Tethering of cattle is viewed critically by society and, according to scientific assessment, does not constitute a welfare-friendly husbandry method. Permanent tethering, with the animals standing tied up in their stalls the entire year without access to pasture or an outdoor yard, is particularly problematic. The Thünen Institute of Farm Economics was commissioned by the Federal Ministry of Food and Agriculture (BMEL) to assess the consequences of a ban on the year-round tethering of dairy cows (with a 10-year transitional period) for Germany. Due to structural changes, permanent tethering of dairy cows would be reduced from 2010 estimates (31,500 farms; 650,000 cows) to 13,500 farms with around 270,000 dairy cows by the year 2027. These are the farms which would be affected by a potential ban. They are comparatively small, specialised in dairy farming and often have other income sources besides agriculture. Particularly high shares of farms with permanent tethering can be found in Bavaria and Baden- Württemberg. Farms with year-round tethering have various options to improve animal welfare: provision of pasture access, construction of an outdoor yard, conversion of the tie-stall to loose housing and construction of a new loose housing. The feasibility of these measures depends to a large extent on site-specific conditions and the situation on the farm. Accordingly, the costs per cow for these measures vary. In a calculation of cost changes in cents per kg milk, cost increases of 0.26 to 13.42 ct/kg milk to cease permanent tethering were determined for the farms concerned. With an average price paid out by dairies of 27.2 ct/kg milk in 2016 and 36.6 ct/kg in 2017, a ban on year-round tethering can therefore have a significant impact on profitability for the holdings concerned. A number of support measures can be used in order to reduce the negative effects of such ban on the economic profitability of farms. In particular, farm investment support (“modernisation of agricultural holdings”), animal-welfare grazing premiums and advisory measures are suitable. The public funding necessary for support during the transitional period of 10 years was estimated at 222 to 287 million Euros, respectively. These expenditures could in principle be financed by means of the second pillar (the Rural Development Programmes) of the EU's Common Agricultural Policy. It is to be expected that even with accompanying support, a ban on permanent tethering will accelerate structural change. A socially acceptable prohibition of permanent tethering requires an adequate transitional period, attractive support measures for the restructuring of the affected dairy farms and, if applicable, that hardship rules be applied to farms that are being phased out.