The Commission Introduces Derogations from the Competition Rules and Adopts Measures aimed at Supporting the Agri-Food Sector
May, 2020 - Elisabeth Eklund
On 4 May 2020, the Commission published the latest package of exceptional measures (announced on 22 April) to support the agricultural and food sectors that have been hit hardest by the crisis. The package of measures adopted by the Commission includes temporary derogations from EU competition rules for milk, flowers and potatoes, support for private storage of dairy and meat products and flexibility in the application of market support programs. In addition, the Commission has proposed that Member States should be allowed to use remaining rural development funds to support farmers and small and medium-sized agri-food businesses.
Temporary derogation from EU competition rules for milk, flowers and potatoes
In accordance with Article 222 of the Common Markets Regulation (Regulation (EU) No 1308/2013), the Commission has introduced temporary derogations from certain EU competition rules for the sectors milk, flowers and potatoes. Article 222 allows the Commission to adopt such derogations during periods of serious market imbalance in the form of oversupply. These derogations allow operators to self-organise and implement certain market measures at their level to stabilise their sector.
The milk sector will be allowed to collectively plan milk production. The flower and potatoes sector will be allowed to withdraw products from the market. In addition, storage by private operators will be allowed. The measures are allowed for a maximum period of six months.
Exceptions made in accordance with Article 222 shall be aimed solely at stabilizing the sectors concerned and shall not adversely affect the EU internal market. Changes in consumer prices will be closely monitored to avoid adverse effects.
For more information on competition law during the Covid-19 crisis, see below:
The Commission has published a temporary competition framework and guidelines for ensuring supply of essential products and services during the Covid-19 crisis
The Commission has introduced further amendments of the Temporary Framework for State aid during the Covid-19 crisis
Competition rules apply also during a crisis – be aware of pricing and discussions with competitors
Support for private storage of dairy and meat products
As a result of the Covid-19 crisis, demand for certain dairy and meat products in the EU has fallen rapidly. In exceptional circumstances, e.g. during periods of lower market prices or in a crisis where intervention is needed to prevent sudden price falls or mitigate the consequences, the EU can provide support to private sector operators by paying for the costs of storing their products for a determined period of time. By storing products for a certain period, the supply of these products is reduced, which allows the market to stabilize.
The Commission has decided to support private storage of dairy products (skimmed milk powder, butter, cheese) and meat products (beef, sheep and goat meat). This allows operators to temporarily withdraw products from the market for at least 2-3 months and a maximum of 5-6 months.
Operators can apply for support for private storage at the Swedish Board of Agriculture. The application period is from 7 May 2020 until 30 June 2020, at the latest. More information can be found on the website of the Swedish National Board of Agriculture.
Flexibility for market support programs
The Commission will allow flexibility in the application of market support programs for wine, fruit and vegetables, table olives and olive oil, apiculture and the EU’s school scheme (milk, fruit and vegetables). The aim of this flexibility is to limit the available supply in each sector so that the markets are stabilized. In addition, the reorientation of funding priorities towards crisis management measures will be permitted.
Proposal to support farmers and agri-food businesses
The Commission has proposed that Member States with remaining rural development funds should be permitted to use these funds to support individual farmers and small and medium-sized agri-food businesses in 2020. The proposal will allow Member States to offer up to EUR 5,000 per farmer and up to EUR 50,000 per small business. This comes on top of the de-minimis aid for the agricultural sector and the increased state aid ceiling previously adopted. This proposal needs to be submitted to the Council and the Parliament for approval.
For more information on state aid law during the Covid-19 crisis, see below:
State aid measures to support companies affected by the Covid-19 pandemic – what opportunities exist?
A summary of the government’s measures and proposed measures
Possible future action by the Commission
The Commission will continue to monitor the situation in close contact with stakeholders, the European Parliament and the Member States, to determine whether further action is necessary. The Commission has previously taken measures to support the agricultural and food sectors in the form of, inter alia, increased amounts for state aid, higher advanced payments, and extended deadlines to submit payment requests.
More information can be found at the Commission’s website.
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