How is the European Commission supporting the agricultural and food sectors?

The European Commission has recently published its latest package measures to further support the most affected agricultural and food sectors during the coronavirus (COVID-19) pandemic.

The measures, announced originally on 22 April 2020, include private storage aid for the dairy and meat sectors, temporary authorisation for operators to self-organise supply in certain hard hit sectors, and flexibility in the implementation of market support programmes. On top of these market measures, the Commission has also allowed member states to use rural development funds to compensate farmers and small agri-food businesses, up to €5,000 and €50,000, respectively.

The Commission has now published a set of Questions and Answers (Q&A) designed to provide further detail about the measures:

How does private storage work? Which products does it include?

The Commission has decided to grant private storage aid for skimmed milk powder, butter, cheese, beef and sheep/goat meat that will be stored for a minimum period of two or three months and a maximum period of five or six months. The aim is to rebalance markets by reducing available supply.

Applications to participate in this scheme will open on 7 May 2020 for all products.

The maximum aid in these schemes is only fixed for cheese, at 100,000 tonnes. The budget allocated cannot be made public since this information is prone to distorting the market.

What is article 222? How will it benefit the targeted sectors?

Article 222 of the CMO Regulation (1308/2013) grants the possibility to the Commission to allow farmers, their associations, recognised producer organisations and recognised interbranch organisations to take collective actions in derogation of the competition rules to stabilise markets. It can only be activated under strict conditions for sectors that experience “severe market imbalances” in the form of oversupply.

The Commission has adopted authorisations based on Article 222 for the milk, live plants and flowers and potatoes sectors. For the potatoes sector, the measures can only apply for potatoes for processing.

The authorisations allow temporary joint measures by operators for a period of six months. Farmers and related bodies can take the following collective actions: market withdrawal and free distribution, joint promotion and planning of production. The conditions imposed by Article 222 are that such actions must strictly aim at stabilising the sectors concerned and they should not impair the functioning of the internal market.

The period of six months covered by the authorisations starts on 5 May 2020 for the potatoes, live plants and flower sector. It applies retroactively for the milk sector, starting on 1 April 2020.

What support will be provided for the wine sector?

The wine sector will benefit from the flexibility provided under market support programmes. More specifically, measures for the sector include:

• Increased flexibility of tools to control production potential, the so-called green harvesting tool. Exceptionally, wine producers will be allowed to use green harvesting in 2020, even if used in 2019. Normally, green harvesting cannot be used two consecutive years on the same vines. This measure aims to help to better manage the wine market in 2020
• Temporarily increasing the European Union’s contribution (from 50 to 60 percent) for restructuring and conversion of vineyards, green harvesting, harvest insurance, investments and innovation measures. This aims to provide financial relief to beneficiaries
• The possibility to include temporary new measures to the National Support Programmes such as the opening of distillation of wine in case of crisis (limited to industrial purposes, including disinfection and pharmaceutical, and to energy purposes), but also an aid to crisis storage of wine. The latter aims at easing the management of large volumes with no immediate marketing.

Other measures include some flexibility in terms of administration procedures, such as facilitating the modification process of programmes or lifting certain sanctions.

What other sectors will benefit from the flexibility given under market support programmes?

The other sectors included under this increased flexibility are the apiculture, olive oil, fruit and vegetables sectors.

The fruit and vegetable sector will benefit from an increased flexibility authorised for producer organisations and the implementation of their operational programmes for 2020. This includes, for example, the authorisation to suspend or adapt the implementation of their operational programmes for 2020. Some administrative penalties will also be softened.

For the olive oil sector, flexibility is exceptionally provided to beneficiaries by allowing, under certain conditions, the amendment of activities planned during the second and third implementation years of the three-year programmes to support the olive oil and table olives sector. This flexibility shall have no impact on the deadline for the payment of the EU financing.

Apiculture

For the apiculture sector, member states and organisations will be able to carry out the measures planned for the current apiculture year (2020) also after the 31 July. This means, for example, that they can hold seminars or treat against the varroa mite, without having to use the funding planned for the next apiculture year (2021).  

How will the new measure under rural development work?

This new measure will allow member states to pay a lump-sum to farmers and small agri-food businesses particularly affected by the COVID-19 crisis. It will allow member states to provide a targeted liquidity support to farmers and SMEs aiming at ensuring continuity of their business activity.