G/AG/N/EU/66  
 
9 February  2021 
(21-1089) Page: 1/6 
Committee on Agriculture  Original: English  
 
 
NOTIFICATION  
The following submission, dated 8 February  2021, is being circulated at the request of the delegation 
of the European Union . The notification concerns new or modified domestic support measures 
exempt from reduction ( Table DS:2). 
 
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 G/AG/N/EU/66  
 
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  Table DS:2   
DOMESTIC SUPPORT: EUROPEAN UNION  
Notification under Article 18:3 of the Agreement:  
New or modified domestic support measures exempt from reduction  
 
(1) FULL TITLE OF MEASURE:  
This notification covers the following new or modified measures:  
 
• A Transitional Regulation, adopted to bridge the gap between the 2014 -2020 CAP and the 
new CAP that should apply from 1 January 2023, and  
• Next Generation Europe, the EU Recovery Instrument adopted in the aftermath of the 
COVID -19 crisis.  
1.1.  Multiannual financial framework (MFF) for 2021 to 2027  
The overall EU budget is governed by the "Multi Annual Financial Framework " (MFF) that sets ou t 
the maximum expenditure per policy area for the EU. The MFF for the period 2021 to 2027 was 
agreed by the Council and the European Parliament on 17 December 2020, and published in the 
official Journal of the European Union L437 on 28.12.2020 - Council Re gulation (EU, Euratom) 
2020/2093 of 17 December 2020 laying down the multiannual Financial framework for the 
years  2021 to 2027. The amounts agreed for the Common Agricultural Policy (CAP) are as follows:  
Commitments CAP 2021 to 2027  – EUR billion; curren t prices  
 2021 2022 2023 2024 2025 2026 2027 TOTAL  
 Direct payments  38.1 38.4 38.5 38.6 38.7 38.8 38.9 270.0  
 Market related expenditure  3.1 3.1 3.2 3.2 3.2 3.2 3.2 22.3 
EAGF – Total needs  41.2 41.5 41.6 41.8 41.9 42.0 42.2 292.3  
 EAFRD (MFF)  14.8 12.1 12.1 12.1 12.1 12.1 12.1 87.4 
 EAFRD (NGEU)  2.4 5.7      8.1 
EAFRD  17.2 17.8 12.1 12.1 12.1 12.1 12.1 95.5 
CAP TOTAL  58.4 59.3 53.8 53.9 54.0 54.2 54.3 387.8  
 
The EU budget for agriculture is financed through two funds. European Agriculture Guarantee Fund, 
EAGF , that finances all expenditure related to Direct Payments as well as all market related 
expenditure. Measures related to Rural Development are financed t hrough the European Agricultural 
Fund for Rural Development EAFRD.  The amounts in the table above are for commitments, and set 
out the annual maximum amounts that can be spent by each fund. In particular for the EAFRD the 
actual payments may differ signifi cantly, since the payment for measures or interventions will only 
take place after the finalisation of the projects or interventions concerned, e.g. in case of investment 
subsidies.    
 
Agriculture will also benefit from the EU Recovery Instrument – Next Ge neration Europe (NGEU). 
This instrument in total provides for EUR 750 billion over the 2021 to 2027 period, of which 
EUR 8.1 billion will be for the agricultural and forestry sectors as well as rural areas through EAFRD.  
 
In the agreement on the MFF, the amounts to be spent on the Fund for European Aid to the Most 
Deprived and on management of expenditure relating to the food chain, animal health and animal 
welfare, and relating to plant health and plant reproductive material as well as the EU research 
programmes, including on agriculture, were also decided. However, the new legal acts for these 
measures have not yet been adopted. The EU will submit DS:2 notifications for these instruments 
once they have been adopted and published, as it will for the new CA P, as noted in point II of this 
notification.    G/AG/N/EU/66  
 
