COVID-19 crisis: deal to speed up delivery of €8bn in aid to farmers

• All recovery money to be released in 2021 and 2022, not 2022-2024
• At least 37% of the funding will support environment and climate-related actions
• Minimum 55% of the aid to help young farmers and build resilient, sustainable, digital recovery

Parliament and Council reached a provisional deal on Tuesday on an EU recovery package for farmers, food producers and rural areas that should boost their resilience.

The political agreement still needs to be formally endorsed by both the Parliament and the Council.

Negotiators agreed to frontload all the funds made available for rural communities from the EU recovery instrument to 2021 and 2022. The Commission had proposed to release the funding between 2022 and 2024. Around 30% of the €8.07 billion aid will become available in 2021, and the remaining 70% would be released in 2022, says the agreed text.

MEPs managed to secure at least 37% of the recovery funding for organic farmers, for environment and climate-related actions and for animal welfare. At least 55% of the fund will support young farmers’ start-ups and on-farm investments that contribute to a resilient, sustainable and digital recovery. The share of recovery funding that EU countries will spend on environmentally beneficial practices should not be lower than the percentage of the EU rural development envelope they currently spend to this end.

Higher EU co-financing without contribution from EU countries

The EU will finance up to 100% of eligible measures from the additional funds provided by Next Generation EU. EU countries will not have to contribute any additional money from their national budgets.

Negotiators agreed that investments made by farmers and food processors that contribute to a sustainable and digital economic recovery can be supported up to a level of 75% of incurred costs. MEPs also managed to increase the ceiling for the business start-up aid from the Rural Development Fund for young farmers from €70.000 to €100.000.

Quotes

“The European Parliament has shown once again that it can lead and drive the EU legislative process, to respond to the real needs and calls for support from our citizens, our rural communities and our farmers and food producers. We managed to secure the EU recovery funding in record time to increase resilience, sustainability and to digitalise the sector; not just finance the business-as-usual solutions. By doing this, we are showing concrete EU solidarity with a sector that, even in the darkest days of the COVID-19 pandemic, has never let EU citizens down”, said rapporteur Paolo De Castro (S&D, IT).

“We have managed in a very short timeframe to agree that the desperately needed financial aid for EU farmers, food producers and rural beneficiaries will be released swiftly. Now we must quickly finalise the negotiations on the CAP rules for 2021 and 2022 so that, by the end of the year, we have relevant rules approved to help farmers to be more resilient in the future”, said Chair of the Agriculture Committee Norbert Lins (EPP, DE).

Next steps

The text on the Next Generation EU recovery instrument will be incorporated into the CAP transitional regulation. The agreed CAP transitional rules will then have to be endorsed by the Parliament and the Council before they can enter into force on 1 January 2021.

The EU recovery instrument needs to be agreed by the Council and is currently being negotiated under the MFF and Own resources package.