Beierse staatssteun aan landbouwcoöperatieven was gedeeltelijk ongeoorloofd (en)

Today the European Commission took a final decision on aid worth € 5 million/year granted by Bavaria between 1991 and 2000 to machinery rings and KBM, their umbrella organisation. Aid for which no evidence can be provided that it only benefited farmers must be recovered from the machinery rings as from 1991. The Commission also found that the aid may have distorted competition outside the agriculture sector by cross-subsidising the machinery rings' commercial subsidiaries. However, the Commission cleared aid benefiting farmers (worth, on average, € 50 a year) which it found too small to distort competition.

Machinery rings are farmers' self-help organisations operating at local or regional level. The machinery rings organise exchanges of farm workers to cope with seasonal demand and to meet needs for specialised staff, coordinate the provision of tourist accommodation on agricultural and forestry undertakings and co-ordinate the sharing of machinery among holdings.

In February 2003 the Commission initiated a formal investigation into the support for machinery rings in Bavaria, Germany (see IP/03/184). The Bavarian authorities paid state aid to the machinery ring association "Kuratorium Bayerischer Maschinen- und Betriebshilferinge e.V." (KBM). The aid measure finances the co-operation between agricultural and forestry holdings via machinery rings and relief services.

In May 2004, the aid file was split and the Commission took a final decision approving, subject to certain conditions, a notified aid package in favour of Bavarian machinery rings intended to be granted over the period 2001-2005. In order to obtain full approval of this scheme, Germany has taken measures to ensure that the whole amount of aid granted to machinery rings will be passed on to farmers in the form of cheaper services, and to rule out the cross-subsidisation of the machinery rings' subsidiaries.

Today's decision only covers the aid granted by the Bavarian authorities to machinery rings in the period proceeding 2001. The aid granted to the machinery rings is not compatible with State aid rules insofar as it has not been passed on to farmers.