Rules for direct EU payments to farmers

KEY POINTS

Direct payments to farmers are paid through support schemes in each EU country.

EU countries must dedicate a certain proportion of their CAP funding allocation to compulsory support schemes, as described below.

• Standard per-hectare payments. To distribute support more fairly, all EU countries had to move towards a uniform payment per hectare from 2015 (a ‘basic payment for farmers’).
• Green payments per hectare. To be granted to farmers for observing practices beneficial for the climate and the environment (30% of national funding allocation).
• Young farmer per-hectare payment. For farmers no more than 40 years old, setting up for the first time as head of their farm, up to 5 years before claiming support; this payment is available for up to 5 years.

There are also some optional support schemes. EU countries can choose to:

• support smaller farms by paying a higher amount on the first hectares (‘redistributive payment’);
• grant additional payments for areas with natural constraints;
• grant limited amounts of production-related support ('coupled support' — payments linked to specific crops or types of livestock) to help agricultural sectors in their own country that are in difficulty;
• offer a simplified scheme for small farmers — an annual payment of up to €1,250.

From 1 January 2018, the new rules contained in amending Regulation (EU) 2017/2393 came into force and include the following.

• In principle, only active farmers (meaning those whose agricultural activity is not insignificant) could be granted direct support. However, in some EU countries, the administration became too burdensome. In particular, claimants operating airports, railway services, waterworks, real-estate services and permanent sport and recreational grounds were considered inactive except if they proved otherwise. The application of that clause has become voluntary for EU countries.
• Some aspects of the rules applying to green payments have been simplified, especially for crop-diversification requirements.
• An extension of the permanent grassland definition:
  • EU countries may decide to include certain shrubs or trees that produce animal feed in permanent grassland where grasses and other herbaceous forage remain predominant, in the whole or part of their territory;
  • they may consider land not ploughed up or used for crop rotation for 5 years or more as a criterion for the classification of permanent grassland.
• Young farmers are able to more easily access all 5 years of payments.
• EU countries’ responsibilities in regard to the production-limiting nature of coupled support are clarified.
• The types of areas of ecological interest for green payments (ecological focus areas) are extended to cover areas on which plant varieties such as Miscanthus and Silphium perfoliatum are grown, and also to land lying fallow for plants that are beneficial for pollinators.

Transitional rules for the years 2021 and 2022

Amending Regulation (EU) 2020/2220, adopted in December 2020, allows for the continued application of the rules under the 2014-2020 CAP framework and ensures the continuity of payments to farmers and other beneficiaries of support from the EAGF and the EAFRD in 2021 and 2022, until the date of application of the new framework. The aim of the transitional period is to facilitate a smooth transition for beneficiaries to a new programming period.