Overview of the new EU Agricultural policy

The Common Agricultural Policy (CAP) for 2023–27 introduces significant changes to support sustainable farming in Europe. Covering over 10 million farms and employing 17 million people within the EU, the policy aims to enhance farming competitiveness while addressing environmental and social objectives.

CAP Strategic Plans
A view of a vast field with rows of crops neatly aligned, and a large EU flag in the background. The crops appear healthy and vibrant, reflecting the success of the new CAP strategic plans in improving agricultural practices.

Key Areas of Reform
The EU's new agricultural policy offers greater flexibility, allowing Member States to design CAP strategic plans tailored to their specific needs. Key changes include:

• Transitioning to sustainable farming methods, such as organic farming and agroforestry.
• Enhanced income support, with direct payments constituting about 70% of the CAP budget.
• Efforts to standardise income support to reduce disparities with non-agricultural income.

Main Objectives
The CAP’s primary goals are to make farming both sustainable and competitive, with 44 indicators in place to monitor progress. The main objectives are:

• To improve the environment through sustainable farming practices and targeted payments.
• To establish a robust system for annual progress monitoring.
• To support young farmers and enhance rural areas, providing better internet access for 18 million people.

The CAP is underpinned by two principal funds: the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD). These funds assist rural economies and promote greater participation of women in farming, focusing on productivity and sustainability, while ensuring that EU policies align with the CAP's objectives.

Sustainability and environmental goals

In recent years, the CAP has set new goals to meet environmental and climate laws. It aims to support the EU’s targets through national CAP Strategies. These strategies focus on environmental and climate actions under the new regulations. Now, obtaining financial assistance is dependent on adhering to strict nature-related rules, such as preserving areas of land for natural habitats.

Targets of the European Deal
The CAP ensures that farming remains sustainable. Agriculture plays a crucial role in addressing climate challenges and preserving nature. Since farming in Europe accounted for 32% of emissions in 2020, substantial changes are required. The CAP is aligned with climate objectives, requiring farmers to contribute to achieving these targets. If the EU intensifies its efforts, farming emissions could be reduced by 5% by 2030.

Extreme weather in EU countries has led to significant financial losses, with the agricultural sector bearing more than half of these costs. The EU aims to prevent such disasters by promoting sustainable farming practices and enhancing the resilience of natural ecosystems.

Environmental Schemes
Environmental schemes are a major component of the CAP, receiving at least a quarter of direct payment funds. These schemes incentivise farmers to adopt environmentally responsible farming methods. This demonstrates the CAP’s strong commitment to sustainable agriculture, with approximately 40% of its budget allocated to climate and nature-related initiatives.

Farmers must comply with specific requirements to receive subsidies, including dedicating 4% of their land to natural habitats. The EU plans to support small-scale farmers by easing certain regulations. It also seeks to increase transparency in farming costs and improve market regulations to further sustainable agriculture.

The EU is also working towards halving food waste by 2030. A new plan aims to promote healthier eating habits, refine food purchasing rules, and provide clearer labelling. Environmental schemes and other CAP initiatives are integral to the EU’s vision for a sustainable future.

Social objectives in the CAP 2023-27

The new CAP 2023-27 framework places a strong emphasis on social sustainability in farming, addressing issues such as support for young farmers and promoting gender equity in agriculture.

Supporting Young Farmers
The CAP 2023-27 underscores the importance of attracting new entrants into the farming sector. It mandates that member states allocate at least 3% of their direct payments to young farmers. This initiative is designed to retain younger generations in farming, contributing to food security and the sustainability of agricultural practices.

Strategic plans and implementation

The implementation of CAP national plans under the 2023-2027 framework is crucial. Each member state designs these plans to meet their specific agricultural needs while aligning with EU agricultural strategies. Countries combine various interventions to harmonise income support with rural development.

Regulation (EU) 2024/1468 streamlines these strategies, aiming to reduce administrative burden, increase flexibility, and create a stable policy environment. For example, it simplifies the rules for national schemes, making compliance easier for countries.

Recent events, such as Russia’s invasion of Ukraine, have influenced the EU's agricultural policy, underscoring the need for adaptable and effective measures.

Member states now have the ability to define certain terms within their strategies, such as 'arable land' and 'permanent crops,’ allowing policies to be tailored to local farming conditions and needs.

The focus on sustainability is robust. By 2024, 7.5% of the budget will be allocated to biodiversity, increasing to 10% by 2026 and 2027. These measures are essential for enhancing rural development strategies, promoting sustainable farming, and protecting the environment.

The first year of the CAP Strategic Plans in 2023 demonstrated the importance of effective planning. Member states used these plans to improve their agricultural practices and reduce bureaucracy, making policies more efficient and easier to implement.

