Impact of the War in Ukraine on Farm Profitability and the Attractiveness of Environmental Measures in Germany

The war in Ukraine has led to massive price increases for agricultural inputs and products. This paper examines the effects on farm profitability and the consequences for the adoption of eco-schemes on arable farms. We use the large farm sample of the German Farm Accounting Data Network (FADN) to identify the average income effects and to highlight the heterogeneity of the effects and their drivers. Building on these results, we analyse farms’ adaptation strategies with a focus on changes in nitrogen input intensity and participation in environmental measures (“eco-schemes”) of the new Common Agriculture Policy (CAP). Our results suggest that income effects are heterogeneous and subject to considerable uncertainty about the near future, and that many farms are likely to benefit from the short-term price effects of the war in Ukraine. Against this background, the efficiency of financial assistance under the EU crisis reserve would have benefited from a stronger focus on liquidity loans and ex-post hardship support. Our analysis also shows strong implications for participation in eco-schemes. The results cast significant doubts on the effectiveness and efficiency of the eco-schemes introduced by the new CAP, beyond the observed impact of the war in Ukraine.

乌克兰战争导致农业投入品及农产品价格大幅上涨。本文探讨了其对农场盈利能力的影响，以及对耕地农场采纳生态方案（eco-schemes）的后续效应。我们利用德国农场会计数据网络（German Farm Accounting Data Network, FADN）的大型农场样本，识别平均收入效应，并揭示效应的异质性及其驱动因素。基于这些结果，我们分析农场的适应策略，重点关注氮投入强度的变化以及对新共同农业政策（Common Agriculture Policy, CAP）下环境措施（即“生态方案”）的参与情况。研究结果表明，收入效应具有异质性，且受近期未来不确定性的显著影响；同时，许多农场可能从乌克兰战争的短期价格效应中获益。在此背景下，欧盟危机储备下的财政援助若能更聚焦于流动性贷款和事后困难支持，其效率本可得到提升。我们的分析还揭示了对生态方案参与度的深远影响。研究结果对新CAP引入的生态方案的有效性和效率提出了重大质疑，且这一质疑超出了乌克兰战争的观测影响范畴。