COMAGRI DELEGATION IN BAVARIA

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3 DIRECTORATE-GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES AGRICULTURE AND RURAL DEVELOPMENT COMAGRI DELEGATION IN BAVARIA IN-DEPTH ANALYSIS Shutterstock

4 This document was requested by the European Parliament s Committee on Agriculture and Rural Development (COMAGRI). AUTHOR Guillaume Ragonnaud European Parliament Policy Department B: Structural and Cohesion Policies B-1047 Brussels poldep-cohesion@europarl.europa.eu EDITORIAL ASSISTANT Lyna Pärt LANGUAGE VERSIONS Original: FR Translations: EN, DE, PT ABOUT THE EDITOR To contact Policy Department B or to subscribe to its monthly newsletter, please write to: poldep-cohesion@europarl.europa.eu Manuscript completed in February European Union, This document is available on the Internet at: DISCLAIMER The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

5 DIRECTORATE-GENERAL FOR INTERNAL POLICIES POLICY DEPARTMENT B: STRUCTURAL AND COHESION POLICIES AGRICULTURE AND RURAL DEVELOPMENT COMAGRI DELEGATION IN BAVARIA IN-DEPTH ANALYSIS Content This briefing note is intended for MEPs on the European Parliament s Committee on Agriculture and Rural Development visiting Bavaria in March The intention of this paper is to set out Bavaria s position in a national and European context by providing a general overview of the state and a description of its farming and forestry sector, and ending with a look at CAP implementation in Bavaria. IP/B/AGRI/NT/2014_01 February 2014 PE EN

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7 COMAGRI Delegation in Bavaria CONTENTS LISTS OF MAPS, GRAPHS AND TABLES 6 SUMMARY 9 1. INTRODUCTON: BAVARIA AT A GLANCE Principal physical features Demographic situation Economy Political system Germany Bavaria AGRICULTURE AND FORESTRY IN BAVARIA Structure Economic data Types of production Diversified agriculture Incomes Non-food uses of agricultural biomass Organic farming Trade Bavarian forests THE CAP IN BAVARIA State of play in Rural development in Bavaria ( ) Notes on the post-2013 CAP in Bavaria 33 MAIN REFERENCES 35 3

8 Policy Department B: Structural and Cohesion Policies 4

9 COMAGRI Delegation in Bavaria ACRONYMS CAP Common Agricultural Policy COMAGRI European Parliament Committee on Agriculture and Rural Development EAFRD European Agricultural Fund for Rural Development EU European Union GDP Gross Domestic Produc Ha Hectare UAA Utilised agricultural area 5

10 Policy Department B: Structural and Cohesion Policies LIST OF MAPS MAP 1 Bavaria in Germany 11 MAP 2 Detailed map of Bavaria 11 MAP 3 Administrative divisions 13 MAP 4 Share of permanent pastures and grasslands in UAA (in %), and area occupied by permanent pastures and grasslands (values in brackets, in ha millions) 21 MAP 5 Proportion of forested area (in %) and size of area covered in forest (values in brackets, in ha millions) 30 LIST OF FIGURES FIGURE 1 Climate chart for Bavaria (monthly averages ) 12 FIGURE 2 Key demographic figures 13 FIGURE 3 Population of the Regierungsbezirke 13 FIGURE 4 Comparative changes in the GDP of Germany and Bavaria (corrected for inflation) 14 FIGURE 5 Some economic indicators for Bavaria 15 FIGURE 6 Composition of the 18th Bundestag ( ) 16 FIGURE 7 Christian Schmidt 17 FIGURE 8 Composition of the Bavarian parliament 18 FIGURE 9 Helmut Brunner 18 FIGURE 10 Agricultural holdings in Bavaria (2010) 19 FIGURE 11 Breakdown of holdings by size and share of UAA 20 6

11 COMAGRI Delegation in Bavaria FIGURE 12 Projected change in the number of holdings in Bavaria 20 FIGURE 13 Breakdown of the total value of agricultural production in Bavaria in 2010 (total = EUR 8.8 billion) 22 FIGURE 14 Breakdown of total agricultural turnover by production type and region in 2010 (total = EUR 6.4 billion) 23 FIGURE 15 Bavarian dairy production FIGURE 16 Income and profit of holdings where agriculture is the main activity (dark blue: income per holding; light blue: profit per holding; red: profit per family worker) 25 FIGURE 17 Breakdown of UAA for non-food uses of biomass 26 FIGURE 18 Relative share of organic farming in Bavaria, Germany and the EU 26 FIGURE 19 Organic farming area and number of organic farms in Germany and Bavaria FIGURE 20 Comparative changes in organic farming area and number of organic farms in Bavaria and Germany FIGURE 21 Share of various products in Bavaria's external agri-food trade 29 FIGURE 22 Breakdown of forest ownership 29 FIGURE 23 Farm supports in Bavaria and Germany 31 FIGURE 24 Spending on the Bavarian RDP (as at end 2013) 32 7

