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European Commission authorizes drought aid for agriculture and fish farms in Germany

Wednesday, November 12, 2003

The European Commission has today authorized Germany under EU state aid rules to pay national aid of €90 million to agricultural holdings and fish farms in several German Länder. The aid will compensate the farmers for losses incurred as a result of the extremely dry weather in 2003. The aid will be financed through funds from the Federal Government and the Länder of Baden-Württemberg, Bavaria, Brandenburg, Mecklenburg-Western Pomerania, Lower Saxony, Saxony, Saxony-Anhalt and Thuringia, and will be carried out in the years 2003 and 2004.

Commenting on the decision Commissioner Franz Fischler, responsible for Agriculture, Rural Development and Fisheries, said: “The excellent co-operation between the German authorities and my services has made it possible to approve this aid scheme in record time in order to quickly help farmers in this difficult situation.”

The aid will be in the form of direct grants or interest subsidies for capital market loans. The capitalised interest subsidy is normally a maximum of 10% of the loan amount. The term of the loan may not exceed four years, with a period of grace of one year. Where a direct grant is paid, it may not exceed 20% of the loss of revenue incurred. The losses will be determined at individual holding level. Holdings whose gross production of the relevant crop or in aquaculture is at least 30% below the level for a normal year can apply for aid. In less-favoured areas, the losses have to be at least 20% of an average year.

According to the Community guidelines for state aid in the agriculture sector, adverse weather conditions such as drought, frost, ice, hail or rain cannot of themselves be regarded as natural disasters. However, because of the damage that such events may cause to agricultural production, the Commission has accepted that such events may be assimilated to natural disasters once the level of damage reaches a certain threshold, which has been fixed at 20% of normal production in the less-favoured areas and 30% in other areas. These conditions are met in the present case.

The text of the decisions will be made available on the Internet at

http://europa.eu.int/comm/secretariat_general/sgb/state_aids/agriculture_2003.htm

once Member States have indicated whether they want parts of the decisions deleted for reasons of confidentiality. The decision can be found under the aid number N 436/03.

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