The sleepy town of Nidda is only one of Hesse’s 524 municipalities. Straddling the Nidda River, this quiet community in rural Wetterau County is home to over 130 farms that received EU agricultural subsidies in 2017. Nationwide, Brussels paid subsidies to around 300,000 farms: from part-time farmers to big agribusinesses to producer associations who raise pigs, milk dairy cows, cultivate grain or grow fruits and vegetables.
Applying for subsidies can be complicated, however. There are 40 different processes, each with its own logic, architecture and system. To make matters worse, the underlying EU regulations are constantly changing. An IT system can only handle this kind of complexity if it is sufficiently powerful and flexible enough to adapt quickly to changes.
To meet this challenge, the Hesse Bank for Economic and Public Infrastructure Development (WIBank) decided to migrate its system for distributing agricultural subsidies to an SAP-based cloud software system. The software integrates a variety of business applications for digitally performing around 20 different funding procedures from the two primary funding programs of the EU’s Common Agricultural Policy (CAP).
Certainty for farmers
“Farm subsidies aren’t just extremely complicated; they’re also closely watched by the public,” says Gottfried Milde, Chairman of the Executive Board at WIBank. “Hessian farmers need certainty and financial resources to make essential investments. They count on receiving their subsidies on time.” The bank, a member of the Helaba Group, operates subsidy programs for Hessian companies, entrepreneurs and individuals and helps them tap state, federal and EU subsidies.
The subsidy programs can be hard to navigate and, to make matters worse, each of them calculates funding needs differently. The European Agricultural Fund for Rural Development (EAFRD), for example, pays out 1.35 billion euros alone to encourage sustainable, environmentally responsible land management and rural development. During the 2014-2020 funding period, Hesse is slated to receive around 319 million euros out of the EAFRD budget.
Another five billion euros is available from the European Agricultural Guarantee Fund (EAGF). This fund pays every farmer an average of 281 euros in income support for each hectare of land. These payments make up an estimated 40 percent of farm income in Germany on average. In exchange, the EU requires farmers to meet environmental and animal welfare standards.