As of: January 21, 2024, 7:10 a.m
By: Lars-Eric Nievelstein
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Rising prices for fertilizer and animal feed are putting strain on German farmers.
There is also the discussion about the disappearance of subsidies.
This is doubly critical for farmers because their pension depends on it.
Berlin - A large rally of thousands of farmers ended the week of farmers' protests on January 15th.
Even before the protests, farmers had managed to wrest concessions from the traffic light coalition.
For example, it initially decided not to introduce vehicle tax on agricultural and forestry vehicles.
Millions of dollars in tax relief are at stake for farmers.
This is particularly important because many of them have to make private provisions for old age.
Basic contribution to the agricultural pension fund (farmers) |
301 euros per month |
|---|---|
Pension entitlement for farmers who retire at 55 |
730 euros |
Average wages of agricultural employees |
18,500 euros per year (Destatis) |
Agricultural retirement funds replace statutory insurance – that would be too expensive
As is common with self-employed people, farmers are not covered by statutory pension insurance.
You can take advantage of independent statutory old-age insurance, which, however, only functions as a type of partial insurance.
The so-called agricultural retirement fund comes in different models:
From 65: The normal standard old-age pension
Early retirement pension from 55 (only for farmers)
Pension from 63 for those with long-term insurance
The pension from 65 for those who have been insured for a long time
Pension due to partial/full disability
According to the social insurance for agriculture, forestry and horticulture (SVLFG), the basic contributions for basic insurance are 301 euros per month (150.50 euros for working family members).
Mandatory contributions like those in statutory pension insurance are not feasible, especially for small farms;
these would be overwhelmed by the necessary costs.
A special feature: the spouses of the entrepreneurs are also compulsorily insured in the agricultural pension fund.
For a married couple, the contribution amount would be 602 euros per month.
The SVLFG had not yet responded to a request about the amount of the payouts.
After 30 years of contributions: 730 euros pension entitlement for farmers
The actual amount of the pension for farmers is calculated in each individual case based on the contributions that the farmers have paid into the pension fund over the course of their working lives.
The more you have paid in, the higher your pension will be at the end.
As soon as they have reached the age of 55, farmers and their spouses receive a notification every three years about their expected standard old-age pension.
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Part of farmers' income depends on subsidies.
If these are no longer available, the possibility of private pension provision decreases - and the agricultural pension fund is not always enough.
© IMAGO / Sabine Gudath
According to a calculation from the
Bavarian Agricultural Weekly
, a 55-year-old farmer is entitled to a pension of 520 euros after 30 years of contributions.
Together the couple would have achieved a claim of 1040 euros.
If he works until the age of 67, the entitlement would increase to 730 euros.
Additional expenses burden farmers – private solutions necessary
That's not always enough to live on.
According to figures from the Bavarian State Institute for Agriculture, the cost of living alone plus household expenses for a farming family is 4,900 euros per person per year.
That's just under 408 euros per month - not including taxes and pension payments.
Depending on how long a farmer has been paying in and where he lives, there may be a financial gap.
To close these, farmers have to come up with something.
However, private provision is not always possible because farmers often have high expenses for resources or machines.
For example, the costs of fertilizer and feed are currently significantly increased.
It is common practice in agriculture for the farmers' successors to close the pension gap through private pension payments.
If no successor is found, farmers have to lease their land.
Subsidies make up half of income
Figures from the Federal Information Center for Agriculture (BLZ) show what the finances of agricultural businesses look like.
According to these, the average income of the companies in 2021/2022 was around 43,500 euros per worker.
Attention: This does not include expenses such as new machines.
In addition, these numbers leave out the family members in the business who live off the farm's profits just as much as the farmer.
The Federal Statistical Office (Destatis) puts the average wage of agricultural employees at just 18,500 euros per year.
Agricultural businesses rely enormously on subsidies - according to the BLZ, these make up around half of their income.
Given this background, it should come as no surprise that farmers are taking to the barricades when their subsidies are cut.