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The Warsaw Voice » Special Sections » July 29, 2011
Polska... tastes good!
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Higher Payments for Farmers?
July 29, 2011   
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New rules on payments for farmers are among the European Commission’s proposals for the EU’s 2014-2020 perspective.

One of the proposals aims to reduce differences in direct payments per hectare of farmland among EU countries. As a result, the countries which now have the lowest payment rates would receive slightly more money at the expense of those who have the highest payments. At present, Belgian farmers, for instance, get 435 euros per hectare, while Latvian farmers only 95 euros. Polish farmers, with payments at 214 euros per hectare, or 80 percent of the EU average, are in the middle of the table.

Under the proposed rules, after 2013, direct payments per hectare would be growing in Poland every year and by 2020 they would be around 10 euros higher than in 2013 and close to the EU average. The highest increase in payments will be recorded in the Baltic states—by around 30 percent to 163 euros. At the same time, payments in countries such as Belgium will drop by almost 30 euros per hectare.

Direct payments for farmers were introduced in 1992 as part of a reform of the Common Agricultural Policy (CAP) and became the main support instrument in agriculture. The purpose of direct payments was to compensate farmers for a drop in their income caused by a major decrease in guaranteed prices.

The CAP reform plan adopted in Luxembourg in 2003 introduced significant changes. The new payment system, decoupled from production, replaced most of the direct aid existing until that time. It also introduced the principle of cross-compliance—to receive payments, farmers now have to maintain their farmland in good agricultural and environmental condition and respect regulations on public, animal and plant health, and animal welfare.

The reform continued in the following years, with changes introduced in 2004 to the tobacco, hop, cotton and olive oil sectors, in 2005 to the sugar sector, and in 2007 to the fruit and vegetable sector. The main objective of the changes was to introduce uniform forms of support based on aid decoupled from production.

A political agreement reached in November 2008 on CAP Health Check was a continuation of the Luxembourg reform. The EU adopted measures aimed at further decoupling direct aid from production by 2012.

Today, there are generally two types of single payments in the EU: Single Payment Scheme (SPS) and Single Area Payment Scheme (SAPS). The SPS is used in the EU15 and two new member states, Malta and Slovenia. SAPS, applied only in new member states, is a simplified form of the direct payment scheme.

Payments in new member states are subject to phasing-in, which means they are gradually raised to reach the EU15 level. Additionally, Poland decided to use Complementary National Direct Payments (CNDP) every year at the maximum level permitted by EU regulations.

The level of direct payments for Polish farmers has been growing every year since 2004. In 2010, it amounted to 100 percent of the aid granted to EU15 farmers—70 percent from the EU budget and 30 percent in supplementary payments from national sources.

In 2004-2010, supplementary payments from national sources were paid to Polish farmers growing basic crops such as cereals, oil and high-protein crops, producers of hop, potato starch, tobacco, and fodder crops grown in permanent grasslands—animal payments available since 2007. Additionally, Polish farmers have received sugar payments from the EU budget since 2006, as a consequence of the reform of the sugar market, as well as tomato payment and payment for soft fruit for processing since 2008. The last two types of payment were introduced as a result of the 2007 reform of CAP on the fruit and vegetable market.
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