Site icon Epthinktank

Direct payments to farmers in 2013

 

 

photo: Swisscan (CC BY-NC-SA 2.0)

The reform of the EU’s Common Agricultural Policy (CAP) is being negotiated by the Council and the European Parliament (ordinary legislative procedure). The new rules should enter into force on 1 January 2014. One of the proposed regulations in the ‘CAP reform package’ aims at ensuring a smooth transition in calendar year 2013 between the currentRegulation No 73/2009 and forthcoming CAP legislation concerning direct payments.

Direct payments: 71% of CAP expenditure

The CAP is structured around two ‘pillars’: Pillar 1 supports EU farmers’ incomes, through direct payments and market measures (e.g. public storage of stocks). Pillar 2 supports rural development.
Since 1992, direct payments have been one of the main support instruments to farmers from the EU budget. They represented 29% of agricultural income in the EU in the period 2007-2009. There are currently different types of direct payment (listed in Annex I to Regulation No 73/2009), which is a consequence of successive CAP reforms.

They were introduced as coupled payments by the 1992 CAP reform, i.e. proportional to farmers’ production, based on the area under cultivation or the number of animals. The 2003 CAP reform created decoupled payments: since 2005, direct payments have been linked less and less to production of a specific product. However, some Member States were allowed to maintain some coupled aid (e.g. for suckler cows in France).

Factors affecting direct payment ceilings

The amount of direct payments which may be granted in calendar years 2009 to 2012 cannot be higher than the net ceilings set out, per Member State, in Annex IV to Regulation No 73/2009. These ceilings particularly take into account these factors:

Transitional measures

In calendar year 2013, Regulation No 73/2009 will remain the basis for granting direct payments. However, this Regulation only sets out ceilings up to calendar year 2012. The proposed regulation establishes the ceilings for calendar year 2013, by adjusting the 2012 ceilings (e.g. taking into account the end of voluntary modulation). In the EU15, the modulation rate is set at 10% for payments between €5 000 and €300 000 and 14% for payments over €300 000. In the new Member States, only payments over €300 000 are concerned (at a rate of 4%), but not in Bulgaria and in Romania. Outermost regions and Aegean Islands are not concerned.

data source: COM(2011)630

___

This briefing is available in PDF format on the European Parliament public register

Exit mobile version