ANNOUNCEMENT 28 Dec 2020

In December 2020, the EU adopted transitional provisions in order to continue providing support to farmers and other beneficiaries from the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) during the years 2021 and 2022.

NUMBER OF INTERVENTIONS

2

  • 0 harmful
  • 2 neutral
  • 0 liberalising

SOURCE

EUR-Lex. EU Official Gazette. “Regulation (EU) 2020/2220 of the European Parliament and of the Council of 23 December 2020 laying down certain transitional provisions for support from the European Agricultural Fund for Rural Development (EAFRD) and from the European Agricultural Guarantee Fund (EAGF) in the years 2021 and 2022 and amending Regulations (EU) No 1305/2013, (EU) No 1306/2013 and (EU) No 1307/2013 as regards resources and application in the years 2021 and 2022 and Regulation (EU) No 1308/2013 as regards resources and the distribution of such support in respect of the years 2021 and 2022”. 28/12/2020. Available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32020R2220&qid=1610640952786

European Commission. CAP transitional regulation: 2021-22. Available at: https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/transitional-regulation_en

Inception date: No inception date

Financial grant

On 28 December 2020, the European Commission adopted Regulation (EU) 2020/2220 which sets the transitional budget of the income support payments financed under the European Agricultural Guarantee Fund (EAGF) for the 2021-2022 period at EUR 76.3 billion (approx. USD 93.3 billion). The annual level of the support reaches EUR 38.2 billion (approx. USD 46.7 billion), compared to a previous annual total payment of EUR 42.4 billion (approx. USD 51.7 billion) valid during the 2014-2020 period.

The operating rules for the direct income support payments will remain the ones outlined for the 2014-2020 period in Regulation (EU) 1307/2013. The support takes the form of financial grants. Beneficiaries are active farmers that meet minimum requirements. As the implementers of the payments are Member States, they can establish further criteria for receiving support in national legislation (see related state acts). Each Member State is obliged to respect national ceilings comprising the maximum values of all the payment entitlements. These ceilings are specified in Annex II of Regulation (EU) No 1307/2013. For more information on the operating rules, please see the related state act on the EAGF. 

CAP's transitional rules

The CAP framework is the EU-wide agricultural policy established in 1962 and is subject to reforms and new rules every six years. It aims to support farmers and improve agricultural productivity, ensuring a stable supply of affordable food. Under the CAP, Member States provide three main types of support to the agriculture sector: (i) income support measures, (ii) market measures; and (iii) rural development measures. The two first are primarily financed by the EAGF; whilst the third and last support type is financed by the European Agricultural Fund for Rural Development (EAFRD).

In this context, in June 2018, the Commission presented proposals on the CAP rules for the period 2021-2027. These proposals, however, were not approved by the Parliament, resulting in the necessity to extend the 2014-2020 rules with a transitional regulation during the years 2021 and 2022. 

AFFECTED PRODUCTS

 
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Inception date: No inception date

State aid, unspecified

On 28 December 2020, the European Commission adopted Regulation (EU) 2020/2220 which lays down the transitional budget of the rural development measures financed under the European Agricultural Fund for Rural Development (EAFRD) for the 2021-2022 period at EUR 26.9 billion (approx. USD 32.9 billion). The annual intensity of the support reaches EUR 13.4 billion (approx. USD 16.4 billion), compared to a previous annual intensity of EUR 13.6 billion to (approx. USD 16.7 billion) valid during the 2014-2020 period.

The operating rules for the rural development support will remain the ones outlined for the 2014-2020 period in Regulation (EU) 1305/2013. The EAFRD can finance a series of measures, including aid for investment in physical assets, for business development plans, for investments in forestry technologies and marketing of forestry products, for organic farming, and for stabilising farming incomes if they drop 30% the annual average. For more information on the operating rules, please see the related state act on the EAFRD. 

CAP's transitional rules

The CAP framework is the EU-wide agricultural policy born in 1962 that is subject to reforms and new rules every six years. It aims to support farmers and improve agricultural productivity, ensuring a stable supply of affordable food. Under the CAP, Member States provide three main types of support to the agriculture sector: (i) income support measures, (ii) market measures; and (iii) rural development measures. The two first are primarily financed by the European Agricultural Guarantee Fund (EAGF); whilst the third and last support type is financed by the EAFRD.

In this context, in June 2018, the Commission presented proposals on the CAP rules for the period 2021-2027. These proposals, however, were not approved by the Parliament, resulting in the necessity to extend the 2014-2020 rules with a transitional regulation during the years 2021 and 2022. 

 
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