News Agricultural policy
Hogan sticks to capping CAP funds
Despite the much criticism of capping farm payments within the Common Agricultural Policy (CAP), European Commissioner Phil Hogan stands by his position. From €60.000, companies will have to deal with a cap on this amount. The measure will come into effect at the end of this year.
The European Commission (EC) announced in mid-2018 that the large agricultural companies in the renewed CAP, which will take effect in 2021, with a capping of the cap amount have to deal with. In doing so, the EC is trying to respond to the criticism that large companies receive (too) high amounts.
€100.000 limit
Farms that receive more than €60.000 annually will have to deal with a reduction. The maximum amount to be received will be €100.000. The rest is capped and goes back to the Member State. The direct payment for small and medium-sized companies is actually going up. Member States are also required to set aside 2% of their direct payments in order to provide financial support to young farmers.
Despite the fact that there has been much criticism of the lowering and capping of the amounts, Hogan remains with the measure. Which writes Top Agrar. According to him, the capping ensures more targeted and fairer payments. He also mentions that the personnel costs of a company are still being looked at. Capping should not lead to job losses.
Family business helped
According to Hogan, large companies have the advantage of scale, which means that the costs per hectare are lower. The reasoning is that they can get by with fewer direct payments. "The money released by capping is used to stabilize the level of direct payments in the first pillar," Hogan said. As a result, the smaller companies actually benefit from it, such as family businesses that are common in the European Union.
The cap will come into effect this autumn, in the run-up to the new Multiannual Financial Framework (MFF) for 2021 to 2027. In total, the CAP budget is €365 billion.
Niels van der Boom
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