Impacts of Biogas Production on the Production Factors Land and Labour – Current Effects, Possible Consequences and Further Research Needs

Abstract

Among the members of the European Union (EU), Germany has the largest biogas produc-tion from agricultural sources. However, many other EU member states are creating the necessary conditions for rapid growth in this area. The German Renewable Energy Sources Act (EEG), which sets payments over a long time period for electricity supplied from renewa-ble sources, often serves as a benchmark. However, the continuing biogas boom has also led to criticism of the EEG in Germany. Opponents of biogas production point to the rising cost of leasing land, changes in the agricultural structure due to maize monoculture, increased competition with other agricultural branches (e.g., livestock husbandry) and the crowding out of classical food production. This paper examines the validity of these points of criticism. To this end, a written survey (n = 246) of farmers in six selected rural districts in the German state of Lower Saxony was carried out in 2010 and 2011. OLS regressions conducted on the data from these farmers showed that biogas production has led to a substantial increase in land lease prices for cropland. Furthermore, approximately 20% of the respondents report complete crowding out of established agricultural production forms, resulting in a decrease in the resource basis for downstream animal and plant processing industries. The results also indicate that, in extreme cases, such crowding out might even reduce the availability of em-ployment in rural areas. In closing, the paper highlights further research needs in order to provide comprehensive information (for every German state, the entire country of Germany and other EU member states) regarding the effects of biogas production on net employ-ment, infrastructure and added value.