EU countries provide billions of euros in aid to agri-food sector amid farmer protests

7 months ago 27

European Union member states have spent billions of euros supporting agricultural and food industries over the past two years, following a temporary relaxation of the bloc’s state aid rules to help businesses cope with the impact of Russia’s war in Ukraine.

Euractiv’s analysis of available EU data on state aid directly targeting the agri-food sector has revealed significant disparities among member states.

Poland leads with almost €4 billion in public subsidies for agri-food, in particular, the grain sector, followed by Italy (€2.3 billion), France (€1 billion), and Romania (€770 million).

See below a data visualisation of state aid for agriculture and food for each EU member state.

Under the first scheme adopted by the European Commission in March 2022, the Temporary Crisis Framework (TCF), member states could allocate up to €35,000 to companies active in the primary production of agricultural products.

The aid ceiling was higher for other sectors, including food processors and fertiliser producers, which could receive up to €400,000 in public subsidies from direct grants, tax breaks, payment advantages, guarantees, and loans.

In March 2023, the original scheme was transformed into the Temporary Crisis and Transition Framework (TCTF).

The latest amendment of the TCTF in November 2023 increased the ceiling to €280,000 per farm, €335,000 for companies active in the fisheries sector, and a maximum of €2.25 million per company in other sectors.

The revised version of the scheme also extended the temporary state aid measures, including for agriculture and fisheries, until the end of June 2024, citing “uncertainty” caused by ongoing geopolitical tensions.

However, their phase-out is expected to be delayed further, as indicated in the conclusions of the latest EU leaders’ summit in Brussels on 21-22 March, which hinted at a extension of the temporary framework “to ease farmers’ financial strain.”

Days later, on 26 March, the EU farming Commissioner Janusz Wojciechowski confirmed that the Commission is preparing a proposal to prolong the TCTF once again, stating that state aid is “absolutely necessary” under the current “unusual circumstances”.

“Of course, for the long term, this is not a good solution because it can create inequalities in the market,” he cautioned.

The above data does not include the so-called de minimis aid, small sums considered not-market distorting that national authorities can directly allocate without notifying the Commission. For agriculture and fisheries, the threshold for de minimis has been increased to €20,000 and €30,000 per undertaking, respectively, from 1 January 2024. For other sectors, it is set at €300,000.

Poland tops the ranks, Italy follows suit

Poland emerges as the heavyweight spender in state aid for the agricultural sector, dishing out €4 billion in government subsidies under the crisis framework.

In 2023, Warsaw nearly matched its state aid, totalling €3 billion, with the amount it allocated to direct payments to farmers under the Common Agricultural Policy (CAP) reaching roughly €3.6 billion.

Euractiv’s analysis also revealed a strategic timeline: most state aid envelopes for agriculture were approved leading up to the country’s parliamentary elections on 15 October 2023. Over €2.5 billion received the Commission’s green light in the preceding five months.

Wojciechowski, whose party, Law and Justice (PiS), needed crucial support from rural voters for re-election, publicly boasted of the billions of euro in aid for farmers approved by the EU executive.

A considerable portion of Polish aid was targeted at grain producers in a bid to tackle rising farmer discontent fuelled by an increase in cheap imports from Ukraine and a drop in cereal prices

Meanwhile, Italy, an EU agricultural powerhouse, allocated €2.3 billion to agriculture, primarily through “umbrella schemes” targeting a wide range of sectors, including agriculture, livestock, fisheries and aquaculture. Most of its state aid schemes got the nod from the Commission between April and December 2022.

Buying a way out of protests?

In the wake of the farmer protests, Romania also disbursed large amounts of aid to the agricultural sector, mainly benefiting livestock farmers, beekeepers and fruit and vegetable growers.

The Commission approved six different Romanian support schemes totalling over €526 million in February and March, following a wave of unrest that started on 10 January.

Similarly, Bulgaria, one of the top spenders of state aid for agriculture, got the green light in March for two envelopes addressed to farmers from multiple sectors amounting to €170 million.

The country witnessed nationwide protests in February, with farmers calling for more subsidies and compensation for producers affected by increased agricultural imports from Ukraine.

Meanwhile, the new Polish government, led by Donald Tusk’s centre-right party, followed the same playbook as the previous administration.

In December 2023, Warsaw asked the Commission for authorisation to hand out €230 million to maise producers to appease farmers and clear a blockade at the border crossing with Ukraine

France favours organics

While France has also utilised state aid funds to appease protesting farmers, it has done so in a more targeted manner.

In March, Paris was authorised by the Commission to support organic farmers with a scheme of €90 million in direct grants.

In January, faced with farmer anger, French Prime Minister Gabriel Attal pledged €50 million in support for organic farmers due to a slowdown in sales of chemical-free food since 2021.

Marc Fesneau, the French minister of agriculture, announced at February’s Salon International de l’Agriculture, one of the world’s largest farming fairs, that the initial amount would be increased to €90 million, adding “Organic farming is a subject close to our hearts.”

France allocated €95 million to the organic sector in 2023 under the same temporary EU framework.

[Edited by Angelo Di Mambro and Alice Taylor]