Instrument

Smallholders' premium

Description

The smallholder’s premium is a premium paid to farms under a certain maximum size, mostly to increase the competitiveness of smaller farms compared with large-scale operations (economies of scale) and to preserve a family business structure. By enabling farming families to invest in sustainable and viable farming systems they are enabled to secure a decent income. Besides being paid the premium, small-scale farmers can also be exempted from certain bureaucratic requirements, e.g. relating to social or environmental policy.

Requirements

  • A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
  • Clear and coherent political strategy and targets for policy-makers and public authorities
  • Clear responsibilities in public authorities
  • Close cooperation and knowledge sharing with farmers' organisations
  • Country-wide register of farms and / or enterprises involved in the agri-food sector
  • Regulated and legally protected payment structures
  • Skilled / specialised personnel to man the respective institutions / provide the respective services

Possible Negative Effects

  • Market distortion
  • Risk of reverse structural change (splitting of farms)
  • Nepotism and corruption
This page was last edited on 18 June 2020 | 18:43 (CEST)