Tag Archives: Aid to agriculture

Single Farm Payment

Single Farm Payment

Outline of the Community (European Union) legislation about Single Farm Payment


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Single Farm Payment

Document or Iniciative

Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 [See amending act(s)].


Since the reform of the Common Agricultural Policy (CAP) which took place in June 2003, production-related support has been gradually abolished and included in the Single Payment Scheme (SPS), the system of direct payments which European farmers benefit from. This Regulation continues this reform.

Direct payments are support granted to farmers directly under the framework of one of the support schemes listed in Annex I to the Regulation. Some of this support is still directly linked to production; however the majority of direct support is decoupled and granted under the auspices of an income support scheme called the “Single Payment Scheme” (SPS). Under the SPS, support granted to farmers is not linked to production.

The objective of this Regulation is to gradually integrate support coupled with production into the single payment scheme.



Direct support is subject to the principle of ‘cross-compliance’, according to which farmers must comply with a certain number of requirements in order to receive payments. These requirements relate to three areas:

  • public health, animal and plant health;
  • the environment;
  • animal welfare.

If the farmer does not comply with these requirements, they are penalised with a reduction in or cancellation of the direct payments.


Modulation is a system of compulsory progressive reduction of direct payments. Direct payments of over EUR 5 000 have therefore been reduced year on year in accordance with a particular percentage of up to 10 % by 2012.

The corresponding amounts are transferred to the European Agricultural Fund for Rural Development (EAFRD) to enhance rural development programmes, in particular for measures concerning climate change, renewable energies, water management and biodiversity. The modulation system does not apply to either the outermost regions, the Aegean Islands or to Member States subject to “phasing in”.

Farm advisory system

Farmers may take part in the farm advisory system set up by Member States to advise farmers with regard to compliance with regulatory requirements on management matters and good farming and environmental conditions.

Integrated administration and control system (IACS)

Each Member State must set up an integrated administration and control system which enables the efficiency and monitoring of the support granted to farmers by the EU to be improved. Through this electronic system, the Member State is able to deal with aid applications and be assured through administrative checks and on-site checks that payments are made properly, in order to prevent and, if necessary, manage irregularities and recover undue amounts.


Full payments are to be made to beneficiaries in one or two instalments per year between 1 December and 30 June of the following calendar year. The Commission may authorise advances. Farmers who have artificially created the conditions required for obtaining payments will not receive them.


The single payment scheme allocates aid to farmers irrespective of their production. The principal aim of this system of support is to ensure greater income stability for farmers. The latter henceforth receive the same amount of support regardless of their rate of production. This enables them to align their production with market demands. The aim of the Single Payment Scheme is also to improve the competitiveness and sustainability of agriculture.

National ceilings

Budget ceilings for the Single Payment Scheme for each Member State are published each year in a Commission Regulation.

National reserve

Member States set up a national reserve to grant rights to payments to new farmers and to those deemed to be in special circumstances, and to establish rights for farmers in areas subject to restructuring and/or development programmes.

Payment entitlements

In order to benefit from the Single Payment Scheme, farmers must first have payment entitlements, which they must declare together with the eligible hectares. The payment entitlements may be transferred from one farmer to another under certain conditions.

Historic implementation

In the “historic model”, entitlements are calculated based on the amount of direct payments each farmer has received during a reference period (generally the years 2000, 2001 and 2002. Other calculation options are possible in specific cases or when other integrations are concerned). Each direct payment is calculated by dividing the reference amount by the number of hectares which are entitled to the support received.

Regional implementation

Member States may opt to allocate payments at regional level. In that case, regional ceilings are to be established and divided among the farmers in the region. The value of their entitlements is obtained by dividing the financial envelope by the number of hectares declared in the first year of application of the scheme.

Partial implementation

Member States have had the option of partially implementing the single payment system. In this case, Member States keep part of the coupled aid and pay it to farmers in the form of a supplementary payment and according to production. These options will disappear in 2012, except for sheep/goats and suckler cows, two productions which may prove to be crucial in order to avoid agricultural land being abandoned in certain regions.


This Regulation forms part of the “health check” component of the Common Agricultural Policy after the 2003 reform. Since then the CAP has been resolutely aimed at simplification by making most payments directly to farmers under the Single Payment Scheme. Using the experience acquired since the introduction of the SPS, the Commission is extending the simplification of the CAP into the area of cross-compliance and that of existing coupled aid.


Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 73/2009


OJ L 30, 31.1.2009

Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 1250/2009


OJ L 338, 19.12.2009

State aid in the agriculture sector

State aid in the agriculture sector

Outline of the Community (European Union) legislation about State aid in the agriculture sector


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

State aid in the agriculture sector

Document or Iniciative

Community guidelines for state aid in the agriculture and forestry sector 2007-13 [Official Journal C 319 of 27.12.2006].


The guidelines cover state aid in the agriculture and forestry sector for the period 2007-13 and replace the previous guidelines (2000-06) established for agriculture.

These guidelines apply to state aid granted for the production, processing and marketing of agricultural products. Annex I of the Treaty on the Functioning of the European Union (TFEU) provides a detailed list of the agricultural products included. They do not apply to the fisheries and aquaculture sector but, unlike the previous ones (2000-06), are applicable for aid for some forestry activities.

European Union (EU) countries are still obliged to notify the Commission of state aid for certain Annex I products that are not covered by a common market organisation (CMO), but the Commission may only make observations on the aid schemes. EU countries are invited to take on board these observations to avoid the risk of infringement procedures.

State aid is categorised in the guidelines as follows:

  • rural development measures;
  • aid for risk and crisis management;
  • other types of aid;
  • aid for the forestry sector.


In line with Regulation (EC) No 1698/2005, which regulates EU support for rural development (the second pillar of the Common Agricultural Policy (CAP)), the guidelines set out the rules governing state aid for rural development measures or other closely related measures.

Aid may be authorised for investment in agricultural holdings in the following cases:

  • aid for investment in agricultural holdings proper;
  • aid for the conservation of traditional landscapes and buildings;
  • aid to relocate farm buildings where this is done in the public interest;
  • aid for necessary investment to improve the environment, hygiene conditions and animal welfare;
  • aid for additional costs due to investment made in EU countries to implement Directive 91/676/EEC;
  • aid for investment in compliance with applicable EU or national rules (only for additional costs incurred by young farmers to implement the rules within 36 months of their establishment).

Aid for investment in connection with the processing and marketing of agricultural products is authorised where it meets the conditions laid down in one of the following provisions:

  • Commission Regulation (EC) No 800/2008;
  • the Commission guidelines on national regional aid for 2007–13.

Environmental and animal welfare aid must meet the general objectives of EU environmental policy. This consists of the precautionary principle and the principles that preventive action should be taken, that as a priority environmental damage should be rectified at source and that the polluter should pay.

Aid to compensate for handicaps in certain areas must contribute to maintaining land use for agriculture, conserving rural areas and maintaining and promoting sustainable farming systems. To qualify for this aid, EU countries must demonstrate the handicaps in question and provide proof that the amount of aid avoids any overcompensation of these handicaps. The level of compensatory payments must be proportionate to the economic impact of the handicaps. Only the economic impact of permanent handicaps that lie outside human control may be taken into account for calculating the amount of compensatory payments.

Aid for meeting standards is designed to cover part of the costs incurred and loss of income as a result of applying standards in the fields of environmental protection, public health, animal and plant health, animal welfare and occupational safety.

Aid for the setting up of young farmers is for persons under 40 years of age who are setting up an agricultural holding for the first time as farm manager. Eligible beneficiaries may also submit a plan to develop their agricultural activities.

Aid for early retirement or for the cessation of farming activities is authorised subject to the conditions for permanent and definitive cessation of commercial farming activities.

Aid for producer groups aims to encourage the establishment of producer groups to concentrate their supply and adapt their production to market requirements. This aid is limited to small and medium-sized enterprises (SMEs). Eligible expenditure includes: rental of suitable premises, purchase of office equipment, including computer hardware and software, administrative costs (including staff), overheads and other expenses.

Aid for land reparcelling aims to support the exchange of plots of agricultural land and to facilitate the establishment of economically viable holdings. Aid may only be granted to cover the legal and administrative expenses involved in reparcelling up to 100 % of actual expenditure incurred.

Aid to encourage the production and marketing of quality agricultural products aims to improve the quality of agricultural products and to encourage farmers to participate in food quality schemes.