12 Policy Department B: Structural and Cohesion Policies 8

13 COMAGRI Delegation in Bavaria SUMMARY Bavaria is a heavyweight on many levels (size, population, economy, etc.), both in Germany and the EU. This is also true in the farm and forestry sectors. In many areas Bavaria maintains strong ties to its traditions (including its cultural landscapes), but it is nevertheless geared towards modernity and innovation. On farming issues, Bavaria is a staunch advocate of sustainable and multifunctional agriculture. Indicator Bavarian share of German total Position in Germany Land area 20% 1 Population 15% 2 Gross Domestic Product 18% 2 Unemployment rate 3,7% 1 Value added of 'agriculture, forestry and fisheries' sector 19% 1 Agricultural holdings 33% 1 Utilised agricultural area 19% 1 Organic farms 29% 1 Forested area 23% 1 9

14 Policy Department B: Structural and Cohesion Policies 10

15 COMAGRI Delegation in Bavaria 1. INTRODUCTON: BAVARIA AT A GLANCE 1.1. Principal physical features Bavaria (Free State of Bavaria, Freistaat Bayern, capital: Munich) lies in the south-east of Germany. With the Alps forming its southern boundary, Bavaria shares international borders with Austria and the Czech Republic. The highest point in Germany (Zugspitze, 2962 m) lies in the Bavarian Alps. Map 1: Bavaria in Germany Map 2: Detailed map of Bavaria Source: Bundesrat Source: Bayerische Vermessungsverwaltung Bavaria is Germany s largest state (measuring km², it covers 20% of the total land area of Germany; Figure 2). Bavaria is more than twice the size of Belgium and approximately the size of Ireland. Some 85% of Bavaria is rural, with 60% of the population living in rural areas. Bavarians are very attached to their natural and cultural heritage and the associated landscapes. Nature has an important place in the landscape; two of Germany s seven biggest nature parks (measuring over 200 km²) are in Bavaria (Bayerischer Wald and Berchtesgaden), and nature reserves make up 2.3% of the area of the state. Bavaria is located in a transitional zone between the oceanic climate of western Europe and the continental climate of eastern Europe. 11

16 Policy Department B: Structural and Cohesion Policies Figure 1: Climate chart for Bavaria (monthly averages ) Source: Bayerisches Landesamt für Umwelt Since June 2013 Bavaria has been affected by major flooding as a result of heavy rainfall and melting snow, which has swollen the Elbe and Danube rivers and their tributaries. For example, in Passau, a Bavarian town lying at the confluence of the Danube, Inn and Ilz rivers, the water has reached its highest level in 500 hundred years. The Bavarian authorities have estimated the damage (including the cost to farming) at EUR 1.3 billion Demographic situation Bavaria is Germany s second most populous state (Figure 2). Its 12.7 million inhabitants make up 15% of the German population. Bavaria has more people than 20 EU Member States, including, for example, Portugal and the Czech Republic. Bavaria has three of Germany s 50 biggest cities: Munich (1.38 million inhabitants, Germany s third biggest city), Nuremberg (0.51 million inhabitants, fourth) and Augsburg (0.27 million inhabitants, 24th). 12

17 COMAGRI Delegation in Bavaria Figure2: Key demographic figures Rank Size (km², 2012) Population (thousands, 2012) Population change ( ) Demographic projection to Bavaria Nordrhein-Westfalen Berlin Hamburg 4,1% 3,9% 2 Niedersachsen Bavaria Hamburg Bavaria 2,5% 0,0% Baden Baden-Württemberg Bremen Baden- 2,2% -1,9% Württemberg Württemberg Nordrhein- Nordrhein Niedersachsen Berlin 2,3% -2,6% Westfalen Westfalen 5 Brandenburg Hessen Saarland 388 Bremen 0,1% -3,2% Mecklenburg- Baden- Schleswig Sachsen ,6% -3,9% Vorpommern Württemberg Holstein 7 Hessen Rheinland-Pfalz Hessen 284 Hessen 0,0% -4,0% 8 Sachsen-Anhalt Berlin Sachsen 220 Rheinland-Pfalz -0,8% -4,1% 9 Rheinland-Pfalz Schleswig-Holstein Rheinland- Nordrhein- 201 Pfalz Westfalen -0,9% -5,5% 10 Sachsen Brandenburg Bavaria 177 Niedersachsen -0,1% -6,3% 11 Thüringen Sachsen-Anhalt Schleswig- Holstein 177 Brandenburg -3,8% -9,6% 12 Schleswig- Holstein Thüringen Niedersachsen 163 Sachsen -6,8% -12,2% 13 Saarland Hamburg Thüringen 134 Saarland -4,8% -12,5% 14 Berlin 892 Mecklenburg- Sachsen- Mecklenburg Vorpommern Anhalt Vorpommern -7,5% -13,7% 15 Hamburg 755 Saarland 994 Brandenburg 83 Thüringen -8,1% -17,1% 16 Bremen 419 Bremen 655 Population density (inhabitants/km², 2012) Mecklenburg- Vorpommern 69 Sachsen- Anhalt -10,7% -19,3% Germany Germany Germany 225 Germany -0,6% -5,4% Source: Bayerns Wirtschaft in Zahlen 2013; Aufbruch Bayern Aktionsplan demografischer Wandel and Statistisches Jahrbuch Deutschland. The most heavily populated region in Bavaria is Oberbayern, which is home to one-third of the state s inhabitants. The region includes Munich. Map 3: Administrative divisions Figure 3: Population of the Regierungsbezirke Rank Regions (Regierungsbezirke) Population Proportion of Bavaria's total population 1 Oberbayern % 2 Schwaben % 3 Mittelfranken % 4 Unterfranken % 5 Niederbayern % 6 Oberpfalz % 7 Oberfranken % Source: Br.de Data source: Bayerns Wirtschaft in Zahlen

