EU changes existing farm income support system

EU changes existing farm income support system

The concept of a reserve to be used in the event of an agricultural crisis and its reimbursement mechanism were agreed as part of the 2013 CAP reform and were first applied in Fiscal Year 2014.

Under the new EU Common Agricultural Policy (CAP), the existing income support system will be amended and measures will be taken to ensure a more equitable distribution of financial support between farmers and workers across the EU.

Until 2023, the current income support measures will continue in accordance with the provisions of the CAP transitional regulation.

Why do farmers need support? The European Commission points to a number of reasons:

Agriculture is more dependent on weather and climate than other industries; There is an inevitable gap in time between consumer demand and the ability of farmers to increase supply, as growing more wheat or producing MILK takes time and investment; EU farmers are under pressure from increased global food trade and trade liberalization. Developments in global markets increase competition but also create new opportunities for the European agri-food sector; Globalization and fluctuations in supply and demand have made agricultural market prices more volatile in recent years, heightening farmers' concerns.

This uncertainty of agricultural business activity justifies the important role that the state plays in ensuring the security of farmers' incomes, the report said.

The European Commission says income support benefits nearly 6.3 million farms across the EU, often a significant share of farm income. On average, over the past 10 years, income support has accounted for nearly half of farmers' incomes.

In 2021, €879.8 million was deducted from direct payments under the Common Agricultural Policy (CAP) to fund the Agricultural Crisis Reserve. However, the €487.6 million crisis reserve was not used in 2021 and the European Commission decided that, together with some “additional allocations” available for reimbursement, “most of the amounts withheld from direct payments this year will be reimbursed ".

That is, European farmers will be reimbursed 686 million euros after the decision of the European Commission to return the money that was deducted from their direct payments during the 2021 fiscal year. The commission has confirmed that Irish farmers will receive more than 21 million euros. Top 5 countries whose farmers will receive a refund:

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