Brussels, 19/02/2003 (Agence Europe) - On Wednesday, the European Commission adopted a proposal of regulation aimed at simplifying the management of and ensuring effective monitoring of State aid in the farm sector. The text will authorise Member States to grant several kinds of State aid in the farm sector without having to call for prior Commission approval. In a press release, the latter stresses that block exemption will speed up the implementation of new agricultural State aid. This, in turn, will facilitate national programmes aimed at improving environmental, animal welfare and hygiene standards in the farm sector. The draft regulation concerns SMEs in the agricultural sector. Given the definition of SMEs (250 workers at most, EUR 40 million in turnover and EUR 27 million on the balance sheet, nearly all farms and companies active in the agricultural sector are covered. The following aid schemes are covered by the regulation proposed:
Investment aid not entailing increased production capacity. Member States may grant up to 40% of investment aid to farmers. This rate may be increased to 50% in less-favoured areas and by a further five percentage points for young farmers. Aid may reach 60% - if not 75% in less favoured areas - for costs relating to the protection and improvement of the environment, the improvement of hygiene conditions of livestock enterprises or the welfare of farm animals, in so far as these investments go beyond minimum EU requirements.
Aid of up to 100% may be granted for the costs of conservation of traditional landscapes and buildings. This may include reasonable compensation for the work undertaken by the farmer himself, or his workers, up to a limit of EUR 10,000 a year.
Aid may be granted for the costs of the relocation of farm buildings in the public interest.
Investment aid of up to 40% may be granted to enterprises active in the processing and marketing of agricultural products (to reach 50% in Objective 1 regions).
Aid of up to EUR 25,000 may be granted for setting up young farmers and also for early retirement, on condition that the cessation of commercial farming activities is permanent and definitive.
Start-up aid for producer groups or producer associations may be granted if the total amount of aid does not exceed EUR 100,000 and is degressive over five years (100% of start-up expenses in the first year, reduced by at least 20 percentage points in the following years).
Aid towards the payment of insurance premiums may be granted if it is limited to 80% of the cost of insurance premiums for cover against losses caused by adverse climatic events which can be assimilated to natural disasters; this rate being lowered to 50% where the insurance also covers other losses caused by climatic events or by animal or plant diseases.
Aid of up to 100% may be granted if it is granted towards and limited to the legal and administrative costs of land re-parcelling as well as aid of up to EUR 100,000 per beneficiary over a three year period for encouraging the production and marketing of quality farm products.
Aid of up to EUR 100,000 per beneficiary may be granted over a three year period for technical support in the agricultural sector (mainly education and training of farmers and farm workers, certain farm replacement services, consultancy services, and the organisation of and participation in competitions, exhibitions and fairs).
Support for the livestock sector may be granted at a rate of up to 100% to cover the administrative costs directly linked to the establishment and maintenance of herd books; up to 70% of the costs of tests performed by or on behalf of third parties to determine the genetic quality or yield of livestock; and aid at a rate of up to 40% for investments in animal reproduction centres and for the introduction at farm level of innovatory animal breeding techniques or practices.
The proposal provides that, in order to allow abolition of the prior authorisation procedure, it will be necessary for ex post reports established by Member States to meet strict quality criteria. The Commission will be able to conduct an inquiry as soon as a complaint has been filed on a presumed irregularity in application of the measure. The Commission stresses that "the regulation will not soften the State aid rule in substance and, in particular, will not allow State aid in areas considered incompatible with the Internal Market. The proposal should therefore in no way be misunderstood as a "re-nationalisation" of aid to farmers. The same agricultural State aid rules will continue to apply throughout the EU". Following consultation of Member States and stakeholders, the Commission plans to implement this regulation from January 2004.