18 Policy Department B: Structural and Cohesion Policies As in the rest of Germany, population decline continues to be a major challenge. However, thanks to its economic pulling power, Bavaria is not in the worst position. In 2011, despite a negative natural balance ( ), the population grew by on the strength of a net migration balance ( ). Demographic projections for 2030 (Figure 2) point to Bavaria enjoying a stable population (0.0%), while Germany as a whole is expected to lose 5% of its population. However, across the state the demographic picture is varied, with the figures more favourable in the south: a significant increase in Oberbayern (around 7%), compared with a fall of around 10% in Oberfranken Economy Since 2009 and the biggest recession Germany has known since the Second World War, the country has seen a return to growth and a significant fall in unemployment. Today Germany is Europe s biggest economy, and the world s fourth largest. Figure 4: German and Bavarian GDP (corrected for inflation) Source: Bayerische Staatsministerium für Wirtschaft und Medien, Energie und Technologie The German economy should remain robust in 2014, with GDP forecast to grow by between 1.5% and 2%, while the jobless rate will remain at around 5%, much lower than in either the EU or the eurozone as a whole. It is expected to perform better than most other EU countries. The eurozone debt crisis continues to be one of the main risks to which the German economy is exposed. 1 For more details see: 14

19 COMAGRI Delegation in Bavaria Figure 5: Some economic indicators for Bavaria Rank GDP (2012, thousands, current prices) GDP/inhabitant (2012, ) Unemployment rate (2012) R&D spending (2012, % of GDP) 1 Nordrhein-Westfalen 582 Hamburg Bavaria 3,7% Baden-Württemberg 5,1% 2 Bavaria 466 Bremen Baden-Württemberg 3,9% Berlin 3,6% 3 Baden-Württemberg 390 Hessen Rheinland-Pfalz 5,3% Bavaria 3,2% 4 Niedersachsen 230 Bavaria Hessen 5,7% Hessen 3,0% 5 Hessen 230 Baden-Württemberg Niedersachsen 6,6% Sachsen 2,9% 6 Rheinland-Pfalz 118 Nordrhein-Westfalen Saarland 6,7% Niedersachsen 2,9% 7 Berlin 104 Saarland Schleswig-Holstein 6,9% Bremen 2,8% 8 Sachsen 97 Berlin Hamburg 7,5% Hamburg 2,2% 9 Hamburg 96 Rheinland-Pfalz Nordrhein-Westfalen 8,1% Thüringen 2,2% 14 Mecklenburg-Vorpommern 37 Sachsen-Anhalt Sachsen-Anhalt 11,5% Saarland 1,5% 10 Schleswig-Holstein 77 Niedersachsen Thüringen 8,5% Mecklenburg- Vorpommern 2,1% 11 Brandenburg 58 Schleswig-Holstein Sachsen 9,8% Rheinland-Pfalz 2,1% 12 Sachsen-Anhalt 53 Sachsen Brandenburg 10,2% Nordrhein-Westfalen 2,0% 13 Thüringen 49 Brandenburg Bremen 11,2% Brandenburg 1,7% 15 Saarland 32 Mecklenburg Mecklenburg- Vorpommern Vorpommern 12,0% Sachsen-Anhalt 1,5% 16 Bremen 28 Thüringen Berlin 12,3% Schleswig-Holstein 1,4% Germany Germany Germany 6,8% Germany 2,9% Source: Statistisches Jahrbuch 2013 In absolute terms Bavaria has the second biggest GDP of all the German Länder (EUR 466 billion, or 18% of the national GDP, Figure 5). At current prices and purchasing power standards, Bavaria s GDP is higher than that of Sweden, Belgium and Austria, and twice as high as that of Greece. Bavaria s unemployment rate (3.7%) is the lowest in Germany. Unemployment in the eurozone on 1 January 2014 stood at 12.1%, and in the EU28 it was 10.9%. Its level of spending on innovation, at 3.2% of GDP, is very high, and above the target level set in the Europe 2020 headline initiative for an Innovation Union. Bavaria s leading industry in terms of turnover is carmaking (nearly EUR 100 billion in 2012), followed by the machine tools industry (around EUR 47 billion). These industries are also the region s two biggest employers Political system Germany The current German political system was devised in the aftermath of the Second World War. Founded in 1949, Germany is a federal state (the Federal Republic of Germany), whose political system is a representative parliamentary democracy. Germany s constitution is its Basic Law. The 16 federal states (Länder) enjoy wide-ranging autonomy. Each has its own constitution, government and parliament. 15

