Who (Really) Benefits from the Complementary Redistributive Income Support? Qui bénéficie (vraiment) de l'aide redistributive complémentaire au revenu ? Wer profitiert (wirklich) von der Ergänzende Umverteilungseinkommensstützung?

Abstract

The 2013 reform of the Common Agricultural Policy (CAP) introduced the redistributive payment as an optional scheme to redistribute direct support between farmers by granting them an additional payment for the first hectares up to a threshold. In 2021, only 15 per cent of the direct payments went to more than 75 per cent of European farms (European Commission, 2021). The 2023 CAP reform made this scheme compulsory under the name of the Complementary Redistributive Income Support (CRIS). Under CRIS, a farmer receives Basic Income Support (BIS) plus CRIS for each hectare of their farm up to a certain threshold, and then only BIS for the hectares above the threshold, irrespective of any other supports to which they may be eligible (Regulation 2021/2115, Article 29). Member States are free to decide the per hectare amounts of CRIS and BIS and the threshold level below which CRIS is granted. They can also define different amounts of CRIS for different ranges of farm area sizes, and set all these parameters at national or regional level. With some exceptions, Member States must devote at least 10 per cent of their first pillar direct payments on implementing CRIS, which reduces the budget available for BIS accordingly.

An analysis of the financial annexes of the national CAP strategic plans shows that, of the 25 Member States implementing CRIS (Malta and Denmark have obtained a derogation), 18 have planned to spend this 10 per cent minimum or more in 2017 (Figure 1), four of them reaching 20 per cent or more. The share of hectares concerned is much more varied: with the same 10 per cent budget, Portugal (PT) will cover 19 per cent of its total supported area while Austria (AT) will cover 68 per cent.

As intended, CRIS leads to redistribution of part of the payments from larger to smaller farms. However, the farm size up to which farmers actually benefit from the policy is not apparent from the scheme parameters and may be well above the CRIS threshold. Take the example of Czechia's strategic plan (Figure 2). In 2027, a 200 ha Czech farm will receive a total of 36,300 € (green line), with 13,200 € coming from BIS (66 €/ha on every hectare; blue line), and 23,100 € coming from CRIS (154 €/ha up to 150 ha; yellow line).

Instead, if the same total budget were to be distributed only through a uniform payment per hectare, the same farm would receive a total of 24,000 € (120 €/ha on every hectare; red line). A comparison of the green and red lines shows that farms with a size equal to the CRIS threshold benefit most from the redistribution. However, in Czechia, even farms of up to 430 ha should benefit from CRIS, which is almost three times larger than the 150 ha threshold.

Figure 3 reports the results of similar calculations for the 25 Member States implementing CRIS, together with their 2020 average farm area. While the maximum area of beneficiary farms is always higher than the CRIS threshold by construction, it is also higher than the average farm size in most cases, suggesting that the degree of redistribution varies between countries.

From this analysis we conclude that while the new CRIS scheme does redistribute income support from larger to smaller farms, the maximum size of farms that actually benefit from this redistribution is well above the threshold up to which the additional payment is granted. In other words, CRIS payments are still far from being exclusively targeted at the smallest farms.