Project details

Greening the economic framework conditions for agriculture

The study is commissioned by the Gregor Louisoder Umweltstiftung (Environment Foundation), which is committed to the protection of the natural basis of living and sustainable land use in Germany, and by the Verein für Ökologische Steuerreform e.V. (Association of Ecological Fiscal Reform). It deals with the examination of direct and indirect subsidies with regard to environmental aspects on the one hand and of the possibilities of a green tax for critical operating resources on the other.

The study examines possibilities of a stronger integration of ecological aspects into tax and financial policies in order to support sustainable agriculture. The authors´ starting point is the present system of subsidies that in some respects makes environmentally harmful practices economically profitable.

  • Because of the enduring environmental problems caused by the agricultural sector, a reduction of problematic subsidies as well as the implementation of economic incentives is recommended. Beyond the implementation of the CAP reform, additional measures need to be taken in order to make production methods harmful to the environment unprofitable. For example, agricultural enterprises saving energy and resources as well as the introduction of biofuel should be promoted systematically instead of affording enterprises tax reliefs for the use of fossil fuel.
  • In order to assess green taxes for agriculture, experiences made in other EU member states were analysed. With regard to EU legislation as well as to economic and ecological consequences, a implementation-focused tax concept is sketched out. The study documents the suitability of economic instruments for the reduction of the use of pesticides and fertilizers. Against this background a temporally staged implementation of taxes on pesticides and on nutrient surpluses is suggested. In order to avoid competitive disadvantages and to enhance ecological effects, revenues should be recirculated systematically into the agricultural sector.

According to the authors´ evaluation, the combination of taxes and incentive mechanisms is an ideal instrument for the reduction of ecological damage through agriculture.

The study is available for download:

Project no.: 



Research | Agricultural policy |


Gregor Louisoder Umweltstiftung München (Environment Foundation) / Förderverein Ökologische Steuerreform e.V. (Development Association of Ecological Fiscal Reform)


2003 - 2004

Contact person/s at IfLS: 

Jörg Schramek