UK farmers will receive just over €36 million, about £26.4 million, under the EU aid package agreed last week, Agriculture Commissioner Phil Hogan has announced.
Following a meeting with EU Agriculture Ministers in Brussels, Mr Hogan also revealed he had agreed to requests, including from the UK, for additional flexibility over BPS to make it easier for member states to make BPS payments from mid-October.
It is unclear at this stage, however, whether the concessions go far enough for the UK administrations to be able bring forward their payments without risk of heavy EU fines.
The aid package was announced last Monday, following a mass protest in Brussels by 6,000 farmers from across the EU.
Putting more detail onto the package today, Mr Hogan announced the targeted aid, the centrepiece of the package would amount to €420m, about £308m, across the EU.
The initial indications last week were that the aid would be targeted primarily at dairy farmers but Mr Hogan revealed he had subsequently agreed to allow member states to distribute it more widely, including to the pig sector.
Under the distribution criteria, the UK will receive the third highest allocation of €36.1m, with Germany, €69.2m, and France, €62.9m, receiving the most. Irish farmers will receive €13.7m.
You can see the full allocations here
Reflecting the ’significant drop in dairy prices over the past year’ across the EU, the vast majority, 80 per cent, has been allocated on the basis of milk quotas in the last year of the system.
The remaining 20 per cent will be allocated using criteria to ensure additional assistance is targeted at member States which have been particularly hit by the fall in pigmeat prices, the impact of the Russian ban, very low milk prices and this summer’s drought, Mr Hogan said.
He said "I am ready to allow Member States the maximum flexibility to target aid for appropriate measures to address the negative market impact on farmers, including those farmers impacted by falling dairy and pigmeat prices or which have been affected by drought."
Defra said it would be speaking to the devolved administrations in Scotland, Wales and Northern Ireland about distribution of the direct aid across the UK.
It will be up to the four UK administrations to decide how the money should be distributed among producers.
Farming Minister George Eustice said last week there would be a trade-off between the simplicity of a hardship fund paid to each dairy farmer and targeting the money at those who most needed it.
Mr Hogan has granted member states some scope to provide additional national aid to support farmers.
He said: "Such a facility could be particularly helpful to address cashflow issues.
"I am also conscious that some of you have already had recourse to state aid provisions under de minimis rules, and that there is little room for manoeuvre left to provide further legitimate state aid to farmers.
"For this reason, I am prepared to consider allowing Member States to provide complementary national aid to increase support to the measures taken under the targeted aid envelopes."
Of potentially greater significance to the UK, Mr Hogan also announced extra flexibility in the rules surrounding BPS, in line with requests being made by the UK and other member states.
"In response to the call from a number of Member States for further flexibility, I will now propose that Member States may pay 70 per cent of advances (from October 16) after the administrative controls have been completed and without the need to complete the on-the-spot checks," he said.
"This derogation is a significant concession, bearing in mind the possible financial risk and is proposed as an absolutely exceptional measure and it is at the absolute limit of the flexibility that the Commission can offer in the context of protecting the EU budget."
Last week, Defra Secretary Liz Truss asked the Commission to remove the need for every claim to be checked before any claims can be paid. She called for the Commission to waive fines that, under current rules, would be levied if all the checks were not made.
She said such a move would help Defra bring payments forward to the start of the December BPS payment window.
It remains to be seen whether the extra concessions granted will bring the level of assurance required to persuade the UK administrations to bring forward the timing of payments.
Mr Hogan also provided updates on new Private Storage Aid schemes for dairy and pigmeat.
He has increased the Private Storage Aid rate for skimmed milk powder by over 100 per cent and fix the storage period for a year.
Private Storage Aid scheme for pigmeat will be extended to fresh lard, responding to the proposal that some of the so-called ’fifth-quarter cuts’ should be included.
Around €30 million will be devoted to ensuring that EU milk will made available for the nutritional needs of refugees, in particular those displaced in difficult conditions in our neighbouring countries.
Mr Hogan said the package was a ’significant statement of support by the Commission for European agriculture’ and said the Commission was ’moving quickly’ to implement the package.
He said: "It is a comprehensive, decisive and robust support package for all 28 Member States and in the words of President Juncker is "a €500 million solidarity package for farmers.""#
He added: "I believe that our shared objective is to get this money flowing as quickly as possible and I urge you, therefore, to support that shared objective by ensuring that these measures are implemented without delay."
Farming Minister George Eustice said: “We recognise that many farmers are suffering financial difficulty at the moment and have been pushing the EU to agree a package of support to help our farmers deal with the serious current cash-flow problems.
“The support announced today will offer some relief to the immediate problems farmers face. While it’s right that the immediate focus is on support for farmers’ cash-flow problems, it is equally important that other elements of this package are not overlooked to safeguard farming for the future.
"Developing futures trading will help farmers manage volatility and we will continue to push the Commission to make rapid progress.”
NFU Scotland Chief Executive Scott Walker said: “As ever, the devil is in the detail but today’s speech by Commissioner Hogan has firmed up on what the aid package might mean for Scotland.
“Allowing Member States to pay up to 70 percent of its Pillar 1 support after all administrative controls have been completed but without the need to have completed the farm inspection process makes this more relevant to Scotland’s situation.
"We will look to discuss this concession with Scottish Government and identify if this is worth adopting or whether Richard Lochhead’s commitment to deliver a full support payment run in the normal early December window is of greater benefit to the industry."
“The UK’s allocation from the European emergency fund announced last week will amount to just over €36 million. We will work with Scottish and UK governments on how much of this package will come back to Scotland and how that money can be delivered back to farms.