20 Policy Department B: Structural and Cohesion Policies At federal level, legislative power is shared between: the Bundestag (the federal parliament), where MPs (a total of 631 in ) serve four-year terms. This is the only institution elected by universal suffrage. The Bundestag adopts laws and scrutinises the work of the government. It has 22 parliamentary committees, one of which is the Committee on Food, Agriculture and Consumer Protection 2. The most recent elections took place on 22 September Figure 6: Composition of the 18th Bundestag ( ) Data source: Bundestag Under the German electoral system it is very difficult for a single party to form a government by itself (it has only happened once). In most cases the parties need to form alliances. A coalition agreement has been signed by the CDU/CSU and SPD 3 ; and the Bundesrat, which is the chamber in which the Länder are represented on the basis of their population size. Bavaria has six votes out of 69 (the maximum possible for an individual Land). Executive power is exercised by the government, which is headed by the federal chancellor, who is elected by the Bundestag by a majority of its members. The current federal chancellor is Angela Merkel (CDU), who was re-elected by the Bundestag for a third term on 17 December The chancellor sets the direction of, and is responsible for, government policy. 2 3 Website: Available at: koalitionsvertrag.pdf? blob=publicationfile&v=2. 16

21 COMAGRI Delegation in Bavaria Figure 7: Christian Schmidt Fourteen ministers and the Chancellor together make up the Federal Cabinet. Christian Schmidt (CSU) (Figure 7) heads the federal Ministry of Food and Agriculture (Bundesministerium für Ernährung und Landwirtschaft 4 ). Source: Bundesregierung The Federal Constitutional Court ensures compliance with the Basic Law. It also rules in disputes between the federal state and the federal Länder. The president (Joachim Gauck) performs an essentially representative function and does not govern. He serves a five-year term and is elected by the Federal Convention, comprising an equal number of members of the Bundestag and members chosen by the Länder Bavaria Bavaria has seven regions (Bezirke), 71 districts (Landkreise) and municipalities (Gemeinden). The Bavarian parliament (the Bayerisches Landtag 5 ) has 180 members. The most recent elections took place on 15 September Its president is Barbara Stamm (CSU). The members are elected to serve a five-year term. The Bavarian parliament has 13 parliamentary committees, including a Committee on Food, Agriculture and Forests 6 (its president is Angelika Schorer (CSU) and the vice-president is Ulrich Leiner (Bündnis 90/Die Grünen)). The committee has 18 members: 10 from the CSU, four from the SPD, two from the Freie Wähler and two from Bündnis 90/Die Grünen (Figure 8)

22 Policy Department B: Structural and Cohesion Policies Figure 8: Composition of the Bavarian parliament Source: Bayerisches Landtag Figure 9: Helmut Brunner Horst Seehofer (CSU) was elected Minister President of Bavaria (the head of the government) by the Bavarian parliament on 8 October The Minister of Food, Agriculture and Forests 7 is Helmut Brunner (CSU, Figure 9). Source: Bayerische Staatsregierung 7 Ministry website: 18

23 COMAGRI Delegation in Bavaria 2. AGRICULTURE AND FORESTRY IN BAVARIA Bavaria is a staunch advocate of a sustainable and multifunctional farming model. It views agriculture as a means of safeguarding its landscapes, and the production of highquality foods and renewable energy, as well as maintaining balanced economic activity distributed throughout its territory, including in the most rural areas Structure Bavaria is home to one-third of all the agricultural holdings in Germany and one-fifth of the country s UAA (Figure 10). Distributed right across the state, including in areas suffering from natural handicaps, Bavarian agricultural holdings are among the smallest in Germany, with an average size well below the national average (32.1 ha in Bavaria compared with 55.8 ha nationally) 9. In fact, almost half of the holdings are less than 20 ha, and they account for only around one-sixth of the total utilised agricultural area. At the other end of the scale, the biggest 20% of holdings (farms with more than 50 ha) occupy 50% of the agricultural area. Figure 10: Agricultural holdings in Bavaria (2010) Rank Nomber of agricultural holdings (1000) Data source: Bayerischer Agrarbericht 2012 Note: Since 2010, only holdings larger than 5 ha are recorded. Share of national total Utilised agricultur al area (1000 ha) Share of national total Average size of agricultural holdings (ha) 1 Bavaria 97,9 33% % 32,1 2 Baden-Württemberg 44,5 15% % 31,7 3 Niedersachsen 41,7 14% % 61,8 4 Nordrhein-Westfalen 35,8 12% % 40,9 5 Hessen 17,8 6% 766 5% 43 6 Rheinland-Pfalz 20,6 7% 705 4% 34,3 7 Schleswig-Holstein 14,1 5% 996 6% 70,5 8 Sachsen 6,3 2% 913 5% 145,2 9 Brandenburg 5,6 2% % 237,8 10 Mecklenburg-Vorpommern 4,7 2% % 285,9 11 Sachsen-Anhalt 4,2 1% % Thüringen 3,7 1% 787 5% 215,1 13 Saarland 1,3 0% 78 0% Staatstaaten 1 0% 25 0% 24,7 Germany 299,1 100% % 55,8 Almost 50% of agricultural holdings in Bavaria are smaller than 20 ha (and account for less than 17% of the UAA). Only 4% of holdings are bigger than 100 ha, but they account for 20% of the UAA (Figure 11). 8 9 Nachhaltige Landwirtschaft in Bayern, Unser Leitbild / Bayerisches Staatsministerium für Ernährung, Landwirtschaft und Forsten, The biggest farms are in the former East German Länder: Sachsen, Thüringen, Brandenburg, Sachsen-Anhalt and Mecklenburg-Vorpommern. 19

