ANNOUNCEMENT 28 Aug 2015

In August 2015, the European Commission approved the extension and budget increase of a Spanish scheme to support farmers and agricultural SMEs.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

SA.42697 Prolongation of the scheme SA.40313 Aid towards the payment of insurance premiums: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_42697

European Commission's Decision SA. 40313: https://ec.europa.eu/competition/state_aid/cases/259782/259782_1697821_64_2.pdf

Inception date: 28 Aug 2015 | Removal date: 31 Dec 2020

Financial grant

On 28 August 2015, the EU approved the extension of a Spanish financial grant scheme for the payment of agricultural insurance premiums. The modification extends the scheme until 31 December 2020, increasing the budget from EUR 274.5 million (USD 306.6 million) to EUR 1.4 billion (USD 1.5 billion). Notably, the scheme supports farmers and SMEs active in primary agricultural production and was first approved in April 2015 (see related state act). 

The scheme provides support in the form of financial grants to support the payment of agricultural insurance premiums. The objective is to encourage farmers to take out insurances to cover the risk of damages caused by natural disasters or other exceptional circumstances (animal diseases and plant pests). Final beneficiaries are farmers producing crops in general (cereals, nuts, fruits, vegetables, trees, plants, flowers, etc.) and livestock.

In this context, the European Commission’s Decision replicated the April 2015 Decision indicating that “the agriculture sector (…) is open to competition at EU level and is therefore sensitive to any measure in favour of the production”. Hence, “the measure is liable to distort competition and to affect trade between Member States”.

Regardless, the Commission approved the state aid without raising objections, concluding that the measure is compatible with the internal market pursuant to Article 107(3)(c) of the TFEU.

Update

On 29 October 2020, the EU approved a Spanish state aid measure that extends the aid scheme for the payment of agricultural insurance premiums throughout the fiscal year 2021 with a budget of EUR 290 million (approx. USD 338 million), see related state acts.