Danish economists content to kill off small farms

The Danish government’s new agricultural platform, aimed at helping farmers, has been questioned by industry experts who see the move as potentially damaging to agricultural efficiency.

The government’s own Environment Economic Council has warned that the current crisis stimulus package may be detrimental in the long term, as smaller inefficient farms that might be in danger of collapsing in the short term will be able to survive for longer. “Crisis aid to agriculture can have the effect that less efficient farms continue production for a longer period and that structural change within the agricultural sector is postponed,” writes the council in a new report featured in Politiken.

Independent experts and those within the Danish agricultural sector have agreed that without the aid package, up to 25 percent of the 13,000 professional farming operations across the country would shut down within five years. To alleviate the impact of the crisis, the Danish government will provide property tax relief of DKK 1 billion (USD 181 million) to farmers in 2011 and 2012. The council, however, has warned that such a package may lead to artificially inflated property prices. “Crisis help in the form of even lower taxation would be a mistake,” says the report.

The council also recommended that the agricultural sector should be faced with stricter economic controls by way of strengthening of environmental regulations in order that Denmark can meet its international responsibilities.