This paper deals with the question of whether the main changes current
ly taking place in German agriculture are compatible with the requirem
ents of economic, social, environmental and political sustainability.
The first issues discussed are structural adjustment processes and inc
ome problems in West German agriculture. This leads to the conclusion
that the social hardships farm families have to cope with, economic di
sruptions caused by policy changes, and serious ecological problems re
sulting from agricultural practices are obviously not in accordance wi
th the criteria of sustainable development. The second issue the paper
addresses is transformation of East German agriculture focusing on tw
o main areas of change: restructuring of collectivized farms and priva
tization of nationalized land. The institutional arrangements and orga
nizational forms of agriculture resulting from these developments are
not likely to be always sustainable in the long run, because of the hu
ge economic transaction costs of the transformation process itself and
the political rent seeking activities it provokes with the interest g
roups and political networks involved. Present and coming changes of t
he Common Agricultural Policy (CAP) are the third subject of the paper
, particularly referring to the present discussion on a ''reform of th
e CAP reform''. Also this area faces serious sustainability problems.
The subsidies paid per ha or livestock unit cause considerable allocat
ive distortions reducing economic efficiency. They can also only be ju
stified as temporary support measures facilitating adjustment processe
s induced by price reductions. Furthermore, only a very small proporti
on of the financial means spent for the reform measures are used for e
nvironmental programs. Finally, the ecological situation in German agr
iculture is outlined by indicating some crucial issues.