According to the European Commission, the proportion of farmers receiving low amounts of direct payments decreased in 2012 relative to 2011, and the average amount of support paid to farmers as direct payments increased, particularly in the member states that joined the EU in 2004 and 2007.
This is the main conclusion of the annual report on the distribution of direct payments by member states with final data for 2012 published recently by the Commission.
This evolution comes through a combination of ongoing structural adjustment, leading to a reduction in the number of farms, and the continued phasing-in of direct payments in newer member states.
Nonetheless, the report shows considerable variation in the distribution among beneficiaries in each member state: on average, taking a benchmark direct payment figure of €5,000, some 80 per cent of beneficiaries receive around 17 per cent of payments.
However, this global figure conceals important differences between member states, where, for example, less than 40 per cent of beneficiaries get less than €5,000 in direct payments in Luxembourg, France and Belgium, but the figure is higher than 75 per cent in Spain, Italy and Portugal (excluding those countries where payments are still being phased in). This is mainly so because the structure of payments depends largely on the structure of farms.
Looking to the future, the Commission is also keen to point out that with the new Common Agricultural Policy (CAP) agreed in 2013, a series of tools (for example internal and external convergence thresholds, degressivity of payments, the so-called redistributive payment, and the small farmers scheme) will ensure that direct payments will be distributed in a fairer way between member states, between regions and between farmers, with a further shift away from ‘historical references’.
According to Brussels, direct payments will also be made more sustainable thanks to the “greening” mechanism (30 per cent of direct payments will be linked to environmentally-friendly farming practices).
Introduced as part of the shift away from price support in the 1992 reform, direct payments amounted to €40.9bn in 2012, approximately 70 per cent of the support provided to farmers by the CAP. This represents a 1.7 per cent increase as compared to 2011, due to the continued phasing-in of direct payments in newer member states.
In 1991, more than 90 per cent of the CAP budget was spent on export refunds and the public intervention of production surpluses.