24 Policy Department B: Structural and Cohesion Policies Figure 11: Breakdown of holdings by size and share of UAA Source: Bayerischer Agrarbericht 2012 The structural changes that have taken place over the past 30 years have been slower than in other Länder. Since the last census (2007), the number of agricultural holdings has fallen by 7% (around farms fewer). Some 65% of farmers are over 45. Figure 12: Projected change in the number of holdings in Bavaria Source: Bayerisches Zukunftsprogramm Agrarwirtschaft und Ländlicher Raum Bavaria has a larger proportion of disadvantaged areas than other Länder (61% of the UAA, approximately 22% of Germany s disadvantaged areas). 20

25 COMAGRI Delegation in Bavaria The utilised agricultural area in Bavaria covers 3.1 million ha, or 45% of the total land area of Bavaria and 19% of the UAA in Germany. Permanent pastures and grasslands account for 34% of the UAA and arable land 66%. The 66% arable land figure breaks down as follows: cereals (37%), fodder (17%), industrial crops (5%), root crops (4%), setaside land (2%) and other crops (1%). Between 1970 and 2011, the share of permanent pastures and grasslands fell by eight percentage points, while the share of arable areas increased by 10 percentage points. Bavaria today has 23% of Germany s permanent pastures and grasslands, and 17% of its arable land. Permanent pastures and grasslands are mainly in the south of Bavaria, whereas in the north, where there is less rain, the UAA is more comprised of arable land (Map 4). Map 4: Share of permanent pastures and grasslands in UAA (in %), and area occupied by permanent pastures and grasslands (values in brackets, in ha millions) Source: Bayerischer Agrarbericht 2012 In Oberbayern, permanent pastures and grasslands ( ha) make up 42.9% of the UAA. 21

26 Policy Department B: Structural and Cohesion Policies 2.2. Economic data Types of production Overview Livestock farming is the backbone of Bavarian agriculture. It accounts for approximately 60% of the value of agricultural production in the state (Figure 12). Nearly 80% of the agricultural holdings in Bavaria rear cattle. Figure 13: Breakdown of the total value of agricultural production in Bavaria in 2010 (total = EUR 8.8 billion) Source: Bayerischer Agrarbericht 2012 The proportion of the total turnover accounted for by the different product groups varies considerably from region to region within Bavaria (Figure 14). Dairy farming is concentrated in Oberbayern and Schwaben, while Unterfranken is the main wine-growing region. 22

27 COMAGRI Delegation in Bavaria Figure 14: Breakdown of total agricultural turnover in Bavaria by production type and region in 2010 (total = EUR 6.4 billion) Oberpfalz Oberbayern Niederbayern Oberfranken Mittelfranken Unterfranken Schwaben BAVARIA % Milk % Cattle % Pigs % Cereals % Vegetables % Eggs and poultry % Flowers and ornamental % plants Potatoes % Oilseed % Sugarbeet % Hops % Seedlings % Wine % Other animal products % Other plant products % Fruits % TOTAL % Source: Bayerischer Agrarbericht 2012 Note: Unlike the value of total agricultural production (Figure 13), the total agricultural turnover does not take into account internal farm consumption (e.g. fodder) Livestock farming In general, livestock holdings are smaller than in the rest of Germany (an average of 31 cows compared with the national average of 48). A total of farms (2011) rear 3.28 million heads of cattle (33% of German farmers, 26% of the cattle). The importance of the biggest livestock holdings is growing (between 2009 and 2011 the proportion of farms with more than 50 cows increased from 14% to 17.5%). As regards dairy production, 7.9 million tonnes of milk were produced in Bavaria in 2011 (up 4% on 2009), which is 26% of the total German milk production. The structural change in dairy production is reflected in a fall of 9%, between 2009 and 2011, in the number of dairy farms (to a figure of farms, which still represents 46% of all dairy farms in Germany), with the number of dairy cows remaining stable over the same period (1.235 million, or 29% of the total number of dairy cows in Germany). In addition, the yield per cow has risen by 6% since The price of milk rose in 2011 on the back of strong demand, settling at cents per kg. 23

