Biogas Boom in Germany Leads to Modern-Day Land Grab

Creating energy from corn once seemed like a revolutionary idea in Germany. But subsidies for the biogas industry have led to entire regions of the country being covered by the crop, and investors are eagerly waiting for local farmers’ land to go for sale. Some of those farmers who lease their land say they have been “ruined.”

Dairy farmer Renate Rahn has made it through a number of industry crises, including the mad-cow disease scare of 2001 and the dramatic fall in milk prices in 2009. “But now we’re being brought to our knees,” she says.

Low milk prices aren’t the only thing threatening her. Rahn lives near the Eider River in the northern German state of Schleswig-Holstein, where she is having an increasingly hard time finding affordable land to lease for grazing her cows and growing their feed. Over the past four years, the average cost of leasing a hectare (2.5 acres) of land has skyrocketed from €250 ($315) to over €600 per year.

She and her fellow dairy farmers just lost even more corn fields to biogas companies. The corn grown there won’t be used to feed any cows. Instead, it will be sent to a reactor for refinement. The facility, which functions somewhat like a cow’s stomach, will be fed chopped-up corn twice a day. The corn is transformed into gases in the dome of the reactor. Energy-rich methane is then channeled into a combined heat and power unit (CHP) and transformed into electricity.

While dairy farmers like Rahn are being threatened by the low prices that food discounters offer for their milk, the biogas producers have nothing to complain about. Germany’s Renewable Energy Act (EEG) has subsidized the energy the biogas companies produce for 20 years.

Rahn is now forced to feed her cows soy meal from Brazil, which is constantly growing more expensive. She knows she will lose the battle over the raw materials, and she blames politicians for having “ruined us.”


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4 responses to “Biogas Boom in Germany Leads to Modern-Day Land Grab

  1. The profitability of the biogas industry will evaporate as fast as the subsidies, leaving a ravaged landscape of once productive agricultural lands.

  2. Agriculture in Western Europe is the most comprehensively ‘managed economy’ in the world. Ag subsidies there consume ~60% of all government revenues. So this isn’t a ‘market failure’ in the way we understand the term in the US. Over there, this is just another problem for legislators.

    Here in the US, agriculture started as subsistence farming, and transitioned into an industrial sector. That’s how we understand agriculture.

    In Europe, agriculture has always been part of government. It was a strategic asset in feudal society, and a fundamental element of social control and conventional warfare. European governments may no longer be feudal, but agriculture is still a government enterprise.

    You simply cannot compare US and EU agriculture. They’re foreign concepts to each other.

  3. Almost immediately after the EU cut farmsubsidies French farmers went bust by the dozens. That tells the story of the failure of food subsidies more clearly then the infamous EU butter mountains and milk lakes did in the 90’s.

  4. most of the Euroweenie farms I saw some decades ago woud qualify as hobby farms here in America. I don’t know if that’s still true or not. One of the reasons for high tariffs against US farm goods was they could not compete with us in production and delivered cost. That’s the other reason for the big stink over so-called Franken-foods (i.e., GMO foods), they couldn’t compete.

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