CULTIVAR ANALYSIS AND PROSPECTIVE STUDIES N.34 | December 2025 | The Future of the Common Agricultural Policy
CULTIVAR Analysis and Prospective Studies
CULTIVAR Analysis and Prospective Studie s® No. 34 | The futureof the Common AgriculturaPl olicy| December 2025 (this edition includes the Supplement– Agriculture and forestry: economic and structural indicators - currently only available in Portuguese) Ownership Office of Planning, Policy and General Administration (GPP) Praça do Comércio, 1149-010 Lisbon Telephone: + 351 213 234 600 Email:[email protected] | Website: www.gpp.pt Editorial team Coordination: Ana Sofia Sampaio, Eduardo Diniz, Manuel Loureiro Ana Filipe Morais, Ana Rita Moura, Eduardo Lopes, Helena Alegre, João Marques, Rui Trindade Email: [email protected] Contributors to this issue Alan Matthews, Ana Carrilho, André Trindade, Angela Dias, António Malta Reis, Bernardo Machado, Carlota Pimentel, Caroline Schmit, Cláudia Costa, Cláudia Gonçalves, Clémence Robin, Christophe Hansen, Cristina Vasques, Francisco Avillez, Hugo Costa, Idalino Leão, Joao Filipe Batista, Jorge Alberto Serpa da Costa Rita, Lucinda Costa Pinto, Luís Coelho da Silva, Margarida Colares, Maria Luís Fino, Pedro Bingre do Amaral, Pedro Miguel Santos, Pedro Santos, Rosário Lemos, Susana Barradas, Vítor Rodrigues, Yves Madre Previous issues: https://www.gpp.pt/index.php/publicacoes-gpp/cultivar-cadernos-de-analise-e-prospetiva Edition: Office of Planning, Policy and General Administration (GPP) Graphic design and finishing: Sersilito – Empresa Gráfica, Lda. Print run: 1,000 copies ISSN: 2183-5624 Legal deposit: 394697/15
CULTIVAR Analysis and Prospective Studies No. 34 December 2025 The future of the C ommnoAgricul tural Policy
Contents 7/9 | EDITORIAL SECTION I – MAJOR TRENDS 13/14 | EUROPEAN FARMERS DESERVE RECOGNITION AND SUPPORT Christophe Hansen 15/19 | EVOLUTIONOR REVOLUTION:ASSESS ING THECOMMISSION'S CAP2028-2034 PROPOSAL Alan Matthews 21/32 | THE NEW EUROPEAN FINANCIAL FRAMEWORK 2028-2034 AND THE CAP REFORM PROPOSEDBY THE EUROPEAN COMMISSION WHEN THE BUDGET TAKES PRECEDENCE OVER POLITICAL AMBITION FOR THE EUROPEAN UNION NOUVEAU CADRE FINANCIER EUROPÉEN 2028-2034 & RÉFORME DE LA PAC PROPOSÉS PAR LA COMMISSION EUROPÉENNE QUAND LE BUDGÉTAIRE PREND LE PAS SUR UNE AMBITION POLITIQUE POUR L’UNION EUROPÉENNE Yves Madre 33/39 | CAP REFORM AFTER 2027: SOME THOUGHTS ON THE EUROPEAN COMMISSION'S PROPOSALS Francisco Avillez 41/54 | EUROPE'S THREE PILLARS: TOWARDS A NEW STRATEGIC (IM)BALANCE THE PLACE OF PORTUGAL AND THE COMMON AGRICULTURAL POLICY IN A NEW EUROPEAN CYCLE 2028-2034 Eduardo Diniz 57/61 | EVOLUTION OF THE COMMON AGRICULTURAL POLICY João Marques, Cristina Vasques, Rosário Lemos and Bernardo Machado 63/68 | THE COMMON AGRICULTURAL POLICY AFTER 2027: THE EUROPEAN COMMISSION'S PROPOSAL AND THE POSITION OF THE PORTUGUESE MINISTRY OF AGRICULTURE AND THE SEA João Marques and Eduardo Lopes SECTION II – OBSERVATORY
No. 34 The future of the Common Agricultural Policy 6 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR 69/71 | CAP 2028-34: GUIDE FOR REFLECTION AND DEBATE Idalino Leão (CONFAGRI - Portuguese Confederation of Agricultural Cooperatives and Credit) 79/84 | PROPOSALS FOR THE NEXT MULTIANNUAL FINANCIAL FRAMEWORK AND COMMON AGRICULTURAL POLICYFOR THE PERIOD 2028-2034 − INITIAL THOUGHTS CAP (Confederation of Portuguese Farmers) Technical Department 85/90 | A STRONG BUDGET, TWO PILLARS, MARKET REGULATIOAN D REDISTRIBUTIONOF AID: TOWARDS A FAIRER CAP FOR ALL FARMERS Vítor Rodrigues (CNA - National Confederation of Farmers ) 91/93 | THE FUTURE OF THE COMMON AGRICULTURAL POLICY AND THE CHALLENGES FACING THE OUTERMOST REGIONS: THE CASE OF THE AZORES 95/97 | Jorge Alberto Serpa da Costa Rita (AASM − São Miguel Agricultural Association) CAP2028-34:A NEWLEADINGROLEIN BIODIVERSITY CONSERVATION? Pedro Bingre do Amaral (LPN - League for the Protection of Nature) SECTION III – REVIEWS 101/104 | SCENAR 2040: METHODOLOGY, POLICY SCENARIOS AND STRUCTURAL IMPLICATIONS OF THE COMMON AGRICULTURAL POLICY Analysis of the JRC report, Scenar 2040 – A Scenario Study on the Common Agricultural Policy, 2025, by Pedro Miguel Santos 105/108 | BIGGER, BETTER FUNDED AND FOCUSED ON PUBLIC GOODS: HOW TO RENEW THE EUROPEAN UNION BUDGET Summary of the Bruegel group report of the same name, 2025, by Ana Filipe de Morais 109/111 | REPORT ON ‘THE FUTURE OF EUROPEAN COMPETITIVENESS’ Summary of the Draghi report, 2024, by Eduardo Lopes 112/115 | THE FUTURE OF THE SINGLE MARKET Summary of the Letta report, 2024, by Bernardo Machado 116/119 | FINDING THE RIGHT BALANCE IN UNCERTAIN TIMES Summary of the OECD report of the same name, 2025, by Helena Alegre 72/78 | RESPONSE TO CAP 2028-34: GUIDE FOR REFLECTION AND DEBATE
7 Editorial At the start of this new reflection on the priorities for the future of the Common Agricultural Policy (CAP) for the period 2028-2034, Cultivar is promoting the debate by contributing a consultation, which is naturally not exhaustive, with authoritative voices at both European and domestic level. The editorial in this edition takes on an exceptional format. The Director-General of the GPP, Eduardo Diniz, contributes at the end of the Major Trends section with an article that serves as an extended editorial, rendering his usual commentary in this space redundant. For this reason, the editorial team has opted to present only a brief summary of the articles that make up this edition. To begin with, Commissioner Christophe Hansen, in his Op-Ed, states that the future CAP post-2027 reinforces the EU's commitment to farmers, guaranteeing a minimum of €300 billion for income support and crisis management, including at least €7.4 billion for Portugal. The new CAP will be simpler, results-oriented and focused on sustainability, encouraging environmental and climate practices. It prioritises small farms, young farmers and