EU Commission boosts state aid ceiling to €25,000 per farm

The ceiling for state aid for farmers is set to rise up to a maximum of €25,000 per farm under new national support measures announced by the European Commission.

The decision, which comes just 35 days before the UK leaves the European Union on March 29, is said to allow for “greater flexibility and efficiency” in times of crisis and situations demanding a swift response by the public authorities, the commission has stated.

This morning (February 22) the commission adopted revised rules on state aid for the agriculture sector – under 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.

The EU Commissioner for Agriculture and Rural Development, 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,” he said.

The maximum aid amount that can be distributed per farm over three years will rise from €15,000 to €20,000.

The commissioner outlined that 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.

The Minister for Agriculture, Food and the Marine, Michael Creed, has welcomed the move describing it as “an important first step and a signal of intent”.

The commission has highlighted that for countries that opt for the highest ceiling, the new rules require the creation of “mandatory central registers” at national level.

It is understood that this will allow the commission to keep 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  March 14 and can apply retroactively to aids fulfilling all the conditions.