Sentiment in agriculture has improved slightly, but remains cautious

DBV publishes results of the June survey

The economic mood in agriculture improved slightly in June after hitting a low in March. The index rose from 50 to 53 points and is thus still at a low level compared to the reference year 2000 (index: 100). This is the result of the current agricultural economic barometer from June 2004. The agricultural economic barometer presented by the German Farmers' Association (DBV) shows the economic mood in agriculture, composed of an assessment of the current situation and future expectations of farmers. In 2001 the index was still at 114 and fell from 2002 to under 60 points. Since then, the mood in agriculture has bottomed out.

Both the assessment of the current situation and the economic expectations for the next two to three years have improved slightly overall. However, dairy and cattle farmers assess their current situation as particularly bad; they also continue to view their future prospects more negatively than farmers of other types of farms. 57 percent expect poorer economic development from dairy cattle and cattle holdings. On average across all farm types, 51 percent of farmers fear this, while 49 percent expect the same or better development. Positive signals can primarily be found in eastern Germany. Farmers assess their current economic situation significantly better here than in northern and southern Germany.

The willingness to invest is also higher in the new federal states than in the old federal states. Overall, however, there will be a further decline in investment activity. While in June 2003 48 percent of those questioned stated that they wanted to make investments in the next six months, in June 2004 the figure was only 44 percent. The DBV sees this as a frightening sign of the ongoing economic uncertainty among farmers. In addition, after the farmers' incomes have fallen over the past three years in a row, there is often no longer any financial scope for new investments. 

The agricultural economic and investment barometer is determined quarterly. Almost 1.000 farmers and over 200 contractors nationwide are interviewed for this representative survey by the market research institute Produkt + Markt on behalf of the DBV.

Source: Bonn [dbv]