generational renewal, dedicating 10% of funds to rural development. The author concludes: "Europe stands by its farmers. (...) We are making EU agricultural policy simpler and fairer, shaping a strong, sustainable and attractive farming sector for future generations." Alan Matthews' article critically analyses the European Commission's proposal for the CAP 2028-2034, highlighting the tensions between the promise of simplification and flexibility and the real risks of fragmentation, reduced environmental funding and loss of coherence in this common policy. The merging of funds, the increased complexity of governance and the absence of ring-fenced amounts for agrienvironmental actions raise concerns about the ability to simultaneously guarantee sustainability, equity and stability for European farmers. As the author summarises, the proposal "opened the possibility Photo by GPP - Brussels, 2024
No. 34 The future of the Common Agricultural Policy 8 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR of much greater differences in the overall CAP budget between Member States, in the size of direct payments per hectare [and] in the ambition of the conditions that farmers have to meet". Yves Madre notes that the European Commission's proposal for the 2028-2034 financial framework introduces a profound reform that recentralises power within the Commission itself, drastically reduces the CAP budget and renationalises a large part of European policies, creating strong pressure on Member States and jeopardising structural policies such as cohesion, the ESF+, POSEI and agricultural investment. Despite providing for almost €2 trillion, funding is uncertain and the logic of national envelopes threatens the EU's political coherence, while agriculture loses its strategic centrality at a time when it should be driving competitiveness and sovereignty. The author warns that this reform "calls into question the democratic process (...) and masks the lack of a vision for European agriculture." Francisco Avillez considers that the Commission's proposal introduces important structural changes and increases flexibility, but also complicates national decisions and could create greater conflict between sectors. Although the budget appears to be decreasing, the use of funds outside the ring-fencing could offset this effect, which, according to the author, means that "only at the end of the approval of the Partnership Plans of the different Member States will it be possible to know exactly whether the nominal values of the CAP budget will be reduced, maintained or increased". For Portugal, the challenges of governance, financing and sustainability can be turned into opportunities if there is the technical capacity and political will to take advantage of the new model. Closing the Major Trends section, Eduardo Diniz presents a comprehensive text in which he analyses how the new European cycle 2028–2034 is being shaped by growing strategic centralisation, the result of successive crises that have strengthened the Commission's executive power and shifted the traditional balance between law, communities and sovereignties, with a direct impact on the CAP and territorial cohesion. In this context of geopolitical competition and asymmetric reindustrialisation, the Union risks weakening the very pillars that have underpinned its democratic legitimacy and its internal market by treating agriculture as a secondary policy at a time when other global blocs are elevating it to strategic priority. As the author warns, the budget proposal poses "a central paradox: by seeking to strengthen the internal market through greater centralisation, the Union risks undermining the political and territorial balances that have underpinned its legitimacy and thus compromising the very functioning of the internal market it seeks to strengthen". Opening the Observatory section, we present two GPP articles. The first one, by João Marques, Cristina Vasques, Rosário Lemos and Bernardo Machado, traces the evolution of the CAP, describing the gradual shift from a model based on price and production support to a system focused on yields, environmental sustainability, rural development and greater flexibility for Member States. The second article, by João Marques Photo by GPP - Brussels, 2025
Editorial 9 Marques and Eduardo Lopes, presents a description of the Commission's new proposal, as well as the position taken by Portugal, pointing out that the proposal integrates agriculture into a more complex and cofinanced common fund, reducing the truly common nature of the policy and creating risks of renationalisation, unfair competition and loss of strategic coherence. The next articles are the ones we received in response to our reflection proposal sent to various national organisations in the form of a list of topics considered relevant in this context. The articles may respond more or less directly to the suggested topics or present each organisation's position on what it considers most relevant for the future of the CAP and related policies. Idalino Leão presents CONFAGRI's comprehensive reflection on the challenges and guidelines of the CAP 2028-34, advocating the maintenance of its founding objectives, the strengthening of agricultural production and competitiveness, balanced policies between the environment and the economy, and a simpler CAP, focused on active farmers and adapted to territorial realities. The article by the Technical Department of the Confederation of Portuguese Farmers, argues that the European Commission's proposal for the 2028-2034 Multiannual Financial Framework, by integrating the CAP into a single fund, reduces its autonomy, complicates management and financing, and threatens food security, posing a serious risk to the Portuguese agroforestry sector. Vítor Rodrigues, from the CNA, states that the future of the CAP requires a