A Historical Look at German Agriculture
Agriculture in Germany markedly evolved following WWII. While farms in West Germany continued to be primarily family operated, under the GDR in East Germany, farming was collectivized and state-run because they had a socialist regime. As both countries sought to rebuild after the war, the GDR took advantage of the end of Bretton Woods in the early 1970s, which allowed for fewer capital restrictions in world markets and with it greater economic exchanges between East and West, and the GDR looked to expand farming operations. Further incentivizing the East was the agreement in the Basic Treaty of 1972 to open trade relations between the East and West. Trade in the world market provided the East with the inputs that would make an economy of scale in livestock production possible. What developed was large-scale factory-farm production, not so different from those in the US. In an interview about his book “Communist Pigs: An Animal History of East Germany’s Rise and Fall,” Fleischman reflects on the interesting phenomenon of how this parallel development occurred under different markets–capitalism in the US and socialism in the GDR. He further explains that socialism and collectivism were certainly reflected in the operation of farms in the East, but the scale of the operation was likely an idea imported from the US. In contrast to East Germany, the US had domestic access to cheaper inputs including animal feed, and the GDR’s entrance into world markets to consume cheap goods created greater economic instability. The East relied heavily on pork production as foreign investment declined in the 1980s, and they were forced to export a greater proportion of the pork, causing domestic shortages in the food supply. This, paired with the environmental fallout of industrial farming contributed to industrial pork production’s decline in the East.
With the fall of the Berlin Wall in 1989 and Deutsche Wiedervereinigung (German reunification) in 1990, socialism came to an end and required the integration of the East’s industries into West Germany’s economy — including agriculture. The existing operations were either state-owned or collectives, and state-owned farms had to be converted into private ownership. Eventually, after much debate and over a long timeline, what resulted was an unexpectedly high number of farms remaining as collectives, while fewer farms were family operated. Thus, Germany differs in that the West has smaller-scale family-operated farms, while the East has more collective farms.
Today, there remain many small farms, but the average farm size is increasing. Furthermore, the largest proportion of utilized agricultural area is held by larger farm operations.
Source: Eurostat (ef_kvaareg) (ef_ov_kvaa)
German agricultural exports have changed over time. In 1998, top exports were paper and paperboard coated with kaolin, cheese, cigars and cigarettes, and coated cellulose wadding. By 2022, top exports included chocolates, pork, cheese, and bakery products.
Germany’s agriculture sector has decreased to about 6% of the share of the world market. This likely reflects Germany’s turn toward innovation in technology and the power of knowledge and ideas on economic growth. The agriculture sector is a comparably less complex export group. Countries whose exports are more complex than expected for their income level, grow faster, so it follows that agriculture remains a smaller fraction of the German economy.
Agriculture is an important part of German history and has continued to play a prominent role in German life. Currently, half of the area of Germany is used for agricultural purposes and almost one million people produce goods worth more than 50 billion euros per year. Simultaneously, the agriculture sector produces a shrinking portion of German output. On the other hand, Germany is the world’s third-largest exporter of agricultural goods. It seems then that this sector will persist in the German economy, and proceed as a key to German economic success, as other high-income countries have largely abandoned agriculture as a source of economic growth.
