Flatter rate: Germany‘s experience Andreas Müller Unit 617 (Direct Payments)

Bundesministerium für Ernährung, Landwirtschaft und Verbraucherschutz

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Flatter rate: Germany‘s experience

Andreas Müller

Unit 617 (Direct Payments)

Federal Ministry of Food, Agriculture and Consumer Protection

D-53123 Bonn Tel.: 0228 / 99 529 - 4113 E-mail: [email protected] Fax: 0228 / 99 529 - 3429


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The German hybrid model in short• Dynamic model moving from a hybrid model

towards a regional model• Static phase 2005-2009: hybrid model• Transitional phase 2010-2013: progessive

approximation of the value of all payment entitlements (PE) in a region to the regional average

• 2012: Decoupling of still coupled payments; i. e. from 2012 only SPS payment in Germany

• Regional model 2013: all PE in each region have the same value


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…. Considerations determining choice• dynamic hybrid model

- regional model is linked with significant income reallocations for farmers- offers farmers enough time to adapt to the new system- capable of winning political majority- historic imbalances between farmers and regions

can be balanced- long term justification of decoupled direct payments towards tax payers:

• Historical model not acceptable in long term - uneven distribution of decoupled support

• area related flat rate amounts as compensation for high EU standards and for landscape conservation


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1. Starting point 2005: hybrid model

• 13 regions: Länder federal states (except city states)

• Allocation of national ceiling to regions:objective criteria: 35% area-based, 65% historical origin) = limited reallocation of historic payment volumes between regions

• Direct payments allocated according regional model: flat rate amounts for permanent pasture and other eligible area (arable land) declared by the farmer in 2005


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Direct payments allocated according regional model:

• crop premia → arable land: Premia for arable crops, seeds, hops, 75 % of decoupled starch potato

• livestock premia → permanent pasture: slaughter premia for adult cattle, national additional payments for catte, 50 % of extensification premium for cattle

• Determination of ratio between permanent pasture and arable land

• Option for regions to modify ratio within certain limits

• Regional values48 – 111 €/ha for permanent pasture; 255 - 322 €/ha for arable land


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Direct payments allocated according historic model: • farm specific top ups according production in reference

period/at reference date:- 100 % of premia for suckler cows, male bovins, calves,

milk, sheep; - 50 % of extensification supplements for beef; - 25 % of decoupled potato starch premium,- 100 % decoupled part of tobacco and dried fodder

premia as well as sugar compensation

• value of payment entilements (PE):area related amount + individual top ups (except PE for set aside)


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2. Approximation to regional flat rates• Basis for the calculation of the approximation to

the flat rate = value of the payment entitlement in 2009

• Change of value of each payment entitlement in each year from 2010 to 2013 is executed by the Central IACS Database (ZID), where changes of the value are visible since 2010 for farmers for the whole period

• Reference amounts for decoupling in 2012 as on top supplement.


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Approximation Phase 2010-2013

2009 2010 2011 2012 2013Remaining ∆

between intitial and

final value (%)100 90 70 40 0

PE 1

€

500500 - 340 =

160

484= 500 –

(160 x 0,10)

452= 500 –

(160 x 0,30)

404= 500 –

(160 x 0,60)

340

PE 2

€

100100 - 340 =

-240

124 = 100 +

(240 x 0,10)

172= 100 +

(240 x 0,30)

244= 100 +

(240 x 0,60)

340


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Regional flat rates in 2013Region regional flat rate (€/ha) after decoupling in

2012

Baden-Württemberg 308,05 309Bayern 354,55 361Berlin/Brandenburg 300,30 306Hessen 299,58 300Mecklenburg-Vorpommern 329,44 333Niedersachsen/Bremen 352,38 366Nordrhein-Westfalen 359,44 360Rheinland-Pfalz 294,54 296Saarland 258,96 296Sachsen 357,26 359Sachsen-Anhalt 354,97 358Schleswig-Holstein/Hamburg 358,83 359Thüringen 346,35 348

Average Germany 339,23 344


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Type of farmers negatively affected by the move to regional flat rates

Value of entitlements higher than the regional flat rate

• Farmers with reference amounts of tobacco,

• Intensive beef farms (fattening of male bovins, dairy farms with silage corn as main feed source),

• Sheep farmers and calf fattening farms with no or limited area holding special entitlements,

• Arable crop farmers with high reference amounts for sugar beet.


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Type of farmers positively affected by the move to regional flat rates

Value of entitlements higher than the regional flat rate

• Farmers disposing mainly over permanent pasture but without reference amounts from animal production,

• Dairy farmers, farmers with succler cows, as well as sheep and goat farmers with extensive use of permanent pasture,

• Arable crop farmers without any reference amounts (e. g. from starch potatoes, sugar beet, beef production).


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Conclusions• 5-year static period + additional 4-year

transitional period for adapting farmers to the new situation

• attempts for exemptions for certain sectors (sugar, milk) could be rejected

• farmers seem to have accepted flat rate despite of considerale reallocation of funds ?

• Outlook for the future: uniform value for the whole country


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Thank you very much for your attention !

Flatter rate: Germany‘s experience Andreas Müller Unit 617 (Direct Payments)

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