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Friday 16 November 2018

New EU proposal would allow government increase payments to farms by €10k without approval

The Future Growth Loan Scheme which it hopes will be in operation in early 2019 makes up to €300m of loans available with a term of 8-10 years. (stock photo)
The Future Growth Loan Scheme which it hopes will be in operation in early 2019 makes up to €300m of loans available with a term of 8-10 years. (stock photo)
Ciaran Moran

Ciaran Moran

The European Commission is proposing changes to the rules governing state aid in the agriculture sector, increasing the amount that national authorities can use to support farmers without the need for prior approval.

The proposal to increase the maximum aid amount from €15,000 to €25,000 over three years per farm holding - is a response to calls from EU member states to improve support for farmers at the same time as reducing the administrative burden and without distorting the market.

The proposed amendment to the so-called de minimis aid rules would also set the national maximum amount of aid at 1.5pc of the annual agricultural output over the same three-year period (up from 1pc in the current rules).

It also proposes setting the total amount of aid that can be granted by member states to any one particular agricultural sector at 50pc in order to reduce the impact on trade between member states and avoid potential distortion of competition.

Finally, the new rules would also propose the creation of mandatory central registers at member state level, to keep records of the de minimis aids granted in order to simplify and improve the delivery and monitoring of de minimis aid.

Under the current agricultural de minimis aid rules, national authorities are allowed to grant small amounts of aid to businesses in the agricultural sector without prior notification to the European Commission. This form of support has proved to be particularly useful in times of crisis as it allows authorities to react quickly and effectively to support vulnerable farmers.

The Commission is currently seeking feedback on the proposed changes. The consultation is aimed primarily at public authorities across the EU with previous experience of granting state aid in the agricultural sector under the de minimis rules. The consultation will run until 16 April 2018.

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