This is taken from our IEG Policy dated 08/06/20.

Member states have called on the European Parliament to finalise the criteria to use left-over rural development programmes to help the agricultural sector deal with the COVID-19 crisis.

In April, the European Commission announced plans to ease the economic impacts from the coronavirus pandemic on farmers by increasing their access to cash from the CAP's rural development programmes.

IHS Markit obtained a letter from the Council's Special Committee on Agriculture, the main preparatory body for the AGRIFISH Council, which said member states had now agreed on how this money should be used.

This cash refers to each member state's rural development programme for the 2014-2020. This is also known as the "second pillar" of the Common Agricultural Policy (CAP) and has a total funding of €150 billion over the seven-year period. The Commission has said there is €6 billion unspent by member states and wants to use this money as a quick solution to address the COVID-19 financial burden being faced by farmers.

The Council's letter was addressed to Norbert Lins, the chair of the European Parliament's agriculture committee (AGRI), and urged farming MEPs to sign-off on their position so the extra financial support can get to farmers as soon as possible.

Another source told IHS Markit that AGRI MEPs have very few differences between the member states' position, making the proposal likely to pass a vote in two weeks. This will set the tone for a final plenary vote which will most likely see the Commission's proposal become EU law and allow farmers to access the extra cash in the coming months.

But not every member state will benefit from the same amount. Some member states have stronger track records of implementing their rural development measures and have a lot less financing available than other countries.

EU data shows that Poland has only spent 40% of its rural development funding while Ireland and Finland have less than 10% remaining.

EU Agricultural Commissioner Janusz Wojciechowski has said that whatever money is available to member states can be used to support investments at farm level "for processing, marketing or packaging of food, or for the restoration of agricultural production potential".

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.