The German government has announced that it is to support farmers by reducing the agriculture industry's diesel tax burden. Calls by the German Farmer’s Union were answered after its members protested by driving several hundred tractors in streets around Germany’s Victory Column and staged hunger strikes outside German Chancellor Angela Merkel’s offices. The government agreed on May 21 to offer support.
According to Finance Ministry spokesman Torsten Albig, the diesel tax, which imposes a 10,000 litre capacity on which farmers can claim tax rebate and burdens them with the first EUR350 of tax on diesel in full, will be rescinded by the end of 2009, at a cost of EUR300m per annum in lost government revenues.
German farmers also received reassurance regarding dairy products; Merkel announced that she would consider introducing subsidies to offset the industry's costs. Recently the European price at which milk is bought by wholesalers has halved whilst prices in supermarkets have remained flat, spurring farmers across Europe to call for assistance not only from their domestic governments but also at EU level. European Union agriculture ministers are to discuss measures to aid European farmers during the course of this week.
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