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European Commission decided on aid under Article 141

Ministry of Agriculture and Forestry
Publication date 27.2.2008 10.36
Press release -

The Commission of the European Communities gave today, on 27 February, its official decision on the aid to be paid in southern Finland. The decision follows the outcome of the negotiations between Minister Sirkka-Liisa Anttila and Commissioner Mariann Fischer Boel. The aid programme is based on Article 141 of the Accession Treaty of Finland, and it contains direct income payments to ensure the preconditions for profitable farming and measures to improve the structures of production. Aid is paid to farmers in support areas A and B.

"I am vary happy that this decision has now been made. This six-year agreement gives the necessary certainty to farmers in southern Finland for the years to come. I am also very pleased with the spirit of the negotiations with Commissioner Mariann Fischer Boel and the Commission officials and the fact that the official decision was given so soon after the political agreement had been reached. Our needs find a lot of understanding within the Commission", says Minister of Agriculture and Forestry Sirkka-Liisa Anttila.

Based on the Commission decision direct income payments may be applied in animal production, greenhouse production and horticultural product stores. New forms of aid to be introduced in 2008 are the hectarage-based payments to animal farms and aid for special crops in southern Finland, which is paid on the basis of the area under open field vegetables and starch potato. The maximum amount payable as direct income payments in 2008 is 93.9 million euros. The total amount of aid is degressive during the programme period so that in 2013 it is 62.93 million euros. The procedure to be followed in the context of the reform of the compensatory allowance scheme (LFA) has been written down in the Commission decision: the annual amount of direct payments in sectors that receive such income aid is reduced by the possible increase in compensatory allowances.

The new decision on the aid under Article 141 changes the structure and forms of the national aids payable in southern Finland. From 2008 part of the aid to animal farms will be paid as hectarage-based payments. In 2008 the aid for pig and poultry sectors continues to be coupled to the production, but from 2009 decoupled farm payments, mainly according to reference quantities based on animal units in 2007, will be applied. The other direct income payments under Article 141 will continue to be coupled to the production all through the programme period.

The structural change indemnity for pig and poultry sectors allows the payment of decoupled aid for two years, also to farms that do not fulfil the requirements for animal farms eligible for the national top-ups to the compensatory allowances (LFA). The maximum indemnity per farm is 20 000 euros a year and it is paid for two years, after which the reference quantity of the farm is abolished and no aid is paid.

The Commission decision also contains the investment aids and additional start-up aid for young farmers paid in southern Finland. By the decision Finland is obligated to continue to apply higher investment aids in sectors which are eligible for direct income payments under Article 141 (in particular investments in dairy and beef sectors and pig and poultry sectors. In pig and poultry sectors opening the application for investment aid is subject to Commission permission based on the market situation.

Further information at the Ministry of Agriculture and Forestry:
Jouni Lind, State Secretary, tel. +358 (0)9 160 53323, +358 (0)50 521 3305
Esa Hiiva, Head of Section, tel. +358 (0)9 160 52657, +358 (0)40 733 6225

Sirkka-Liisa Anttila