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  1.2.  Transitional Regulation 2021 and 2022  
Due to delay in agreeing the EU 's legal framework for the CAP for the period 2021 -2027, a 
Transitional Regulation has been adopted to cover 2021 and 2022. Once the Council and the 
European Parliament have adopted the legislation for the new CAP for 2023 to 2027, a further DS:2 
notificati on will be submitted by the EU covering this new regulatory framework.  
The Transitional Regulation mostly extends the current CAP (as described in the EU DS:2 notification 
in document G/AG/N/EU/35) to apply during the 2021 and 2022 calendar years.  
This n otification explains the cases where the Transitional Regulation differs from the current CAP 
and the changes it includes compared to the instruments and measures as described in 
G/AG/N/EU/35.  
(2) DOMESTIC LEGISLATION REFERENCE:  
Regulation EU 2020/2220 of the European Parliament and the Council laying down certain 
transitional provisions for support from the European Agricultural Fund for Rural Development 
(EAFRD) and from the European Agricultural Guarantee Fund (EAGF) in the years 2021 and 2022 
and amendi ng Regulations (EU) No 1305/2013, (EU) No 1306/2013 and (EU) No 1307/2013 as 
regards resources and application in the years 2021 and 2022 and Regulation (EU) No 1308/2013 
as regards resources and the distribution of such support in respect of the years 202 1 and 2022  
(3) DETAILED DESCRIPTION OF MEASURE WITH REFERENCE TO CRITERIA:  
3.1.  Direct Payments scheme (Article 9 of Regulation (EU) 2020/2220)  
The Transitional Regulation prolongs the 2014 -2020 direct payments schemes by two years to cover 
the 2021 and 2022 calendar years, but taking into account the new reduced limits as agreed in 
the MFF.  
EU member States still have until 19 February 2021 to notify the EU Commission of decisions on 
implementing certain options within the support measures, such as tran sferring amounts from EAGF 
to EAFRD or from EAFRD to EAGF and options in implementing the various direct aid schemes. If 
necessary, the EU will submit an addendum to this notification when these decisions have been 
taken.  
The specific aid schemes will the refore continue to be notified unchanged as indicated in 
G/AG/N/EU/35:  
Annex 2, paragraph 6  
• Basic Payment Scheme  
Which will include:  
1. The young farmer payment (up to 2%)  
2. Where applied, the redistributive payment (up to 30%)  
3. Where applied, the payment for areas with natural constraints (up to 5%), and  
4. The remaining amount, after deduction of the 30% to be allocated to the compulsory 
"greening payment", forms the ceiling available for the basic payment.  
• Small farmers scheme  
Annex 2, paragraph 5  
• Single Area Payment Scheme    
Article 6.5  
• Voluntary Coupled Support  G/AG/N/EU/66  
 
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  • Crop specific payment for cotton  
3.2.  Rural Development (Article 6 and 7 of Regulation (EU) 2020/2220 – except Article 7 
paragraphs 12 and 13)  
Regulation (EU) No 1305/2013 was limited in time to 2020. The Transitional Regulation therefore 
extends the measures provided for by that Regulation until the date on which the new CAP should 
apply, i.e. 1 January 2023. The extension respects the new finan cial ceilings as set out in the MFF 
for 2021 to 2027.  
No changes were made to the types of measures that may be financed during 2021 and 2022 as 
provided for by Regulation (EU) No 1305/2013. However, some minor changes were made to the 
eligible amounts fo r investments in physical assets that can be financed by EURI, i.e. by an additional 
maximum 35%, provided that such support does not exceed 75% and for young farmers the aid 
may be increased by an additional maximum EUR 30,000. Therefore, the measures for  Rural 
Development will continue be notified by the EU as set out in G/AG/N/EU/35.  
Annex 2 paragraph 2  
• Fostering knowledge transfer and innovation  
• Advisory Service, farm management and farm relief service  
• Quality schemes for agricultural products and food stuffs  
• Co-operation between farmers/entities on pilot projects, sharing facilities and resources, 
innovations, horizontal and vertical integration and development of short supply chains  
• Mutual funds for adverse climatic events, animal and plant diseases, p est infections and 
environmental incidents  
Annex 2 paragraph 7  
• Risk management  
• Income stabilisation tool  
Annex 2 paragraph 8  
• Crop, animal and plant insurance  
• Mutual funds  
• Restoring agricultural production damaged by natural disasters  
Annex 2, paragraph 11  
• Investments in physical assets  
• Farm and business development  
• Setting -up producer groups and organisations  
Annex 2 paragraph 12  
• Agri-environment and climate  
• Organic farming  
• Natura 2000 and Water Framework directive payments  
• Payments to areas f acing natural or specific constraints  
• Animal welfare  
Annex 2, paragraph 13  
• Basic services and village renewal in rural areas  
• Payments to areas facing natural or other specific constraints  
A new measure "M21" was introduced in Regulation (EU) 2020/872 as a response to the impact of 
the Covid -19 pandemic. Should any of the measures that member States implement under this 
provision comply with the requirements of Article 6.5 or Annex 2 to the Agreement of Agriculture 
then the EU will submit a DS:2 notification  for them.  
  G/AG/N/EU/66  
 
