ANNOUNCEMENT 28 Dec 2020

In December 2020, the EU and Germany established the transitional budgets for the agricultural support given under the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) during the period 2021-2022.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 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

Inception date: 01 Jan 2021 | Removal date: 31 Dec 2022

Financial grant

On 28 December 2020, the European Commission adopted Regulation (EU) 2020/2220 setting out the transitional budgets for the German payments income support payments financed under the European Agricultural Guarantee Fund (EAGF). The 2021-2022 budget was set at EUR 9.8 billion (approx. USD 12 billion). This represents an increase in the biannual intensity of the scheme when compared to the previous biannual intensity during the 2014-2020 period of EUR 8.5 billion (approx. USD 10.3 billion).

Income support measures to farmers take the form of financial grants. The operating rules for the direct income support payments will remain those outlined for the 2014-2020 period in Regulation (EU) 1307/2013 and in corresponding national legislation. For more information on the granting rules, please see the related state act. 

Notably, Regulation (EU) 2020/2220 set the budget for the agricultural development support under the European Agricultural Fund for Rural Development (EAFRD). For more details, see related intervention.

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: 01 Jan 2021 | Removal date: 31 Dec 2023

Financial grant

On 28 December 2020, the European Commission adopted Regulation (EU) 2020/2220 setting out the transitional budgets for the German rural development support to national farmers under the European Agricultural Fund for Rural Development (EAFRD). The support primarily takes the form of financial grants. 

The 2021-2022 budget was set at EUR 2.4 billion (approx. USD 3 billion). The operating and granting rules for the support will remain those outlined for the 2014-2020 period in Regulation (EU) 1305/2013 and in Germany's approved Rural Development Programmes (RDPs). No specific budgets per priority objective of the RDPs were provided. Notably, the RDPs established in 2014 is in force until 2023, however, no specific budget was allocated for the period 2021-2023. For more information on the granting rules and previous set budgets please see the related state act.

Notably, Regulation (EU) 2020/2220 also set the budget for the country's income support payments under the European Agricultural Guarantee Fund (EAGF). For details, please see the related intervention. 

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. 

 
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