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 to gear the payments even more than before towards remunerating the provision of services to society.
Key elements of this 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 certain maximum percentages of crops;
- maintain permanent grassland; and
- have at least 5% of their farmland as ecological focus areas and apply farming methods there that are particularly beneficial to climate and environmental protection. You can find current information on the declared ecological focus areas for 2019 here.
Since 2015, the following direct payments have been granted in Germany:
- a basic premium;
- a payment for agricultural practices beneficial to climate and environment protection (so-called “greening premium”);
- a redistributive payment that particularly benefits small and medium sized farms;
- a payment to young farmers; and
- a simplified payment to small producers.
The above-mentioned payments are only granted if farmers meet basic requirements regarding farm management (cross-compliance). These basic requirements result from EU Directives and Regulations governing nature, environmental conservation and animal protection, and from standards for maintaining land in "good agricultural and environmental condition".
Further information is available at www.bmel.de/cross-compliance.
Please find statistical information on direct payments here (in German only)
Brochure (in German only)
A comprehensive overview of the new system of direct payments can be found in the free brochure entitled Implementation of the EU agricultural reform in Germany – 2015 edition (Umsetzung der EU-Agrarreform in Deutschland – Ausgabe 2015). The situation described in this brochure is no longer completely up-to-date, with some changes having been made and some others in preparation. Please find information about these changes (as of 7 April 2016) here. While there were no extensive changes to the direct payments in 2017, there have been more changes for the year 2018. Please find the main changes that apply from the application year 2018 (as of 29 March 2018) here.
In the meantime, the discussion on the reform of the Common Agricultural Policy has started at European level, including a further development in the system of direct payments.
Laws and regulations
The relevant laws and regulations relating to direct payments are provided on the German article "direktzahlungen".