reinforced budget, the maintenance of the two pillars, effective market regulation and a fair redistribution of aid, in order to guarantee decent incomes for farmers, supporting those who actually produce and ensuring food sovereignty and the vitality of rural areas. Jorge Rita, from the São Miguel Agricultural Association, argues that the future of the CAP should preserve a differentiated approach for the outermost regions, while guaranteeing autonomy and strengthening POSEI as an essential condition for the viability, competitiveness and sustainability of agriculture in the Azores, given its structural constraints. The president of the LPN, Pedro Bingre do Amaral, maintains that, in view of the possible extinction of the LIFE programme, the CAP 2028-2034 should take on a central and more ambitious role in biodiversity conservation, integrating financing, innovation and payments geared towards ecological results, in close alliance with farmers. Opening the Reviews section, we present an analysis by Pedro Miguel Santos, from Consulai, of the recent JRC study on scenarios for the CAP in 2040. Next, we analyse four studies relevant to the reflection on public policies and strategic options for the European Union: a document from the Bruegel group, the socalled Draghi and Letta reports, and a recently published OECD report aptly titled “Finding the right balance in uncertain times”. This edition of Cultivar No. 34 is accompanied by a Supplement (currently available only in Portuguese), which aims to provide an overview of the sector's evolution since Portugal joined the then European Economic Community in 1986 to the present day, while also presenting a picture that looks to the future and can support the reflection that lies ahead. The two complementary articles by Ana Rita Moura and Rui Trindade, from the GPP, show that national agriculture and forestry are essential for the economy, the territory and sustainability, although they face challenges at various levels. The first article begins by drawing attention to the recent change in methodology in the National Accounts estimates. It then analyses the evolution of the agroforestry complex, highlighting trends such as the reduction in its weight in GVA and employment, the growth in exports and the impacts on the sector. The second article addresses the productive structure, the ageing of farmers, land concentration, climate change, as well as the challenges of forest management, proposing an integrated vision for reflection on the future of rural territories.
Editorial 11 No. 34 December 2025 MAJOR TRENDS
CULTIVAR = CULTIVATE v. TO PREPARE THE LAND AND GROW CROPS ON IT.
Europe's farmers deserve recognition and support 13 Europe’s farmers deserve recognition and support CHRISTOPHE HANSEN European Commissioner for Agriculture and Food Food and farming are vital for Europe's people, economy and society. As we lay the foundations for the Common Agricultural Policy after 2027, we will continue to recognise the vital role that farmers play as food producers, stewards of the countryside and backbone for our rural communities. Although the EU budget is changing in how it functions, our commitment to farmers is unwavering. The CAP will remain a cornerstone of EU funding, as it always has been. It will be simpler, more targeted and focused on results. It will have more impact on farms and in the fields. And it will guarantee farmers a fair income so they can continue producing safe and affordable food for millions of Europeans. To that end, we have fully ring-fenced at least €300 billion for income support and crisis management. This is a minimum amount. It is not subject to flexibilities, it does not change; it is dedicated for farmers, who will not feel a difference in the CAP support they receive. For Portugal, this represents a minimum of €7.4 billion. The future CAP will give Europe's farmers the predictability and stability that they need for the years ahead. It protects their income and EUfunded support so that they can plan and invest for the future with greater confidence. And we have incorporated a new method for inflation adjustment to shield them from price volatility and income erosion. Our proposals also make sure that financial support will go to those who need it most, like small and family-sized farms. The future CAP will give Europe's farmers the predictability and stability that they need for the years ahead. It protects their income and EUfunded support so that they can plan and invest for the future with greater confidence. And as part of our work to get more young people working in agriculture, young and new farmers will receive more support to set up farms. Given that the EU farmer’s average age is 57 – and under 12% of farmers aged below 40 – the sector urgently needs generational renewal to sustain family traditions and farming vitality. This issue is even more pressing in Portugal with only 6.4% of farmers who are below 40 years old. We will ask all Member States to do a national strategy for generational renewal and allocate 6% of their CAP funding to this objective. Today, the CAP is based on two funding streams. To make this simpler, we propose merging them into one coherent set of instruments. No overlaps, one common policy – with one set of measures – that will apply to farmers as well as to rural development. Preserving Europe's rural areas and making them attractive places to live and work is of paramount importance. Not only for our food security and wider security, but also for the very future of Europe's agriculture and farming. These regions, spread far and wide across Europe, protect our continent's beauty, environment and traditions. We need to keep them lively, dynamic and populated. The new CAP will maintain this as a key priority, using its familiar instruments to reinforce rural innovation and entrepreneurship.
