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Frequently Asked Questions on the Background of the Current Status of CAP

Frequently asked questions on the 2014 reform of the common agricultural policy

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

Total annual EU funding of around € 6.3 billion is available for agricultural support in Germany from 2014 to 2020. EU funding is 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, specific standards (“cross-compliance”) must be observed. On average, these payments make up around 40 % of the farms’ income. The payments are vital to sustain the livelihoods of small and medium-sized farms and to support the cultivation of less-favoured areas. 30 % of direct-payment funding is, under the “greening scheme”, tied to compliance with specific climate-friendly and environmentally sound farming methods that even go beyond the cross-compliance standards in place today.
  • The second pillar comprises specific funding programmes for sustainable and environmentally sound farming and rural development. These include agri-environmental programmes and the support of organic farming. Under the second pillar, Germany has around € 1.3 billion in annual EU funding at its disposal, which must be co-financed with national funding.

How high are direct payments on average?

Direct payments in Germany have gradually declined to just over € 4.7 billion in 2019 as a result of the budgetary cuts adopted at EU level in 2013, the redistributions in favour of new Member States, and the scheduled shifting of direct payment funding in Germany to the second pillar. The direct-payments scheme consists of a basic premium, the greening payment, young farmers’ support and an additional payment for the first hectares. Direct payments are gradually being made uniform throughout Germany during this funding period. Regional disparities in the basic premium were dismantled in three steps from 2017 to 2019. The level of the greening payment granted to farmers for additional environmental services has been the same throughout Germany from the beginning. This also applies to young farmers’ support and for the additional premium for the first hectares. A total of 30 % of direct payments is used for this greening scheme.

Now that all transition processes have been completed, farmers on average receive around € 281 in direct payments per hectare as of 2019. This encompasses a deduction of around 1 % of funding for the crisis fund. If the crisis 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 receive considerably more than € 281 per hectare and larger farms correspondingly less.

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

These farms have been granted a supplement for the first few hectares since 2014. This means that farms additionally receive a roughly € 50 for the first 30 hectares and roughly € 30 for a further 16 hectares. A total of about 7 % of the direct payments is used in this way to improve support to small and medium-sized holdings. As a result, farms with fewer than roughly 95 hectares are better off while farms with more than 95 hectares receive less funding. Moreover, very small farms will be freed from certain requirements. In future, a special small farmers’ scheme will apply to farms which are eligible for funding totalling less than € 1250.

Is there targeted support for young farmers?

Young farmers who are under 40 years of age in the year in which they file their first application for the new regime receive additional funding of approx. € 44 per hectare for a maximum of five years under the first pillar. This fully exploits the maximum admissible funding under EU law of up to 90 hectares per farm (changes applicable since the 2018 application year). In addition, young farmers can benefit from increased funding of operational investments under the federal states’ 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 30 % of each farmer’s direct payment – the “greening premium” – is dependent on the farmer providing specific additional environmental services. Following a transitional period, the premiums may, in the event of considerable infringements of the greening requirements, even be cut by much more than the 30 % of the direct payment that is accounted for by the greening premium.

Greening covers the preservation of permanent grassland areas (such as meadows and pastures), a greater crop diversification (a more diverse range of crops being planted) and the provision of “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, fruit, and hops) are not affected either, as there are no specific greening provisions for permanent crops. In addition, 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 provided by EU law for greening activities is utilised to ensure effective protection of permanent grassland. There is a comprehensive ban on converting and ploughing permanent grassland that is, as of 1 January 2015, located in flora, fauna, and habitat areas (FFH areas), which are ecologically very sensitive. A single-farm authorisation system applies to the remaining permanent grassland. The conversion of permanent grassland (which since spring 2018 also includes ploughing) is generally only permissible if new permanent grassland is created elsewhere (or in the same location in case of ploughing). This helps to stabilise the total area of ecologically valuable permanent grassland (changes applicable since the application years 2016 and 2018).

Greening: What are the requirements for crop diversification?

Farms with up to 10 hectares of arable land are exempt from this requirement. Farms with 10 to 30 hectares of arable land must cultivate at least two different crops. The main crop may not account for more than 75 % 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 % while the first two crops combined may not account for more than 95 % of the total area (for details, see section 4.3.2 of the information sheet as well as the changes applicable since the 2018 application year )

Farms with more than 75 % of their farmland under grassland (permanent pasture, ley grass, or other herbaceous forage) or with more than 75 % of their arable land under ley grass, other herbaceous forage, 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 5 % of their arable land as ecological focus areas from 2015 onwards. These areas must be used in a way so 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 that fix 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: all the area categories that are admissible under EU law are 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 an ecological focus area of a hectare that is not put to agricultural use. While the weighting factor for catch crops thus only amounts to 0.3, the weighting factor for fields lying fallow totals 1.0 and hedges even have a weighting factor of 2.0 since they 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, and field copses (if under CC protection);
strips of eligible hectares along forest edges without production,

new since 2018: areas lying fallow and used for honey plants

(pollen-rich and nectar-rich species)

1,5

Fallowing, agroforestry land, and afforested land;

stone walls, terraces, and wetlands (if under CC protection)
1,0
Areas with nitrogen-fixing crops (legumes) (increased in 2018)1,0

Catch crops,

short-rotation plantation (increased in 2018)

new since 2018: areas with miscanthus grass, areas with silphium perfoliatum

0,3

0,5

0,7

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

There are additional requirements for certain land uses if the land is to be recognised as an ecological focus area. 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 at least 2 crop species from a list of approved species with defined maximum percentages (or undersown crops with grass) need to be planted. Sowing of undersown crops must take place before 1 October. No chemical-synthetic pesticides, no mineral nitrogen fertilisers, and no sewage sludge may be used on these in the application year. However, farm manure may be spread on these catch crop areas. No pesticides of any kind may be used between sowing the catch crop and 31 December.

