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FAQs on the agricultural reform and national implementation

Answers to frequently asked questions concerning the reform of the European Union's Common Agricultural Policy and its implementation in Germany

How much money will be available for EU agricultural support in the future?

Total annual funding of around EUR 6.3 billion in Community resources will be available for agricultural support in Germany from 2014 to 2020. EU support funds are divided across two pillars.

The direct payments to farmers, which are granted per hectare of farmland if the respective requirements are met, are financed under the first pillar. To receive these payments, there are explicit stipulations that specific standards (so-called cross-compliance) are observed. On average, these payments make up around 40 per cent of the farms' income. They are vital to sustain the livelihoods of small and medium-sized farms to support the cultivation of less-favoured areas. 30 per cent of direct-payment funds will, under the so-called greening scheme, be tied to compliance with specific climate-friendly and environmentally friendly farming methods that even go beyond the cross-compliance standards in place today.

The second pillar comprises specific aid programmes for sustainable and environmentally sound farming and rural development. This includes, inter alia, agri-environmental programmes and the support of organic farming. Under the second pillar, Germany has around EUR 1.3 billion in EU funds at its disposal per year that must be co-financed with further national funds.

How high will direct payments be on average in the future?

Direct payments in Germany will gradually decline to some 4.7 billion Euros by 2019 as a result of the budgetary cuts adopted at EU level, the redistributions in favour of new Member States and the shifting of direct payment funds to the second pillar that is planned in Germany. The new direct-payments scheme consists of a basic premium, the greening payment, young farmers' support and an additional payment for the first hectares. Direct payments will gradually be made uniform throughout Germany during the programming period. Regional disparities in the basic premium that currently still exist will be dismantled in three steps from 2017 to 2019. The level of the greening payment granted to farmers for additional environmental services is already the same throughout Germany. This also holds true for young farmers' support and for the additional premium for the first hectares. A total of 30 per cent of direct payments will be used for this greening scheme.

When all conversion processes have been completed, farmers will, on average, receive around 281 Euros in direct payments per hectare as of 2019. This encompasses a deduction of around 1 per cent of funds for the crisis fund. If these funds are not needed in certain years, direct payments will be slightly higher. With regard to average values, it should be borne in mind that due to the specific support measures for the first hectares and for young farmers, young farm operators and smaller farms will receive far more than 281 Euros per hectare and larger farms correspondingly less.

In what way will small and medium sized farms be strengthened in the future?

Since 2014 a supplement for the first few hectares is granted. This means that farms will receive some additional 50 Euros for the first 30 hectares and some additional 30 Euros for a further 16 hectares. A total of about 7 percent of the direct payments will be used in this way to improve support to small and medium-sized holdings. Farms with less than 95 hectares will be better off as a result while farms with more than 95 hectares stand to lose support funds thereby. Moreover, very small farms will be freed from certain requirements. In future, a special small farmers' scheme will apply to them which is interesting for farms which are eligible for support funds totalling less than 1250 Euros.

Is there targeted support for young farmers?

Young farmers under 40 years of age in the year in which they file their first application for the new regime will, under the first pillar, receive additional aid of approx. 44 Euros per hectare for a maximum of five years. This way the support ceilings admissible under Community law of up to 90 hectares per farm are fully exhausted. In addition, young farmers can benefit from increased funding of operational investments under the Länder programmes for the implementation of the second pillar (EAFRD).

What is meant by greening?

The greening aspect of direct payments under the first pillar means that farmers receive 30 per cent of their direct payments - the so-called greening premium - only if they provide specific additional environmental services. Following a transitional period, the premiums may, in the event of serious infringements against the greening requirements, even be cut by much more than the 30% direct payments' share accounted for by the greening premium.

Greening covers the preservation of permanent grassland areas (such as meadows and pastures), an intensified crop diversification (more diverse range of crops being planted) and the provision of so-called ecological focus areas on arable land.

Greening is obligatory for all farmers claiming direct payments. Only organic farms and farms falling under the small farmers' scheme are exempt from greening. Farms growing only permanent crops (e.g. wine, fruits and hop) are not affected either as there are no specific greening provisions for permanent crops. On top of that, there are further special provisions for smaller farms and farms with a high proportion of grassland.

Greening: What is meant by preservation of permanent grassland?

The scope for action provided by Community law for greening will be utilised for an effective protection of permanent grassland. A comprehensive ban on conversion and ploughing will apply to permanent grassland in flora, fauna and habitat areas (FFH areas) which are very sensitive in ecological terms. A single-farm authorisation system is in effect for the remaining permanent grassland. Under this system, conversion of permanent grassland to other uses will basically only be possible in future if new permanent grassland is established elsewhere in return. This helps to stabilise the total area of ecologically valuable permanent grassland.

Greening: What are the requirements for crop diversification?

