Agricultural Cooperative Development: East Germany

COPAC Open Forum
Successful Cooperative Development Models
in East and Central Europe
26 October 1999

Number and development of Raiffeisen Cooperatives in East Germany 1992 – 1998
Year/type of cooperative	1992	1995	1998	Difference 98:92 absolute	Difference 98:92 in %
Supply and marketing	244	152	106	-138	-56.1%
Dairy total	33	32	29	-4	-12.1%
Meat and livestock	10	10	9	-1	-10.0%
Fruit/Vegetable/Flowers/Wine-grower	45	34	27	-18	-40.0%
Agrarian	1,015	918	837	-178	-17.5%
Others	89	108	88	-1	-1.1%
TOTAL	1,436	1,254	1,096	-340	-23.7%

Cooperatives in East Germany:	Cooperatives in West Germany:
Compulsory	Voluntary
Primary production	Supply and marketing
Cooperative roots in supply and marketing 270 BHG 80 Dairies 2 Wine growers cooperatives Productive cooperatives of manual workers

Framework for the transformation of agriculture and cooperatives
Agricultural Adaption Act (1990/91) - Separation and merger of collective farms - Conversion of collective farms by change of legal form - Dissolving of collective farms - Leaving a collective farms - Establishment and reordering of land ownership Economic and monetary union West German cooperative law came into force in East Germany Accession to the European Union Privatization of land by Treuhandanstalt/BVVG (roughly 1 of 6 Mio. ha land were expropriated before 1949

Framework for the transformation of agriculture and cooperatives

Agricultural Adaption Act (1990/91)
- Separation and merger of collective farms
- Conversion of collective farms by change of legal form
- Dissolving of collective farms
- Leaving a collective farms
- Establishment and reordering of land ownership
Economic and monetary union
West German cooperative law came into force in East Germany
Accession to the European Union
Privatization of land by Treuhandanstalt/BVVG (roughly 1 of 6 Mio. ha land were expropriated before 1949

Development of Cooperatives
Primary agricultural sector Cooperatives - Result of transformation of collective farms - Farming on one third of the land - Legal persons still roughly 60% Organizational structure of cooperatives - Three legal levels 1. Membership 2. Labour relationship 3. Rent of land Types of agricultural cooperatives - Public cooperative - Producer cooperative (supply and marketing)
Supply and marketing Totally different structure of agriculture requires a different structure in supply and marketing This sector was owned and directed by government and privatized by Treuhandanstalt (Trust company of German Government) Cooperatives started with cooperation of West and East German Cooperatives West German regional centre cooperatives engaged in privatization through buying from Treuhandanstalt

Development of Cooperatives

Primary agricultural sector

Cooperatives
- Result of transformation of collective farms
- Farming on one third of the land
- Legal persons still roughly 60%

Organizational structure of cooperatives - Three legal levels
1. Membership
2. Labour relationship
3. Rent of land

Types of agricultural cooperatives
- Public cooperative
- Producer cooperative (supply and marketing)

Supply and marketing

Totally different structure of agriculture requires a different structure in supply and marketing
This sector was owned and directed by government and privatized by Treuhandanstalt (Trust company of German Government)
Cooperatives started with cooperation of West and East German Cooperatives
West German regional centre cooperatives engaged in privatization through buying from Treuhandanstalt

Structural development of the agrarian enterprises in East Germany
Agrarian enterprises with 1 ha production land a.m.	1992	1995	1996	1997	1998	± to p. y.
Agrarian enterprises (Germany total)	600,543	555,065	539,975	525,101	514,999	-1.9%
Natural person	15,725	27,259	27,834	29,999	28,989	-3.4%
Legal person	2,749	2,902	2,894	3,115	3,008	-3.4%
from: Agricultural cooperatives	1,464	1,315	1,293	1,261	1,218	-3.4%
from: Limited company	1,178	1,417	1,432	1,605	1,560	-2.8%
Farm-area in 1000 ha (Germany total)	16,842	17,231	17,228	17,201	17,233	0.2%
Natural person	1,380	2,340	2,438	2,502	2,555	2.1%
Legal person	3,680	3,169	3,108	3,055	3,046	-0.3%
in % of production land in East Germany	72	57	56	55	54
from: Agricultural cooperatives	2,251	1,887	1,843	1,786	1,744	-2.4%
in % of production land in East Germany	44	34	33	32	31
from: Limited company	1,314	1,194	1,182	1,180	1,207	2.3%
in % of production land in East Germany	26	22	21	21	22
Æ Average size in ha (Germany total)	28.0	31.0	31.9	32.8	33	0.6%
Natural person	88	86	87	83	88	6.0%
Legal person	1,338	1,092	1,074	1,006	1,013	0.7%
from: Agricultural cooperatives	1,537	1,435	1,425	1,416	1,432	1.1%
from: Limited company	1,116	843	826	735	773	5.2%

Selected numbers of the DRV-report about agricultural cooperatives 1997/1998
	1997	1998
Examined enterprises	171	185
Agrarian production land in ha	1,595	1,611
Rented land in ha	1,515	1,417
Members	72	68
Employed members	29	26
Work-force	38	41
Work-force /100 ha production land	2.41	2.20
Animal units/100 ha LF	59.1	55.9
Proceeds/ha production land in DM	2,504	2,434
Yearly surplus in DM	20,000	50,000
Yearly surplus + personnel expenditure /enterprise in DM	1,677,000	1,643,000
Yearly surplus + personnel expenditure /ha LF in DM	1,051	1,020
Yearly surplus + personnel expenditure /work force in DM	44,132	40,073

Comments or questions? Contact the COPAC Coordinator.
Updated: 24 November 1999