State aid – agricultural and forestry sectors

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;
• the conservation of cultural and natural heritage on agricultural holdings and in forests;
• the repair of damage from natural disasters in the agricultural sector;
• research, development and innovation in agriculture and forestry;
• other forestry measures.

The regulation 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 and interest rate subsidies);
• provide an incentive to change the behaviour of a potential beneficiary (a written request for aid must normally be submitted before starting the project or activity);
• ensure proportionality and comply with certain conditions if cumulated with other aid or other public funding;
• be published on national and Commission websites (Annexes II and III set out the requirements).

The regulation requires 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 one year or €750 million over the lifetime of the scheme.

The regulation empowers 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.

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 and 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 due to damage from natural disasters.
• Research, development and innovation:
  • research and development in agriculture and forestry;
  • costs incurred from participation in the European innovation partnerships.
• 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, and 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.

Regulation (EU) 2022/2472 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;
• 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.

Amending Regulation (EU) 2024/3118 introduces the following changes to Regulation (EU) No 1408/2013:

• Member States can increase the amount of aid over the three-year period to a single company to €50,000;
• the national caps are raised from 1.5 % to 2 % of the value of national agricultural output of each Member State and the reference period is extended from 2012–2017 to 2012–2023 to reflect the increased value of agricultural production in recent years;
• the sectorial cap, which made it impossible for Member States to grant de minimis aid exceeding 50 % of the national cap to the same product sector, is abolished;
• a mandatory central register of de minimis aid at the national or EU level will be introduced from 1 January 2027 to reduce administrative burden and increase transparency.