TRANSFORMING SOCIAL-SECURITY IN AGRICULTURE IN THE NEW FEDERAL STATES IN GERMANY - PROBLEMS AND PROSPECTS

This article deals with problems involved in the introduction of the specialized insurance system for the agricultural population existing in the Federal Republic of Germany (FRG) in the New Federal States. The system comprises old-age insurance, health insurance and accident insurance. The paper initially presents problems in implementing health and accident insurance, which are already in force in Eastern Germany, and subsequently discusses other major topics in the forthcoming debate about transformation of the old-age insurance system in the New Federal States. The analysis of impacts on social security, and of financial and distributive effects regarding all three types of insurance leads to the conclusion that there are two main obstacles to overcome in order to create an integrated, well-balanced solution: On the one hand, in the 'Old' FRG, a special system was set up for social security of self-employed farmers and, at the same time, fulfilled objectives of income and structural policies. On the other hand, in the New Federal States, differences in structure and organization of agriculture as compared to the 'Old' FRG must be taken into account. Hence, political decision-makers are in a dilemma: Introducing a similiar agricultural insurance system without significant changes in the financing system would exclude many registered cooperatives and corporations from subsidies of considerable importance. Not introducing such measures would create further disparities between New and Old Federal States and would mean to sustain the division between the agricultural populations in both parts of Germany in social security matters.