BERLIN, Nov. 21 (Xinhua) -- With 114 agricultural companies filing for insolvency from January to October this year, the number of insolvencies among agro companies in Germany went up around 24 percent from last year, the credit and solvency agency CRIFBURGEL announced on Thursday.
The evaluation by CRIFBURGEL showed that the consequences of the extreme drought in summer 2018 "also had a negative impact on insolvency figures in the agricultural sector."
"Lower revenues and higher costs due to extreme heat are the main reasons for the sharp rise in agricultural insolvencies," said CRIFBURGEL managing director Ingrid Riehl.
In 2018, Europe was hit by an extreme heatwave. In Germany, the highest temperatures since the beginning of the weather records in 1881 had been registered.
The 2018 drought effected many areas of agriculture, for example the rapeseed cultivation. At the time of sowing in late summer 2018, "soil moisture was often too low," according to the harvest report published by the Ministry of Food and Agriculture (BMEL).
As a result, some German farmers decided not to sow rapeseed and in 2019 Germany registered the smallest rapeseed cultivation area since 1996 with only around 857,500 hectares, BMEL noted.
"As the insolvency statistics mainly reflect the past, they are a kind of look in the rear mirror, the effects of last summer are only visible now," said Riehl.
Despite the high number of insolvencies, the agricultural sector was "generally stronger in financial terms and more robust than the economy as a whole," said CRIFBURGEL.
