Direct payments and conditionality from 2023 onward

However, as also the CAP’s first pillar is confronted with comprehensive societal demands, the direct payments will from 2023 onward be supplemented by so-called “eco-schemes”. The present article provides the complete information on the relevant definitions, the interventions and the new green architecture of Pillar 1.

Implementation of the CAP from 2023 in Austria

Minimum requirements

In Austria, the minimum requirement for being granted direct payments is a farm size of at least 1.5 hectares or 150 euros, if beneficiaries receive coupled payments only.

Definitions

The exact Austrian definitions are set out in Chapter 4 of the published CAP Strategic Plan.

Active farmer

As a principle, applicants have to meet the definition of an “active farmer” to be eligible for area-based and animal-based interventions within Pillar 1 and Pillar 2.  Active farmers include

• natural persons subject to compulsory insurance according to the Austrian Law on Social Insurance for Farmers (“Bauern-Sozialversicherungsgesetz - BSVG”, Federal Law Gazette No 559/1978),
• legal entities and partnerships having an agricultural unit value determined according to the Austrian Valuation Law (“Bewertungsgesetz”,  Federal Law Gazette No 148/1955),
• beneficiaries who can furnish proof of their capacity as “active farmer” by means of their tax declaration or equivalent documents,
• beneficiaries who received direct payments of no more than € 5,000 for the preceding year of application.

Young farmers

All payments for young farmers are subject to compliance with the requirement “young farmer”.  The following uniform rules apply in the first and the second pillar:

• Maximum age of 40 years at the time of first application
• The young farmer must have a relevant opportunity of influencing the “farm management”. This requirement is met by natural persons if the young farmer manages the holding on his/her own name and for his/her own account.
• In the case of registered partnerships, legal entities or partnerships the young farmer has to perform the long-term and effective control over the management of the agricultural holding, i.e. be a majority shareholder or at least have equal rights (with appropriate proof) with all other stakeholders.
• The minimum technical qualification for farm management is a suitable education at least on the level of a skilled worker.

Direct payment interventions

The direct payment scheme provides for nine interventions, of which four take the form of eco-schemes (see New green architecture). Overall, about € 678 million are available for the direct payments. The shares of the individual interventions can be seen in the figure “Anteile an Direktzahlungs-Obergrenze” (Shares in direct payment ceilings).

Basic income support for sustainability (basic payment)

As from the application year 2023, the existing system of payment entitlements will cease to apply. The basic payment is granted for each eligible area in the form of a uniform per-hectare premium, with a differentiation being made between homestead land (“Heimgutflächen”) and alpine pastures (analogous to the reduction coefficient for payment entitlements for alpine forage areas applied in the 2015-2022 period).

• Basic payment for homestead land: About € 208/hectare (arable land, permanent grassland and permanently cropped areas, with the exception of alpine pastures).
• Basic payment for alpine pastures: About € 41/hectare

The maximum basic payment per farm is € 100,000 (“capping”). Wages relating to the agricultural activity, including related taxes and social contributions, can be considered, provided that they appear in the most recently available wage account and that compliance with the collective agreement regulations can be proved by means of service contracts or service slips.

Complementary redistributive income support (redistributive payment)

In Austria, 10 % (€ 67.8 million) of the direct payment ceiling is earmarked for redistribution. The redistributive payment is an additional payment which is granted to all farms for the first 40 hectares of homestead land (not including alpine pasture land).

The redistributive payment is granted in two stages: In the first stage, up to 20 hectares, the premium is twice as high as in the second stage:

• Stage 1: up to 20 hectares: about € 44/hectare
• Stage 2: > 20 to 40 hectares: about € 22/hectare

Complementary income support for young farmers (payment for young farmers)

The payment for young farmers (according to definition) in the form of a top-up payment is continued. For this intervention, there is a common budget with the setting-up premium in Pillar 2 (3 % of the direct payment funds as a minimum). The payment for young farmers of € 66/ha is granted for a maximum of 40 hectares of eligible area and for a maximum of 5 years.

