Commission approves €1 billion German State aid schemes to improve animal welfare in livestock breeding

The European Commission has approved, under EU State aid rules, two German schemes with a total budget of around €1 billion to improve animal welfare standards in breeding of livestock, in particular pigs. The measures will contribute to the achievement of the EU’s strategic objectives relating to the European Green Deal,  the Common Agricultural Policy and the Farm to Fork Strategy.

The German measures

Germany notified the Commission of its plans to introduce two schemes with a total budget of around €1 billion to support livestock farmers in (i) investments to upgrade pig breeding sites, and (ii) implementing management practices to improve pigs welfare standards. Both schemes may be extended in the future to animals other than pigs. The schemes are open to small and medium-sized livestock farmers in Germany.

Under the first €675 million scheme, the aid will take the form of direct grants covering up to 60% of eligible investment costs for upgrading pig breeding sites to improve welfare standards. This includes improvements to the living conditions (such as access to outdoor climate or cooling possibilities), as well as limits to livestock density and CO2 emissions. This first scheme will run until the end of 2030.

Under the second €325 million scheme, the aid will take the form of direct grants covering up to 80% of the additional costs as result of aligning livestock practices with methods providing higher welfare standards (such as extra roughage and bedding, and electricity for ventilation and cooling). This scheme will run until the end of 2031.

The Commission’s assessment

The Commission assessed the schemes under Article 107(3)(c) of the Treaty on the Functioning of the European Union (‘TFEU’), which allows Member States to support the development of certain economic activities under certain conditions, and under the 2022 Guidelines for State aid in the agricultural and forestry sectors and in rural areas (‘2022 Agricultural Guidelines’).

The Commission found that:

• The measures facilitate the development of an economic activity, namely livestock farming.
• The schemes are necessary and appropriate to ensure that farmers implement measures leading to higher animal welfare standards. They support the objectives of key EU policy initiatives, such as the European Green Deal, the Common Agricultural Policy and the Farm to Fork Strategy.
• The aid will have an ‘incentive effect’, as the beneficiaries would not put these measures in place without the public support.
• The aid is proportionate, as it is limited to the minimum necessary and will have a limited impact on competition and trade between Member States.
• The aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU.
  On this basis, the Commission approved the German schemes under EU State aid rules.

Background

The 2022 Agricultural Guidelines provide guidance on how the Commission will assess the compatibility of aid measures in the sector, which are subject to the notification requirement, under Article 107(3)(c) TFEU. The Guidelines create a flexible, fit-for-purpose enabling framework to help Member States provide the necessary support and contribute, among other things, to the objectives of the Common Agricultural Policy. The 2022 Agricultural Guidelines aim to help Member States design national measures and meet national and EU’s goals at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.

The non-confidential version of today’s decisions will be made available under the case numbers SA.107835 and SA.107837 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.