Increased support for EU farmers through rural development funds / Ukraine

On 20 May 2022 the European Commission  proposed an exceptional measure funded by the European Agricultural Fund for Rural Development (EAFRD) to allow Member States to pay a one-off lump sum to farmers and agri-food businesses affected by significant increases in input costs. Such increases in prices, notably for energy, fertiliser and animal feed, are disrupting the agricultural sector and rural communities, leading to liquidity and cash flow problems for farmers and small rural businesses active in processing, marketing or development of agricultural products. By directly addressing these cash-flow challenges, helping to keep them afloat, the support will address the market disturbances and thus contribute to global food security.

Agriculture Commissioner Janusz Wojciechowski said: “Farmers, with the support of the Common Agricultural Policy, continue to relentlessly prove their worth by producing food under difficult circumstances. After the COVID-19 pandemic, they are now being heavily hit by the consequences of the Russian invasion of Ukraine. For some, survival is at stake. With this measure, the latest in a series deployed under the CAP, we support them so they can keep producing the food the world needs, care for their land and provide for their families.”

Once adopted by the co-legislators, this measure will allow Member States to decide to use available funds of up to 5% of their EAFRD budget for the years 2021-2022 for direct income support for farmers and SMEs active in processing, marketing or development of agricultural products. This represents a potential budget of €1.4 billion in the EU. Member States are required to target this support to beneficiaries who are most affected by the current crisis and who are engaged in circular economy, nutrient management, efficient use of resources or environmental and climate friendly production methods. Selected farmers and SMEs could receive up to €15,000 and €100,000 respectively. The payments should be made by 15 October 2023. To make use of that exceptional possibility, Member States will have to submit a modification to their rural development programme(s) introducing this new measure.

The exceptional proposal follows the €500 million support package for EU farmers adopted on 23 March in the framework of the Communication on “safeguarding food security and reinforcing the resilience of food systems”. In these two measures, the Commission encourages Member States to support farmers engaged in sustainable practices.

In this context, the Commission is also stepping up its monitoring of the main agricultural markets impacted by the war. Following a decision published today, Member States will have to notify the Commission their monthly level of stocks of cereals, oilseeds, rice and certified seeds of these products held by relevant producers, wholesalers and operators. The European Commission has also launched a dedicated dashboard presenting up-to-date, detailed statistics on prices, production, and trade of milling wheat, maize, barley, rapeseed, sunflower oil, and soya beans at EU and global level. This provides market operators a timely and accurate picture of the availability of essential commodities for food and feed.

More information.

The European Economic and Social Committee (EESC) issued its opinion on the proposal on 15/06/2022.

Key points of the opinion:

• The Russian invasion of Ukraine is hitting the EU’s agricultural and agri-food sectors hard. The European Economic and Social Committee (EESC) therefore endorses the new additional aid measure proposed by the European Commission. The Committee feels that this measure is absolutely necessary and calls on the European institutions to lose no time in adopting it.
• The war in Ukraine is demonstrating the geostrategic nature of the agri-food sector and the need to maintain food security in the European Union. Consequently, measures supporting the cash-flow of farms and agri-food SMEs are imperative to ensure their economic survival during this new crisis, which comes on the heels of the COVID-19 pandemic.
• However, the EAFRD budget is already covering existing financing needs and mid- and long-term commitments; it should not be used to finance emergency measures. However, as some EU countries have already used up or committed their funds under the EAFRD, the EESC considers that the European Commission should set up another source of funding outside the common agricultural policy (CAP) budget, so that this measure can be implemented without limiting EAFRD funds in the coming years.
• Furthermore, in view of the exceptional circumstances of the present situation and the need for a swift response, the Committee considers that the Commission should reduce the timeframe for paying out the aid and simplify the eligibility criteria for beneficiaries.