Under technical support in the agricultural sector, aid may be granted for the following measures:

  • education and training provided to farmers and agricultural workers;
  • replacement services to cover farmers’ absence due to holiday or sickness;
  • consultancy services provided by third parties;
  • organisation of forums to pool knowledge between enterprises and organisation of and participation in competitions, exhibitions or fairs;
  • publication of factual or scientific data;
  • publications.

Aid in the livestock sector targets support for the maintenance and improvement of the genetic quality of EU livestock.

Aid for the outermost regions and the Aegean islands aimed at meeting the needs of these regions will be examined by the Commission on a case by case basis, in accordance with the specific legal provisions applying to these regions, and with regard to the compatibility of the measures concerned with rural development programmes for the regions concerned.


State aid may be granted to manage crises in the sector of primary agricultural production. However, distortions of competition must be avoided as far as possible. Requiring a minimum contribution from producers to losses or the cost of such measures provides an incentive for minimising risk. The following risk and crisis management measures are eligible for state aid:

  • aid to compensate for damage to agricultural production or the means of agricultural production;
  • aid regarding TSE (transmissible spongiform encephalopathies) and fallen stock;
  • aid towards the payment of insurance premiums;
  • aid for closing production, processing and marketing capacity.

Aid for rescuing and restructuring firms in difficulty will be assessed in accordance with the applicable EU guidelines on state aid for rescuing and restructuring firms in difficulty.


Regulation (EC) No 800/2008 provides certain conditions under which aid for employment and aid for research and development are authorised.

There are horizontal aid instruments applicable to the agriculture sector. State aid for the agriculture sector is also covered by more general rules on the compatibility of aid with the TFEU, such as training aid (which is also covered by Regulation (EC) No 800/2008), state aid in connection with investment capital, state aid in the form of guarantees and state aid in the form of public service compensation.

Aid for advertising agricultural products may be authorised if the advertising campaign is centred on quality products – recognised EU designations (such as registered designation of origin – protected designation of origin (PDO) and protected geographical indication (PGI)) or for national or regional quality labels. Advertising campaigns must not be dedicated directly to the products of one or more particular company or companies.

Aid linked to tax exemptions under Directive 2003/96/EC may be granted by applying reduced or zero rates of taxation, provided that no differentiation is made in the agricultural sector. This covers products used as fuel for primary agricultural production or energy and electricity products used for primary agricultural production.

Aid in the form of subsidised short-term loans is no longer authorised.


Up to now there have not been any specific EU rules governing state aid for the forestry sector. Aid could be granted under EU general rules for all sectors or under certain specific regulations. In the interests of transparency, the Commission has therefore sought to more clearly define EU policy on state aid for the forestry sector. However, the guidelines apply only to living trees and their natural environment in forests and other wooded land. They do not apply to state aid for forest-based industries, timber transport, wood processing or other forestry resources used as products or for the purpose of energy generation.

Aid in the forestry sector is authorised for the following purposes:

  • to contribute directly towards maintaining and enhancing the ecological, protective and recreational functions of forests, local biodiversity and a healthy forest ecosystem;
  • afforestation of agricultural and non-agricultural land, establishment of agri-forestry systems on agricultural land, Natura 2000 payments, payments for the forestry environment, restoring forest potential, introducing prevention systems, and non-productive investments;
  • to cover additional costs and loss of revenue linked to using more demanding environmentally friendly forestry techniques than those imposed by the rules, if the owners concerned undertake voluntarily to use these techniques and this commitment meets certain conditions;
  • to purchase forestry land, provided that the intensity of aid is within the limits set for aid for investment in agricultural holdings;
  • training for forestry owners and workers and for consultancy services provided by third parties;
  • setting up forestry associations;
  • support for initiatives to spread new techniques, pilot or demonstration projects under the conditions laid down in the chapter on technical assistance in the agricultural sector in the guidelines.


All new aid schemes and all new aid must be notified to the Commission before they are implemented, unless the aid is covered by one of the exemption regulations adopted by the Commission. In contrast to the guidelines for 2000-06, only aid schemes of limited duration are now authorised, with the maximum duration being seven years. These new guidelines apply from 1 January 2007.

EU countries must submit annual reports and the Commission reserves the right to request additional information.

These guidelines apply until 31 December 2013. However, the Commission reserves the right to amend them in the light of important considerations of competition policy, agricultural policy, human and animal health or in order to take account of other EU policies or international commitments.