There is a defined list of approved nitrogen-fixing plant species. Winter crops or winter catch crops must be planted after the legume harvest in order to prevent nitrogen inputs into waters. Starter dressing according to good professional practice is allowed on these ecological focus areas. No pesticides may be applied between sowing and harvesting. A specific period of time has been defined during which the area must be covered with the nitrogen-fixing plants.

Please see the information on changes applicable from the application years 2016 and 2018 for further requirements regarding the management of ecological focus areas, e.g. lists of suitable protein crops and catch crops and minimum and maximum widths of specific elements.

Greening: Since when have the requirements applied?

Greening has applied since 1 January 2015. The requirements always refer to the year in which the application is filed.

Was funding reallocated between the pillars within the scope of the 2014 reform?

Pursuant to the Act on the Implementation of Direct Payments for Agricultural Holdings (Gesetz zur Durchführung der Direktzahlungen für landwirtschaftliche Betriebe), 4.5 % of the funding under the first pillar (direct payments) was shifted to the second pillar (rural development) every year between 2015 and 2019. This amounts to an average of approx. € 229 million per year being made available for the federal states’ rural development programmes between 2016 and 2020 which require no national co-financing. These funds are politically earmarked and 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 naturally disadvantaged areas such as mountain areas, and the promotion of organic farming.

How is funding allocated to rural areas for the 2014–2020 period?

The funding budget for measures in rural areas has increased in comparison with the previous funding period. As a result of the reallocation, the federal states will, on balance, have € 1.1 billion extra at their disposal for measures to promote sustainable agriculture. This more than offsets the nearly 9 % cut in funding for rural development support (EAFRD) which was decided at EU level on account of general budgetary savings. In the coming programming period, four percent more EU funding is 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 funding to benefit sustainable agriculture and rural areas, the federal states need to guarantee the required co-financing in the state budgets. The funding from the Joint Task for the Improvement of Agricultural Structures and Coastal Protection also contributes to this. The Federal Government currently allocates funding in the order of € 600 million per year and the federal states about € 400 million to this Joint Task.

Did the 2014 reform involve the reallocation of funding between federal states?

The adopted implementation resulted in different shifts of funding among the federal states. Thus, the stepped-up support of the first hectares ensures that above all those federal states with a high proportion of small and medium-sized farms receive comparatively more money. Federal states 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 previously amounted to up to € 70 per hectare. The progressive adjustment of the premium in the period up until 2019 provides for a standard distribution. Certain shifts also occurred in the distribution of rural development funding. Those federal states that previously received the least amount of money per hectare now obtain more funding. The increase in the particularly small amounts is funded by those federal states that previously received the highest funding rates.

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

The EU agricultural policy makes Europe’s agricultural sector greener and more sustainable. Its centrepiece is an effective greening of direct payments under the first pillar. This means that the granting of 30 % of the direct payments to farmers will be dependent on the respective farms providing additional environmental services that go beyond the currently applicable cross-compliance requirements. This is not only beneficial to the environment, but also highlights the principle of ‘value for money in public services’ even more.

The federal states can also use the additional funding under the second pillar, notably to promote the introduction and maintenance of organic farming and husbandry practices that are particularly geared to animal welfare requirements. Moreover, the additional funding under the second pillar is available both for area-based agri-environmental and climate stewardship measures and for greater support for grassland sites of particular ecological importance. The federal states also have more money at their disposal under the second pillar in order to promote farming in naturally disadvantaged areas, including mountain areas.

How much funding is available for rural development support (second pillar)?

Germany has EU funding of € 8.303 billion at its disposal for rural development support in the 2014–2020 funding period.

In addition, the Act on the Implementation of Direct Payments for Agricultural Holdings (Gesetz zur Durchführung der Direktzahlungen für landwirtschaftliche Betriebe) stipulated a shift from the first to the second pillar to the tune of 4.5 % of the direct payments’ ceiling in 2015–2019. This funding has been available under the second pillar in the 2016–2020 period. It amounts to roughly € 1.1 billion. The funding is to remain in the respective federal states according to their proceeds. The distribution among the federal states is therefore based on the model for the national implementation of the direct payments scheme from 2015. This funding is earmarked for sustainable farming, notably via the support of grassland sites, area-based agri-environmental and climate measures, the strengthening of particularly welfare-oriented animal husbandry and organic farming, and the compensatory allowance for naturally disadvantaged areas (including mountain areas).

The allocation of EAFRD funds among the federal states has been incorporated into the partnership agreement for Germany that covers all EU funding and forms the basis for drawing up the federal states’ rural development programmes as well as the federal programme for the national network (National Network Unit for rural areas) (www.netzwerk-laendlicher-raum.de).

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