TRANSFORMING THE OLD-AGE INSURANCE SYSTEM FOR FARMERS IN THE NEW FEDERAL STATES BY THE FEDERAL GOVERNMENTS CONCEPT FOR FURTHER DEVELOPMENT OF THE SOCIAL-SECURITY SYSTEM FOR FARMERS
P. Mehl et K. Hagedorn, TRANSFORMING THE OLD-AGE INSURANCE SYSTEM FOR FARMERS IN THE NEW FEDERAL STATES BY THE FEDERAL GOVERNMENTS CONCEPT FOR FURTHER DEVELOPMENT OF THE SOCIAL-SECURITY SYSTEM FOR FARMERS, Landbauforschung Volkenrode, 44(1), 1994, pp. 77-90
The Federal Government of Germany has presented a bill to reorganize t
he social security system for farmers, i.e. the old-age insurance, and
to introduce this system in the New Federal States. This article deal
s with the prospective impacts of this plan on social security matters
of the additionally insured persons in the New Federal States, and wi
th the financial and distributive effects of the reform. The analysis
shows that this way of transfering the (reformed) system cannot be exp
ected to be a successful solution in all parts. On the one hand the sy
stem originally was set up for providing social security for self-empl
oyed farmers in West Germany; first it seems questionable, whether thi
s scheme is applicable to the special situation and particular social
security demands of the farm population in the New Lander and second,
in spite of some Special regulations, the enduring incompatibility of
the differences between old-age insurance schemes of farmers and non-f
armers will cause problems for people changing systems. On the other h
and, the agricultural system has moved towards one of the most importa
nt instruments of agricultural income policy on the national level. A
comparison between social security contribution paid in the general sy
stem and contributions paid by farmers, regarding both the existing an
d in the reformed agricultural system according to the Federal Governm
ents bill shows, that most of the public funds support still is used f
or reasons of income support. Thus, acceptance of the bill would mean
to create further disparities between New and Old Federal States in tw
o ways: first, it would exclude many registered cooperatives and corpo
rations from subsidies of considerable importance, and secondly, nearl
y all advantages of the new system would concentrate on farmers in the
Old Federal States. The only way to avoid disparities, other conflict
s and problems of incompatibility is to separate agricultural policy f
rom social security policy and to reform the farmers' pension system b
y following the principles of the general system of old-age insurance
in Germany.