The European Commission has put online its draft new rules on state aids in the agriculture and forestry sectors. These new rules have not yet been adopted by the Commission. These drafts are made public to inform institutions, public authorities, organisations, companies and citizens who can make comments by 24 March 2014. The revision aims at modernising state aids and adapting them to the new Common Agricultural Policy (CAP).

This review of state aid rules takes place in the framework of a general State Aid Modernisation Initiative launched by the commission in May 2012. The objective is also to set the state aids rules needed now that a new CAP was agreed in December 2013, so as to maximise the efficiency of that policy, in particular its rural development pillar.

The new rules proposed should speed-up procedures and significantly reduce the administrative burden for public authorities when dealing with state aids in the agriculture sector. This means that potential beneficiaries will also be able to benefit from state aids more quickly.

The draft new rules widen the scope of the Agricultural Block Exemption Regulation (“ABER”, ie the set of rules defining the categories of state aid that can be granted by member states without prior notification to the Commission) to include new categories of aid. They make it for example possible to grant aid to the forestry sector receiving funding from the Rural Development Fund.

The proposal also intends to widen the scope of the agricultural guidelines for state aid in the agriculture and forestry sector (ie the general criteria that will be used by the commission when assessing state aids notified by member states). Compared to the current guidelines, the draft proposes to define the criteria and conditions for granting compensation for damage caused by protected animals.

The draft will also be discussed with member states in mid-March 2014. It will then be further developed, also on the basis of comments received by stakeholders throughout the whole process. The new rules are set to enter into force on 1 July 2014.

Competition is one of the main generators of growth and maintaining a system of free competition without distortion is one of the founding principles of the European Union.

EU policy as regards state aid aims to guarantee free competition, the efficient distribution of resources and the unity of the European market while still respecting its international commitments. State aid rules in the agricultural sector are based on three different principles. These must complement existing competition policies and have compatibility with CAP and World Trade Organisation agreements.

State aids rules have been under review in the context of the commission’s state aid modernisation initiative and in the light of the new rules that will apply to agriculture and rural development under the 2014-2020 Multiannual Financial Framework. A new ‘de minimis’  was adopted by the Commission on 18 December 2013 and entered into force on 1 January 2014.