State aid – agricultural and forestry sectors

SUMMARY OF:

Regulation (EU) 2022/2472 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union

Regulation (EU) No 1408/2013 on the application of Articles 107 and 108 of TFEU to de minimis aid in the agriculture sector

WHAT IS THE AIM OF THE REGULATIONS?

Regulation (EU) No 1408/2013 sets out the rules for de minimis* aid in the agriculture sector. It lays down the conditions under which small amounts of aid are not considered to be State aid under Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) and do not need to be notified to the European Commission under Article 108(3) TFEU.

It defines the threshold and conditions of the aid to ensure it does not distort trade or competition within the single market.

Regulation (EU) 2022/2472, known as the agricultural block exemption regulation, declares specific categories of aid compatible with European Union (EU) State aid rules and exempts them from prior notification to, and approval by, the Commission.

The changes enable EU Member States to provide aid quickly, simplify procedures and increase transparency, evaluation and control of the financial assistance given.

KEY POINTS

Regulation (EU) 2022/2472 applies to the following categories of national aid for:

micro, small and medium-sized enterprises (SMEs), as defined in Annex I, involved in:
- agricultural activities: production, processing and marketing;
- non-agricultural activities in rural areas;
environmental protection in agriculture;
conservation of cultural and natural heritage on agricultural holdings and in forests;
repair of damage from natural disasters in the agricultural sector;
research, development and innovation in agriculture and forestry;
other forestry measures.

It sets out:

the various thresholds below which aid does not need to be notified;
rules on maximum aid intensity and eligible costs;
specific conditions for each category of aid.

Aid must:

be transparent to allow for the precise calculation of the gross grant equivalent (grants, loans, guarantees, interest rate subsidies);
provide an incentive to change the behaviour of a potential beneficiary (a written request for aid has to be submitted before starting the project or activity);
be published on national and Commission websites (Annexes II and III set out the requirements).

The regulation requires:

the Commission to instruct Member States to notify future aid, if it finds that the aid already given does not meet the conditions in the legislation;
Member States to:
- send to the Commission a summary of each type of aid they give and provide an annual report;
- maintain detailed records, with supporting documentation, for at least 10 years;
- have aid schemes evaluated by independent experts after their implementation if spending is over €150 million in 1 year or €750 million over the lifetime of the scheme.

The regulation applies to the following aid categories.

SMEs active in primary agricultural production, processing of agricultural products and marketing of agricultural products:
- investment in farms to improve agricultural performance and sustainability, environmental performance and infrastructure;
- land consolidation;
- relocation of farm buildings;
- investments related to the processing and marketing of agricultural products;
- start-ups for young farmers, farming and producer groups and organisations;
- participation in quality schemes;
- knowledge exchange, information and advisory services;
- farm replacement services;
- agricultural product promotion;
- repairing damage from unfavourable weather, such as storms or severe drought;
- prevention, control and eradication of animal diseases and plant pests and repairs to any damage;
- livestock and fallen stock*;
- payment of insurance premiums and contributions to mutual funds;
- repairs to damage caused by protected animals*;
- conservation of agricultural genetic resources;
- animal welfare;
- agricultural cooperation.
Environmental protection:
- areas disadvantaged by the EU’s Natura 2000 programme (a network of core breeding and resting sites for rare and threatened species);
- agri-environmental-climate measures;
- organic farming.
Conservation of cultural and natural heritage on farms or in forests.
Repairs to damage from natural disasters.
Research development and innovation:
- R&D in agriculture and forestry;
- costs incurred from participation in the European innovation partnership.
Forestry:
- afforestation and creation of woodland;
- agroforestry systems;
- prevention and restoration of damage;
- improvements to forest ecosystems;
- compensation for certain compulsory requirements;
- environmental/climate services and conservation;
- knowledge exchange, information and advisory services;
- investment in infrastructure to develop, modernise or adapt the sector;
- technologies in processing, mobilising and marketing forestry products;
- conservation of forestry genetic resources;
- start-ups for producer groups and organisations;
- land consolidation;
- forestry cooperation.
SMEs in rural areas:
- basic services and infrastructure;
- business start-ups for non-agricultural activities;
- farmer participation in cotton and food quality schemes, including information and promotion activities;
- cooperation between SMEs;
- community-led local development projects.

The regulation replaces Regulation (EU) No 702/2014.

Regulation (EU) No 1408/2013:

applies to aid to companies producing primary agricultural products (e.g. live animals, fruit or vegetables);
does not apply to aid for products based on price or quantity offered for sale, for export to non-EU countries or dependent on the use of domestic goods;
sets basic limits over 3 fiscal years of national aid to:
- a single recipient (€20,000);
- all recipients (Annex I gives the maximum cumulative amount for each Member State);
allows Member States who operate a national central register to increase the amount over the 3-year period to a single company to €25,000 and to all recipients according to a table in Annex II;

Requires Member States to:

ensure aid is transparent by expressing it as a gross cash grant, in the case of grants or interest rate subsidies, or its equivalent for subsidised loans and guarantees;
grant new de minimis aid solely under the terms of the regulation;
keep records for 10 years;
provide the Commission with any information it requests in writing.

Regulation (EU) 2022/2046 amends the annexes to Regulation (EU) No 1408/2013 in the light of the United Kingdom’s departure from the EU. It replaces the maximum cumulative amounts for the entire United Kingdom originally set out in the annexes by amounts for Northern Ireland alone.

FROM WHEN DO THE REGULATIONS APPLY?

Regulation (EU) 2022/2472 applies from 1 January 2023 to 31 December 2029.
Regulation (EU) No 1408/2013 applies from 1 January 2014 to 31 December 2027.

BACKGROUND

Regulation 2022/2472 is part of a package of measures the Commission adopted revising State aid rules on agriculture, forestry and rural areas. These revised rules align State aid with the EU’s strategic priorities, notably the common agricultural policy and the European Green Deal.

For further information, see:

State aid: Commission adopts new rules for agriculture, forestry and fishery and aquaculture sectors (European Commission).

KEY TERMS

De minimis aid. Small amounts of national State aid which do not need to be notified to the Commission.

Fallen stock. Animals killed or that have died which were not slaughtered for human consumption.

Protected animal. Animal protected by EU or national legislation.

MAIN DOCUMENTS

Commission Regulation (EU) 2022/2472 of 14 December 2022 declaring certain categories of aid in the agricultural and forestry sectors and in rural areas compatible with the internal market in application of Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ L 327, 21.12.2022, pp. 1–81).

Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the agriculture sector (OJ L 352, 24.12.2013, pp. 9–17).

See consolidated version.