European Commission approves €650 million Dutch scheme to compensate companies in the floriculture, specialty horticulture and potato sectors

The European Commission has found a €650 million Dutch scheme that compensates companies in the floriculture, specialty horticulture and potato sectors for the loss of revenue or additional costs related to the collapse in demand for their products to be in line with EU State aid rules.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €650 million Dutch scheme enables the Netherlands to compensate Dutch businesses active in the floricultural, horticulture and potato sectors for the damage they have suffered due to the coronavirus outbreak and help them to continue their activities in these difficult times. We are working closely with Member States to find workable solutions to support companies in these difficult times, in line with EU rules.”

The Netherlands notified to the Commission a €650 million aid scheme, of which €600 million will be allocated to aid farmers and traders in the floricultural sector and companies in the specialty horticultural sector for the food-service market, who have been negatively affected by the coronavirus outbreak. The remaining €50 million will be allocated to compensate potato growers affected by the outbreak.

Under the scheme, these operators will be entitled to compensation for certain damages suffered. As notified by Netherlands, the compensation in the form of direct grants can cover a maximum of 70% of the loss of revenue or additional costs for farmers and traders in the floricultural sector and companies in the specialty horticultural sector and a maximum of 44% of the loss of revenue or additional costs for potato growers.

The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), and the European Union Guidelines for State aid in the agricultural and forestry sectors and in rural areas 2014 to 2020. The latter set out criteria for the assessment of damage caused by exceptional occurrences to compensate companies in the agricultural sector under Article 107(2)(b) TFEU.

The Commission considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member States to compensate for the damages linked to the outbreak are justified.

The Commission found that the Dutch aid scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the foreseen compensation does not exceed what is necessary to make good the damage.

The Commission therefore concluded that the scheme is in line with EU State aid rules.

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