No. 34 The future of the Common Agricultural Policy 14 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR EU countries will use the larger financial envelopes attached to National and Regional Plans to top up the minimum ring-fenced amount and finance projects that are so important to support lively rural areas. We established a rural target: at least 10% of the available funds from the National and Regional Plans have to be dedicated to rural development. Lastly, we need to give farmers the freedom to do what they do best. Less paperwork, fewer rules and details to work through. But there must be results as well. Incentives, rather than burdensome regulation, are at the heart of this new policy. Farmers will be offered more financial incentives to do more for the environment and climate, while still producing food. This is why we are moving away from complex, prescriptive requirements towards a system that rewards farmers for the extra work they put in to protect soil, water, biodiversity and animal welfare. After all, farmers know best what they need, which depends a lot on individual regions, farming types and local situations. The CAP must reflect all these different national and regional requirements. Europe stands by its farmers. In a fast-moving world that brings endless new challenges, that commitment has not changed. We are making EU agricultural policy simpler and fairer, shaping a strong, sustainable and attractive farming sector for future generations. It is a commitment to the future of Europe.
Evolution or revolution: assessing the Commission's CAP 2028-2034 proposal 15 Evolution or revolution: assessing the Commission’s CAP 2028-2034 proposal ALAN MATTHEWS Professor Emeritus of European Agricultural Policy, University of Dublin, Trinity College, Ireland Introduction The Commission published its proposal for the next Common Agricultural Policy for the coming programming period 20282034 alongside its publication of its proposal for the Multiannual Financial Framework on 16 July 2025. All the familiar tools in the CAP have been continued, although redesigned in some instances and with important changes. However, the proposal to eliminate the two CAP funding instruments, the EAGF and the EAFRD, and to merge the CAP, along with cohesion, social, fisheries and other shared management programmes in the MFF budget, into a single fund sent shockwaves through the agricultural sector. While a minimum amount of expenditure (€296 billion) on what is now defined as ‘CAP income support’ will be ring-fenced within the single fund, the initial reaction of agricultural stakeholders was to treat this as a maximum, and to highlight that it implied a sharp reduction in the resources available to support farmers compared to the current programming period. A further source of concern and frustration was that, in addition to a proposal to further amend the Common Market Organisation Regulation, provisions related to the CAP were fragmented over three separate Regulations: a Regulation establishing the National and Regional Partnership Fund (the NRPF Regulation)1; a specific CAP Regulation2; and a common Expenditure Tracking and Performance Framework Regulation which will apply in future to all EU expenditure.3 This not only makes it difficult to easily follow what the new proposals mean for the CAP. It has also given rise to concern in both the Council and Parliament that the traditional agricultural bodies will no longer have full control over subsidy policy for farmers. In the months following its publication, the focus of the debate on the Commission proposal has been on governance and budget issues. Indeed, a threat by four of the main parliamentary groups that the proposal was not a basis for negotiation led to concessions by the Commission. In a non-paper published in November 2025, the Commission agreed to reinforce spending on rural areas by proposing a rural target (10% of the NRP Plan budget, excluding the ring-fencing amounts for the CAP and fisheries).4 It also agreed to move several articles in the proposed NRPF Regulation that deal with CAP issues to the CAP Regulation "to reinforce the identity and facilitate the reading of the provisions applicable to the CAP". However, the integrated programming in the NRPF Regulation based on the general and specific objectives, the requirements applying to the NRP Plans, the common set of rules on the governance of the NRP Plan and the assurance framework, would remain. Additional changes were proposed to strengthen the role of the regions and to give Parliament greater oversight over annual budgetary priorities. This article first briefly surveys the governance and budget debates. It then reviews the changes that the Commission 1 Commission, Regulation establishing the European Fund for economic, social and territorial cohesion, agriculture and rural, fisheries and maritime, prosperity and security for the period 2028-2034 and amending Regulation (EU) 2023/955 and Regulation (EU, Euratom) 2024/2509, COM(2025) 565. 2 Commission, Regulation establishing the conditions for the implementation of the Union support to the Common Agriculture Policy for the period from 2028 to 2034, COM(2025) 560. 3 Commission, Regulation establishing a budget expenditure tracking and performance framework and other horizontal rules for the Union programmes and activities, COM(2025) 545. 4 Commission, Non-paper on adjusting the proposal on the future common agricultural policy and the budget structure, 9 November 2025.
