Agriculture state aid ceiling raised

agriculture state aid
© iStock/Daniel_Kay

The European Commission has updated its rules on state aid in the agriculture sector, allowing farmers to receive greater levels of financial support.

The revised rules raise the ceiling at which national authorities may extend state support for farmers before applying to the Commission for approval; with the dual aims of reducing the administrative burden on Member States and allowing farmers to receive necessary support without creating undue market distortion. In particular, the rules will allow Member States greater scope to provide aid to the agricultural sector in times of crisis, such as outbreaks of disease or attacks by wild animals.

Under current regulations, the maximum aid level of aid which can be provided is set at €15,000 per farm over three years, with Member States held to a total agricultural aid ceiling of one per cent of the country’s annual farming output over three years. The new rules will raise the limits to €20,000 per farm over three years, with Member State totals of 1.25 per cent of annual output. If a Member State spends less than 50 per cent of its total aid budget on a single agricultural sector, it may further increase the limits to €25,000 per farm or 1.5 per cent of annual output.

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 increased state aid limits will come into effect on 14 March; aid allocations which fulfil the set requirements will be able to be applied retroactively.

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