Five things to know about the EU's next farm fund

Euractiv

6 hours ago

The European Commission's planned revamp of the EU's long-term budget is stirring uncertainty across many sectors, but especially among farmers, who remain the biggest recipients of EU money.
Here's what we know so far about how the budget, known as the Multiannual Financial Framework (MFF), will influence the next Common Agricultural Policy (CAP), with an announcement expected on 16 July. The two-pillar structure Early drafts of the EU budget reform explored merging CAP funds into a flexible "Single National Plan" alongside cohesion instruments.
But EU Agriculture Commissioner Hansen said on Wednesday that the Commission's intention to maintain income support for farmers – the policy's first pillar – remains very clear.
Farmers' main concern has been that rural development money – the second pillar – would be forced to compete with cohesion funds. According to Jan Olbrycht, a special adviser to EU Budget Commissioner Piotr Serafin, that risk now appears off the table. 'We have the CAP, which probably will be separated with the two pillars… The plot that the rural development can go to cohesion policy is over, is finished,' he said at the Committee of the Regions last week.
The real uncertainty now is how much money will go into the second pillar and whether it will be ring-fenced or remain vulnerable to reallocation.
Hansen has repeatedly defended preserving the current two-pillar structure. At a meeting with EU agriculture ministers in Warsaw and again this week at the Committee of the Regions, he made it clear that scrapping the two-pillar setup would be a mistake. 'It would be unwise to throw overboard this toolbox,' he said. More power to the capitals Since the last CAP reform, national governments have taken on a bigger role in shaping farm policy through their own strategic plans – a role that's expected to grow after 2027.
Speaking at an event this week, Gijs Schilthuis, director for sustainability at the Commission's Directorate-General for Agriculture (DG AGRI), said the Commission wanted to give member states more flexibility to tailor green rules and incentives to local realities.
The Commission's May simplification package already proposed giving national governments more room to revise their CAP national plans. Dedicated but decimated? While the overall MFF remains under pressure, the CAP is still expected to receive a 'dedicated budget,' Hansen told Euractiv on Wednesday.
According to Olbrycht , the CAP budget will "for sure not be bigger," and farming policy is unlikely to be spared from cuts.
Sources consulted by Euractiv suggest that CAP funding could fall by 15-20%, depending on how the budget reallocation is handled. With limited options – raising national contributions, creating new EU own resources, or cutting programmes – some pressure on agricultural funding seems inevitable. Timing There's also uncertainty around timing. The current CAP is implemented through three regulations: the national strategic plans, the Common Market Organisation (CMO), and the horizontal regulation.
Last year, Hansen proposed targeted changes to the CMO to boost farmers' bargaining power in the food chain. Work on the file is still ongoing.
Meanwhile, the recently proposed CAP simplification package includes amendments to both the national strategic plans and the horizontal regulation – and these, too, are still being discussed.
It remains unclear how the Commission intends to launch a broader CAP reform while parts of the existing legislation are being negotiated. According to multiple sources, the 16 July MFF package will likely include a regulation on the single fund, with a CAP chapter outlining basic new elements in the national strategic plans and horizontal regulation. CMO amendments could follow later in autumn.
In that case, a full-blown overhaul of the CAP looks increasingly unlikely. From sticks to carrots With the Green Deal and Farm to Fork effectively buried, environmental conditions are no longer expected to be central to the post-2027 CAP. Many of the eco-requirements once placed on farmers were scaled back or scrapped in 2024 in an effort to reduce red tape.
Hansen has made no secret of the shift. The next CAP, he said, will focus on incentives rather than penalties – a pivot from stick to carrot. It's not a revolution, he said at the Committee of the Regions, but an "evolution" – likely building on the May simplification package.
In his view, CAP funds should target 'those most in need' – namely young, new, and small farmers. But shifting more money toward these groups would require cuts elsewhere, he added.
The solution, he argues, would be to cap payments to the largest farms and introduce stronger 'degressivity' – where payouts decrease as the amount of farm aid increases. His proposal is already dividing the EU's main farming groups.
Jeremias Lin contributed reporting.
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