No. 34 The future of the Common Agricultural Policy 16 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR has proposed to some of the CAP tools. For reasons of space, this discussion of tools is confined to direct payments and the green architecture. Other important initiatives, such as to promote innovation, generational renewal, territorial and rural development, or preparedness for crises, are not addressed. Governance issues raise new concerns The rationales for merging shared management funds were the budgetary arguments for flexibility, simplicity and synergies. The Commission argued that the multiplicity of funds made it difficult to redeploy funds quickly in response to new crises. It argued that fewer funds would simplify access to funding for beneficiaries and reduce the workload for national administrations. Requiring governments to plan the different funds together would encourage the exploitation of synergies. These are good arguments for much of the MFF but are hardly persuasive when it comes to agriculture. For much of the MFF, which consists of support for investments, one can foresee that investments can be shifted during a programming period in response to new priorities. Moving payments to farmers, whether direct payments or payments for environmental actions, to other sectors within a programming period, seems much less likely. The argument that aid applications by farmers would be simplified by being part of a single fund does not seem convincing. Also, apart from rural development measures where there has always been a debate whether they belong in Pillar 2 of the CAP or regional policy, it is hard to see where possible synergies between regional and social investments and direct and environmental payments will arise. As against these budgetary considerations, there is an important argument in favour of maintaining stability. The 2021 CAP reform introduced a New Delivery Model. This extended the idea of strategic planning from Pillar 2 to the whole CAP and required considerable adjustments in Member States. Because of delays in agreeing the CAP budget, the process of preparing and approving CAP Strategic Plans was rushed. There are good arguments that this governance process should be kept in place for a further programming period to bed down the process and to build on the experiences from its introduction. Developing the CAP chapter in the NRP Plan will in many ways be similar to the process of preparing the current CAP Strategic Plans (requiring a partnership process, the setting of targets, the allocation of resources in line with identified needs). But the Commission proposal will add a new level of negotiation, as agricultural ministries will need to coordinate and negotiate not only with the Commission but with other national ministries. A risk is that the CAP budget in the national Plans will be more heterogeneous than before as a result. nate and negotiate not only with the Commission but with other national ministries. A risk is that the CAP budget in the national Plans will be more heterogeneous than before as a result. Budget issues remain crucial Questions about the future governance of the CAP mainly concern the EU institutions and national administrations. What matters for farmers is the overall budget and the design of individual schemes which influence the ease with which they can access funding. The Commission has proposed a significantly higher MFF budget in absolute terms (almost €2 trillion over 2028–2034 in current prices). Some analysts point out that the increase is less significant as a percentage of GNI (if we ignore the repayment of NGEU borrowing, MFF expenditure is projected to be equivalent to 1.15% of EU GNI as compared to a planned 1.13% when the current MFF was agreed in 2020). This comparison overlooks the fact that, as a result of higher inflation in recent years, which was not reflected in the annual inflation adjustment to the EU budget, the contribution of Member States has fallen to 1.01% of GNI in 2027. The Commission proposal would thus require a significant increase in practice in contributions from Member States in the next programming period. The Commission has allocated much of the increased budget to new priorities such as competitiveness, defence and management of migration. For the traditional priorities of agriculture and regional spending, the budget allocates exactly the same amount (in current prices) in the NRP Fund in the next programming period as for all shared management funds in the current period (€749 billion). In principle, therefore, it would seem possible to maintain spending on both agriculture and cohesion at current levels in current prices. The Commission emphasises that the ring-fenced amount for CAP income support is just a minimum. It can be topped up from unearmarked resources in the NRP Fund (the other major tranche of funding that is earmarked is for less developed regions in those Member States with such regions). However, the scope for adding to the CAP budget will differ greatly between Member States. First, a new formula allocates the overall budget differently across Member States. Some countries will gain, while others will lose. The allocation formula contains a safety net and a ceiling to limit the extent of this redistribution, but some redistribution will occur.
Evolution or revolution: assessing the Commission's CAP 2028-2034 proposal 17 Secondly, the ‘General Allocation’ element in the NRP Fund, which collects the current shared management funds, has been assigned an additional objective: to finance infrastructure to facilitate military mobility. This will place greater demands on the budgets of some countries compared to others, depending on their geographical location. There is also a possibility for Member States to transfer resources from the General Allocation to the European Competitiveness Fund. A third constraint on funding for the CAP is the requirement in the NRP Regulation that Member States must freeze 25% of their General Allocation (excluding the CAP ring-fenced amount) as a flexibility amount. In the early years of the programming period, this amount is reserved to deal with natural catastrophes. At the mid-term review in 2031, Member States will be allowed to programme the unspent funds, including on new challenges that may have emerged since the National Plans were designed. Some funds must still be retained to address natural disasters which, if still unspent, can only be released after June 2033. While these funds are frozen in this way, they will not be available to top up the funding of CAP interventions. The Commission has emphasised that a corollary of a larger budget is agreement on new own resources if national contributions are to be held stable. However, there seems to be little appetite among Member States to agree on new own resources (which would not only have to be agreed unanimously by Heads of State and Government at the European Council but also approved by all national parliaments). Several Member States have already indicated that they are seeking a reduction in the proposed MFF budget. If cuts are made, even whether the minimum ringfenced amount proposed by the Commission can be maintained will be up for debate. Significant revisions to well-known CAP tools Direct payments. The Commission's commitment on direct payments was to make them fairer and more targeted. Payments should be made to farmers who are actively engaged in food production and contributing to food security. If Member States wish, payments can also be made to parttime farmers who have significant agricultural activity. There are five main innovations with respect to direct payments. First, the existing DP schemes (BISS, CRISS, young farmers) are merged into a new payment called DABIS, the Degressive Area-Based Income Support. Member States will be obliged to differentiate these payments according to objective income indicators. The CAP Regulation gives a nonexhaustive list including small farms, women farmers, farms in areas of natural constraints, and farms combining crops and livestock. The payment can be made either based on area or as a lump sum (the Commission gives the example where female farmers might receive a lump sum top up on their standard area-based payment). In its Strategy for Generational Renewal in Agriculture in October 2025, the Commission recommended that Member States dedicate at least 6% of their agriculture ring-fenced amounts to generational renewal. 