Direct Payments

Direct payments

European Union (EU) farmers receive support in the form of direct payments, on the condition that they respect strict rules on human and animal health and welfare, plant health and the environment. The amount of support they receive is not linked to the quantities they produce, and is designed to provide EU farmers with a safety net against volatile market prices. Direct payments include a basic payment and additional payments notably a so called green payment for farming methods that go beyond basic environmental protection. In certain member states, direct payments also include support for certain sectors in difficulty or for farmers working in areas with natural constraints.

The lion’s share (72%) of the current EU farm budget is dedicated to direct payments for European farmers. The financial resources come from the European Agricultural Guarantee Fund (EAGF).

Basic direct payment complemented by specific support
Direct payments are granted to farmers in the form of a basic income support based on the number of hectares farmed. This so-called basic payment is complemented by a series of other support schemes targeting specific objectives or types of farmers:

  • a ‘green’ direct payment
  • for agricultural practices beneficial for the climate and the environmenta payment to young farmers
  • (where applied) a redistributive payment to provide improved support to small and middle-size farms
  • (where applied) payments for areas with natural constraints, where farming conditions are particularly difficult, such as mountain areas
  • (where applied) a small farmers scheme, a simplified scheme for small farmers replacing the other schemes
  • (where applied) voluntary support coupled to production to help certain sectors undergoing difficulties

On average direct payments amount to €267 per eligible hectare.

How to receive direct payments?

In order to receive direct payments, each year farmers have to submit an aid application declaring all the agricultural parcels on their holding. Direct payments are also subject to eligibility conditions such as being an active farmer whose holding is located within the EU.

Payments are not linked to the quantities produced, encouraging farmers to better align their businesses with the demands of the market. In addition, farmers can have their payments reduced if they do not comply with clearly defined rules on food safety, animal health and welfare and environmental protection.

This interplay between payments and the respect of rules is known as cross compliance.

EU countries administrate and control direct payments

While the rules governing direct payments are set at EU level, their implementation is managed directly by each member state under the principle known as shared management. This means that national authorities are responsible for the administration and control of direct payments to farmers in their country.

Each country also has a certain level of flexibility in the way they grant these payments to take account of national farming conditions, which vary greatly throughout the European Union.