The European Commission proposals for the next CAP would allow member states provide grant aid at a rate of up to 75% for on-farm investment, with the maximum allowable rate increased to 85% for young farmers.

A list of ineligible investment items is to be developed by each country that cannot receive grant aid in accordance with the ‘do not do significant harm’ principle, which means that investments that could significantly increase greenhouse gas emissions or nutrient losses to water must be ruled out of investment support schemes.

This list of ineligible items must include the purchase of livestock (aside from rare or local breeds), land costs where grants would make up more than 10% of the purchase costs and the servicing of loans.

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However, the Commission noted that an exception can be made for grant aiding land purchases if the land is to be used for environmental conservation and carbon-rich soil preservation.

The proposals note that investment aid should be payable where the funds are used to restore farm production potential after climate or catastrophic events, but that this aid shall be granted only when such an event has destroyed at least 30% of a farm’s production potential.

EU countries are generally not permitted to pay grants for investments where the funding applied for is sought to take a farm up to a level of regulatory compliance that a farm had been subject to under law.

A departure from the previous CAP on-farm investment schemes is that farmers will have a longer term of three years to avail of grant aid for taking their facilities up to regulatory standards after the date that the regulations changed.

For young farmers setting up for the first time, the three-year window where grant aid can be paid for taking a farm up to regulatory compliance will apply from the date that they take over a farm.