5 Second, the DABIS payment will be tiered (degressivity) and capped at a ceiling of €100,000. This will be mandatory for Member States and no deduction for labour costs will be permitted. Thirdly, farmers receiving a national pension will no longer be eligible for the DABIS payment, as part of a policy to encourage the release of land for a new generation of younger farmers. Fourth, it will now be mandatory for Member States to introduce a small farmer payment with a maximum limit of €3,000. Small farms will be exempt from farm stewardship requirements (apart from social conditionality) and will also be allowed to receive this payment in addition to any pension to which they are entitled. Fifth, it will be obligatory for Member States to provide coupled support for sectors undergoing difficulties and important for environmental or socio-economic reasons, and the maximum ceiling has been raised. For livestock payments, Member States must take into account environmental impacts, including by setting a maximum livestock density in nitrate vulnerable zones. A feature of the DABIS payment is that it is the only ringfenced instrument within CAP income support. The Commission proposes that the average payment per hectare in Member States should vary between a minimum of €130 per hectare and a maximum of €240 per hectare. While giving additional flexibility to Member States, this wide range risks fuelling antagonism among farmers competing in a single market. Green architecture. The Commission’s proposals to modify the green architecture of the CAP reflect its commitment in its Vision paper to orient the future CAP away from 5 Commission, Strategy for generational renewal in agriculture, COM(2025) 872.
No. 34 The future of the Common Agricultural 18 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR conditions towards incentives.6 It argues that it is not lowering its ambitions to support farmers to shift towards more sustainable practices, but it is reducing the burden of regulation and moving more to the provision of incentives. There is indeed strong legal language in the proposed Regulations, for example in Article 4 of the CAP Regulation that requires Member States to address at least six environmental and climate priorities in the CAP chapter of the national Plans. There are also positive innovations. These include the merging of eco-schemes and agrienvironment measures into a single intervention for agrienvironment-climate actions. This will make it easier for Member States to coordinate short-term and longer-term actions. There will be greater flexibility for Member States in setting payment rates, the introduction of a new transition payment to de-risk the transition to more sustainable farming models, and an obligation on Member States to provide support for extensive livestock production systems and areas with nitrate surplus. Conditionality associated with eligibility for direct payments will be replaced by farm stewardship. Farmers will still be required to observe the same set of Statutory Management Requirements, and social conditionality is integrated into farm stewardship. The major change is that Good Agricultural and Environmental Conditions will be substituted by protective practices to be defined by Member States. These have broadly the same objectives as conditionality in the current period following the various simplification measures that have been adopted. However, the language around protective practices is more general and less directive, giving Member States greater flexibility in their design. For example, whereas GAEC 4 requires the establishment of buffer strips along watercourses which should, as a general rule, respect a minimum width of 3 metres without using pesticides and fertilisers, the relevant protective practice merely prescribes that Member States must establish standards that protect watercourses against pollution and run-off, leaving it up to Member States what these standards should be. The biggest change is that Member States will, in future, be able to compensate farmers for the cost of complying with these mandatory requirements. In the current CAP, the practices specified in conditionality form a baseline. Member States can only pay farmers for voluntary environmental and climate commitments, either through eco-schemes or Pillar 2 measures, that go beyond this baseline. This change is in line with the Commission’s declared aim to rely more on incentives, although the practices themselves will remain mandatory for those farmers in receipt of direct payments. Further, Member States have greater scope to provide exemptions and derogations in specified circumstances. Controls in future will not apply to holdings that are smaller than 10 hectares in size. The main fear is that, despite the high ambitions for the green architecture in the legal texts, the money available to support farmers in moving towards more sustainable farming systems, including carbon farming, will likely be severely reduced. This is partly because there is no ring-fenced budget for agri-environment-climate actions as in the current CAP. As part of the budget tracking mechanism, Member States are required to ensure that at least 43% of the NRP Plan budget has a positive impact on climate action or the environment, using a system of EU coefficients that defines the contribution of each intervention towards these objectives. But this will be a very weak incentive to allocate CAP funding to ambitious climate and environmental measures, given that the coefficient attached to direct payments (due to farm stewardship requirements) is already 40%. Also, the new provision that Member States can compensate farmers for the cost of engaging in mandatory protective practices will no doubt be welcomed by farmers, but to the extent that Member States pay farmers for these practices, this will further reduce the funding available for voluntary actions with greater ambition. The lack of ring-fencing is more troubling because of the incentives Member States will have to limit spending on agrienvironment-climate actions. Within the ring-fenced budget for CAP income support, spending on direct payment interventions (DABIS, coupled support, cotton, small farmer payment) is wholly financed from the EU budget and does not require national contributions. All other CAP expenditure, including agri-environment-climate actions, will require a national contribution of 30%. If Member States wish to top up their minimum CAP ring-fenced amount from the unearmarked amount in their NRP Plan budget, any such expenditure must be cofinanced by national contributions according to the appropriate minimum rate for the region where the expenditure takes place. This can be as low as 15% for less developed regions but as high as 60% for more developed regions. There will be a requirement to show spending to address the agri-environmentclimate objectives set down in the legal texts in order for the national Plans to be approved. Still, for Member States with 6 Commission, A Vision for Agriculture and Food; Shaping together an attractive farming and agri-food sector for future generations, COM(2025) 75.
