Germany seeks tax deal for farmers
Germany is waiting for the European Commission to rule on whether its farmers can get income tax relief to help offset the effects of drought on this year's harvest, weekly magazine 'WirtschaftsWoche' has reported, citing an unidentified German agriculture ministry spokeswoman.
The German government first passed the measure in late 2016, but it potentially runs foul of EU State Aid rules.
The European Union itself last week extended aid to farmers as extreme heat and drought slashes grain output to the lowest in at least five years.
Farmers will be able to receive part of their direct and rural development payments earlier than usual to help alleviate the impact of this year's drought, the European Commission said on Thursday.
That comes after the bloc's regulatory arm last month relaxed two key environmental rules in some countries.
European Union grains output is forecast to fall by 13.6m tonnes to the lowest in commission data, going back to the 2014-15 season.
The drought could cost German farmers at least €2bn, according to the nation's GDV private insurers' lobby.
The fall in cereal yields is likely to feed through into higher food prices. (Additional reporting Bloomberg)