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

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.