A focus on performance and results

The EU's Common Agricultural Policy (CAP) has undergone significant changes, with a greater focus on performance and results. This shift enhances accountability and transparency in monitoring agricultural policies, marking a considerable step forward.

Performance Monitoring
The revised CAP employs a set of performance indicators to assess progress. These metrics allow us to determine whether we are achieving our objectives. For instance, the Farm to Fork Strategy targets 25% of agriculture to be organic by 2030. It also seeks to reduce the use of pesticides and fertilisers. Every two years, we review CAP Strategic Plans to ensure they remain on track. This process encourages collaboration towards shared goals.

Evaluation Framework
The CAP's results-oriented approach is supported by a detailed evaluation framework. This framework assesses the effectiveness and efficiency of strategies, examining factors such as the number of farmers benefiting and the extent of peatland restoration. It also evaluates voluntary schemes for farmers and their role in addressing environmental challenges. By regularly reviewing the CAP's performance, we ensure that our farming policies are both effective and sustainable.

The CAP includes voluntary schemes for farmers, which, while sometimes complex, are scrutinised by the EU to determine their environmental benefits. This thorough evaluation ensures that our agricultural practices contribute to long-term sustainability.

By maintaining high standards, we ensure that our farming aligns with the CAP's objectives, guiding us towards a more sustainable future.

The role of innovation and knowledge in Modern Agriculture

In today's rapidly evolving farming landscape, continuous improvement is essential for a sustainable and resilient agricultural sector. Innovation has become a central component of modern farming, enhancing both productivity and sustainability.

The new Common Agricultural Policy (CAP) emphasises the significance of research and innovation. It has partnered with the Horizon Europe programme, which allocates approximately €10 billion for projects related to food, farming, and rural development.

Importance of Research
Horizon Europe's funding for agricultural research is crucial for initiating new projects. These funds drive significant advancements, making farming more efficient, reducing environmental impact, and addressing challenges related to climate change.

This funding is vital for overcoming emerging challenges and developing new farming techniques and technologies.

Farm Advisory Services
Farm advisory services play a pivotal role in disseminating agricultural knowledge. They convey important research findings to farmers, enabling them to adopt best practices.

These services create a link between researchers and farmers, fostering an environment where new ideas can be effectively implemented in practical settings.

Integrating these services into the CAP ensures seamless and effective knowledge transfer, helping farmers adopt new methods. This, in turn, enhances farming productivity and sustainability.

By supporting these services, we ensure that the benefits of new research are accessible to all stakeholders.

In summary, the combination of innovation, research funding, and farm advisory services through Horizon Europe contributes to a forward-looking and robust agricultural sector.

Income support and fair distribution

The CAP 2023-27 framework introduces a new income support system aimed at ensuring fair agricultural support across the EU. This system is particularly beneficial for smaller and medium-scale farmers. Over the past decade, income support has accounted for approximately half of farmers' earnings on average.

Redistributive Income Support Tool
A central element of this new framework is the redistributive income support tool. This tool ensures that at least 10% of direct payments are allocated to income redistribution. The EU budget allocates nearly €188 billion for income support from 2023 to 2027. Payments start at €200 per hectare in 2023, rising to €215 per hectare by 2027. This support is vital for assisting farmers in countries where the average payment is below 90% of the EU average.

Different CAP payments influence income in various ways. General direct payment schemes typically help to equalise income, whereas payments for animal welfare or environmental initiatives have a lesser impact on income. This highlights the need for a tailored approach to maximise the effectiveness of these supports.

Leveraging market orientation

The new Common Agricultural Policy (CAP) for 2023-27 places significant emphasis on market orientation. This approach is crucial for strengthening farmers' positions within the supply chain and enhancing the competitiveness of the agri-food sector. By implementing changes in the agricultural market, we aim to make farmers more robust and resilient to market fluctuations.

Improved Bargaining Power
The new CAP seeks to enhance farmers' bargaining power in negotiations. Rules that encourage cooperation are vital in this regard, enabling farmers to collaborate effectively. Producer groups and associations play a key role in planning, supply management, and identifying optimal market opportunities.

By collaborating, farmers can secure better prices and terms, thereby strengthening their position within the value chain.

Market-Based Strategies
The CAP also incorporates market-based strategies to support agriculture. A financial reserve of at least €450 million per year is in place to safeguard against market volatility. Specialised support is provided to sectors such as wine, fruit, vegetables, and olive oil to enhance their competitiveness.

With approximately €510 million allocated in 2023 for specific measures, we demonstrate our commitment to maintaining the stability and growth of the agri-food sector. These initiatives contribute to building a resilient and adaptable agricultural industry, capable of overcoming challenges and seizing new opportunities.