RSS
Agriculture: EUR 430 million of EU funds to support the EU agricultural sector
The Commission proposed yesterday, 26 June, to mobilise additional EU funding for EU farmers affected by adverse climatic events, high input costs and various market and trade issues. The new support package will consist of EUR 330 million for 22 Member States. In addition, Member States yesterday approved the EUR 100 million support package for farmers in Bulgaria, Hungary, Poland, Romania and Slovakia presented on 3 May. A number of other measures, including the possibility of higher advance payments, should support farmers affected by adverse climatic events.
EU farmers in Belgium, Czechia, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Finland and Sweden will benefit from this exceptional support amounting to EUR 330 million from the CAP budget.
Countries can complement this EU support with up to 200 % of national funds. Member States have submitted to the Commission in-depth assessments of the difficulties faced by their respective agricultural sectors. The measure will be voted on by the Member States at the next meeting of the Committee on the Common Organisation of Agricultural Markets.
National authorities will distribute the aid directly to farmers to compensate them for economic losses caused by market disturbances, the consequences of high input prices and the rapid fall in agricultural prices and, where appropriate, for the damage caused by recent climate events, particularly acute in the Iberian Peninsula and Italy. The aid may also finance the distillation of wine in order to avoid further deterioration of the market in this sector.
The EUR 100 million support package approved yesterday by Member States for farmers in Bulgaria, Hungary, Poland, Romania and Slovakia presented in May will allocate EUR 9.77 million to Bulgaria, EUR 15.93 million to Hungary, EUR 39.33 million to Poland, EUR 29.73 million to Romania and EUR 5.24 million to Slovakia. Farmers in these five Member States face logistic bottlenecks as a result of large imports of certain agri-food products from Ukraine. Exceptional and temporary preventive measures on imports of a limited number of products from Ukraine entered into force on 2 May 2023 and will be phased out by 15 September 2023.
A joint coordination platform is also working to improve the trade flow of trade between the European Union and Ukraine through solidarity lanes.
Payments for both support packages should be made by 31 December 2023. The Member States concerned will have to notify the Commission of the details of the implementation of the measure, in particular the criteria used to calculate the aid, the expected impact of the measure, its assessment and the actions taken to avoid distortions of competition and overcompensation.
In addition to this direct financial support, the Commission proposes to allow higher advance payments from CAP funds. Up to 70 % of their direct payments and 85 % of area- and animal-related rural development payments could be made available to farmers from mid-October to improve their cash flow situation.
Member States will also have the possibility to amend their CAP Strategic Plans to redirect CAP funds to investments that restore production potential following crop destruction, loss of farm animals and damage to buildings, machinery and infrastructure due to adverse climatic events. The changes introduced by national governments in this framework would not be included in the maximum number of amendments allowed. Similarly, flexibility is also granted in the implementation of sectoral programmes for wine and fruit and vegetables. This allows beneficiaries to better adapt their measures to the current market situation.
Context
The agricultural sector has been under pressure from the COVID-19 pandemic and the sharp rise in energy prices and agricultural inputs, such as fertilisers, following the Russian aggression against Ukraine. The European Commission already adopted a EUR 500 million support package in March 2022 and listed a wide range of actions to ensure the availability and accessibility of fertilisers in November 2022.
The rapid decline in agricultural product prices over the past year, amid still high input costs that are falling less rapidly – causes liquidity problems for farmers, especially in the cereals, oilseeds, dairy, livestock, wine or fruit and vegetables sectors. As a result of food inflation, consumer demand has moved away from certain products such as wine, fruit and vegetables or organic products, creating additional difficulties for producers.
In addition to this negative overall economic development, the Iberian Peninsula has been affected by drought, while certain Italian regions have been affected by particularly severe flooding. These extreme weather events cause damage to local agricultural production and infrastructure. The Commission analysed the aid applications sent by Member States justifying the large support package approved Monday.