Germany pledges up $A536m in drought aid

German Agriculture Minister Julia Kloeckner.The German government will launch a special aid program worth up to 340 million euros ($A536 million) to help farmers after this summer’s drought massively damaged harvests.

Agriculture minister Julia Kloeckner said she had agreed special federal government drought aid of between 150 million and 170 million euros with German finance minister Olaf Scholz.

Along with additional aid from German regional state governments, farms should receive a total of about 340 million euros in aid, Kloeckner said in a statement.

The association of German farmers DBV has called for around one billion euros in special aid to help farmers after huge crop losses this summer.

German crops wilted under the highest summer temperatures since 1881 and prolonged dryness. EU wheat prices hit five-year highs in August on concern about supplies.

Germany’s 2018 grains harvest is likely to fall by about 22 per cent this year after the heatwave and drought, the DBV said on Wednesday.

Dairy farmers were especially suffering from reduced crops of feed grains, straw and hay, the DBV said. Dairy farmers were being forced to reduce their herds because of high feed costs, sending more cattle to slaughter.

“I declare this year’s period of dryness to be a weather event with a national impact,” Kloeckner said.

If the existence of farms is threatened, they will qualify for special aid, Kloeckner said. It was believed that the existence of about 10,000 farms was under threat, or about one in every 25 in Germany.

In neighbouring Denmark, the drought combined with low pork prices, is expected to trigger losses in the country’s agricultural sector not seen since the 2008 financial crisis.

The losses could reach almost eight billion Danish crowns $US1.23 billion ($A1.68 billion) this year, according to research institute SEGES, part of the Danish Agriculture & Food Council lobby group.

On its own, the impact of the drought is seen at around six billion crowns, it added.

At the beginning of the year, SEGES forecast a small profit for the sector.

“There is no doubt the drought has impacted so many farmers, that there will be more bankruptcies,” SEGES economist Klaus Kaiser told Reuters.

Denmark’s harvest of wheat, barley and rye could fall by about 40 per cent from previous years, the lobby group has previously forecast.