The European Commission has announced an increase in the maximum amount of agricultural aid that Member States can provide without prior notification to Brussels, raising it to €50,000. Additionally, the national maximum limit has been raised to 2% of agricultural production.
In its proposal, Brussels aims to enhance the rights of producers within the food supply chain. This includes making written contracts a mandatory requirement between farmers and buyers, which must reflect cost fluctuations.
As stated, the maximum ‘de minimis’ aid limit per company over a three-year period has been increased from €25,000 to €50,000. This adjustment is intended to account for various factors, including past experiences, market changes, and significant sector-specific inflation observed in recent years, alongside projected inflation rates until the regulation concludes.
The European Commission has also raised the national maximum limit from 1.5% to 2% of a Member State’s agricultural production, calculated based on output data up to 2023. This extends the previous reference period, which was from 2012 to 2017, and eliminates the sectoral maximum limit that restricted Member States from granting ‘de minimis’ aid exceeding 50% of the national limit for the same product sector.
Furthermore, the Commission proposes to bolster the contractual rules between farmers and buyers, by making written contracts a general obligation and ensuring that long-term contracts adequately account for market changes and fluctuations in costs and economic conditions, as stated in their announcement.
Mandatory mediation mechanisms between suppliers and buyers are also part of the proposal, which includes strengthening producer organizations within the food supply chain and introducing a new regulation to ensure cross-border enforcement of rules against unfair commercial practices.
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