AGRICULTURE IN GERMANY - SOME CONSIDERATIONS ON ECONOMIC, POLITICAL AND ENVIRONMENTAL SUSTAINABILITY

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.