Granting State Aid in the Agriculture Sector

Abstract

The economic aid granted in the agricultural environment is the subsystem of State Aid, that represents the economic instrument for the strengthening of competitiveness of agriculture and for creating new jobs in the agricultural sector. State Aid promoting the economic development of the agricultural and forestry sectors and of rural areas is embedded in the broader Common Agricultural Policy. State Aid or subsidies is a legal term for money given from the state budget in direct or indirect form. However, despite a general prohibition of granting State Aid by national authorities in EU member states , State Aid may be necessary to address market failures in order to ensure a well-functioning EU internal market. State Aid can only be justified if it is in line with the principles of the internal market and with the principles of Common Agricultural Policy. This paper aims to provide an overview of the conditions and criteria for granting State Aid in the agriculture sector from the Government. The analysis also includes the conditions for the provision of State Aid during the COVID-19 pandemic. The paper concludes with an analysis of the measures of the Slovak Republic supporting the competitiveness of economic entities operating in the agricultural sector.