Today, the European Commission proposed an exceptional measure funded by the European Agricultural Fund for Rural Development (EAFRD) to allow Member States to pay a one-off lump sum to farmers and agri-food businesses affected by significant increases in input costs. Such increases in prices, notably for energy, fertiliser and animal feed, are disrupting the agricultural sector and rural communities, leading to liquidity and cash flow problems for farmers and small rural businesses active in processing, marketing or development of agricultural products. By directly addressing these cash-flow challenges, helping to keep them afloat, the support will address the market disturbances and thus contribute to global food security.
Once adopted by the co-legislators, this measure will allow Member States to decide to use available funds of up to 5% of their EAFRD budget for the years 2021-2022 for direct income support for farmers and SMEs active in processing, marketing or development of agricultural products. This represents a potential budget of €1.4 billion in the EU. Member States are required to target this support to beneficiaries who are most affected by the current crisis and who are engaged in circular economy, nutrient management, efficient use of resources or environmental and climate friendly production methods. Selected farmers and SMEs could receive up to €15,000 and €100,000 respectively. The payments should be made by 15 October 2023. To make use of that exceptional possibility, Member States will have to submit a modification to their rural development programme(s) introducing this new measure.