State aid in the agricultural sector

Competition is a main driver of growth. It plays a fundamental role in defending and strengthening the single market. The maintenance of a system of free and undistorted competition is one of the basic principles of the EU. Its policy in respect of State aids seeks to ensure

• free competition,
• an efficient allocation of resources and
• the unity of the EU market,

whilst respecting the international commitments of the EU.

 

The EU's State aid rules are enshrined in the Treaty on the Functioning of the European Union (TFEU). Article 107 of the TFEU contains the definition of State aid and the grounds on which aid may be considered to be compatible with the internal market. Article 108 of the TFEU sets out the main procedural principles governing the Commission's action to ensure Member States' compliance with the substantive State aid rules.

>> Go to the consolidated version of the TFEU

 

State aid rules in the agricultural sector are based on three different principles:

1. They follow the general principles of competition policy.
2. They have to be coherent with the EU's common agricultural and rural development policies.
3. They have to be compatible with the EU's international obligations, in particular the WTO Agreement on Agriculture.

 

These different principles have resulted in the following legal instruments which are in force only in the agricultural sector:

• Community Guidelines for State aid in the agriculture and forestry sector
• Agricultural Block exemption regulation ("ABER")
• Regulation on notification forms
• De minimis Regulation

>> More info on the legal instruments

 

These instruments expire on 31 December 2013 and are under revision in the context of State aid Modernisation (SAM) and in the light of the new rules that will be applicable to agriculture and rural development under the Multiannual Financial Framework 2014-2020. A public consultation took place between 20/12/2012 and 20/3/2013.

>> More info on the revision of the legal instruments

>> More info on the public consultation 

 

The treatment at Commission level of the specific cases related to State aids in the agricultural sector is under the responsibility of the Directorate-General for Agriculture and Rural Development.

 

State aids in agriculture = all State aids, including aid measures financed by parafiscal taxes, granted in connection with activities related to the production, processing and marketing of agricultural products. Agricultural products = products listed in Annex I of the Treaty , products falling under CN codes 4502, 4503 and 4504 (cork products), processed agricultural products where the product resulting from the operation remains such a product and products intended to imitate or substitute milk and milk products, excluding those products covered by Council Regulation (EC) 104/2000 of 12 December 1999 on the common organisation of the market in fishery and aquaculture products).