Direct payments represent a core element of EU agricultural support. This instrument supports the safeguarding of incomes and risk protection of agricultural holdings in the form of a payment that is not linked to production. These payments are intended to cushion the impact of the, in part, considerable fluctuations of agricultural prices.
Direct payments also reward services to society provided by the agricultural sector which the market does not pay for. They serve as financial compensation for high standards because farmers in Germany and the EU operate at far higher standards of environmental, animal and consumer protection than farmers in some non-EU countries. They tend and preserve valuable cultural landscapes and natural resources through their work, enhance the attractiveness and settlement of rural areas as employers and produce renewable resources for other economic sectors.
2015 reform: Direct payments and Greening
The reform of the Common Agricultural Policy adopted in late 2013 thoroughly overhauled the direct payments scheme. Thus, payments should be focused, even more than has hitherto been the case, on rewarding specific services rendered to society.
Key elements of the new system include:
- area-based direct payments to farmers that are basically decoupled from agricultural production, leaving certain options to Member States, however, when it comes to fleshing out individual elements;
the so-called greening requiring farmers
- to adhere to maximum percentages of crops;
- maintain permanent grassland and
- provide at least 5 per cent of their farmland as ecological focus areas and apply farming methods there that are particularly beneficial to climate and environmental protection.
Since 2015, the following payments have replaced the single farm payment paid up to that date:
- a basic premium,
- a payment for agricultural practices beneficial to climate and environment protection (so-called "greening premium"),
- a redistributive payment benefiting small- and medium sized farms especially,
- a payment to young farmers, and
- a simplified payment to small producers.
Meanwhile, the Federal Ministry of Food and Agriculture (BMEL) has announced
- the reduction of the basic payment scheme's ceiling to establish the national reserve,
- the regional ceilings for the basic payment scheme for 2015,
- specific levels of the payment entitlements for the basic payment,
- the amount of the payment for the agricultural practices beneficial to climate and environmental protection for 2015,
- the amount of the payment for young farmers and
- the amount of the redistributive premium for 2015
The above-mentioned payments will only be granted if farmers meet basic requirements for farm management (cross-compliance). These basic requirements result from EU Directives and Regulations governing nature, environmental and animal protection and from standards for maintaining land in "good agricultural and environmental condition".
- As of: