(de-news.net) – Drought, crop losses, growing input costs, and problems in the livestock sector are putting increasing strain on Germany’s farmers, leading the federal government to declare a national emergency and set aside up to 1 billion euros for assistance. While proposed KTF cuts raise constitutional concerns, businesses’ plans for climate investment are essentially unchanged. An intensifying El Niño is contributing to the uncertainty surrounding climate change on a global scale.
While presenting Germany’s official 2026 harvest report, Federal Agriculture Minister Alois Rainer (CSU) said farmers across the country were confronting a combination of serious and overlapping pressures. Drought and regional losses in crop yields and quality have coincided with acute shortages of animal feed, higher diesel and fertilizer costs linked to geopolitical crises, growing economic pressure in livestock farming, particularly in the pork market, and severe stress affecting forests. Rainer argued that each of these problems would represent a substantial challenge on its own, but that their simultaneous occurrence was placing agricultural businesses under extraordinary financial strain. The harvest results, he said, therefore illustrated a broader pattern of vulnerability in German agriculture, with farms required to absorb multiple risks rather than simply cope with the consequences of an unfavorable harvest.
Against that backdrop, Rainer reiterated that the federal government would stand behind farmers while emphasizing that financial assistance should be targeted to those facing the greatest pressures rather than distributed indiscriminately. In response to the findings of the harvest report, he classified the situation as a crisis of national significance, a designation that is required before the federal government can provide financial assistance in cases involving extreme weather. The federal government consequently intends to make as much as 1 billion euros available, primarily through two liquidity programs designed to give farmers access to low-interest loans with limited administrative burdens. Additional measures are expected to include tax relief and targeted assistance related to fertilizer costs. Emergency assistance in response to extreme weather is generally the responsibility of Germany’s states, meaning that federal participation is possible only when circumstances are deemed to constitute a crisis of national importance. The scale of the agricultural impact was reflected in the 2026 grain harvest, which was estimated at about 37.4 million metric tons, down 7.3 percent from the previous year.
At the same time, German companies appear set to make only a limited increase in the proportion of their investments devoted to climate protection, according to an Ifo Institute survey. Corporate investment in climate-related measures represented an average 9.3 percent of total investment in 2025. Companies expected that share to rise to 10.6 percent in 2026 before easing slightly to 10.5 percent in 2027. Gerome Wolf, an Ifo researcher, characterized the projected increase as negligible, particularly at a time when climate-friendly investment is considered important to meeting national and international emissions targets. The figures also reveal notable differences among sectors. Service providers planned to devote the largest share of investment to climate measures in 2026, at 12.2 percent, followed by the construction sector at 10.5 percent, manufacturing at 8.8 percent and retail at 8.5 percent. Construction was the only sector expecting another increase in 2027, when its planned share would reach 11.2 percent.
The survey did not provide a definitive explanation for the cautious investment outlook. Ifo researchers suggested that companies may have shifted spending priorities in response to a combination of weaker competitiveness in export markets and increased geopolitical risks. Uncertainty surrounding economic policy, particularly the future of carbon pricing, was also identified as a possible factor influencing investment decisions. The findings thus point to a limited change in corporate investment priorities despite the broader emphasis on climate-related spending.
Global climate outlook darkens as El Niño strengthens
Meanwhile, planned reductions to Germany’s Climate and Transformation Fund, or KTF, have prompted constitutional concerns, according to a legal assessment commissioned by environmental organizations. The assessment concluded that the planned transfer of 2.7 billion euros in expected emissions-trading revenue into the Federal Government’s core budget next year could still fall within constitutional limits. Greater concerns were raised, however, over a planned global spending reduction of 4.4 billion euros. Under that arrangement, the specific areas in which savings would ultimately be made would not be determined in legislation but during the budget year. The legal assessment argued that this could effectively move part of the Bundestag’s budgetary authority to the Federal Government, even though Parliament is intended to exercise oversight over the federal budget.
The KTF is a special fund used to finance programs intended to advance Germany’s climate objectives, while its economic plan forms part of the federal budget proposal scheduled for parliamentary consideration. The legal assessment was commissioned by environmental organizations WWF, Greenpeace, BUND and GermanZero amid criticism of Finance Minister Lars Klingbeil (SPD) and allegations that the government is prioritizing fiscal consolidation over climate investment. The dispute therefore places the fund at the intersection of Germany’s budgetary constraints and its continuing climate policy commitments.
Beyond Germany, the climate outlook is also becoming more uncertain as the United Nations warns about the potential consequences of a renewed El Niño phenomenon. The World Meteorological Organization, or WMO, has warned that the event could bring flooding, drought and extreme heat, while producing significant regional fluctuations in precipitation and temperature patterns over the coming months. In response to the potential risks, early-warning systems have been strengthened to an unprecedented degree during the organization’s 50-year history. WMO Secretary-General Celeste Saulo and U.N. Secretary-General António Guterres have emphasized the scale of the potential disruption to societies and economies and the importance of acting before the associated risks intensify.
El Niño typically develops every two to seven years and is associated with unusually warm surface waters in the Pacific Ocean, which can disrupt weather patterns around the world. Average surface temperatures in the central and eastern equatorial Pacific were already about 1.5 degrees above normal between May and July. By August, the deviation had increased to between 2.2 and 2.6 degrees above normal. Temperatures in deeper ocean layers were also substantially elevated, reaching more than 8 degrees above average in some areas during July and early August. The available data indicated that the warming trend could strengthen further, adding to uncertainty over the phenomenon’s eventual effects.
El Niño is expected to reach its peak toward the end of the year, while its climatic effects could continue well into 2027. The timing and persistence of the phenomenon mean that its consequences may extend beyond the period of maximum intensity. Scientists nevertheless caution that the effects cannot currently be predicted with precision at the regional level, leaving uncertainty over which areas will experience the most significant changes in weather conditions.
