The main elements of the € 500 million aid package for EU farmers announced by the European Commission in September (see speeches by Vice-President Jyrki Katainen to the Agriculture Council on 7 September and by EU Agriculture and Rural Development Commissioner Phil Hogan to the Informal Agriculture Council on 15 September) have been published in the Official Journal today and will enter into force in the coming days.
Intended as an urgent response to the difficult situation witnessed notably on the EU dairy market, but also for pigmeat, and the negative impact in some regions of drought this summer, the support package provides Member States with flexibility on how they want to use the € 420 million targeted aid to directly benefit farmers.
Member States also have the exceptional possibility to double this sum by matching it with a nationally-funded "top-up" of up to 100% of the aid they receive from the EU budget. The national top-ups can only be used for the same purposes for which the EU funds are used. So, for example, if the MS decides to confine use of the EU funds to support the dairy and/or pigmeat sectors, the national top-up can only be used to support those same sectors. Subject to this conditionality being met, the national top-ups are not subject to state aid rules.
The publication of these Delegated and Implementing Regulations takes place in the same week as the Commission updated its forecast budget needs for next year in its Amending Letter No 2 to the draft 2016 budget. It provides an additional €500 million to the proposed budget for next year to cover the aid package, as well as additional € 200 million for the extension of measures linked to the Russian import ban, notably for the fruit & vegetables sector.
€ 420 million for targeted aid
As the centrepiece of the support package, the Commission has made available € 420 million for national envelopes in order to support farmers in sectors which have been mostly hit by the current market situation.
Member States have flexibility to decide how to target this support on the basis of objective and non-discriminatory criteria, and must inform the Commission of its intention by the end of December 2015.
Allocations to Member States [see table below], are based on national milk quotas (2014-15), with additional amounts to reflect those with lower prices, those more affected by the Russian embargo, and further amounts reflecting feed crop problems related to drought.
Member States are also granted the exceptional possibility to double these EU funds with national funds. Under budgetary rules, Member States need to pay out these funds to their farmers before the end of June 2016.
This is a Delegated Regulation with urgency procedure (based on Article 219 of Regulation 1308/2013), discussed with Member State experts at the expert group on 17 September and 1 October, adopted by the European Commission on 15 October and published as Commission Delegated Regulation 2015/1853 in the Official Journal today, 16 October. It comes into force on 17 October.
Improved private storage aid (PSA) scheme for skimmed milk powder (SMP)
In addition to the existing PSA schemes for butter and SMP, the Commission has opened an enhanced scheme for SMP to alleviate pressure on the supply side of the market more effectively. The butter market is suffering less from market imbalance.
This revamped PSA guarantees that surplus products are effectively kept off the market for a sufficiently long period to enable the market to recover. It provides the possibility for contracting a longer period of storage (up to 365 days, rather than the usual 90-210 days) and a higher rate of daily support.
For current, standard contracts for 90-210 days, the rate is 8.86 € per tonne of storage for fixed storage costs, plus 0.16 € per tonne per day of contractual storage. Under the new enhanced scheme with contracts of 365 days, the aid rate is 8.86 € per tonne of storage for fixed storage costs, plus 0.36 € per tonne per day of contractual storage. However, these new contracts allow for contracted quantities to be withdrawn earlier (after a minimum storage period of 270 days) in which case the aid amounts are reduced by 10%.
This is an Implementing Regulation supported by Member States in a vote in the 1 October CMO Committee, published as Commission Implementing Regulation 2015/1851 in the Official Journal today (16 October), and comes into force on 17 October.
Private storage aid (PSA) for cheese
To help cheese makers who need more time to secure new market outlets and to relieve pressure on the dairy supply side, the Commission has opened the possibility of private storage aid for 100 000 t of cheese. This scheme foresees a breakdown of the total volume per Member State based on their respective cheese production. Contracts are for a period between 60-210 days, with the rate of support fixed at 15.57 € per tonne of storage for fixed storage costs, plus 0.40 € per tonne per day of contractual storage. The last date for applications is 16 January 2016.
This is a Delegated Regulation with urgency procedure (based on Article 219 of Regulation 1308/2013), discussed with Member State experts at the expert group on 17 September and 1 October, adopted by the European Commission on 15 October and published as Commission Delegated Regulation 2015/1852 in the Official Journal today. It comes into force in 3 days.
Increased rate of advances of CAP Direct Payments and certain Rural Development measures
In order to address cash-flow problems, the Commission has raised the amount of CAP funds that can be paid early to farmers (from today, 16 October, onwards, rather than the usual starting date of 1 December).
This covers: the CAP Direct Payments for claim year 2015, where the advance is increased from 50% to 70%; and also area-based payments and animal-related support provided under Rural Development measures, where the advance is increased from 75% to 85%.
Under normal rules, advance payments can only be made after the verification of the eligibility conditions has been finalised for all farmers, meaning administrative checks and on-the-spot checks. By way of derogation, advances may be paid after administrative checks have been finalised. An exceptional derogation for on-the-spot checks for advance payments in being given by the Commission to national implementing administrations.
This is an Implementing Regulation derogating from the Article 75 of Reg. (EU) No 1306/2013 supported by Member States in a vote in the Direct Payments Committee on 24 September and was published as Commission Implementing Regulation 2015/1748 in the Official Journal on 1 October.
Increase in EU funding under 2016 Annual Work Programme for promotion
As a more medium-term measure to support the EU agri-food sector's attempts to find new markets, the Commission has also increased the available funding for promotion programme awards by € 30 million for dairy and pigmeat programmes, with 70% of this targeted at export markets. Coinciding with the new Promotion policy (Regulation 1144/2014), this means that programmes worth € 111 million in EU funds can be given the green light next year.
Commission Delegated Regulation (EU) 2015/1829 and Commission Implementing Regulation (EU) 2015/1831 were published on 13 October 2015. On the same day, the annual work programme for 2016 establishing the priorities in accordance with Article 8 of Regulation (EU) n° 1144/2014 was adopted.