The European Commission will allow EU countries to further expand the temporary state aid to agricultural enterprises affected by the consequences of the war in Ukraine. In June, a maximum of 62,000 euros per enterprise was permitted, which is now being increased by half to 93,000 euros. Additionally, the scheme is extended by one year.
Agriculture Commissioner Janusz Wojciechowski and Competition Commissioner Margrethe Vestager will discuss their proposal on Monday and Tuesday at the Agriculture and Fisheries Council in Luxembourg. Last month, EU President Ursula von der Leyen hinted at more financial support for affected companies in her annual State of the Union address.
To finance this, EU countries may use funds from the large EU Recovery Fund, which was initially intended only to repair the economic consequences of the coronavirus pandemic. Meanwhile, the Energy Ministers have decided that EU countries may also use the capped excess profits of gas and oil companies for targeted support to affected agricultural enterprises.
Fertilizer factories will also soon qualify for financial aid. The support may be granted in the form of direct subsidies, tax and payment advantages, or other forms such as repayable advances, guarantees, loans, and equity, according to a note from the European Commission. Agriculture Commissioner Wojciechowski is likely to make announcements next week regarding a European fertilizer strategy.
The EU farmers' lobby, COPA-COGECA, recently asked the Commission to relax the state aid rules. Commissioner Vestager is currently working on this, but a structural adjustment of the current rules will take considerable time.