Well Schroeder lost his vote of confidence, as he wanted. There's little chance the president will object to dissolution of Parliament, so it will be for Mrs. Merkel to deal with the Bavarian farmers:
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"....Subsidies in the United States amount to about 20 percent of total farm revenue, compared with 34 percent in the European Union, according to the Organization for Economic Cooperation and Development, the OECD, in Paris.
[....]
But Europe would become more competitive and the money that is today spent on subsidies could be channeled into such things as scientific research, where Europe has long lagged behind the United States.
Perhaps as many as a third of Europe's farmers would go out of business, economists say. Europe would also import more products that it cannot produce efficiently, such as sugar. But other products do not lend themselves to long journeys, such as fresh milk, and would logically still be produced in Europe."
http://www.iht.com/articles/2005/07/01/news/farm.php