Luxembourg MPs Give Green Light to New Agricultural Law with €812m Budget

On Thursday 13 July 2023, the Chamber of Deputies (Luxembourg's parliament) passed a new law on support for the sustainable development of rural areas.

According to Luxembourg's Ministry of Agriculture, Viticulture and Rural Development, this agricultural law provides the basis for the financial framework of the agricultural and rural development policy for the period 2023 to 2027 and implements the EU's Common Agricultural Policy (CAP) in the Grand Duchy.

Following the vote, Luxembourg's Minister of Agriculture, Viticulture and Rural Development, Claude Haagen, stated: "The new agrarian law intends to support the entire Luxembourg agricultural sector, carried by some 1,750 family-type agricultural, wine-growing and horticultural holdings, but also rural development initiatives that improve the quality of life of our citizens."

Although the law guarantees the financing of public aid schemes, more than one-third of the overall budget is devoted to agri-environmental aid in favour of the climate, which active farmers receive on the condition that they orient their mode of production towards sustainable practices that respect the environment, the climate, biodiversity and animal welfare. "The ecological and energy transition of the agricultural sector will be financially supported by this law," added Minister Haagen.

The bill has been amended taking into account the grievances of the sector, according to the ministry, so that aid is now more targeted for the benefit of active farmers. Considering the takeover of farms as one of the great challenges of Luxembourg agriculture, young farmers will benefit from specific aid for setting up. Moreover, the law gives more importance to the recognition of diplomas and professional experience.

The ministry added that the law places the competitiveness of all Luxembourg agricultural sectors at the heart of concerns. It aims to guarantee a fair income for producers and to maintain future-oriented local food chains. Other specific aid aims to stimulate production and encourage the diversification of agriculture, in particular by further subsidising the production of fruit and vegetables in Luxembourg.

In accordance with the climate objectives and in order to reduce ammonia and greenhouse gas emissions, the animal herd will only be able to evolve under certain conditions under this new law.

The use of new technologies, the electrification and digitalisation of agriculture, strategic partnerships with the research and innovation sectors and the development of holistic agricultural advisory programmes feature among the other priorities of the law.

The budget of this agricultural law is set at more than €812 million for the period 2023 to 2027. About one-quarter of the budget (€225 million) comes from the European Union and three-quarters (€587 million) is supported by the state. "When Brussels gives €1, Luxembourg co-finances up to €3, and thus supports its agriculture and its rural areas with the maximum possible national co-financing within the rules of the CAP," elaborated Minister Haagen, whilst recalling that this law will continue to be based on three pillars: ecological, economic and social.