28 Policy Department B: Structural and Cohesion Policies Figure 15: Bavarian dairy production Source: Bayerischer Agrarbericht 2012 Bavaria s pig production (3.5 million pigs reared on holdings with at least 10 sows or 50 pigs, a fall of 7% compared to 2010) accounts for 13% of total German production. The holdings are also smaller than in other production areas in the country Importance of the agriculture, forestry and fisheries sector to the Bavarian economy The gross value added generated by agriculture, forestry and fishing in Bavaria amounted to EUR 3.7 billion (2012), of which 75% was from agriculture, a little less than 25% from forestry and the remainder from the fisheries sector. This means that Bavaria contributes 19% of the gross value added of the agriculture, forestry and fisheries sector in Germany, making it the biggest national contributor (followed in second place by Niederdersachsen, with 15%). However, this amount only represents around 1% of the total gross value added generated in Bavaria. The sector employs , which is 2.8% of the state s active population. One in seven employees earns a living from the agriculture and forestry sector, including the upstream and downstream sectors Diversified agriculture Only half (51%) of holdings have farming as their principal activity (that is to say, at least half of their net annual income comes from farming). These proportions are in line with the national average. On average these holdings are bigger (41.8 ha) than those where farming is carried on as a supplementary activity (17.8 ha). One-third of holdings (34 400) carry on at least one other income-generating activity. The other two main activities are forestry activities (40% of diversified holdings) and renewable energy production (40% of diversified holdings). In addition, 22% carry out work for other farms, 10% offer accommodation, 10% are engaged in an activity outside the agricultural sector, 9% process wood, 8% sell produce directly, 7% offer horse boarding and 2% are involved in aquaculture (the total exceeds 100% because farmers may be engaged in more than one additional activity). 24

29 COMAGRI Delegation in Bavaria Income The annual profit of holdings where agriculture is the principal activity is estimated at EUR in 2010/2011 (Germany: EUR ). Farm supports (state, national and EU) make up 64% of the profit figure. Income per holding is EUR Figure 16: Income and profit of holdings where agriculture is the main activity (dark blue: income per holding; light blue: profit per holding; red: profit per family worker) Source: Bayerischer Agrarbericht 2012 Between 2010 and 2011, producer prices rose by 13% (22% for animal products and 32% for plant products). Average input prices rose by 10% Non-food uses of agricultural biomass Around ha of UAA (13% of the total) are used to produce biomass intended for non-food uses, mainly for energy uses and the production of biomaterials. At the end of 2011, agricultural biogas production facilities were operating in Bavaria (equivalent to 674 MW of installed capacity). This is approximately one-third of the total number of facilities in Germany. Some ha of solar panels have been installed on farmland. Wood is the main source of biomass in the region: 4.8 million tonnes of wood is used every year to produce energy. Wood accounts for around 18% of primary energy consumption (2008), and biogas 13%. 25

30 Policy Department B: Structural and Cohesion Policies Figure 17: Breakdown of UAA for non-food uses of biomass Source: Bayerischer Agrarbericht Organic farming In 2012, the two states of Bavaria (29%) and Baden-Württemberg (29%) had nearly 60% of all organic farms in Germany. The next two states on the list (Nordrhein- Westfalen and Hessen) had only 8% each. Organic farming has a bigger share of the UAA (6.3%) in Bavaria than in the rest of the EU (Figure 18). Figure 18: Relative share of organic farming in Bavaria, Germany and the EU Data source: Ökolandbau.de, Bayersiches Staatsministerium für Ernährung, Landwirtschaft und Forsten, Bundesanstalt für Landwirtschaft und Ernährung 26

31 COMAGRI Delegation in Bavaria Figure 19: Organic farming area and number of organic farms in Germany and Bavaria Area (ha) Number of holdings Germany Bavaria Germany Bavaria Data source: Ökolandbau.de, Bayersiches Staatsministerium für Ernährung, Landwirtschaft und Forsten, Bundesanstalt für Landwirtschaft und Ernährung Organic farming in Bavaria has developed at a faster pace in recent years than in the rest of Germany (Figure 20). 27

32 Policy Department B: Structural and Cohesion Policies Figure 20: Comparative changes in organic farming area and number of organic farms in Bavaria and Germany Source: Created by Policy Department B. More than half of the organic milk produced in Germany comes from Bavaria. The state has set itself the target of doubling its organic output by 2020 compared to the current level 10. Since 2003, Bavaria has had its own organic produce logo Trade Agri-food exports in 2011 totalled EUR 7.7 billion, 83% of which went to other EU countries. This figure represents around 5% of Bavaria s total exports and 13% of German agri-food exports. The principal destinations in 2010 were Italy (25%), Austria (13%), the Netherlands (8.5%) and France (8%). The main export products are cheese and 10 For more details see: 28

