F.A.Z.-Serie Schneller Schlau. Boden – begehrt, begrenzt, (un)bezahlbar

He has been declared the „Ground of the Year“ – and not without reason: Farmland is a precious and increasingly scarce resource in Germany.

Ackerböden in Germany have a low level of protection. The soil market in Germany is characterized by fierce competition for agricultural and green areas. There are various reasons for this: on one hand, there is increasing price competition within the agricultural sector due to the centralization of farms, and on the other hand, more and more land is being taken out of agricultural use for other purposes. As a result, the available land is shrinking, which is also seen as an attractive investment opportunity for non-agricultural investors due to its stability and relatively low returns. Consequently, farmers have to spend significant amounts on rent or purchasing land. It is not always possible to recover these expenses through farming activities.

The agricultural sector occupies the largest portion of land in Germany, accounting for 50.5 percent, but it is gradually decreasing. From 1992 to 2021, the agricultural land has decreased by 7.4 percent. Forests cover approximately 29.8 percent of Germany’s land, while bodies of water account for 2.3 percent. The remaining land is used for residential areas, roads, or industrial zones.

Approximately 70 percent of the agricultural land is arable soil. The remaining portion is allocated to grassland (29.8 percent). More than half of the arable land is used for growing cereal crops. Winter wheat is the most common crop, covering an area of 2.9 million hectares, followed by silage maize, barley, and rapeseed. Around 60 percent of the cultivated cereals are used for livestock feed.

On average, a farmer today manages 63 hectares of land, of which approximately 40 percent are owned by the farmer. The remaining 60 percent are leased from other owners. While the number of farms has decreased, the average size of each farm has increased. There is little information available about the distribution of land ownership in Germany. However, most landowners are non-farmers, including former farmers or their heirs. There are differences, as some land is owned by the government, state, church, municipalities, or companies. It is difficult to provide a detailed breakdown, as ownership structures vary greatly. In particular, large corporations and cooperatives are also included in the eastern German states. On average, government and other entities such as the government, state, municipalities, and churches own 10 percent of the land, ranging from 2 to 30 percent depending on the municipality.

Auf der Deutschlandkarte ist zu sehen, dass Unternehmen größere Flächenanteile fast ausschließlich in den ostdeutschen Fallgemeinden gehören. Das ist verbunden mit den wesentlich geringeren Flächenanteilen der natürlichen Personen in diesen Gebieten. Die unterschiedlichen Agrarstrukturen in Ost und West sind hierfür ausschlaggebend.

Specific to the region, the Bodenverwertungs- und -verwaltungsgesellschaft (BVVG) holds a special significance, although it is declining. The BVVG is associated with the federal government and is tasked with privatizing agricultural and forestry land in the eastern German states. This will inevitably result in the transfer of BVVG land to other ownership categories in the future. In some sample communities, the BVVG owns 10 percent of the agricultural land, while in other regions it does not.

In the case of companies in the legal form of legal entities, especially in East Germany, groups of companies can be observed that present themselves as a unit to the outside world and act similar to a holding company, even though they are not technically one. Additionally, there are also groups of companies with land ownership, which belong to a single capital owner or their family, who also holds a large amount of land as an individual and manages it through their agricultural companies. The economic power of such individuals can significantly shape the affected regions, as they usually own a significant portion of the land. In general, the businesses and agricultural land in the East are historically much larger than those in the West.

Actually, only a few agricultural areas are traded, as most are either inherited or used for non-agricultural purposes. However, this is not reflected in the purchase prices. The same applies to the change of ownership of agricultural land, which occurs through share sales. In 2022, 0.86 percent of the total area was traded in East Germany, and 0.34 percent in the West.

The cost of one hectare of land depends on factors such as soil quality, usage, and geographical location. High prices in Bavaria and North Rhine-Westphalia, for example, are due to the demand for construction, transportation, and compensatory areas. In Brandenburg (13,000 euros), Saxony, and Thuringia (both 13,400 euros), the prices are lower. According to economists, the price differences can also be justified by the productivity of the farms. For instance, farmers in North Rhine-Westphalia and Lower Saxony have significantly higher revenues per hectare. In the eastern regions, the prices also vary due to the different history of farm development after the end of the German Democratic Republic. This includes the lower initial price level. Certain regions, where the government, church, or municipalities own a large portion of the land, may also deviate from the average.

Die Bodenpreise gehen derweil durch die Decke. Sie haben sich seit 2006 im Bundesdurchschnitt fast verdreifacht. Waren es im Jahr 2006 noch rund 9000 Euro für einen Hektar, lag der Preis im Jahr 2020 bei stolzen 26.800 Euro.

Even though there are significant differences between the federal states, the trend is clearly upward everywhere. The factors driving prices are partly different in the east compared to the south or north. One essential reason is that arable land cannot be increased, and the supply is becoming increasingly scarce. To protect farmers from uncontrolled loss of agricultural land, there is the Land Transaction Act. According to this law, every transfer of land requires official approval. If a person who does not engage in agricultural activities wants to buy agricultural land, the authority can prohibit it. However, this only applies if a farmer classified as „urgently in need of expansion“ expresses interest in acquiring the land. The Federal Ministry of Agriculture has recognized this development and therefore wants to prevent the sale of agricultural land and initiate legislative changes to prevent „price abuse“. The regulation of agricultural land transactions has been discussed at the federal and state level for about ten years.

The rental prices in Germany have also more than doubled since 2007, similar to the purchase prices. This is mainly due to the decrease in agricultural land, technological advancements, and the centralization of farms. This leads to increased competition, following the motto „grow or perish“. For example, livestock farms need more land for more animals. Similarly, public landlords or private heirs can drive up prices. In 2020, the average rental price was 329 euros per hectare, with arable land at 375 euros and permanent grassland at 198 euros. Compared to 2010, this is an average increase of 62 percent.

In Germany, 58 hectares of land are lost every day. This is equivalent to 81 football fields. While agricultural land is shrinking, areas for settlements, businesses, and infrastructure are increasingly being utilized. The competition is further intensified by the energy transition – land is needed for solar and wind parks. Therefore, a decrease in prices is not expected.

The German government aims to reduce land consumption to 30 hectares per day by 2030. The „Soil of the Year“ board stated that we must stop thoughtlessly using soils with high yield security. Therefore, Germany will continue to face the challenge of sustainably utilizing the increasingly scarce resource of land.