European Agricultural Fund for Rural Development

KEY POINTS

Objectives

The EAFRD aims to:

• foster competitiveness in agriculture;
• ensure that natural resources are managed sustainably and that measures to tackle climate change are implemented effectively;
• achieve a balanced territorial development of rural areas across the EU, including creating and maintaining employment.

Priorities

The EU supports action to meet six priority objectives:

• fostering knowledge transfer and innovation;
• enhancing viability and competitiveness of all types of agriculture and the sustainable management of forests;
• promoting food chain organisation, including processing and marketing of agricultural products, animal welfare and risk management;
• restoring, preserving and enhancing ecosystems related to agriculture and forestry;
• promoting resource efficiency and the transition to a low-carbon economy;
• promoting social inclusion, poverty reduction and economic development in rural areas.

EU Member States and regions may also address issues of particular importance in their area such as:

• young farmers;
• small farms;
• mountain areas;
• women in rural areas;
• climate change mitigation, adaptation and biodiversity.

Budget

• The EAFRD’s budget was set at €99.3 billion in 2015. At least 30% of this must be used for measures to take care of the environment and combat climate change and 5% is reserved for local development strategies.
• Delegated Regulation (EU) 2015/791 revises the budget breakdown of EU support for rural development programmes (Annex I to Regulation (EU) No 1305/2013).

2017 amendment of the regulation

Regulation (EU) 2017/2393, which has applied since 1 January 2018, aims to simplify and improve farmers’ access to finance under the CAP. Among other things, it introduces:

• a new sector-specific income stabilisation tool providing compensation to farmers affected by a severe drop in their income;
• support for insurance contracts in cases where more than 20% of a farmer’s average annual production is destroyed, for example due to adverse weather conditions.

Implementation

The regulation requires rural development policy to be consistent with other policies in this area. EU-level rules and agreements are in place to ensure that EU funding is used effectively, minimising overlaps and inconsistencies.

COVID-19 pandemic

• Amending Regulation (EU) 2020/872 provides exceptional temporary emergency assistance to farmers and small and medium-sized enterprises (SMEs) active in the processing, marketing or development of agricultural products and cotton under the EAFRD.
• Member States must target the support at beneficiaries who are most affected by the COVID-19 crisis, based on available evidence and objective and non-discriminatory selection criteria.
• The support must take the form of a lump sum payment to be paid by 30 June 2021, based on applications for support approved by the national competent authority by 31 December 2020.
• The maximum amount of support must not exceed €7,000 per farmer and €50,000 per SME.

Exceptional temporary support

• Amending Regulation (EU) 2022/1033 introduces the possibility for Member States to provide for exceptional temporary liquidity support under the EAFRD for farmers and SMEs in response to the impact of Russia’s invasion of Ukraine. The support seeks to address the problems that put the continuity of farming activities and of small businesses that process agricultural products at risk – substantial rises in input costs, in particular for feed and fertiliser undertakings, and increased energy costs.
• Farmers and SMEs will be able to receive support of up to €15,000 and €100,000 respectively. This would be paid by 15 October 2023. Member States will therefore need to submit an amendment to their rural development programme(s) introducing this new measure.

Transitional rules for the years 2021 and 2022

• Amending Regulation (EU) 2020/2220 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 EAFRD in 2021 and 2022, until the new framework applies from 1 January 2023.
• In addition, exceptional temporary support to farmers and SMEs particularly affected by the COVID-19 crisis will tackle ongoing liquidity problems that threaten the continuity of farming and of small businesses active in the processing, marketing or development of agricultural products.
• The total amount of EU support for rural development from 1 January 2021 to 31 December 2022 will be a maximum of €26,896,831,880 in current prices, in accordance with the multiannual financial framework for the years 2021 to 2027.
• A further amount of €8,070,486,840 in current prices is to be made available as additional resources under the EAFRD for the recovery of the EU agricultural sector and rural areas for the years 2021 and 2022. The regulation lays down detailed rules on how these funds should be allocated to priorities such as economic and social development, climate action, animal welfare, etc.