France: temporary state aid scheme for the agricultural sector

Measure #3180 | Published 18 Apr 2012 ▲

Description

On 5 November 2009, France notified a temporary aid scheme for granting limited amounts of  aid in favour of the agricultural sector - State aid No. N 609/2009.
 
According to the French authorities, the aim of the notified scheme is to grant temporary aid to agricultural producers that have been affected by a sudden shortage or unavailability of credit as a result of the global financial and economic crisis. The aid consists in diverses forms of subsidies, loan bail outs, interests subsidies and social contribution tax cuts. The aid will reach over 1'000 enterprises, however, the French authorities precise that the specified scheme does not apply to export aid.
 
The amount of aid is limited to 15'000 euros per enterprise. The overall budget is estimated not to exceed 700 million euros. The aid scheme will end on 31 December 2010.
 
The commission found that the measure constitutes State aid within the meaning of Article 107 par. 1 TFEU and gave the following assessment:
 
The measure is selective since the aid will only be allowed to a limited amount of enterprises. According to a constant jurisprudence, the condition of trade distortion is filled as soon as the beneficiary is active in sectors where intra-community trade exists. [...] The simple fact that the aid strengthens the position of this enterprise in comparison with other competitors allows to consider that trade has been affected. The amount of export of agricultural products to other EU members reached 9 054 million euros in 2007 and the amount of imports 5 051 million euros. (par. 30-31 of the letter from the EC to France - Brussels, 2.12.2009 C(2009) 9627 final)
 
The Commission concludes that despite the measure constituting State aid pursuant to the Article 107 (1) TFEU, it is compatible with the internal market according to the Article 107 (3)(b) TFEU.
 
Extension of the aid scheme - State aid SA.32173
On 29 December 2010, the frenche authorities notified the EC their intention to extend the scheme until 31 December 2011. The Commission decided not to raise objections.
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
 

Any Evidence-Based Deliberation:

Question Result
Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations?
Is there any evidence that alternatives to the proposed measure were considered?
Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government?
Was such evidence identified?
Is such evidence publicly available?
Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives?
Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken?
Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory?
Did the government state its intention to review the measure within one year of implementation?

Implementing Jurisdiction:

Affected Trading Partners:

Measure type:

Affected Sectors:

Affected Tariff Lines:

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Date Discovered:

Implemented: No

Date of inception: 2 Dec 2009

Duration: 25 months

GTA Evaluation: Red

Source:

the letter from the EC to France - Brussels, 2.12.2009 C(2009) 9627 final (french). Available from: < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >

the letter from the EC to France - Brussels, (date and number unknown) (french). Available from: < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >

Government Response:

Glossary of trade terms