Luxembourg government meets agricultural sector with aid measures

The year 2021 was again troubled for Luxembourg agriculture: after the pandemic, the Ukraine crisis followed. The Luxembourg government has therefore met the sector with specific aid measures. On the other hand, the Luxembourg government also imposes very ambitious objectives on the agri-food sector. Agricultural production sometimes experienced strong fluctuations in 2021.

Aid to compensate for the consequences of the Ukraine crisis

As elsewhere in the European Union, Luxembourg’s agriculture is also feeling the effects of the war in Ukraine. The Luxembourg government therefore launched a number of support measures on 20 May 2022 to strengthen the resilience of the agri-food sector:

  1. Guarantee on bank loans from agri-food companies in order to meet their liquidity needs.
  2. Reduction in the selling price of agricultural diesel between mid-May and the end of July 2022.
  3. Financial support to producers through the agricultural crisis Reserve under the Common Agricultural Policy. In return, farmers commit to the application of environmentally and climate – friendly production methods.
  4. Compensation for the higher energy, fertilizer and other input prices with a maximum of €35,000 per company.

In the area of Agricultural Policy, Luxembourg has shown itself ambitious in the recent past with the ban on glyphosate since 1 January 2021 and with the target of 20% organic acreage by 2025. And from mid-2023, Luxembourg will once again take a leading position, but this time in retail (following the French example): from then on, fruit and vegetables weighing less than 1.5 kg will no longer be allowed to be packaged in plastic.

Luxembourg consumers prefer local, seasonal and short-chain food.

Since the cost of agricultural production resources also rose sharply in 2021 (+9.5%), the real income of the farmer fell (-5.3%).

Organic farming

Organic farming recorded strong growth, but unofficially it is acknowledged that the target for 20% organic acreage by 2025 is not realistic. In total, the number of organic farms increased by 10.5% to 126 farms, accounting for 6.7% of the total number of farms. The organic area increased by 13.3% to 6,938 ha, or 5.2% of the total agricultural area.

Structure of agricultural holdings

In total, Luxembourg had 1,869 farms in 2021, which together cultivated 132,811 hectares of land.

The agricultural workforce included 3,521 FTE, of which 68% were family members and 32% were external workers. The share of the latter group is increasing.

The average size of a Luxembourg farm in 2021 was 71 ha.