Why the EU’s budget must work for systems, not just sectors

The European Commission’s proposals for the post-2027 Common Agricultural Policy (CAP) and the €2 trillion Multiannual Financial Framework (MFF) will shape Europe’s food, climate, and rural livelihoods for the next decade and beyond.

The stakes are high. Europe is already facing the reality of droughts, floods, soil degradation, and biodiversity collapse. Farmers and rural communities are on the frontline of these crises, while consumers feel the knock-on effects in food prices and supply disruptions. Yet instead of responding with a meaningful long-term strategy, the EU’s proposal risks diluting environmental safeguards and reducing coherence by rolling agriculture, cohesion, and social policy into a single ‘mega-fund’ focused on efficiency rather than enabling effective transformation.

What is presented as simplification could in fact accelerate unhelpful deregulation. Cuts of up to 30 percent combined with weaker environmental conditionalities would make it harder to uphold common standards across Member States. Rather than steering Europe toward resilience, this risks fragmenting efforts into competing national priorities, where short-term economic gains come at the expense of long-term security. As long as CAP instruments, disaster finance, insurance markets, prudential policy, and data live in separate lanes, the EU keeps a big, expensive protection gap, especially on drought.

Systemic risk requires systemic solutions

The problem is structural. Agriculture is inseparable from climate, biodiversity, health, and finance. But in practice, policies and budgets treat them as if they belong to different worlds. As a result, investments meant to strengthen food security often undermine climate goals, while climate action is pursued without regard for rural livelihoods. Europe can no longer afford to operate in these silos.

That is Climate KIC’s core insight from over a decade of work with farmers, innovators, and governments across Europe. In a recent policy lab we held in Ireland, ministries, agencies, researchers, and farmers came together to explore the potential of biochar – a residue from biomass used in energy production – for carbon removals. By connecting soil health, waste management, energy efficiency, job creation, and finance, the initiative identified and bridged the hidden gaps that typically block progress and reduce momentum. For those in the lab, it felt like a breakthrough.

This is the power of a systemic approach: aligning innovation, finance, and governance around shared outcomes. When one of these elements is missing, transformation stalls. When they come together, they create a ripple effect.

Bridging the gap between the field and EU policy

Farmers are not resistant to change: they are navigating it daily. What they want is predictability, fairness, and agency in shaping the systems that govern their work. What innovators want is stability to take risks and scale solutions. What public authorities want is confidence that investments will deliver durable outcomes. The goal of EU policy is to create the enabling framework and strategic change management such that these efforts reinforce each other.

So, what should change? Here’s a roadmap for systems transformation in three steps:

1. Bridge policy and institutional divides. Align agriculture, climate, biodiversity, and health under a shared vision of regenerative land use and resilient food systems. That means connecting soil health, water resilience, and food waste reduction rather than treating them as separate files.

2. Reform financial incentives and safeguards. Shift from compliance-based subsidies to outcome-oriented financing and integrated risk metrics and standards that reward long-lasting benefits like carbon sequestration, biodiversity restoration, and community resilience.

3. Invest in people and innovation. Farmers, rural communities, and public servants need the tools, skills, and mindsets to drive systemic change. Experimentation and cross-sector learning are means to that end – from biorefineries that turn farm waste into high-value products, to methane-reducing technologies tested with start-ups and farmers on the ground.

Europe’s farmers, citizens, and innovators are ready. What they need is a budget and policy framework that matches their determination with long-term vision and stability. If the EU chooses coherence over fragmentation and resilience over deregulation, it will build a food system that can transform the lives of over 450 million people. If it fails to do so, we risk locking ourselves into another decade of missed opportunities – with far higher costs when the next crisis arrives.