The redistributive payment explained

The majority of European Union farm holdings are under 28 hectares, and the small size of these farms means that they cannot benefit from economies of scale. To help combat this, EU countries can elect to support smaller farmers through the redistributive payment.

To redistribute support to smaller farmers, EU countries may allocate up to 30% of their national income support budget to a redistributive payment. This payment targets the first few hectares on a farm, meaning that all hectares below the threshold receive additional support. This is defined by the EU country in question. This helps small farmers, as a higher proportion of the hectares on their farms will qualify for the higher payments.

The number of hectares for which this payment can be allocated is limited to a threshold set by national authorities (30 hectares or the average farm size in the country, in case it is above 30 hectares). The amount per hectare is set by each EU country, and cannot exceed 65% of the average payment per hectare. The amount of the top-up payment per hectare varies from country to country.

New CAP: 2023-27

In June 2021, following extensive negotiations between the European Parliament, the Council of the EU and the European Commission, agreement was reached on reform of the common agricultural policy (CAP). The new CAP will begin on 1 January 2023.

Under the new CAP, changes will be made to the existing income support system, with measures being taken to ensure a fairer distribution of financial support for farmers and workers across the EU. Until 2023, current income support measures will continue, in line with the provisions of theCAP transitional regulation.