Farms with up to 10 hectares of arable land are exempt from this obligation. Farms with 10 to 30 hectares of arable land must cultivate at least two crops. The main crop may not account for more than 75 percent in terms of area. Farms with more than 30 hectares of arable land must cultivate at least three crops, with the main crop covering a maximum of 75 percent while the first two crops combined may not account for more than 95 percent of the total area.

Farms with more than 75 percent of their farmland under permanent pasture or with more than 75 percent of their arable land under ley grass or land lying fallow are also exempted from this obligation provided that the remaining arable area does not exceed 30 hectares. Special provisions apply to specific farms participating in an annual land exchange.

Greening: What are ecological focus areas?

Farms are, in principle, initially required to designate five per cent of their arable land as ecological focus areas from 2015 onwards. These areas must be used in a way that they serve ecological interests (e.g. to preserve hedges or as buffer strips along water bodies). However, productive agricultural use may be permitted under certain conditions.

This includes, for instance, the cultivation of protein crops fixing nitrogen in the soil or the growing of catch crops. As far as ecological focus areas are concerned, farmers are granted a high degree of flexibility when it comes to selecting the suitable elements: the use of all area categories admissible under Community law is allowed in Germany. The different ecological value of the various types of ecological focus areas is reflected in weighting factors that have been stipulated by the European Commission in a delegated act. This means, for example, that a significantly larger area needs to be cultivated with catch crops for the area to be recognised as equivalent to a hectare of unused ecological focus areas. While the weighting factor for catch crops thus only amounts to 0.3, the weighting factor for fields lying fallow totals 1.0 and a weighting factor of 2.0 even applies to hedges that are of particular ecological value.

Value of the different types of ecological focus areas
Types/features of ecological focus areasFactor
Hedges, wooded strips, tree rows and ditches (if under CC protection)2,0

Buffer strips, field margins;
edges of arable fields, isolated trees, field copses and ponds (if under CC protection),

strips of eligible hectares along forest edges without production

1,5
Land lying fallow, agroforestry land, afforested land;
terraces, stone walls and wetlands (if under CC protection)
1,0
Areas with nitrogen-fixing crops (legumes)0,7
Intercropping, short-rotation plantations
0,3

Greening: Which requirements apply to the cultivation of catch crops or nitrogen-fixing crops on ecological focus areas?

For the recognition of specific land uses as ecological focus areas there are further prerequisites. These constitute a well-balanced compromise between the additional ecological benefits and arable farming requirements.

In the case of catch crops (for ecological focus areas), mixtures of 2 crop species at least from a list of approved species with defined maximum percentages (or undersowing with grass) need to be planted. Catch crops may be sown in the period from 16 July to 1 October. In doing so, no chemical-synthetic pesticides, no mineral nitrogen fertilizers and no sewage sludge may be used in the claim year. However, farm manure may be spread on these catch crop areas.

A list of approved nitrogen-fixing plant species was adopted. Winter crops or winter catch crops must be planted after the legume harvest in order to prevent nitrogen inputs into waters. Starter dressing and plant protection according to good professional practice are allowed on these ecological focus areas. A specific period of time has been defined during which the area must be covered with the nitrogen-fixing plants.

Greening: When will the commitments apply?

Greening has applied since 1 January 2015. The commitments always refer to the year in which the application is filed. In the case of a farmer, for instance, who decides to provide the ecological focus areas by planting catch crops, this means that the catch crops for the 2015 claim year need to be sown in the autumn of the year 2015 (by 1 October at the latest).

Will support funds be redistributed between the pillars?

Pursuant to the Act on the Implementation of Direct Payments for Agricultural Holdings, 4.5 percent of the funds under the first pillar (direct payments) will be shifted to the second pillar (rural development) as from 2015. This amounts to an average of approx. 229 million Euros per year being made available for the rural development programmes of the Länder between 2016 and 2020 which require no national co-financing. These funds are politically earmarked and are to remain entirely in the agricultural sector. They are to be used exclusively for agricultural purposes such as agri-environmental measures and the strengthening of husbandry practices with a special focus on animal welfare requirements, promotion of grassland and areas with natural handicaps such as mountain areas and the promotion of organic farming. An open review of the percentage being shifted has been scheduled for 2016/17 with the possibility of an increase from 2018 onwards.

Will the same level of support funds be available for rural areas in the future as is currently the case?

The promotional budget for rural development measures will even exceed previous levels. As a result of the reallocation, the Länder will, on balance, have 1.1 billion Euros extra for measures to promote sustainable agriculture. This more than offsets the nearly 9 percent cut in funds for rural development support (EAFRD), that had been decided at EU level on account of general budgetary savings. In the new programming period, four percent more EU support funds will be available for rural development measures than is currently the case. This constitutes a substantial improvement of financial assistance options in this field.

