CAP rules for 2021-22
On 1 June 2018, the European Commission presented legislative proposals on the common agricultural policy (CAP) for the period 2021-27. Due to ongoing negotiations between the European Parliament and the Council of the EU, the provisional start date of the proposed CAP reform has been pushed back to 1 January 2023.
In order to allow for continued payments to farmers and other CAP beneficiaries, a transitional regulation has been introduced for the years 2021 and 2022. During these years, funding will be drawn from the CAP’s budget allocation for 2021-27, bolstered by an additional €8 billion from the next generation EU recovery instrument (EURI) assigned to the European agricultural fund for rural development (EAFRD).
The transitional regulation will extend most of the CAP rules that were in place during the 2014-20 period, while also including new elements to make a stronger contribution to the European Green Deal and to ensure a smooth transition to the future framework of the CAP strategic plans.
The transitional period should provide enough time for the European Parliament and the Council of the EU to agree on the legal framework of the future CAP. The period should also provide EU countries with sufficient time to design and prepare for the implementation of their respective CAP strategic plans, with the assistance of the Commission.
Strong and sustainable recovery
The transitional regulation will direct the additional resources of the EURI towards funding a resilient, sustainable and digital economic recovery in line with the objectives of the European Green Deal.
Benefiting climate and the environment
Sustainable social and economic development
A smooth transition
The regulation will shorten certain multiannual commitments, schemes and programmes to enable a smooth transition to the new CAP legislation.
Multiannual commitments in rural development programmes
The duration of new multiannual commitments in relation to agri-environment-climate, organic farming and animal welfare should, as a general rule, be limited to a maximum period of three years. From 2022, the extension of existing commitments should be limited to one year. A derogation to this rule is possible based on the nature of the commitments, as well as the environmental- climate objectives and the animal welfare benefits sought.
Aid-schemes and operational programmes
Regulation (EU) No 1308/2013 (laying down rules for the common organisation of agricultural markets) includes aid schemes and operational programmes to support certain sectors. The transitional regulation sets out rules regarding the duration of aid schemes and operational programmes that are to be renewed in the years 2021-22, in order to ensure their smooth integration into the new CAP.
- As regards the aid scheme in the olive oil and table olive sector, the existing work programmes drawn up for the period running from 1 April 2018 until 31 March 2021 should be followed by new work programmes running from 1 April 2021 until 31 December 2022.
- Existing operational programmes in the fruit and vegetable sector that have not reached their maximum duration of five years may only be extended until 31 December 2022. New operational programmes in the fruit and vegetable sector should only be approved for a maximum duration of three years.
- Existing national programmes for the apiculture sector drawn up for a period running from 1 August 2019 until 31 July 2022 should be extended until 31 December 2022.
Countering income volatility
In response to the economic and environmental risks brought to farmers by climate change and increased price volatility, the transitional regulation loosens restrictions on the application of risk management instruments and state aid rules.
- Under Regulation (EU) No 1305/2013, EU countries may incorporate an income stabilisation tool in their rural development programmes to compensate farmers who suffer a 30% drop in their average annual production or income. In order to further promote the use of this tool, the transitional regulation provides EU countries with the possibility to reduce the threshold for compensation from 30% to 20%.
- State aid rules shall not apply to national tax measures whereby the income tax base applied to farmers is calculated on the basis of a multiannual period. By permitting EU countries to even out the tax base over a number of years, the regulation aims to alleviate the effects of income volatility and encourage farmers to make savings in good years to cope with bad years.
Regulation (EU) 2020/2220 of the European Parliament and of the Council of 23 December 2020 laying down certain transitional provisions for support from the EAFRD and from the EAGF in the years 2021 and 2022.