State aid - agricultural State aid
If you think a new project might involve state aid you might need to get state aid cover. There are different types of cover available and which you will use will depend on the exact type of aid you want to pay. The answers to the following questions will help us determine whether or not you require state aid and which kind over cover is needed.
1. Does your project involve aid?
Some guidance on how to tell if your project involves state aid is available in the State Aid Guide: guidance for state aid practitioners available through the DTI website.
2. If your project does involve aid, can you alter it to remove the aid element whilst still achieving the same policy goals?
3. Does your project already have cover under an existing scheme?
If so there may be no need to get additional cover.
4. Is your project agricultural?
An agricultural aid is support related for activities relating to the production, processing and marketing of agricultural products. With regard to processing, for the activity to be agricultural under official definitions, the product at the end of processing must remain an agricultural product. An agricultural product is one listed in Annex 1 to the treaty establishing the European Community (except fisheries products). If your aid is not agricultural, it will be covered by separate rules. You should then seek advice from the DTI website.
5. Does your project relate to production, processing or marketing activities?
‘Production’ means farming. ‘Processing’ means any operation on an Annex 1 product resulting in a product which is also an Annex 1 product, except on farm activities necessary for preparing an animal or plant product for the first sale. ‘Marketing’ means holding or display with a view to sale, delivery or any other manner of placing on the market, except the first sale by a primary producer to resellers or processors and any activity preparing a product for first sale. A sale by a farmer to final consumers is considered marketing if it takes place in special premises reserved for marketing activities (eg. a farm shop).
The distinction is important because different rules often exist for state aid for production on the one hand and processing and marketing on the other. If your project involves aid to both production and processing or marketing you will need cover under both sets of rules.
6. What is the approximate maximum value of the aid per beneficiary?
A beneficiary is the business which ultimately receives the benefit of the aid. This is not necessarily the same as the business which receives the money. For example, if you award a contract to a business to provide advice to farmers, providing you follow relevant procurement rules, the beneficiaries of the state aid are the farmers who receive the advice.
7. What exactly will the money be spent on?
This is known as the eligible costs of the project. The eligible costs are important because the state aid rules set out a list of the types of eligible costs which are permitted and your proposed eligible costs must tally with these.
We can help you address these questions and determine which form of state aid cover you should seek: contact us or your relevant devolved administration.
- Department for Business, Enterprise and Regulatory Reform (DBERR) website
- State Aid Guide: guidance for state aid practitioners (PDF 330 KB)
- Annex 1: agricultural products
Page published: 21 November 2007