33 COMAGRI Delegation in Bavaria meat and dairy products (Figure 21). Agri-food imports in 2011 totalled EUR 7.4 billion (10% of Germany s total agri-food imports), 85% of which was from the EU. This figure represents around 5% of Bavaria s total imports. The state s principal suppliers in 2010 were Italy (18%), Austria (15%), the Netherlands (14%) and France (10%). Fresh and tropical fruit topped the list of imported product types (Figure 21). Bavaria s trade surplus in agri-food products in 2011 was EUR 360 million. Figure 21: Share of various products in Bavaria's external agri-food trade EXPORTS IMPORTS Rank Product Export share Import share 1 Cheese 18,1% Fresh fruits and tropical fruits 10,9% 2 Meat products 14,7% Cheese 9,3% 3 Milk 14,7% Other plant products 9,1% 4 Other plant products 8,8% Vegetables 9,0% 5 Bakery products 6,7% Meat products 8,8% 6 Beer 4,7% Milk 6,7% 7 Sugar beet and sugar products 3,5% Wine 4,3% 8 Hops 2,8% Bakery Products 3,9% 9 Bran 2,0% Horticultural products 3,5% 10 Wheat 1,8% Preparations based on vegetables 3,4% Source: Bayerischer Agrarbericht Bavarian forests Forests cover 2.5 million ha, or 35% of Bavaria s territory. This represents approximately 23% of the forests in Germany. The forested area has been increasing for 30 years (by an average of 536 ha per year). The most heavily forested areas are in the foothills of the Alps in the south, the Bavarian Nature Park and Oberpfalz (in the east), the Fichtelgebirge in the north-east, and Spessart and the Rhön in the north-west. The region with most forest in terms of area is Oberbayern (Map 5). Private forest makes up 57% of the forested area. Forest ownership remains fragmented, with private forests being distributed among owners, each having an average of 2 ha of forest. Over 70% of them have less than 2 ha, and only 1% of owners own more than 20 ha of forest. Figure 22: Breakdown of forest ownership Source: Bayerischer Agrarbericht

34 Policy Department B: Structural and Cohesion Policies Map 5: Proportion of forested area (in %) and size of area occupied by forests (values in brackets, in ha millions) Source: Bayerischer Agrarbericht 2012 The forestry sector is one of the pillars of Bavaria s rural economy, in terms of both employment and value. Bavaria is seeking to develop its forestry potential and protect the sector from the effects of climate change. The total volume of standing timber is around one billion cubic metres. In 2010, 16.2 million m³ of raw timber was harvested: 68% spruce, fir and Douglas fir; 16% pine and larch; 13% beech and other broadleaf; 2% oak. The total turnover in the forestry sector, which employs people, is estimated at around EUR 35 billion. Bavaria s forests have received EUR 40.2 million through state, national and EU funding. 30

35 COMAGRI Delegation in Bavaria 3. THE CAP IN BAVARIA 3.1. State of play in 2011 In 2011, a total of EUR 3.5 billion of public funds was spent in Bavaria on agriculture and forestry, of which: EUR 894 million was from the Land (mainly on research, training and advice); EUR 1.36 billion was from the federal government (almost 90% of which was social spending); EUR 1.27 billion was from the EU (CAP), of which EUR 1.1 billion was in the form of direct payments. Bavaria has the highest level of total support per hectare (EU+national+Bavarian state) of all the German Länder (Figure 23). Figure 23: Farm supports in Bavaria and Germany Rank Land Profit per holding Profit per ha ( ) Profit per ha (%, Germany = 100%) Total support (EU+federal gov't+state) per holding ( ) Total support (EU+federal gov't+state) per ha ( ) of which, agrienvironmental measures ( /ha) of which, compensatory allowance ( /ha) of which, subsidised loans and investment support ( /ha) 1 Bavaria Baden- Württemberg Nordrhein- Westfalen Sachsen Thüringen Hessen Schleswig-Holstein Niedersachsen Sachsen-Anhalt Mecklenburg- Vorpommern Rheinland-Pfalz Brandenburg Saarland Germany Source: Bayerischer Agrarbericht Rural development in Bavaria ( ) The total amount of EU funding for rural development (under the EAFRD) allocated to Germany in the period was EUR 9.1 billion. EUR 1.4 billion was allocated to Bavaria, which is 15% of the total EAFRD funds received by Germany. In Bavaria, EU rural development policy is implemented through Rural Development Programmes (RDPs) drawn up at Land level, which set out specific regional objectives. The RDPs are backed by a National Strategy Plan for Rural Development. There are two other national programmes: the National Network and the National Framework, whose measures can be included in the regional programmes. 31

