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Commission approves €1.74 billion Danish scheme to support mink farmers and related businesses

Christian Fernsby |
The European Commission has approved under EU State aid rules, an approximately €1.74 billion (DKK 13 billion) Danish scheme to compensate mink farmers and mink-related businesses for measures taken in the context of the coronavirus outbreak.

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Topics: DANISH   

This follows the receipt of a complete notification from Denmark on 30 March 2021.

Following the detection and rapid expansion of several mutated variants of the coronavirus among mink in Denmark, at the beginning of November 2020, the Danish authorities announced their intention of culling all mink in Denmark. In order to avoid a similar situation developing in 2021, the Government also issued a ban on the keeping of minks until beginning 2022.

On 30 March 2021, Denmark sent a complete notification to the Commission on a Danish scheme to compensate mink farmers and mink-related businesses in this context, given the significant economic impact and loss of employment caused by these extraordinary measures. The scheme consists of two measures:

The first measure, with a budget of approximately €1.2 billion (DKK 9 billion), will compensate mink farmers for the temporary ban on mink farming. The second measure, with a budget of approximately €538 million (DKK 4 billion), will support mink farmers and mink-related businesses who are willing to give up their production capacity to the State. Support under both measures will take the form of direct grants.

The direct grants to compensate for the ban on mink farming will cover all fixed costs for those mink farmers that will temporarily close production until the ban on mink farming is lifted on 1 January 2022. This period may be extended by one year.

The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by Member States to avoid the emergence of new coronavirus variants and prevent new outbreaks, such as the temporary ban on mink farming, and the compensation for the damages linked to these interventions are justified.

The Commission found that the Danish measure will compensate the damages suffered by mink farmers that are directly linked to the coronavirus outbreak, since the ban on the keeping of mink until beginning 2022 can be considered as a damage directly linked to the exceptional occurrence.

This scheme will compensate mink farmers who will give up their production capacity to the Danish State for the long-term, with a view to restructuring an industry prone to the appearance of new coronavirus variants that could threaten to prolong the current crisis and the disturbance to the Danish economy.

It will be calculated based on two overall loss items of mink farmers: i) their loss of income for a ten year budget period; and ii) the residual value of the mink farmer's capital stock (buildings, machinery, etc.).

Mink-related businesses that significantly rely on mink production will also be eligible for support under this measure (specialised feed centers and providers, skinning factories, the auctioneer Kopenhagen Fur, etc).

A valuation commission will assess that they fulfill a number of conditions, namely that at least 50% of the businesses' turnover in the period 2017-2019 is related to the Danish mink industry and that the business cannot directly convert the production into other activities. The aid will equal the value of the part of the business that cannot directly convert its production into other activities.


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