10th Dec 2023


The CAP reform - what it is and why it matters

  • The Common Agriculture Policy has already failed in the past decade to reverse long-standing decline in biodiversity caused by intensive farming, according to EU auditors (Photo: European Parliament)

Three years of backroom wrangling and fierce public debate came to an end, as EU member states finally greenlit 'green' reform of the bloc's multi-billion euro farm-spending programme, the Common Agriculture Policy (CAP) on Monday (28 June).

The revised CAP will spend around €387bn - nearly a third of the EU's 2021-2027 budget - on two strands of payments: direct payments to farmers and other support for rural development.

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The most-recent reform of the CAP, one of the longest-standing EU policies, was back in 2013.

EU capitals now have to prepare their strategic plans, due to be presented by the end of the year - with first payments expected to start from 2023 onwards.

1. How much greener the new CAP will be?

Agriculture is directly responsible for more than 10 percent of the EU's greenhouse gas emissions. It is also considered one of the main drivers of biodiversity-loss, as well as a key contributor to air, water and soil pollution.

How much money from the €270bn direct payments should flow into green farming projects was the main sticking point during the lengthy negotiations.

EU negotiators finally agreed that 20 percent of direct payments to farmers should go to environmental-friendly projects in the first two years, raising to 25 percent in the final three years. Examples of these 'eco-schemes' include precision farming, agroforestry, and organic farming.

However, there will be a 'rebate' loophole that will allow EU countries to spend the eco-schemes money on other projects, under certain conditions.

EU officials also set out a 35-percent green spending from the share of agricultural development money. But this includes non-environmental activities such as animal welfare.

As a result, green groups have slammed the deal for being "full of greenwashing," claiming that it is not aligned with the EU climate targets.

The new CAP refers to the objectives of the Green Deal, but there are no binding provisions or targets to hold member states to account if their national plans lack environmental ambition.

"The new CAP relies on the goodwill of national decision-makers," according to Sarah Martin, a lawyer from NGO ClientEarth.

Green MEP Martin Häusling said that the reform was a "joke" and that the implementation of the eco-schemes would be "extremely weak," since they depend on member states.

In the period 2014-2020, more than €100bn was earmarked for climate change, but emissions from agriculture have not actually decreased since 2010, EU auditors confirmed last week.

2. How does the reform address biodiversity loss?

The EU has lost 57 percent of its farmland birds since the 1980s, while insects populations are also collapsing.

Moreover, it is estimated that the biodiversity crisis is already reducing crop yields because of the loss of pollinators and natural pest predators.

However, the revised CAP fails to set out a minimum requirement of at least 10 percent of farm space for nature, in the form of trees, ponds, flower strips or hedges - despite that being both recommended by scientists, and a target of the EU's Biodiversity Strategy.

EU auditors previously warned that CAP had failed to reverse the long-standing decline in biodiversity caused by intensive farming.

Currently, 45 percent of agricultural habitats are deteriorating in the EU, compared to only eight percent in 'good' conservation status.

3. Is the new CAP more socially-just?

Under the current system, the majority of farming subsidies go to large-scale and often intensive and industrial farms.

But the new CAP says that at least 10 percent of national direct payments would have to be used to support small and medium-sized farms.

Additionally, member states would be able to use at least three percent of rural development funding to support young farmers.

According to Eurostat, the total number of farms in the EU has been in steep decline for decades, due to a "tendency towards consolidation, with large farms accounting for a growing proportion of the land farmed in the EU".

The new CAP will also include a new social dimension - a proposal from MEPs that was not part of the commission's initial proposal.

By 2025 at the latest, national labour inspectors will be connected with CAP-paying agencies to punish those found in breach of EU labour market rules.

The deal also creates a €450m crisis fund to help farmers with price or market instability.

4. How does CAP reform prevent 'pesticide-risk'?

During the reform of the CAP, EU negotiators failed to successfully ban the import of agricultural products from third countries that might have been exposed to pesticides prohibited inside Europe itself.

Instead, the EU Commission committed to deal with this issue as part of its Farm to Fork Strategy and to revise World Trade Organization rules on the matter.

Last year, NGO PAN Europe found residues of 74 pesticides banned in the EU in 5,811 food samples.

"For us, it was important to stop tolerating the import of pesticides that have negative effects on the environment, [but] the council was against that from the beginning," said socialist MEP Eric Andrieu, leading MEP on the CAP reform.

Meanwhile, the new CAP does not foresee any legal provisions to transition away from pesticides and fertilisers. Yet - somehow - the EU's Farm to Fork strategy aims to reduce their use by 50 percent over the next decade.

5. Winners and losers

EU legislators have both claimed a huge victory on the CAP reform.

However, many consider that domestic capitals have come out of the negotiations as the clear winner.

"The parliament has lost virtually all the amendments that could have made the future CAP somewhat greener and fairer, while the [European] Council has managed to get most of its positions through," said Jabier Ruiz from WWF.

"Unless the parliament wakes up and pulls the handbrake, this CAP will just protect the status quo," he added.

The Greens/EFA group of MEPs have even launched a campaign to vote against the reform in the next plenary.

'Marked divergences' remain in CAP reform showdown

The 'super trialogue' on the knotty issue of Common Agriculture Policy reform later this week aims to give a rough approximation of the different institutions positions. However, there are still big differences between national capitals and the European Parliament.

EU farming deal attacked by Green groups

EU agriculture ministers at around 4am on Wednesday reached a common position on the bloc's farming policy post-2020, including ring-fencing part of the CAP budget for initiatives that protect the environment - but with much flexibility for member states.


Farmers among new MEPs deciding on EU farming money

Renew Europe MEP Asger Christensen, from Denmark, earns €20,000 per month as a farmer. He became a member of the agriculture committee, which could create a conflict of interest situation.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.


Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

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