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  3.3.  Next Generation Europe – "EURI Regulation " (paragraphs 12 and 13 of Article 7 of 
Regulation EU 2020/2220).  
The extra amount of EUR 8.1 billion is not yet available. Pursuant to Article 3(3) of Regulation (EU) 
2020/2094 of 14 December 2020 establishing a European Union Recovery Instrument (EURI), these 
resources will be made available as of the date of entry into force of the Own Resou rces Decision. It 
is not possible at this moment to indicate an exact date for its entry into force as it first needs to be 
ratified by all national parliaments of EU member States.  
The resources for rural development from the "EURI Regulation " will be ava ilable only for the 2021 
and 2022 programming years. Given the unprecedented challenges faced by EU agriculture and rural 
areas due to the Covid -19 pandemic, the additional resources will support targeted measures paving 
the way for a more resilient, susta inable and digital economic recovery in line with the objectives of 
the Union’s environmental and climate commitments.  
At least 37% of the additional resources provided by the EURI should be devoted to measures that 
are particularly beneficial to the envi ronment and climate as well as to animal welfare and LEADER 
cooperation activities.  
Moreover, at least 55% of those additional resources should be devoted to measures that promote 
economic and social development in rural areas, namely to investments in phy sical assets, farm and 
business development, support for basic services and village renewal in rural areas and cooperation. 
The emphasis will be on job creation in rural areas and creation of a more resilient, sustainable 
agricultural sector including a di gital economic recovery in rural areas.  
Within the limits set out in the regulation, the allocations from the EURI can finance the same type 
of measures and instruments as in Rural Development programmes. However, the EURI measures 
will be separate from th e Rural Development programmes as the EURI funding is a significant 
supplementary effort to assist rural areas after the pandemic.  
The current 2014 -20 programming framework concerning implementation, including monitoring, 
controls and payments will be app licable to these measures. EU member States will be required to 
report on the implementation of the measures financed under the EURI Regulation separately from 
the measures financed through traditional EAFRD financing.  
The reporting of the measures finance d under the EURI Regulation in the EU DS:1 notification will 
follow that of the equivalent instruments under current Rural Development programmes. They will 
all be notified as Green Box measures.  
Measures related to mitigation of and adaptation to climate  change including reduction of 
greenhouse gas emissions from agriculture; soil conservation, including the enhancement of soil  
fertility through carbon sequestration; improvement of the use and management of water, including 
water saving; organic farming; creation, conservation and restoration of habitats favourable to 
biodiversity; reduction of the risks and impacts of pesticide and antimicrobial use; as well as animal 
welfare will, as similar measures indicated in G/AG/ N/EU/35, be notified according to An nex 2 
paragraph 12 fulfilling the criteria for payments under environmental programmes.  
Expenditure related to the LEADER programme will continue to be notified according to Annex 2, 
paragraph 13 regional assistance programme.  
The measures related to inves tments will be notified according to Annex 2 paragraph 11 structural 
adjustment assistance through investment aids.  
(4) COST OF MEASURE:  
For EAGF  the maximum expenditure for 2021 and 2022 will be EUR 41.2 billion and EUR 41.5 billion 
respectively. The exact amount on Blue and Green Box support schemes can only be notified after 
the information mentioned in point 3.1. above has been received. By way of comparison, the total 
EAGF ceiling for 2020 was EUR 43.9 billion for EU plus the United Kingdom.  G/AG/N/EU/66  
 
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  For EAFRD  the maximum amounts that can be committed for rural development in 2021 and 2022 
is EUR 14.8 billion and EUR 12.1 billion respectively. The exact amount paid out for EAFRD will 
depend on the transfers between EAGF and EA FRD to be decided by EU member States as mentioned 
in point 3.1. above. The EAFRD ceiling for 2020 was EUR 14.7 billion for EU plus the United Kingdom.  
The amounts to be made available for EAFRD from the EU Recovery Instrument  in 2021 and 2022 
will be EUR 2.4 billion and EUR 5.7 billion respectively.  
For the EAFRD, including amounts from the Recovery Instrument will have to be paid within three 
years following the commitment.  
(5) DATE OF ENTRY INTO EFFECT:  
1 January 2021  
(6) PERIOD OF APPLICATION:  
The Tr ansitional Regulation will apply in 2021 and 2022.  
(7) PRODUCTS TO PRINCIPALLY BENEFIT (IF ANY INDIVIDUAL PRODUCT(S)):  
The measures in the Transitional Regulation are not intended to support individual products except 
for the Blue Box measures of Voluntar y Coupled Support and cotton support.  
 
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