German government agrees to tax breaks for protesting farmers

26th May 2009, Comments 0 comments

The tax relief for diesel fuel used on farms meets a key demand of the German Farmers' Association, which called the demonstration that drew thousands of farmers into Berlin’s streets.

Berlin -- Faced with a mass protest of farmers riding tractors through Berlin's city centre Monday, the German government agreed to tax breaks to help farms struggling due to falling food prices.

Just four months before a national election, the left-right ruling coalition said it would cut taxes on diesel fuel used on farms, finance ministry spokesman Torsten Albig told a regular government news conference.

The reduction will apply for two years, which Albig estimated would cost the government 525 million euros (734 million dollars) in lost revenue. He said the government would also consider other measures to aid farmers in trouble.

The tax relief meets a key demand of the German Farmers' Association, which called the demonstration that it said drew about 6,000 farmers and 200 tractors to the streets leading to the central Victory Column roundabout.

"Where is the rescue plan for us farmers?" asked one banner draped across a tractor.

"We are here mainly because of the milk market," one of the protesters, Dieter Bockey, told AFP.

"The price of milk is too low and costs are too high."

Chancellor Angela Merkel can ill afford to lose farmers' support before the September 27 poll, with the Bavarian sister party to her conservatives, the Christian Social Union, particularly reliant on the rural vote.

The Berlin demonstration came as some 12,000 farmers, according to unions, blockaded 81 dairies around France and dairy producers from 10 European countries demonstrated in Brussels against low wholesale milk prices.

European Union agriculture ministers were later to discuss the crisis in the industry, in which farmers accuse retailers of exploitation.

They complain that the price they are paid for milk by wholesalers has fallen dramatically in recent months, while the cost to consumers in supermarkets has remained stable.

Merkel met with farmers Thursday pledging her support, after women dairy farmers held a five-day hunger strike outside her offices demanding assistance.


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