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Review highlights continued importance of EU member states’ agricultural support alongside EU programmes

A review of EU member states agricultural support programmes has been published by Professor Alan Matthews of Trinity College Dublin, on the websiteCAPreform.eu. The analysis of these programmes, which are additional to the EU budget, has concluded that when looking at budget transfer to agriculture, both national as well as EU expenditures for every two euro contributed by the EU budget, national exchequers contribute a further euro both in co-financing EU expenditures as well as through state aid expenditures.

Many of these national expenditures are similar in nature to EU support measures and would fall under EU rural development programmes if the budget allocation were larger. However, given that EU funding is multi-annual and member state funding is determined on an annual basis, member state expenditures tend to be more sensitive to current economic conditions.In terms of member state expenditures, the most important categories of support in 2011 were Investment in agricultural holdings, livestock sector supports, insurance premiums, animal disease measures, which targeted areas with certain handicaps, and research and development. The noticeable trends are:

  • the reduction in member state expenditures since 2007/2008 (21%);
  • the increased support to insurance premiums (+509 million), handicaps in certain areas (+369 million), and animal welfare measures (+242 million support);
  • the reduction in expenditures in environmental protection measures (1,173 million).

According to the analysis, as a proportion of CAP expenditures, national agricultural support measures were at a peak in 2002, at 35%, but fell to 20% for the years 2003 to 2011. This is linked to the multiannual nature of EU allocations and the annual nature of member state allocations, which are much more sensitive to fiscal pressures.

EU member states aid to agriculture under the top 10 objectives 200211 ( million)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Investment in agri. holdings 1,065 1,188 1,645 1,839 1,725 1,656 1,806 1,631 1,410 744
Livestock sector 893 787 1,293 1,106 1,155 1,015 1,202 963 783 730
Insurance premiums 34 294 300 348 389 388 678 529 607 543
Animal diseases 794 865 651 554 530 648 635 605 615 483
Handicaps in certain areas 64 43 56 172 184 300 271 257 310 433
Research & development 692 719 862 677 612 584 563 468 458 408
Adverse climate events 148 697 1,066 305 498 632 414 367 172 384
Environmental protection 1,482 1,093 441 351 306 308 465 503 292 309
Early retirement 190 194 214 221 242 428 401 362 307 279
Animal welfare 2 2 1 1 6 6 67 79 65 244
Total 8,969 8,850 11,831 10,057 10,159 11,088 11,017 10,164 9,020 8,722