P. Mehl, TRANSFORMING SOCIAL-SECURITY IN AGRICULTURE IN TRANSITION COUNTRIES -THE CASE OF EAST-GERMANY, Landbauforschung Volkenrode, 47(2), 1997, pp. 75-88
In this paper practical and political problems concerning the transfor
mation of the social security system in agriculture of the 'old' Feder
al Republic of Germany to the New Federal States are discussed. The in
tention is to analyse the impacts of transferring this system to East
Germany, especially concerning social security matters and their finan
cial and distributive effects. Furthermore some conclusions from the E
ast German experiences for the transformation of the social policy sys
tems for the agricultural sectors in Central and Eastern European coun
tries (CEECs) are drawn. Since insight into the interdependencies of p
olity politics and policies are important for a successful guidance th
e political determinants of policy-making in this sector in unified Ge
rmany are examined too. In comparison with the CEECs the transformatio
n process in East Germany has to Se dealt with as a special case. The
very rapid transition from a planned economy to a market economy lead
to a drastic reduction of jobs particularly in the agricultural sector
of East Germany. But unlike other CEECs in transition, a whole string
of government programmes has been adopted and contributed a lot to ma
ke this process socially acceptable. The transfers from the federal bu
dget to the New Lander amounted to 615 billion DM from 1991 to 1995; a
pproximately 40 per cent (215 billion DM) has been spent on social pol
icy measures, mainly for the labour market policy measures. In this re
spect, the New Federal States found themselves in a unique situation w
hich gave them a rather privileged position, facilitating and mitigati
ng the required changes. A further consequence of this general framewo
rk of transition was that the transformation in the New Federal States
meant in almost every economic sector the transfer of the West German
institutions. The structure of agricultural enterprises in East Germa
ny differed, however, considerably from the West German family farms.
Therefore, a sob adoption of West German institutions of social securi
ty policy for the agricultural sector in the New Federal States was pr
oblematic: On the one hand it seemed questionable whether this scheme
was applicable to the special situation and particular social security
demands of the farm population in the New Federal States. On the othe
r band the agricultural social security system in the Federal Republic
of Germany had become an important instrument of agricultural income
policy at the national level. Since it is highly subsidised the questi
on arised how this would influence the competitiveness between differe
nt legal forms of farm enterprises. Hence political decision makers we
re in a dilemma: introducing the special agricultural insurance system
without any significant changes in the financing system would exclude
many registered cooperatives from subsidies of considerable amount. S
o an alternative policy-option was to reform the system by decoupling
the social security policy for agriculture from income: policy objecti
ves and reforming it using the social insurance systems for employees
as a point of reference. Politicians have chosen different options in
transferring the social security system in agriculture of the Old Fede
ral States to the New Federal States. In health and accident insurance
the policy-option of an unchanged transfer of the West German institu
tions was preferred. In the old age pension scheme the policy-option o
f a transfer was linked with a partial reform of the system, reducing
the distributive advantages of the sectoral system. With the exception
of the agricultural accident insurance covering an types of farm ente
rprises the working population in agriculture is treated in accordance
to their status as self employed or employees. Whereas agricultural e
ntrepreneurs are included into the sectoral systems, agricultural empl
oyees remain in the general statutory systems. This was a reasonable s
olution in terms of the different social needs of both groups. Compari
ng the distributive effects of the two systems however shows, that the
re are still considerable advantages for the farmers' system, despite
a remarkable reform of the farmer's old age pension scheme. Explaining
these policy outcomes in social security policy in agriculture has to
focus on changing policy networks before and after German unification
. The path-dependency and in some way contingency of the policy proces
s and its results make it almost impossible to draw general conclusion
s, in order to provide guidance as to how to manage reform processes i
n agricultural policy. Due to the fact that all CEECs are undertaking
or initiating reforms of their social security systems, however, these
countries do have a particular interest to find the best possible sol
utions for the social problems they are involved, bearing in mind, how
ever, that a social security system cannot simply be copied from anoth
er country. A look at social security systems in West European countri
es demonstrates the wide range of possibilities available for organizi
ng social security. In Central and East European countries too there w
as not one single socialist system of social security policy. Hence, C
EECs have to reform their own schemes due to the overall conditions an
d the historical backgrounds in each country. This does not, however,
imply that experiences from social security in western democratic coun
tries or the transformation process in East Germany may not be of inte
rest to the other states undergoing transformation. In all 15 member c
ountries of the EU employees in agriculture and self-employed farmers
as well are covered by comprehensive compulsory insurance schemes. But
especially the insurance schemes for farmers, obligatorily insured in
old age pension schemes in all states, are very heterogenously organi
zed. Partly, farmers are insured in special agricultural systems or in
social security systems for self-employed persons, partly, farmers ar
e members of the general social security systems. Despite great variet
ies in entitlement rules, insured persons, level of benefits etc. all
sectoral systems for farmers have the following in common: more old ag
e pensioners than contributors; a high dependency on state subsidies;
a low level of pensions and problems of compatibility with other old a
ge pension schemes, if a farmer decides to change occupation. Up to no
w among the CEECs only Poland has a special system of old age pensions
for farmers. In the other CEECs, farmers as well as the ent