The new guidelines form part of the 2003 reform of the CAP, which confirms the importance of rural development and shows the Commission’s concern to make aid granted by EU countries in the agriculture sector more coherent. The guidelines for the period 2007-13 are based on Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development, and in particular Articles 88 and 89 thereof, which contain specific provisions regarding state aid.

Specific measures for the outermost regions

Specific measures for the outermost regions

Outline of the Community (European Union) legislation about Specific measures for the outermost regions


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Agriculture > General framework

Specific measures for the outermost regions

Document or Iniciative

Council Regulation (EC) No 247/2006 of 30 January 2006 laying down specific measures for agriculture in the outermost regions of the Union [See amending acts].


The Outermost Regions (OR) are listed in Article 349 of the Treaty on the Functioning of the EU:

  • the French Overseas Departments (OD): Guadeloupe, French Guiana, Martinique, Réunion, Saint-Barthélemy, Saint-Martin;
  • the Azores and Madeira (Portugal);
  • the Canary Islands (Spain).

These regions are called ‘outermost’ due to their geographical remoteness from Europe. The OR generally have a small surface area and are exposed to difficult climates. All these factors present difficulties for the agricultural development of the OR.

This Regulation lays down measures specific to the OR in the area of agriculture. The objective is to meet the additional costs related to the supply arrangements and agricultural activities of these regions.

Specific supply arrangements

Some agricultural products (listed in Annex I to the Treaty), considered to be essential for human and animal consumption or for the production of other products, are covered by specific support arrangements (or SSAs). Under this system, limited amounts of these products may be introduced from the EU with the granting of aid to cover a part of the additional costs related to remoteness or from third countries without being subject to any kind of import duty.

The maximum amounts of products covered by these arrangements are established in a forecast supply balance produced by Member States before being approved by the Commission.

The products covered by these arrangements can only be exported following the payment of import duties and the reimbursement of aid received under these arrangements. This condition does not apply to products which are exchanged between French overseas departments nor to products processed in the outermost regions using products which have benefited from the special arrangements, if they are:

  • exported to third countries or dispatched to the rest of the EU within the limits of dispatches or exports as part of traditional trade flows;
  • exported to third countries as part of regional trade flows;
  • dispatched from the Azores to Madeira or vice versa;
  • dispatched from Madeira to the Canary Islands or vice versa.

Under the specific supply arrangements, no import duty is due on certain types of sugar imported into Madeira and the Canary Islands and certain products from the rice sector imported into Réunion. Aid is also paid for supplies of milk-based preparations imported into the Canary Islands, which are not included in Annex I to the Treaty.

Support for local agricultural production

Community support programmes promote local agricultural production. They are prepared by the competent authorities appointed by the Member States concerned. Their preparation should take EU legislation and policy into account.

The Regulation stipulates that the Community support programmes should indicate:

  • a quantified description of the agricultural production situation in the regions in question;
  • a description of the strategy proposed and an appraisal showing the expected economic, environmental and social impact;
  • a description of the measures contemplated;
  • a schedule for the implementation of the measures and a general indicative financing table showing the resources to be deployed;
  • proof of the compatibility and consistency of the various measures under the programmes and a definition of the criteria and quantitative indicators to be used for monitoring and evaluation;
  • the steps taken to ensure the programmes are implemented effectively and appropriately, the definition of quantified indicators for use in programme evaluation and the provisions for checks and penalties;
  • the designation of the competent authorities and bodies responsible for implementing the programme, the designation of associated bodies and socio-economic partners, and the results of the consultations held.

Annual financial resources

The specific supply arrangements and the measures to promote local agricultural production benefit from the following annual financial allocations (in EUR million):

2007 financial year 2008 financial year 2009 financial year 2010 financial year 2011 financial year

French overseas departments






Azores and Madeira






Canary Islands






As regards the specific supply arrangements, financing should not exceed the following amounts:

  • For the French overseas departments: EUR 20.7 million
  • Azores and Madeira : EUR 17.7 million
  • Canary Islands: EUR 72.7 million

Accompanying measures

In addition to the specific supply arrangements and the Community support programmes, this Regulation also introduces other types of derogating measures promoting the agricultural development of the OR.