Coupled income support for bringing cattle, ewes and she-goats up to alpine pastures (premium for mountain pasturing)

The mountain pasturing premium for cattle, ewes and she-goats is continued. This animal-based payment is granted for bringing the above-mentioned animals up to alpine pastures in the entire federal territory. The premium rates have been significantly increased:

• Cows: approx. € 100/RLU (roughage eating livestock unit),
• Ewes and she-goats: approx. € 100/RLU,
• Cattle, except cows: approx. € 50/RLU

New green architecture

For the CAP from 2023, nine specific objectives were defined: Its success will be measured by the achievement of these objectives. Three out of the nine objectives address the protection of the environment and climate change mitigation. In order to achieve the ambitious goals, a good mix of different tools is needed, to which also Pillar 1 must make a corresponding contribution.

Enhanced conditionality

Similar to the cross compliance system of the preceding period, farmers have to meet certain basic requirements to be fully eligible for area-based and animal-based payments. These requirements also represent the basis for all voluntary agri-environment and climate interventions. The enhanced conditionality consists of two different components, each of them including several requirements.

One of these components are the standards for a “Good Agricultural and Environmental Condition” (GAEC) of the areas. They include certain minimum requirements for the agricultural management of areas, which above all address the protection of soil, water and biodiversity. From 2023 onward, farmers will have to meet 10 GAEC standards:

• GAEC 1: Maintenance of permanent grassland ration on national level
• GAEC 2: On designated wetland and peatland areas, certain management requirements have to be met.
• GAEC 3: Ban on burning arable stubble
• GAEC 4: Establishment of buffer strips along water courses with a focus on water bodies affected by material pollution
• GAEC 5: Erosion-reducing measures from a gradient of 10 % on arable land and permanent cropland
• GAEC 6: Minimum soil cover on arable land and permanent cropland between January 1 and February 15.
• GAEC 7: Requirements concerning crop diversification (main crops must not cover more than 75 % of the land) and crop rotation
• GAEC 8: 4 % minimum share of fallow land, protection of landscape elements and ban on cutting hedges and trees between February 20 and August 31.
• GAEC 9: Ban on converting or ploughing environmentally sensitive permanent grassland designated in Natura 2000 sites
• GAEC 10: Compliance with the recommendations for appropriate fertilisation in respect of phosphorus fertilisation.

More detailed information on the implementation of the GAEC standards can be found in the overview.

In addition to the GAEC standards, the enhanced conditionality also includes the element of the “statutory management requirements” (SMR). They provide that the receipt of CAP payments is subject to compliance with certain requirements of selected EU regulations according to their national implementation. This concerns the following 11 EU regulations:

• SMR 1: Water Framework Directive (Directive 2000/60/EC)
• SMR 2: Nitrates Directive (Directive 91/676/EEC)
• SMR 3: Birds Directive (Directive 2009/147/EC)
• SMR 4: Fauna, Flora, Habitats Directive (Directive 92/43/EEC)
• SMR 5: Food Safety Regulation (Regulation (EC) No 178/2002)
• SMR 6: Directive 96/22/EC concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of ß-agonists
• SMR 7: Regulation (EC) no 1107/2009) concerning the placing of plant protection products on the market
• SMR 8: Directive 2009/128/EC establishing a framework for Community action to achieve the sustainable use of pesticides
• SMR 9: Minimum standards for the protection of calves
•  (Directive 2008/119/EC)
• SMR 10: Minimum standards for the protection of pigs
•  (Directive 2008/120/EC)
• SMR 11: Minimum standards for the protection of animals kept for farming purposes (Directive 98/58/EC)

Social conditionality

In the course of the Covid-19 pandemic, working conditions in agriculture have once again come into focus. In response to this, a so-called “social conditionality” has been introduced, which makes the receipt of area-based and animal-based CAP payments subject to compliance with certain labour-law provisions. Sanctions for non-compliance are based exclusively on judgements or official notices of the competent labour courts and authorities. There will be no additional controls by the paying agency. In addition, greater attention will be paid to labour law issues in agricultural extension services.

Schemes for the environment and climate (eco-schemes)

With the eco-schemes, for the first time voluntary environment- and climate-related interventions for farmers are financed from funds of Pillar 1. Specifically, around 15 % of the direct payment funds are earmarked for them. In order to ensure broad acceptance and use of this new tool, the choice of suitable interventions was based on four proven measures of Austria’s Agri-environmental Programme (ÖPUL):

• Greening of arable land - catch cropping
• Greening of arable land - system “Evergreen”
• Erosion control wine, fruit and hops
• Animal welfare - pasture

The premium is paid per hectare of eligible land or, in the case of the intervention “Animal welfare – pasture”, per livestock unit. The details on the design of measures can be found in the Draft of the Special Guideline ÖPUL.