EU extends and broadens state aid rules for agriculture and livestock

In addition, the European Commission has announced a broader general exemption from state aid rules for all EU countries, starting already next year. This means government subsidies for agricultural projects aimed at biodiversity, climate, soil condition, health, and nature restoration will no longer be considered ‘market-distorting’.

With these two decisions, the way also seems to be cleared for buying out the biggest polluters in the Dutch nitrogen debate.

Earlier this year, Dutch officials and four Dutch ministers were unable to obtain clarity from the Competition department of the European Commission on whether the temporary scheme could be extended or expanded. It now appears that the ‘broadening’ requested by the Netherlands will be included in an EU-wide modernization of state aid rules.

A spokesperson for the European Commission could not comment on Wednesday on the legal connection of these two decisions for the Netherlands, but did mention that negotiations between The Hague and Brussels about the nitrogen dossier are still ongoing. This is also confirmed in The Hague.

“The European Commission is in contact with the Dutch authorities on measures that help reduce nitrogen. We cannot make further statements about the content of these contacts,” said a Commission spokesman.

It is clear, however, that a livestock farmer or grower may not use the (state aid) amount for purchased (animal) rights to start ‘the same activity elsewhere.’ The two press releases published on Wednesday did not refer to a ‘professional ban.’ In doubtful cases, a court may potentially be involved, a Commission spokesman suspected.

Extending the current limited Dutch scheme was obvious because similar extensions have already been made by most other EU countries. The Netherlands wants to extend it until December 31, 2027, with a budget increase of approximately €720 million, bringing the total budget of the current scheme to €1.2 billion.

The scheme is not only open to farmers but also to land-managing organizations and private land managers active in the agriculture and forestry sector.

That the European Commission now, on the same day, also proposes to broaden the state aid rules across the entire EU for government support to more and other climate- and environmentally friendly goals in agriculture has long been anticipated. A ‘reorientation’ on the competition impact was already announced earlier by Competition Commissioner Verstaeger.