First, the Regulation provides for the option of increasing European financial aid provided to the OR under the Common Agricultural Policy. The OR benefit from derogations with regard to the maximum eligible amounts of financing from the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD).

In addition, the Regulation provides for the option for Member States of granting State aid for the production, processing and marketing of agricultural products listed in Annex I to the Treaty. However, this State aid remains subject to authorisation by the Commission.

Furthermore, France and Portugal may present programmes to the Commission for the control of organisms harmful to plants or plant products (with the exception of bananas) in their respective outermost regions. The EU contributes to the financing of these programmes on the basis of a technical analysis of the circumstances at the regional level, up to 60 % of eligible expenditure for the French overseas departments and 75 % for the Azores and Madeira.

Lastly, this Regulation makes provisions for derogations and exemptions that are specific to the outermost regions in four sectors:

  • wine: the Azores, Madeira and the Canary Islands benefit from derogations to Regulation (EC) No 1234/2007 for abandonment premiums, aid for release from storage and measures concerning distillation.
  • milk: only producers in the Azores are regarded as having participated in the overrun of the reference quantity for the purposes of sharing the additional levy under Regulation (EC) No 1788/2003. Madeira (within a local production limit of 4 000 tonnes of milk) and the French overseas departments are exempt from the additional levy scheme applicable to producers of cow’s milk laid down by Regulation (EC) No 1788/2003. Madeira is permitted to produce, solely for local consumption purposes, UHT milk reconstituted from Community milk powder, by derogation from Council Regulation (EC) No 2597/97.
  • livestock farming: the French overseas departments and Madeira may import bovine animals from third countries without applying the customs duties. This practice is allowed until the herd of local young male bovine animals reaches a sufficient level to ensure the continuation and development of local animal production.
  • tobacco: Spain may grant aid for the production of tobacco in the Canary Islands up to the limit of 10 tonnes per year. In addition, no customs duties are applied to direct imports into the Canary Islands of certain raw and semi-manufactured tobaccos.


Agriculture in the outermost regions has benefited from the POSEI system (Programme of Options Specifically Relating to Remoteness and Insularity) since 1991 for the French OD (POSEIDOM) and since 1992 for the Canary Islands (POSEICAN), the Azores and Madeira (POSEIMA). The objective of the POSEI system consisted of taking into consideration the geographical and economic handicaps of these regions.

This Regulation therefore reforms the POSEI system and repeals Regulations No 1452/2001, No 1453/2001 and No 1454/2001.


Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 247/2006


OJ L 42, 14.2.2006

Amending Act(s) Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EC) No 318/2006


OJ L 58, 28.2.2006

Regulation (EC) No 2013/2006


OJ L 384, 29.12.2006

Regulation (EC) No 1276/2007


OJ L 284, 30.10.2007

Regulation (EC) No 674/2008


OJ L 189, 17.7.2008

Regulation (EC) No 72/2009


OJ L 30, 31.1.2009

Regulation (EC) No 73/2009


OJ L 30, 31.1.2009

Regulation (EC) No 641/2010


OJ L 194, 24.7.2010

The successive amendments and corrections to Regulation (EEC) No 247/2006 have been incorporated into the original text. This consolidated versionis of documentary value only.

Related Acts

Rules for application

Commission Regulation (EC) No 793/2006 of 12 April 2006 laying down certain detailed rules for applying Council Regulation (EC) 247/2006 laying down specific measures for agriculture in the outermost regions of the Union [Official Journal L 145 of 31.5.2006].

See consolidated version .

Community support for combating harmful organisms

Commission Decision 2007/609/EC of 10 September 2007 on the definition of the measures eligible for Community financing in the programmes for the control of organisms harmful to plants and plant products in the French overseas departments, in the Azores and in Madeira [Official Journal L 242 of 15.9.2007].

Commission Decision 2009/126/EC of 13 February 2009 on the Community’s financial contribution to a programme for the control of organisms harmful to plants and plant products in the French overseas departments for 2009 [Official Journal L 44 of 14.2.2009].

Notification of information

Commission Regulation (EC) No 792/2009 of 31 August 2009 laying down detailed rules for the Member States’ notification to the Commission of information and documents in implementation of the common organisation of the markets, the direct payments’ regime, the promotion of agricultural products and the regimes applicable to the outermost regions and the smaller Aegean islands [Official Journal L 228 of 1.9.2009].