The EU's Common Agricultural Policy Has Created a Farming Crisis

Yahoo

20-03-2025

European farmers have been in the news in recent months due to high-profile protests against climate policies, which they argue put a disproportionate burden on their already thin margins, as well as European Union trade deals, which they claim expose farmers to unfair competition from global producers. Combined, the twin pressures have radicalized many in the sector, while putting a spotlight on the EU's climate and trade policies.
But less attention has been paid to a quieter but nonetheless significant risk facing European agriculture: the distortions introduced into the sector by the bloc's Common Agricultural Policy, or CAP, and their impact on the security of Europe's food supply.
The first iteration of the CAP was introduced by the six founding members of what was then the European Economic Community, or EEC, back in 1962. Its principal objective was to increase food production, which had fallen drastically in the immediate postwar years due to labor shortages and damage to agricultural land. The policy also aimed to raise farmers' wages and improve food security by offering farmers a 'guaranteed price for their produce and introducing tariffs on external products.' In the subsequent half century, the CAP has been pivotal in the transformation of European agriculture, helping to usher in an agri-business model that has increased production but at the cost of driving thousands of farmers from the land, degrading the environment and enriching big landowners at the expense of smaller ones. As a result, it now threatens the long-term security of the bloc's food supplies.
A key driver in the transformation of the bloc's agricultural model was the CAP reforms of the early 1990s, which saw a move away from the original price support system toward 'direct income support for farmers … based on the area of land cultivated or number of livestock maintained.' These changes inevitably favored bigger farmers, leading to 'land grabbing' by large producers and a major decline in the European model of family farming, according to ARC, a voluntary rural organization dedicated to preserving family farms across the bloc. The inequitable consequences of the reforms were belatedly acknowledged by the EU itself in 2013, when it pledged a more equal distribution of support by 'limiting the budget for big farms.'
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But the rhetoric on greater equality has not translated into substantive change. A 2021 report for the European Parliament on the biggest beneficiaries of CAP funding found that between 2018 and 2021, a staggering 3.3 billion euros ended up in the coffers of 17 billionaires. Recipients included former Czech Prime Minister Andrej Babis and British vacuum cleaner tycoon James Dyson. At a time when thousands of small farmers are struggling for survival or throwing in the towel, such largesse for the super-rich raises serious questions about the fitness for purpose of the CAP and the effects of multiple rounds of reform over the years.
Attempts to root out abusive practices in the bloc's food supply chain through CAP reform have also floundered in the face of both powerful special interests and the complexities of the EU single market rules. Food producers have long complained about the overwhelming power of the massive supermarket chains that maximize profits by relentlessly squeezing producers' profit margins. In response to unfair trading practices in the supply chain, the European Commission set up the much-vaunted Agricultural Markets Task Force back in 2016. Its final report contained a whole host of recommendations to reform how CAP regulates the relationship between food producers and retailers, in order to give farmers a fairer deal.
Yet almost a decade on, a major survey conducted by the food charity Sustain found that farmers still typically make a profit of less than one cent on staples like a loaf of bread or a block of cheddar cheese. Frustrated by lack of progress at the EU level, national governments, particularly across Eastern Europe, have tried to curb the power of supermarkets by imposing 'taxes, price caps and requirements to stock local produce.' However these moves have repeatedly fallen afoul of EU single market and competition rules, leading to confrontation with Brussels and ultimately a maintenance of the status quo.
Perhaps the biggest existential threat to the future of European agriculture over the coming decade, however, is rapid demographic change, with the average age of an EU farmer now around 57. Almost a third of land holders are already at or beyond retirement age, while only about 10 percent are under the age of 40. The demographic crisis in farming has been exacerbated by the CAP's drive to create ever-larger units, which has seen the number of farms in the bloc fall by more than a third since 2005. As a result, only those with already large holdings have the resources to afford the often astronomical price of farmland, creating a vicious cycle that increasingly excludes new and younger entrants.
The CAP's direct payments system also exacerbates the damaging phenomenon of 'land retention.' As Marian Picot, general secretary of the European Council of Young Farmers, or CEJA, explains, 'When people retire from farming they often choose to keep their land, to receive the payments that go with it as a source of income.' That further delays young farmers' access to land ownership. The CEJA cites overly burdensome CAP bureaucracy and difficulties in accessing credit as other major obstacles to entry into the profession. As a result younger people are now less engaged in farming, even though the amount of land devoted to agriculture has remained steady.
As land ownership is increasingly concentrated in fewer and larger holdings, environmentally damaging intensive farming methods are more likely to be employed, despite clear scientific evidence that 'agriculture must become more sustainable or it will be decimated by climate change' and pose a serious threat to food security across the bloc. The belated response from EU policymakers has been yet another reform of the CAP to facilitate the creation of so-called 'eco-schemes,' which are supposed to reward farmers 'for taking care of the climate, landscapes and the environment.'
However, a recent report by BirdLife Europe suggests that up to 48 billion euros of CAP funding is being directed toward measures that preserve the status quo, rather than drive change. In many cases national governments have deliberately prioritized weak eco-schemes that maximize payouts while achieving very little substantive reform, rendering the schemes at best largely ineffective and at worst counterproductive. What little good that may be achieved by such initiatives is also ultimately undermined by the realities of the CAP funding model. According to a major study carried out by the Nature Food journal in 2023, more than 80 percent of CAP income supports are channeled into livestock. As professor Paul Brehen—one of the lead authors of the report—explains, that is having 'a perverse effect on the food transition' by prioritizing emissions-heavy animal produce at the expense of more environmentally friendly and efficient plant cultivation.
In early 2023, with many key agricultural indicators—including emissions, farmers' salaries and demographics—still heading in the wrong direction, the EU introduced its latest round of CAP reforms designed to make EU farming 'fairer, greener and more results driven.' However, given the outsize contribution of the bloc's agricultural policy to the multiple crises now facing European farming, expecting the CAP to put the industry on an equitable and sustainable footing for the future may be akin to closing the barn door after the horse has already bolted.
John Boyce is an Irish freelance journalist with a background in international relations and Hispanic affairs. He writes for a variety of publications on Anglo-Irish, Spanish and European politics.
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