Voluntary coupled support (VSC) explained
Under the common agricultural policy, the link between the receipt of income support payments and the production of specific products has been progressively removed (‘decoupled’). This is to avoid overproduction of certain products and make sure that farmers are responding to genuine market demand.
However, in some situations targeted aid to a specific agricultural sector or sub-sector may be needed if it is facing difficulties. The VCS scheme aims to prevent the escalation of these difficulties, which could cause abandonment of production and could affect other parts of the supply chain or associated markets.
Therefore, EU countries may continue to link (couple) a limited amount of income support payments to certain sectors or products. This is subject to various conditions and to strict limits to mitigate the risk of market distortion.
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 the CAP transitional regulation.
VCS in practice
VCS is what is known as a production-limiting scheme and is designed to limit the distortion of market competition.
The potentially eligible sectors are cereals, oilseeds, protein crops, grain legumes, flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheep meat and goat meat, beef and veal, olive oil, silkworms, dried fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation coppice.
In order to finance voluntary coupled support, EU countries follow a number of guidelines:
- they may use up to 8% of their total income support budget.
- if certain prerequisite conditions are met, this can be raised to 13%.
- this may be raised higher than 13% if approved by the European Commission and the support meets very strict criteria.
- this percentage may be further increased by an additional 2% to specifically support the production of protein crops.
EU countries may revise their VCS decisions by 1 August of any given year, with effect from the following year.
All EU countries, except Germany, decided to apply the scheme between 2015 and 2020.
The amount of funding and the range of sectors covered vary greatly between the various EU countries.
