Direct payments are payments granted directly to farmers under certain support schemes. Examples are the Single Payment Scheme and the Single Area Payment Scheme.
What are the objectives of direct payments?
Direct payments ensure a safety net for farmers in the form of a basic income support, decoupled from production, stabilising their income stemming from sales on the markets, which are subject to volatility. In order to maximise their profits, producers must respond to market signals, so that they produce goods that are demanded by consumers. Direct payments also contribute, in combination with cross-compliance, to providing basic public goods delivered through sustainable farming.
Which schemes fall under direct payments?
With a yearly budget of around € 40 billion, direct payments form a significant part of the EU budget. The direct support schemes are listed in Annex 1 of Council Regulation (EC) No 73/2009 , such as SPS, SAPS, coupled schemes and specific support.
>> More on coupled schemes [172 KB]
>> More on specific support [169 KB]
In order to face new and demanding challenges such as climate change, bio-energy, better water management etc. in the framework of the rural development policy, it was decided during the 'Health Check' of the CAP to transfer money (from 2010 onwards) from the first pillar to the rural development envelope, the so-called 'progressive modulation'.
>> More on modulation [30 KB]
Implementation of direct payments
The CAP reform agreed in 2003 has been gradually implemented since 2005. In just three years, 85% of the support has been decoupled, marking a major shift of EU agricultural policy. In 2013, with the full implementation of the 'Health Check', agreed in 2008, that share has increased to 92%.
>> Overview implementation of direct payments in the Member States:
>> 01/2013 [65 KB]