New state aid rules: Commission increases national support to farmers up to €25,000

Farmers 2019

Wlodawa, Poland (Unsplash, 2019)

This article is brought to you in association with the European Commission.


The ceiling for national support to farmers will rise significantly, allowing greater flexibility and efficiency, notably in times of crisis and situations demanding a swift response by the public authorities.

Today the Commission has adopted revised rules on state aid in the agriculture sector (the so-called de minimis aid), increasing the maximum amount that national authorities can use to support farmers without the need for prior approval from the Commission. This decision will allow EU countries to increase support for farmers without distorting the market, while reducing the administrative burden for national authorities.

Agriculture and rural development Commissioner Phil Hogan said: “The Commission’s proposal for new state aid rules for the agricultural sector reflects the value of this form of support in times of crisis. By increasing the maximum aid amount to farmers, national authorities will have more flexibility and be able to react more quickly and more effectively to support vulnerable farmers. In some cases, the amount of State aid that can be provided to individual farmers will be increased by 66%. These new rules will continue to accompany the normal rules for notified State aid, which Member States may continue to apply.

The maximum aid amount that can be distributed per farm over three years will rise from €15,000 to €20,000. In order to avoid any potential distortion of competition, each EU country has a maximum national amount which they cannot exceed. Each national ceiling will be set at 1.25% of the country’s annual agricultural output over the same three-year period (up from 1% in the current rules). This is an increase in the national ceiling of 25%.

If a country does not spend more than 50% of its total national aid envelope on one particular agricultural sector, it may increase even further the de minimis aid per farm to €25,000, and the national maximum to 1.5% of the annual output. This represents a 66% increase in the ceiling per farmer and a 50% increase in the national ceiling.

For countries that do opt for that highest ceiling, the new rules require the creation of mandatory central registers at national level. This will allow keeping track of the aids granted in order to simplify and improve the delivery and monitoring of the so-called de minimis aid. Several Member States already maintain such registers, which will allow them to apply the higher ceilings immediately.

The increased ceilings come into force on 14 March and can apply retroactively to aids fulfilling all the conditions.

Background

In EU state aid rules, EU countries shall notify state aid to the Commission and may not implement the aid measure until it has been authorised by the Commission. However, when the aid amounts are small enough, which is the case for the de minimis aid, EU countries do not need to notify or get authorisation from the Commission. Due to their size, the aid does not threaten competition and trade in the internal market.

The de minimis aid is typically used by Member States when they need to act quickly without setting up a scheme in accordance with state aid rules, notably in times of crisis. It is also commonly used for very specific purpose, for example to help prevent or eradicate animal diseases as soon as an outbreak occurs, or to compensate farmers for damages caused by animals that are not protected under EU or national law such as wild boars. The damages caused by protected species of animals (wolves, lynx, bears, etc) can be compensated under notified state aid rules.

The Commission consulted Member States and stakeholders to provide input on the revision of the de minimis rules. Those contributions were taken into account when finalising the amendments.

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