(1)

Pursuant to Article 44(2), second subparagraph, of Regulation (EU) 2021/2116, from 16 October to 30 November Member States may pay advances of up to 50 % for interventions in the form of direct payments and prior to 1 December they may pay advances of up to 75 % for area-based and animal-based rural development interventions under Regulation (EU) 2021/2115 of the European Parliament and of the Council (2).

(2)

The Covid-19 pandemic, its impact on food supply chains, and the surge in the prices of energy and agricultural inputs since autumn 2021 have been putting the agricultural sector under pressure. In addition, the Russia’s invasion of Ukraine aggravated the situation and had a further negative impact on the agriculture sector. Input prices, such as energy, fertiliser and feed costs have increased significantly in all agricultural sectors.

(3)

As a result, the share of energy and fertilisers costs in total intermediate consumption had increased significantly in 2022, with the largest increase being observed for field crops and permanent crops farms, in both cases because of their exposure to fertiliser costs. Fertiliser prices are still at historically very high levels. Data suggests that farmers have reacted by reducing their use of fertilisers with, as of yet, uncertain negative consequences on yields and the quality of food and feed commodities.

(4)

The prices of other inputs for farmers and food chain operators in the Union such as for example plant protection products and animal health treatments, machinery and packaging have increased in line with the general inflation.

(5)

Recently, prices for most agricultural commodities such as cereals, oilseeds and dairy products have been falling significantly. In some Member States, the situation has become particularly difficult as the ratio between input prices and commodity prices has deteriorated.

(6)

These circumstances, in addition to recent adverse meteorological events in certain regions, such as extreme drought and floods, are liable to cause liquidity problems for agricultural producers. To tackle these liquidity problems, Member States should be allowed to pay increased advance payments in respect of claim year 2023.

(7)

The measures provided for in this Regulation are in accordance with the opinion of the Committee on the Agricultural Funds and the Common Agricultural Policy Committee,