bloc, told DW that the phasing out of agricultural fuel subsidies is an attack on the farmers' competitiveness. But the picture here, too, is complex.

Are German farmers at a disadvantage?

Europe's Common Agricultural Policy (CAP) with its €387 billion budget (2021-2027) is a thicket of policies, regulations, financial instruments and funds. EU subsidies are allocated according to the amount of agricultural land — so the large member states France, Spain, Germany, Italy and Poland get the most.

Germany receives €6 billion per year. The majority goes to farmers as direct payments based on farm size. So large farms, which are often better off than small ones, get more.

Martin Häusling, a Green Party lawmaker in the European parliament, is a farmer whose two sons now run the family farm in central Germany. He told DW that German farmers are not better or worse off than their European counterparts, although there are differences between EU member states. Each state has its own strategic plan and a say over how the EU funds it gets are allocated.

In addition to EU funds, German farmers receive subsidies at national and federal state level. Land prices, retail markets and national policy must also feed into any comparison.

Germany's minimum wage, which has just been increased to €12.41 per hour, is also almost two-and-a-half times more than that of Poland, which puts German fruit growers and others heavily dependent on seasonal workers at a considerable disadvantage, says CDU MEP Norbert Lins.

But while the tax on diesel in 18 EU states may be lower than in Germany, it is even higher in the Netherlands, Poland and France.

Where do we go from here?

Green MEP Häusling says that agriculture needs to adapt to climate change just as much as other sectors. But he urges more dialog between policymakers and farmers on the best way forward.

"Farmers can't just do without diesel from one day to the next. I can't convert a tractor to run off electricity by tomorrow. The transformation process has to be much more strongly funded and supported," says the Green MEP.

Far too little has been explained in past years about why something must be done and how it can be done, according to Häusling.

Christian Democrat MEP, Norbert Lins, says new regulations take time to implement. It is vital for farmers to be able to plan ahead, he says, when building a cow shed for example. "If every two or three years you have to invest tens of thousands, or possibly hundreds of thousands, as a dairy farmer, then it's a huge burden."

Agricultural policy specialist Thomas Herzfeld blames past agricultural ministers for trying to preserve the existing system for too long.

"There is less and less time to meet the climate targets. The pressure to implement transformation much more radically and rapidly is only going to grow," the director of the Leibniz Institute of Agricultural Development in Transition Economies (IAMO) told DW.

Edited by: Rina Goldenberg

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