COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE EVALUATION of the instruments applicable to State aid in the agricultural and forestry sectors and in rural areas
Date: 2021-05-11
Institutions: Directorate-General for Competition, European Commission
Subjects: EAFRD, State aid, aid to agriculture, control of State aid, farming sector, forestry economics, investment aid, regional aid, rural development, rural region

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  EN 

   EUROPEAN COMMISSION  Brussels, 11.5.2021  SWD(2021) 108 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE EVALUATION  of the instruments applicable to State aid in the agricultural and forestry sectors and in rural areas {SEC(2021) 200 final} - {SWD(2021) 107 final}  
 
 
Context and objectives 

State  aid  control  is  a  key  instrument  of  the  EU’s  competition  policy,  as  enshrined  in  the 
Treaty  on  the  Functioning  of  the  European  Union.  Its  objective  is  to  safeguard  the  internal 
market  by  preventing  undue  distortions  of  competition  and  trade.  The  Treaty  generally 
prohibits  State  aid  unless  it  is  justified  for  reasons  of  economic  development  or  for  the 
common good. The European Commission monitors Member States’ use of national aid and 
lays down rules governing the assessment of its compatibility with the smooth functioning of 
the internal market. 

In 2014, the Commission set  up a specific State aid  framework for agriculture, forestry and 
rural  areas;  this  comprises  the  Agricultural  Block  Exemption  Regulation  (ABER)1  and 
sectoral  guidelines2. This evaluation  assesses how that framework has performed  against its 
main objectives: 

-  minimising  distortion  of  competition  and  trade  in  the  agricultural  and  forestry  sector, 
thus providing predictability and legal certainty for Member States and beneficiaries of 
State aid; 

-  ensuring the consistency of the agricultural State aid rules with the common agricultural 

policy (CAP) and the objectives of CAP support for rural development; and 

-  simplifying procedures and reducing administrative costs. 

The  ABER  and  the  2014  State  aid  guidelines  for  agriculture,  forestry  and  rural  areas  were 
both set to expire in 2020, but (in line with the rural development rules under the CAP) have 
been extended to 2022. This evaluation will feed into the process of establishing a new State 
aid framework to be applied from 1 January 2023. 

The  evaluation  examines  the  performance  of  the  current  framework  against  five  criteria: 
effectiveness,  efficiency,  relevance,  coherence  and  EU  added  value.  It  looks  back  to  gauge 
how the rules have performed and where there is scope for improvement. 

The evaluation takes into account in-house data, experience from case-handling practice and 
the outcome of an open public consultation. It is supported by an external evaluation study. 

Main findings 

The evaluation concludes that the 2014 framework has worked well overall and achieved its 
objectives.  However,  it  also  identifies  some  weaknesses  and  a  need  for  an  update  to  meet 
future challenges such as the European Green Deal and the CAP reform.  

More specifically, the evaluation finds that the framework is relevant, as it adequately meets 
the  needs  of  the  agricultural  and  forestry  sectors  and  contributes  to  CAP  rural  development 
objectives  and  other  public  policy  objectives,  in  particular  those  relating  to  environmental 
protection and animal and public health. However, some challenges have become more acute 
in recent years, such as adverse climatic events, biodiversity loss, animal diseases, plant pests 

1   Commission  Regulation  (EU)  No  702/2014  of  25  June  2014  declaring  certain  categories  of  aid  in  the 
agricultural  and  forestry  sectors  and  in  rural  areas  compatible  with  the  internal  market  in  application  of 
Articles 107 and 108 of the Treaty on the Functioning of the European Union (OJ L 193, 1.7.2014, p. 1).  
2   2014  EU  Guidelines  for  State  aid  in  the  agricultural  and  forestry  sectors  and  in  rural  area  (OJ  C  204, 

1.7.2014, p. 1.)  

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and  forest  fires.  The  challenges  are  closely  linked  to  the  Commission’s  new  political 
priorities, in particular the European Green Deal (which addresses climate change and other 
environmental  concerns).  To  remain  relevant,  the  agricultural  State  aid  rules  will  have  to 
contribute to the achievement of the Green Deal initiatives, particularly the 2030 targets set by 
the ‘farm to fork’ strategy and the biodiversity strategy. Specific attention will be needed to 
ensure that State aid is compatible with the respect of EU environmental and climate law. 

