German agricultural sector to concentrate on fewer but larger farms: study

The number of agricultural businesses in Germany would decline from the current 267,000 to only around 100,000 by 2040, according to a study by DZ Bank published on Thursday.

At the same time, the average size of farms would increase noticeably from around 63 hectares to some 160 hectares as the total farming area in Germany would mostly remain unchanged, said the study.

Changes in the country’s demographic structure and a resulting shortage of successors for smaller businesses “reinforce this development,” it noted.

In the long term, there would be a “threat of turning away from the centuries-old model of the rural family farm.” The study stated that there were around 1.5 million farms in Germany back in 1960.

The last two record summers which had caused significant harvest losses, as well as German consumers being “unwilling to pay higher prices for quality food” have further added economic pressure on farmers, the study indicated.

The management of agricultural businesses in Germany has been increasingly resembling that of an industrial enterprise in which digitization would make production processes more efficient.

The study believes that information about the condition and temperature of the soil through GPS data, for example, would make possible a “time-optimized sowing and spatially precise fertilization and pest control.”

But it also found that “digitization was driving job losses” in the agricultural sector. Of the almost 1.9 million jobs in 1991, only around 650,000 remains now, and the number of jobs in German agriculture businesses would fall another 50 percent by 2040.

The study noted that by 2040, the share of Germany’s total farming area used for organic farming would increase to around 20 percent.

The German Association of Organic Farmers, Food Processors and Retailers (BOELW) announced on Wednesday that consumers spent a total of 11.97 billion euros (13 billion U.S. dollars) on organic food and beverages last year, almost 10 percent more than the previous year.

“In total, the organic acreage has increased by almost 50 percent in the last five years,” said Peter Roehrig of the BOELW. “Every tenth hectare in Germany is fit for future generations.”