In order for EU support funds to benefit sustainable agriculture and rural areas in the future as well, the Länder need to ensure the required co-financing in the Länder budgets. The support funds from the Joint Task for the Improvement of Agricultural Structures and Coastal Protection also contribute to this. The Federal Government currently allocates funds in the order of 600 million Euros per year and the Länder about 400 million Euros to this Task.

Will there be any shifts in the allocation of support funds among the Länder?

The adopted implementation will result in different shifts of support funds among the Länder. Thus, the stepped-up support of the first hectares will ensure that above all those Länder with a high proportion of small and medium-sized farms will receive comparatively more money. Länder with many young farmers also stand to capitalise on this. A further shift ensues from the nationwide greening premium and the gradual alignment of the basic premium to a uniform amount throughout the country. Regional disparities have so far amounted to up to 70 Euros per hectare. The progressive adaptation of the premium until 2019 will allow a harmonised distribution. Certain shifts will also occur in the distribution of rural development funds. Those Länder that have hitherto received least money per hectare will in future obtain more funds. The increase in the particularly small amounts is funded by those Länder that have received the highest rates of aid to date.

In what way does the agricultural reform benefit animals and the environment?

The EU's agricultural reform makes Europe's agricultural sector greener and more sustainable. The centrepiece of the reform is an effective greening of direct payments under the first pillar. This means that 30 per cent of direct payments will only be granted to farmers on condition that farms provide additional environmental services that go beyond the currently applicable cross-compliance requirements. This is not only beneficial to the environment, but also puts the principle 'value for money in public services' even more into the spotlight.

The Länder will, in the future, be able to use the additional funds under the second pillar notably to promote the introduction and maintenance of organic farming and husbandry practices that are particularly respectful of animal welfare requirements. Moreover, the additional funds under the second pillar will be available both for area-based agri-environmental and climate protection measures and for intensified support to grassland sites of particular ecological importance. The Länder will have more money at their disposal under the second pillar also in order to promote farming in areas with natural handicaps including mountain areas.

What's next for rural development support (second pillar)?

In the 2014- 2020 programming period Germany will have appropriations in the order of 8.218 billion Euros from the EAFRD fund at its disposal for rural development support. Unused balances from the direct payments in the years 2013 and 2014 come on top of this as a result of the continuation of the current direct payments system until and including 2014. This adds up to a sum of 8.303 billion Euros in EU funds.

By taking a decision on the implementation of the CAP reform on 4 November 2013, the Conference of Agriculture Ministers (AMK) also decided on the distribution of EAFRD funds among the Länder. Distribution will accordingly be based on the previous allocation key of the old programming period (2007-2013), taking into account an area component: the percentage of farmland of each Land will count as 10 per cent weighting in the last year of the programming period. This goes hand in hand with the decision that allocation according to the historic key will expire at the end of the new programming period.

The sole application of the historic key leads to considerable differences in the funding among the Länder; gauged by the annual amount of support per hectare of agricultural land (UAA) the values range from 33 to 140 Euros/ha given a federal average of 71 Euros/ha. Each Land will receive a minimum amount of 50 Euros/ha to reduce this margin. The reallocation required for this will be financed by those Länder whose area-based payment exceeds the federal average. In order to allow for the special situations in Lower Saxony/Bremen and Rhineland-Palatinate, the amounts will be raised to 52 Euros per hectare for these Länder.

In addition, the Act on the Implementation of Direct Payments for Agricultural Holdings stipulated a shift from the first to the second pillar to the tune of 4.5 per cent of the direct payments' ceiling of 2015 to 2019. These funds will be available under the second pillar in the 2016-2020 period. They account for a sum of around 1.1 billion Euros. The funds are to remain in the respective Länder according to their proceeds. The distribution among the Länder thus ensues from the model for the national implementation of the direct payments scheme' as from 2015. These funds are to be earmarked for sustainable farming, notably via the support of grassland sites, area-based agri-environmental and climate measures, strengthening of particularly welfare-oriented animal husbandry and organic farming and the allowance for areas with natural handicaps (including mountain areas).

The allocation of EAFRD funds among the Länder has been incorporated into the partnership agreement for Germany that covers all EU funds and forms the basis for drawing up the Länder rural development programmes. The new support programmes were presented to the European Commission in summer 2014. The National Framework Regulation (NFR on the basis of the GAK Framework Plan), the Federal Programme for the National Network (www.netzwerk-laendlicher-raum.de) and the programmes for Saxony, Saxony-Anhalt, Bavaria, Hesse, North Rhine-Westphalia and Mecklenburg-Western Pomerania were approved between December 2014 and February 2015. The programmes for the other Länder – with the exception of Hamburg, which has not presented a support programme in accordance with the EAFRD Regulation – were approved in May 2015.

As of:
14.09.15

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