Evolution or revolution: assessing the Commission's CAP 2028-2034 proposal 19 limited fiscal capacity, the temptation to allocate as much CAP funding as possible to direct payments where no national contribution is required will be hard to withstand. Conclusions A common theme underlying the response to several aspects of the Commission proposals is finding the right balance between providing flexibility to Member States while maintaining a common agricultural policy. Everyone agrees that flexibility is necessary and desirable, and yet everyone is also aware that it creates risks, not least for the survival of the single market. And the CAP has never been totally uniform in its implementation. The current CAP had already moved in the direction of giving Member States more flexibility, but the Commission proposal goes much further. It has opened the possibility for much greater differences in the overall CAP budget between Member States, in the size of direct payments per hectare, in the ambition in the conditions farmers must meet for direct payments, whether they will be compensated for meeting those conditions or not, and whether they will receive coupled payments or not. The new Commission steering mechanism, which will provide recommendations to Member States on the content of the CAP chapter in their national plans is a key mechanism to ensure that Member States, in designing their CAP interventions, also contribute to Europe-wide objectives. But the Commission's view suggests it will focus on identifying the objectives that Member States should prioritise in their CAP plans, without making recommendations on the interventions to be adopted. Member States in the Council welcome this flexibility, but is there a point at which the idea of a common agricultural policy disappears? The other main flashpoint is around support for the transition to more sustainable farming practices in the EU. The Commission insists that it remains committed to promoting this transition, even if any mention of Farm to Fork targets has been eliminated. But it insists that the transition should be supported through incentives, rather than driven by regulation. The corollary of this approach is that significantly greater resources need to be allocated to supporting this transition if we are to achieve the same level of climate and environmental ambition. Yet we have underlined the fear that, in practice, the allocation of resources to these objectives will significantly decline, not only in absolute but also in relative terms. This may address a short-term political need, but it stores up problems for the long-term resilience of the agricultural sector and its ability to provide for Europe's food security.
21 The new 2028-2034 European financial framework and the CAP reform proposed by the European Commission When the budget prevails over political ambition for the European Union YVES MADRE Founder and director of Farm Europe1 The European Commission has presented a radical proposal for reforming the European Union (EU) budget, largely inspired by the governance of the postCOVID recovery fund (RRF – Recovery and Resilience Facility), which is structured primarily around national envelopes, leaving aside the Community method. Figure 1 – Breakdown of the draft budget presented by the European Comm ission(€ billion) Amounint billion € 19, 84 Within the framework of a requested total allocation of €2 trillion, the European Commission proposes to divide the resources among four major funds: the National and Regional Fund (which includes the CAP, cohesion policy, Frontex, climate, Interreg, etc.); the Competitiveness Fund; the Global Europe Fund for actions in third countries and Ukraine; and the Fund for administrative expenditure. A total budget increase, but with drastic cuts to historic European policies In fact, the European Commission has presented a draft budget of almost €2 trillion for this period, divided into six funds: — a fund of €865 billion to finance the European 409 NRP plans EU Competitiveness Fund Other (civil protection, single mareketct.,) Global Europe NextGenerationpEaUymrent Erasmus+ Union's major traditional policies, namely the CAP, cohesion policy, social policy (currently ESF+ – European Social Fund Plus), fisheries policy, to name the most important ones, 1https://www.farm-europe.eu/
No. 34 The future of the Common Agricultural Policy 22 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR — a €409 billion fund to finance competitiveness projects through calls for projects launched by the Commission, Commission. In that case, finance ministers will be tempted to propose to heads of State and government even sharper cuts in funding — a fund of €293 billion for defence, civil protection, etc. — a fourth fund, worth 200 billion, for the EU's external actions for the benefit of third countries, half of which would be allocated to Ukraine to prepare for its accession to the Union. — 168 billion for the The €2 trillion financing presented by the European Commission is based on contributions from Member States, new European loans and growth in own resources. The vast majority of Member States have already expressed their opposition to the idea of financing based on new European loans, which would increase their own indebtedness. allocated to the various European policies, if it is necessary to maintain a consistent competitiveness fund and the effort in relation to Ukraine. The question of the size of the competitiveness fund suggested by the European Commission will certainly also arise. As proposed, this fund is largely unaffected, as it is a common fund that is not pre-distributed among Member States. payment of the European Union debt under the EU Next Generation plan, aimed at addressing the effects of the COVID-19 crisis, — 49 billion euros for Erasmus+ training actions. A European budget proposal without funding The financing of these €2 trillion presented by the European Commission is based on contributions from Member States, new European loans and growth in own resources. The vast majority of Member States have already expressed their opposition to the idea of financing based on new loans Depending on the capacity that each Member State considers it has to raise its funding when the time comes, the position of the heads of State and government may vary. An over sight:agriculture as a driver of European competitiveness Still in relation to this fund, it is important to note the absence of any real reference to agriculture as a driver of European competitiveness. This point raises even more questions given that, at the same time, the bioeconomy is one of the pillars of the transition of the European economy to a carbon-neutral economy which would increase their own indebtedness. Furthermore, the estimate of expected own resources is particularly ambitious, if not unrealistic. ... it is important to note the absence of any real reference to agriculture as a driver of European competitiveness. and the growth cementing this bioeconomy is an essential asset for increasing the Union's sovereignty. Without significant advances in European agricultural production and productivity, For these two reasons, it is to be expected that the European Council will revise the Commission's proposal downwards, not agreeing to a real increase in the level of Member States' contributions to ensure the effective financing of the expenditure proposed by the these guidelines risk being merely cosmetic or, at least, lead to a situation where the EU would simply be replacing its dependence on fossil fuel imports with a dependence on biomass imports.
