Support & agricultural social policy
Rural areas are facing major challenges due to demographics and climate change. Agriculture is under constant pressure to become more competitive in response to globalisation and technological advances. The federal government, the Länder (federal states) and the EU provide support for these difficult adjustment processes with tailormade programmes. The goal is to maintain secure jobs, optimum value creation and high quality of life in rural areas.
Current EU agricultural support is largely based on direct payments to the owners of agricultural holdings. They were originally introduced to compensate for the falling support prices of major agricultural products.
Direct payments make an important contribution to income protection and risk coverage for agricultural holdings. They reward services performed by the agricultural sector for the common good that are not remunerated by the market. Direct payments represent financial compensation for complying with the EU's high standards in environmental conservation, animal welfare and consumer protection, which are more stringent than the production requirements in non-EU countries.
Single farm payment
With the introduction of the single farm payment scheme in Germany in 2005, the direct payments, which originally related only to products, were, in the course of the following years, fully decoupled from production and incorporated into the scheme. The so-called single farm payment is not linked to production. The size of the payment depends on the farm size and the availability of so-called payment entitlements. The payment entitlements per eligible hectare are now at a uniform level within a particular region (usually the federal state).
The decoupled direct payments (single farm payment scheme) are granted regardless of agricultural production. The agricultural holdings can thus align their production – flexibly and according to their respective market opportunities – to the needs of the market. Compared with the "market organisation measures" that used to dominate the previous agricultural policy, decoupled payments support the market orientation of producers. They have little or no trade-distorting impact upon prices or production patterns on the world market or in developing countries.
The granting of direct payments is directly linked to compliance with numerous requirements imposed by the cross compliance instrument and others. Compliance with 19 existing EU Regulations and Directives in the fields of nature, environmental and animal protection and food safety is continuously and strictly monitored. Requirements include erosion-prevention measures, varied crop rotation patterns and measures to retain soil fertility. Greening and maintenance measures are to be taken for all uncultivated areas in order to maintain agricultural land in good agricultural and environmental condition. The removal of landscape features, such as hedges, tree rows and field copses is prohibited even if this would make production more profitable for the farmer.
Joint Task on Agricultural Structures and Coastal Protection
In Germany, the Joint Task for the Improvement of Agricultural Structures and Coastal Protection (GAK) is an essential element of the National Strategy for the Development of Rural Areas and constitutes the thematic and financial core of many Länder programmes.
Financial support within the framework of the Joint Task is aimed at making the agricultural and forestry sectors efficient, competitive and oriented towards future challenges, while safeguarding the vitality of rural areas and improving coastal protection. It is the most important national support instrument for agriculture, coastal protection and rural areas.
The GAK contains a broad range of agristructural and infrastructural measures. Through the scheme, more than EUR 600 million of federal funds alone are made available for the development of agriculture and rural areas every year. Together with the Länder funds, the total resources of the GAK amount to more than EUR 1 billion a year. Added to this is funding from the European Agricultural Fund for Rural Development (EAFRD) in the order of nearly EUR 1.2 billion alongside additional funding from the Länder and municipalities.
Social policy in agriculture
Agricultural social policy takes a positive and targetoriented approach towards helping active farmers and their families to establish the conditions for developing efficient and competitive agriculture. The agricultural social security system provides farmers and their families with financial protection against the vicissitudes of life (illness, need for longterm care, work-related accidents, reduction in earning capacity, old age and death of the insured person). As a special profession-based system, it is uniquely focused on providing self-employed farmers with the best possible social protection and on offering welfare support to cushion the impact of structural change in agriculture.
Absorbing the financial impact of structural change is the responsibility of society as a whole. This is why the federal government will spend around EUR 3.66 billion on financial support within the framework of agricultural social policy in 2013.
The ongoing reforms are designed to ensure that the agricultural social security system is sustainable as an independent welfare system tailored to the needs of self-employed farmers, while keeping it affordable for farmers. In order to achieve these goals, the organisational setup of the agricultural social security system was fundamentally modernised by the Restructuring of the Agricultural Social Security System Act (LSV-NOG) that came into effect on 1 January 2013.
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