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Business

German farmers hit by oversupply in agriculture

The financial situation of German farmers has worsened as a result of steeply falling market prices. Russia's embargo also hit the sector, the farmers' association said, calling for an end to sanctions against Moscow.

The German Farmers' Association, DBV, said Tuesday that the country's 280,000 farmers and agricultural companies had seen "drastically" falling prices in the 2014/2015 season, with the downturn set to continue "in the near future."

Presenting its annual Agricultural Report, DBV said the average farm's income slumped by 35 percent compared with the previous year, falling to 43,300 euros ($47,000). That meant that an average farmer's monthly income amounted to 2,500 euros or 30,000 euros per year.

"The drop in income is reminiscent of the crisis years in 2008 and 2009," DBV President Joachim Rukwied said at a news conference in Berlin.

Supply glut ups price pressure

Rukwied attributed the slump in farmers' income to Russia's embargo on European produce which came last year in retaliation against Western economic sanctions slapped on Moscow over the conflict in Ukraine.

The import ban on European fruit and vegetables had cost German farmers alone 1 billion euros ($1.08 billion) in lost revenue, he added.

In addition, the resulting oversupply in European markets and less demand from the "well supplied international markets," notably in Asia, had led to steeply falling prices.

According to DBV figures, German dairy farmers earned only half as much as in the previous year, while meat, grain and vegetable producers suffered income cuts of about 25 percent.

Price pressure from Germany's big retail chains added to farmers' woes, Rukwied said, describing their practices as "monopoly price fixing." He called on the government to prevent further concentration of market power in the hands of retailers, and to work toward an end to the embargo against Russia.

Coming home to roost

Critics of German agricultural policy, however, laid much of the blame for the sectors problems onto the farmers' lobby group itself.

Greenpeace Germany described the DBV report as "hypocritical wailing." Its agriculture expert Martin Hofstetter said in a statement Tuesday that DBV had strongly lobbied government to deregulate prices and quantities in the sector. Moreover, it had been pressing for higher subsidies to "extremely intensify" meat production.

DBV's drive toward cheap production for export markets was now coming back to roost with German farmers, Hofstetter said, because the world "didn't exactly wait for pork bellies and milk powder made in Germany."

uhe/cjc (Reuters, AFP, dpa)

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