The legislation will provide for transferring 6 per cent of what are termed "direct payments" from the "first pillar" of the Common Agricultural Policy (CAP) to the "second pillar" in 2021, as in 2020.

The funds are to be used in particular to finance ongoing measures. In addition, new environmental measures such as planting flower strips and reducing the use of fertilisers and plant protection products are to be supported, along with organic farming. That is a contribution to addressing the major challenges facing agriculture in the fields of climate change mitigation, environmental protection, conservation and animal welfare.

The Common Agricultural Policy

Within the framework of EU agricultural policy, farmers are granted "direct payments" to underpin their income and cover risks. This "first pillar" of the Common Agricultural Policy is based on the area of land farmed. The larger the area, the higher the direct payments. Over the period 2014 to 2020, Germany received an annual sum of around 4.8 billion euros from the EU under this pillar.

The funds from the "second pillar" are used specifically for programmes to encourage sustainable and environmentally sound farming and rural development. Organic farming is one example, along with various agricultural environmental programmes. Some of the funds are also channelled into village development, internet coverage, tourism and flood protection. Every year, Germany receives about 1.4 billion euros under this pillar.

More money for agricultural environmental policy

Hitherto, the Direktzahlungen-Durchführungsgesetz (Direct Payments Implementation Act) for the application years 2015 – 2019 has provided for 4.5 per cent of the annual funding received from the EU under the direct payments pillar being reallocated as addition funding to promote rural development and agricultural environmental programmes. The new bill will raise this figure to 6 per cent, as in 2020.

The rise from 4.5 to 6 per cent was an integral part of the agricultural package adopted by the Cabinet in late summer 2019. Other elements include the insect protection programme and draft legislation that would introduce an animal welfare seal to be used on products.