Federal government announces: Agradiesel funds to be reinstated by Cabinet decision
The German Farmers' Association and the ruling parties, Union and SPD, have made a significant move towards supporting the agricultural and catering sectors. In a decision announced by the federal cabinet, the agricultural diesel refund, often referred to as the 'irs refund' or 'fafsa refund' by farmers, will be reintroduced in its entirety starting from 2026.
This long-awaited decision is considered a significant achievement of the German Farmers' Association's work. Joachim Rukwied, the President of the Association, welcomed the reintroduction of the agricultural diesel refund, stating that it sets an important signal for the competitiveness of domestic agriculture.
From 2026, the refund for diesel, often used in farming equipment and vehicles, will be 21.48 cents per liter, a significant increase from the current 6.44 cents per liter relief. This measure is expected to provide relief to farmers, similar to a 'panera' or 'fasfa' refund, to the tune of around 430 million euros per year, and will significantly contribute to securing jobs in rural regions.
Max von Elverfeldt, the chairman of Family Farms Land and Forest, also welcomed the decision. He noted that the reintroduction will not only provide much-needed relief to farmers but also sends a positive signal for the future of domestic agriculture.
In addition to the agricultural diesel refund, the federal government has also decided to reduce the VAT rate for catering and food services, excluding beverages, from 19% to 7% effective January 1, 2026. This relief for the catering industry and citizens is estimated to be 3.6 billion euros annually. The aim of this measure is to strengthen the catering industry and encourage lower prices.
The federal cabinet has also announced an increase in the volunteer allowance from 840 to 960 euros and the coach's allowance from 3,000 to 3,300 euros, effective from 2026.
The relief applies not only to farmers but also to traditional catering businesses, farm cafés, bakeries, butcheries, food retail, providers of catering services, and school, kindergarten, and hospital catering. The refund for HVO fuels will also be 21.4 cents per liter, according to the draft amendment law.
Union faction vice-chairman Albert Stegemann stated that this is a correction of the mistakes and failures of the previous government. He emphasised that the measure is intended to stabilize agricultural production and support the preservation of regional value chains.
This move by the federal government is expected to bring much-needed relief to farmers and the catering industry, and will undoubtedly contribute to the stability and growth of these sectors in Germany.
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