The new 2028-2034 European financial framework and the CAP reform proposed by the European Commission 23 This analysis of the Commission's proposals is based on financial allocations that are likely to be revised downwards. The risks analysed are therefore 'a minima' risks. A proposal for a largely renationalised single fund The European Commission proposes to bring together most of the EU's traditional policies and their funding under a single regulation and a single fund. The current CAP, cohesion policy, ESF+, fisheries policy, environmental and climate policies, as well as the European crisis fund, would be merged into a single framework: the regulation on National and Regional Partnership Plans (NRPP, with an overall allocation reduced to €865 billion for the period 2028-2034. More than 97% of this budget is distributed among Member States through national allocations proposed by the Commission. In fact, the only means of action remaining at European level is the Interreg budget (€10.2 billion and a reserve margin for the EU of €15 billion, in addition to the €6.3 billion reserve for crises and the regulation of agricultural markets. CAP funding: -17.6% and €300 billion maximum In this context, €293.7 billion are ring-fenced for the new CAP and allocated to Member States, with an additional €6.3 billion earmarked for agricultural crisis management and market stabilisation. At current prices, the CAP budget would see a significant reduction of 17.6% between the periods 2021-2027 and 2028-2034, i.e. a reduction of -38% in value (constant prices) compared to 2020. The European Commission proposes a multi-speed approach to Member States' contributions to reduce the CAP budget, with efforts distributed unevenly. This raises questions regarding the distribution key used. The proposal makes the Netherlands the "relative winners," or rather the "best losers," alongside Portugal and Spain. Although the European Commission proposes to allow Member States that so wish (and are able) to significantly increase their co-financing of the future CAP, it should be recalled that between 2021 and 2024, in a Member State such as the Netherlands, farmers benefited from significant national financial supplements in the form of state aid, which doubled their direct payments during that period. While France, Italy, Bulgaria, Estonia, Latvia, Poland, Romania and Slovakia are broadly maintaining their share of the (reduced) CAP budget in relation to the current distribution between countries, Ireland, Germany, the Czech Republic, Austria, Slovenia, Greece, Denmark and Luxembourg are among the losers. Funding for POSEI measures, Cohesion, ESF+: competition and lack of funding The European Commission proposes to remove the financing of POSEI, LEADER and school fruit and vegetable schemes from the CAP envelope. The Member States concerned will therefore have to finance POSEI measures from their non-CAP NRPP allocation. Within this non-CAP allocation, Member States will be responsible for allocating funding for measures relating to cohesion, the social fund, fisheries, POSEI, LEADER and the school scheme, among the main ones. European Commission rhetoric that does not stand up to scrutiny of the figures "Are non-CAP NRPP allocations sufficient to meet all expectations?" – FALSE and unrealistic In view of the drastic reduction proposed for the CAP budget, the European Commission is leaving it up to Member States to supplement
No. 34 The future of the Common Agricultural Policy 24 ANALYSIS AND PROSPECTIVE STUDIES CULTIVAR their respective budgets by drawing on other funds allocated to them under the NRP plans. Just to maintain the CAP budget at current prices, Denmark, Ireland and Austria would thus have to devote more than three-quarters of their remaining NRP allocations (NRP funds after deduction of the CAP, the social climate plan "Greater effectiveness of cohesion and social measures?" – FALSE "Guaranteed and potentially improved funding for POSEI?" – FALSE and borders). The Netherlands, France, Finland, Sweden and Luxembourg would have to allocate around 50%, while Italy, Spain, Belgium and Germany would have to mobilise between 18 and 35%. It turns out that these NRP allocations are intended to In view of the drasticreduction proposedfor theCAPbudget,the EuropeanCommissionis leaving it up to Member States to supplement their respective budgets by drawing on other fundsallocatedto themunderthe NRP plans. The proposed regulation leaves Member States the responsibility for deciding what to finance or not within their NRPP allocation outside the CAP, choosing between cohesion measures, social fund, fisheries, POSEI, LEADER and school scheme, among the main ones. be used to finance, in particular, future cohesion measures, ESF measures, POSEI measures, etc. The European Commission's statements do not stand up to scrutiny of the financial equation. It should be noted that this this remaining 'free' allocation for Member States is in average 40% lower than the allocation they received during the 2021-27 period under cohesion policy. Figure 2 – Reduction in the CAP budget per Member State as a percentage of its NRPP allocation outside the CAP
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