May 30, 2022

European Commission proposes lump sum support to farmers affected by increased input costs

The European Commission proposed an exceptional measure funded by the European Agricultural Fund for Rural Development (EAFRD) to allow EU member states to pay a one-off lump sum to farmers and agri-food businesses affected by significant increases in input costs.

Such increases in prices, notably for energy, fertiliser and animal feed, are disrupting the agricultural sector and rural communities, leading to liquidity and cash flow problems for farmers and small rural businesses active in processing, marketing or development of agricultural products.

By directly addressing these cash-flow challenges and helping to keep them afloat, the support will address market disturbances and contribute to global food security, according to the commission.

Once adopted by co-legislators, the measure will allow EU member states to decide to use available funds of up to 5% of their EAFRD budget for 2021-2022 for direct income support for farmers and SMEs active in processing, marketing or development of agricultural products. This represents a potential budget of €1.4 billion (US$1.5 billion) in the European Union.

Member states are required to target this support to beneficiaries who are most affected by the current crisis and who are engaged in circular economy, nutrient management, efficient use of resources or environmental and climate friendly production methods.

Selected farmers and SMEs could receive up to €15,000 (US$16,146) and €100,000 (US$107,637) respectively.

The payments should be made by October 15, 2023.

- European Commission