36 Policy Department B: Structural and Cohesion Policies There are 14 RDPs in Germany 11. Bavaria s RDP is called the Bayerisches Zukunftsprogramm Agrarwirtschaft und Ländlicher Raum The management authority responsible for implementing the RDP in Bavaria is the Bayerisches Staatsministerium für Ernährung, Landwirtschaft und Forsten (StMELF). The main objectives of the Bavarian RDP include promoting the socioeconomic dynamism of rural areas and a better balance in the standard of living between the different rural areas of the state, and improving the sustainable management of agricultural and forestry activities. Figure 24: Spending on the Bavarian RDP (as at end 2013) EAFRD allocation ( ) EAFRD expenditure ( ) Take-up (%) Axis % Axis % Axis % Axis % Technical assistance % Total % Source: European Commission Most funding under the EAFRD went on Axis 2 Improving the environment and the rural landscape, which received over two-thirds (68%), followed by Axis 1 Improving the competitiveness of the agricultural and forestry sector (17%), Axis 3 Improving the quality of life in rural areas and encouraging the diversification of the rural economy (10%) and Axis 4 Leader approach (5%). In Germany as a whole it was also Axis 2 which received the lion s share of EAFRD funding, although to a less pronounced extent (44%), followed by 25% for Axis 1, 24% for Axis 3 and 6% for Axis 4. A total of EUR 2.8 billion in public funding was allocated to rural development under the RDP for In terms of total public funds, Axis 2 is the principal beneficiary, receiving 59% of the funding, followed by Axis 1 (12%), Axis 3 (8%) and Axis 4 (1%). The main measures, in terms of the amount of public funding received under the various axes, were: Axis 1 Improving the competitiveness of the agricultural and forestry sector : Infrastructure related to the development and adaptation of agriculture and forestry (Measure 125) and Modernisation of agricultural holdings (Measure 121). These two measures alone account for almost two-thirds (64%) of the total public funds allocated to Axis 1. The take-up rate of funds allocated under these two measures in 2012 was 72% and 63% respectively. Axis 2 Improving the environment and countryside : Agri-environmental payments (Measure 214) and Payments to farmers in areas with handicaps, other than mountain areas (Measure 212). These two measures alone account for three-fifths of the total funds under Axis 2. In 2012, the take-up rate of funds allocated under these two measures was 88% and 85% respectively. 11 Niedersachsen and Bremen, and Brandenburg and Berlin have drawn up joint RDPs. 32

37 COMAGRI Delegation in Bavaria Axis 3 Improving the quality of life in rural areas and encouraging diversification of the rural economy : Village renewal and development (Measure 322). This measure accounts for 70% of the budget under Axis 3. The other significant measure under this axis is Conservation and upgrading of the rural heritage (Measure 323). In 2012, the take-up rate of funds allocated under these two measures was 81% and 85% respectively. Axis 4 Leader approach : Quality of life/diversification (Measure 413). This measure on its own accounts for four-fifths of the funds under Axis 4. Only 25% of the funds under this measure were spent in Bavaria s action priorities in the context of its RDP can be seen from the list of measures receiving the most public funds (in decreasing order): Measure 214 ( Agrienvironmental payments ), Measure 212 ( Payments to farmers in areas with handicaps, other than mountain areas ) and Measure 322 ( Village renewal and development ) Notes on the post-2013 CAP in Germany During the CAP reform process, Bavaria advocated a bigger budget for the CAP, maintaining its two-pillar structure and leaving the regions adequate scope for manoeuvre. The new CAP gives the Member States substantial room for manoeuvre in its implementation. On 4 November 2013, the 16 regional agriculture ministers and their federal counterpart met in Munich to decide how to implement the new CAP in Germany 12. They decided, for example, that the redistributive payment for the first hectares will be EUR 50 for the first 30 hectares and EUR 30 for the next 16 hectares (which represents 6.9% of the direct payments budget allocation in Germany). In addition, 4.5% of the direct payments budget allocation will be transferred to the second pillar (rural development). Young farmers will receive EUR 50 per hectare for the first 90 hectares under the first pillar. In addition, a uniform basic payment will be introduced across Germany by 2019, in three equal stages ( ). According to the Bavarian agriculture ministry, 95% of farms in the state will receive the redistributive payment, which should mean a gain of EUR 43 million a year for the region s farmers 13. The payment to young farmers should represent a gain of EUR 7 million a year for Bavaria from For more details see: Ergebnisprotokoll der Agrarministerkonferenz zur Umsetzung der GAP-Reform in Deutschland, November 2013; Die Zukunft der Gemeinsamen Agrarpolitik, Bundesministerium für Ernährung und Landwirstschaft. See Einigung zur Umsetzung der EU-Agrarreform in Deutschland Bäuerliche Familienbetriebe gestärkt, Staatsminister Helmut Brunner informiert, November

38 Policy Department B: Structural and Cohesion Policies 34

39 COMAGRI Delegation in Bavaria MAIN REFERENCES Bayerisches Staatsministerium für Ernährung, Landwirtschaft und Forsten, Bayerischer Agrarbericht Available at: Bayerisches Staatsministerium für Wirtschaft und Medien, Energie und Technologie, Bayerns Wirtschaft in Zahlen Available at: tschaft_in_zahlen_2013_deutsch.pdf Bundesrat Available at: Bundesregierung. Available at: Bundestag, CDU/CSU bleibt größte Fraktion im Bundestag. Available at: Bundeswahlleiter, Endgültiges amtliches Ergebnis der Bundestagswahl Available at: ueltiges_amtliches_ergebnis.html European Network for Rural Development, Rural Development Programmes , Progress Snapshot , Bayern, Germany, Updated June Available at: S. Fischer Verlag GmbH Frankfurt am Main, Der neue Fischer Weltalmanach Statistische Ämter des Bundes und der Länder Agrarstrukturen in Deutschland - Einheit in Vielfalt, Statistisches Bundesamt, Statistisches Jahrbuch Available at: df? blob=publicationfile 35

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