European Law Monitor

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The Commission adopts new rules on State aid in agriculture

The Commission on the 7th December 2006 adopted new rules on the granting of State aid in the agricultural sector. These rules are in two parts: an exemption regulation which allows Member States not to notify State aid given to small and medium-sized undertakings involved in agricultural production provided that certain requirements are met, and guidelines which complement the regulation and lay down rules applicable to notified aid. The two documents cover the period from 2007 to 2013.

Mariann Fischer Boel, the Commissioner responsible for agriculture and rural development, expressed her satisfaction at the adoption of these new rules, saying: "This new regulatory framework is consistent with the framework for rural development, and will provide the agricultural sector with an efficient, stable instrument to help its development over the period covered. Moreover, the ability to exempt certain types of State aid will be a genuine relief to the sector, especially when farmers are in genuine and urgent need."

The new rules have been designed to be fully in line with the Commission's rural development policy and therefore constitute a step in the simplification process launched by the Commission's Communication entitled "Simplification and better regulation for the common agricultural policy".

As part of this simplification process, the guidelines on State aid for advertising and those on tests for bovine spongiform encephalopathies, fallen animals and slaughterhouse waste will be revoked, as will the Commission's Communication on the granting of aid in the form of management credits. The guidelines on State aid in the agricultural sector, which cover the period 2000-2006, will however continue to apply in very specific cases for a limited period after 1 January 2007.

The new categories of aid included in the new guidelines include aid for compliance with standards, "Natura 2000" aid and aid relating to the payments provided for in Directive 2000/60/EC (water policy), aid relating to exemption from excise duties as provided for in Directive 2003/96/EC (taxation of energy products and electricity) and aid to the forestry sector.

As regards the processing and marketing of agricultural products, the granting of State aid will from now on by governed by the provisions applicable to State aid in the industrial sector.

The exemption regulation will make it possible for aid to be granted to farmers faster, which is especially important, for example, where they sustain losses due to bad weather or animal or plant diseases.

Alongside these two texts, there is still a de minimis regulation under which Member States may grant aid which, provided specific requirements are met, is not regarded as State aid as long as a certain ceiling is not exceeded (3 000 euros per farmer over three years).