A Glimpse of Farm Business in Bavaria, Germany

Amberg – Agriculture is challenged sectors in everywhere in the world, including Germany. Event though the CAP (Common Agricultural Policy) is applied to sustain and guarantee the farm business, farmers should develop their own strategy to sustain and do more efficiently to get more profit on farm business. One of the strategies is the partnership of several individual farms through cooperative or joint cooperation. There are several forms of cooperatives in Germany, most of based on task, i.e.: cooperation for marketing, machine operation, brings manure, etc. But the cooperative forms is getting seldom nowadays.

We visited two examples of farm in Hanhbach, Amberg city, on 16th September 2014, which are Rauch- Ehbauer & Cow GbR and Laubhof.

Rauch- Ehbauer & Cow GbR is an example of farm cooperative. Several small cow farmers join together to achieve efficiency and reduce cost of production by sharing the work time, stables, machines, and buildings. By joining, the time of farm care is more flexible and there is more free time for farmers as they works interchangeably. Every weekend, one farmer has responsibility to do farm business, so others can have vacation.

This partnership is established step by step. Contract management was difficult prior to joining the farms. Two farms united as first, and the cooperation came into operation. The cooperation has its one legal agreement. The cooperation purchased the individual farm’s properties. Some land still belong to the individual farm which is rented by the cooperation for every 9 years.

It was begun by slurry spreading manure community with 40 members since 1995. Their business developed considerably by expanding the land until 225 ha (165 ha is leased in), which are for maize (52 ha), cereals (56 ha), rapeseed (19 ha), clover grass (15 ha), millet (30 ha), fruit (15 ha), and buildings.

Currently, they have 130 dairy cows which produce 1 million kg of milk every year. The milk is sold to milk factory. Direct market is not applicable since it needs more labors. The milk price is based on the market price as the price support from government is not available. Currently the milk price is highly fluctuated due to the economic recession and export ban to Russia. About ten year ago, the price was relatively high (0.20 – 0.25 Euro/liter), but it went down considerably to 0.18 – 0.19 Euro/liter (?). However, the government intervention still apply on CAP (Common Agricultural Policy) by subsidize land rent.

Rauch- Ehbauer & Cow GbR

Rauch- Ehbauer & Cow GbR (Photo: Kurniawan, 2014)

Through CAP scheme, government subsidizes 300 euro/ha/year to help farmers; but the system has several drawbacks. The subsidy only goes to the landowner, not the farmers. As a result, the land price is increase. At this point, there is no profitable to buy land and farmer tent to rent the land which makes the land rent increase. In result, the farm orientation has changed from long term sustainability to short term profitability.

Their business has extended into biogas production since 2010. The facility includes three silos, a fermenter, an after-fermentation basin, a repository pool and a generator building. Establishing the biogas plant definitely need huge investment (865.000 Euro). The plant establishing fund is from normal credit as the special credit for biogas is not available

Manure (30%) and renewable raw materials (70%) are fermented to methane. The gas produced is stored in the attic of the generator building. The gas then generates electricity accounting 150 kW in Koetzersricht and 250 kW in Hanhbach. The gas produced also provide heat 659 kW thermal to school and municipal buildings. This biogas use has reduced oil consumption by 10,000 liter per year. The gas price is fixed and guarantee by the government as a renewable energy. Biogas production is costly; however, a premium price provides the profit to the farmers. In the repository pool, resulting digested are stored and used when needed as a fertilizer for crops and grass cultivation.

The future farm business is optimistic but highly depend on the price of milk and biogas. Due to the world population growth and more opening market in developing countries, the farm business will have bright future. In the future, they plan to rear additional 160 dairy cows. Beside price, the government intervention on environmental issue is also the problem encountered by farmers. The integrated farm is still debated regarding to the ground water pollution because of fertilizer and pesticide use which decrease the social prestige of the farmers. Thus, there is still work to do to convince people, as they see that integrated farming is not the best model.

Other farm business strategy is introduced by Laubhof farm. Laubhof is joined two individual farms. They have 80 ha (5 ha is leased in) and a hundred ha near the Germany-Czech border. The farm in Hahnbach focuses on rearing of pig, beef and sheep for meat production and breeding. The main business is direct market on meat product. They also sell the boar meat which has higher price compared to pig meat. Rearing boar is more challenging compare to pig since they need 2 – 4 weeks longer for fattening.

Pig and wild boar rearing (left); and new heating system (right)

Pig and wild boar rearing (left); and new heating system (right) (Photo: Kurniawan, 2014)

The farms also cultivates barley, maize, other cereals, and asparagus. A nice restaurant is also established on the farm, where visitors can enjoy fresh meal and buy the fresher asparagus home. In order to reduce the farm cost, they changed the heating system which reduces 80% of previous heating cost.

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Slaughtering facility (Photo: Kurniawan, 2014)

Those two farms are the example how farm strategy to reduce cost by joining and sharing the resources. In additional, they tend to specialize to one or two core product.

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One thought on “A Glimpse of Farm Business in Bavaria, Germany

  1. Pingback: Pertanian masih tidak menarik di mata pemuda | Kurniawan's Page

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