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EU considering a 50% raise to agricultural state aid ceiling

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3 min read
AUTHOR: Molly Long
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Farmers in the EU struggling to keep up with the cost of their operations may soon be able to access more than €100,000 in targeted state aid.

The EU’s temporary crisis framework was put forward in March 2022, following Russia’s invasion of Ukraine. The conflict has had stark knock-on effects for agriculture both in the neighbouring European Union, and worldwide.

European Commission President Ursula von der Leyen said in last month’s State of the Union address that an amendment to the framework was in the works. It is expected to be unveiled at the end of the month.

Speaking with EU-focussed publication Euractiv, an undisclosed source has shed some light on what changes may be on the horizon.

Under the current framework, EU member states can offer struggling farmers up to €62,000 in aid without prior approval from the European Commission.

According to the leaked draft obtained by Euractiv, the Commission is considering increasing this ceiling by 50% to €93,000  in a bid to soften the blow dealt by the Russia-Ukraine conflict.

EU member states have supposedly welcomed the uplift, according to the anonymous source, but have also warned that even this may not be enough to deal with the current market situation.

However, as Euractiv reports, this financial support could be used in conjunction with so-called de minimis aid. This type of aid is specific to the agricultural sector and like agricultural state aid, it can also be granted without approval from the Commission.

The ceiling for this type of aid was recently increased to €20,000, and up to €25,000 in certain cases. Combining the two would bring the total amount of aid available to struggling farmers to €113,000 or €118,000.

The support will also be available to manufacturers of fertilisers and nitrogen compounds, according to Euractiv, as the bloc tries to sure up its supplies of the essential agricultural ingredients which have been disrupted by the conflict.

Though the news of the agricultural state aid ceiling uplift will be reassuring for some struggling farmers, there remains some doubt over whether this support measure can impact everyone equally. Because the money is disbursed from state budgets, countries with more resources can afford to offer support to more farmers. This in theory could undermine the single market – putting into question whether state aid is the right way to support struggling farmers.

The issue is expected to be discussed at the next meeting of EU agriculture ministers later this month.  

Understand why the Russia-Ukraine conflict is having such a widespread effect on the world by listening to this episode of the Food Matters Live Podcast:

War in Ukraine – what next for the global food system?


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