The subsidiarity-based approach envisaged for the future rural  development  policy will also 
be  a  challenge  for  the  new  State  aid  framework.  State  aid  objectives  and  measures  must 
remain  closely  linked  to  and  coherent  with  that  policy  and  the  Commission’s  design  of  the 
future  State  aid  rules  will  have  to  facilitate  its  implementation,  including  the  enhanced 
environmental  ambition  of  the  new  CAP.  Under  the  forthcoming  CAP  Strategic  Plans 
Regulation,  the  EU  will  establish  basic  policy  parameters,  but  it  will  be  up  to  the  Member 
States to tailor their rural development intervention to their specific needs, while remaining in 
line  with  the  Green  Deal  targets  and  the  legal  framework  of  the  new  CAP.  The  absence  of 
precise eligibility criteria for rural development support at EU level means that the design of 
the agricultural State aid rules will also have to change. 

The evaluation concludes that, as a whole, the current State aid rules have been  effective in 
achieving  their  objectives,  in  particular  the  overarching  objective  of  minimising  distortive 
impacts on competition and trade in the internal market. Analysis showed that such effects are 
limited,  mainly  because  aid  beneficiaries  in  agriculture  and  forestry  are  almost  exclusively 
small and medium-sized enterprises. Moreover, aid amounts are generally small and low aid 
intensities mitigate the effects of aid measures with a higher potential for distortive impacts. 
Specific  analysis  of  certain  aid  measures  showed  positive  effects  in  terms  of  viable  food 
production, a sustainable use of resources, growth and jobs in rural areas and the achievement 
of  societal  objectives  such  as  ecological  development  and  public  health.  The  analysis 
indicates  that  these  positive  effects  largely  outweigh  the  limited  distortive  impacts  on 
competition and trade. 

The  alignment  with  the  rural  development  legislation  has  led  to  a  more  streamlined 
assessment  of  aid  at  both  Commission  and  national  level.  The  evaluation  shows  that  the 
current State aid rules have performed better than the previous ones in terms of enhancing the 
predictability  and  legal  certainty  of  State  aid  control.  However,  it  also  reveals  aspects  that 
may need further clarification or fine-tuning in the context of the upcoming revision. 

As regards efficiency, the evaluation suggests that the rules have at least partly achieved their 
objectives  from  the  point  of  view  of  overall  simplification.  This  is  particularly  true  for  the 
extended  scope  of  the  ABER,  which  as  from  2014  covers  most  of  the  rural  development 
support  measures  financed  under  the  CAP.  The  exemption  of  these  measures  from  the 
obligation to notify aid has saved time and reduced administrative costs. As for the impact on 
businesses, speedier procedures mean faster access to aid. The revised guidelines are seen as 
contributing  less  to  simplification,  as  Member  States’  authorities  still  associate  the 
notification  process  with  a  heavy  workload  and  lengthy  procedures.  The  evaluation  thus 
reveals  a  need  to  address  some  weaknesses  in  order  to  improve  the  efficiency  of  State  aid 
control and do away with unnecessarily unclear or complex provisions. 

The evaluation confirms that the agricultural State aid rules are generally coherent with other 
EU  policies  and  legislation.  In  particular,  their  almost  complete  alignment  with  the  rural 
development rules has fully achieved the key objective of consistency and coherence with the 
CAP.  The close link to  the CAP  also  influences  the assessment of coherence between State 

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aid rules and environmental ambition of the rural development policy, as State aid rules with 
climate and environmental objectives mirror the rural development provisions. The evaluation 
also  looks  at  State  aid  for  risk  and  crisis  management  in  the  light  of  EU  animal  and  public 
health policy and legislation, and confirms that the rules are coherent in that field too. 

Overall, the very existence of a tailor-made State aid framework for agriculture and forestry 
has  EU  added  value,  as  it  reduces  administrative  costs  and  provides  clarity,  transparency, 
predictability  and  legal  certainty  for  both  Member  States  and  businesses.  The  revised  rules 
reinforce  that  added  value,  as  they  ensure  consistency  with  rural  development  measures 
co-financed under the CAP and facilitate State aid control of those measures. 

On  the  basis  of  the  above  findings,  the  evaluation  concludes  that  the  current  State  aid 
framework  for  agriculture,  forestry  and  rural  areas  has  largely  achieved  its  objectives.  It 
nevertheless  points  to  a  need  to  adapt  the  rules  to  new  challenges,  in  particular  to  the 
European Green Deal  (‘farm to fork’ and biodiversity strategies) and the future Regulation on 
CAP  strategic  plans,  including  its  enhanced  environmental  ambition.  It  shows  that  certain 
aspects  of the  guidelines raise interpretation problems or are otherwise difficult  to  apply;  in 
particular, this concerns obsolete or partly outdated rules, unclear definitions and terms giving 
rise  to  recurring  interpretation  requests,  and  overly  complex  requirements.  Due  account 
should be taken of these shortcomings in the upcoming impact assessment. 

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