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Euronews
17-07-2025
- Business
- Euronews
EU Commission shrinks agriculture share in record budget
The European Commission unveiled a record €2 trillion budget—its largest ever—signalling significant changes and reductions to EU agricultural funding compared to the current 2021–2027 period. The proposal confirmed earlier reports that agricultural subsidies and regional development funds would be merged into a single mega-fund worth €865 billion. Within this new single fund, the Common Agricultural Policy (CAP) is ringfenced—meaning a fixed amount is protected from reallocation—for income support totalling €300 billion. The term income support no longer refers exclusively to direct payments, which have traditionally made up the bulk of the CAP, but it also includes co-funded initiatives that were previously part of rural development, now phased out under the new structure. This sum also includes a €6.3 billion safety net, doubling the agricultural reserve created in 2021 to address market fluctuations, now increased from €450 million to €900 million over the seven years. According to the Commission, the €300 billion ringfenced amount represents a minimum and is expected to account for 80% of total agricultural spending. Additional agricultural investments, although not certain, could be drawn from other policy areas under the single fund, such as regional funds, as well as from the other European competitiveness fund (for instance, under the research programme Horizon Europe). Does this mean more or less money for farmers? Making a direct comparison with the previous budget is tricky due to the different overall structure, a fact that the Commission has used to fend off criticism. Commission President Ursula von der Leyen even claimed that 'agriculture will be strengthened', while EU agriculture Commissioner Christophe Hansen pointed out that 'the money that gets directly to the farmers is not cut at all.' However, a closer look at the numbers paints a different picture. In the 2021–2027 budget, the CAP was allocated €386.6 billion (with €270 billion specifically for direct payments to farmers). This general figure is remarkably less than the €300 'ring-fenced' for agriculture in the single fund. Different agricultural policy experts contacted by Euronews all estimate that, when adjusted for inflation, the new proposal represents a 20% to 30% cut in real terms to the EU's agricultural spending. 'In nominal terms, there's less money, but we hope that due to synergies with other policy areas, the overall support remains similar,' an EU official admitted on the sidelines of the presentation. Agriculture's shrinking share Symbolically, the proposed changes underscore agriculture's declining importance in the EU budget. While the total EU long-term budget grows from €1.21 trillion to €1.816 trillion (excluding COVID-19 borrowing repayments), the CAP's share drops from 32.2% to just 16.5%. It now makes up only 35% of the new single fund, which amounts to less than half of the overall budget. This trend aligns with a long-term shift: in the 1980s, CAP accounted for more than 70% of the EU budget. The proposed changes reflect the Commission's shift in priorities, with von der Leyen choosing to reduce spending in areas such as agriculture and cohesion in favour of new initiatives such as defence and competitiveness. Reactions and protests The budget plan sparked immediate backlash. Almost all the MEPs intervening in a heated exchange in the European Parliament with Commissioner Hansen criticised the proposal. 'You're doubling the MFF, but we're getting a 25% cut to the CAP. Don't try and sell that to us as a success story,' quipped MEP Herbert Dorfmann, who hails from Hansen and von der Leyen's own European People's Party (EPP). Outside the halls of the EU institutions, farmers staged a symbolic protest dubbed 'European Agriculture's Black Wednesday'. In a strongly worded statement, the farmers' lobby Copa-Cogeca accused the Commission of dismantling the 'common' aspect of the CAP through 'concealed budget cuts' and 'complete renationalisation,' masked as 'administrative simplification'. In a bid to appease future concerns of European lawmakers and avoid further unrest of farmers, the Commission introduced several new measures previously demanded by the sector. A new inflation adjustment mechanism will allow subsidy amounts to be revised if inflation falls below 1% or rises above 3%, aiming to protect farmers from price volatility. Transition payments of up to €200,000 will be available to farms adopting ambitious transformation plans, helping to de-risk innovation in the sector. While the Commission hopes these adjustments will mitigate discontent, the debate over the future of European agriculture, as well as its place in the EU's evolving priorities, is set to intensify in the talks that will take several months before the formal go-ahead to the long-term budget.
Euractiv
16-07-2025
- Business
- Euractiv
EU farm subsidies slashed in new long-term budget plan
The EU's landmark farming subsidies programme, the Common Agricultural Policy (CAP), is set to shrink by nearly 30% in real terms under the Commission's proposed EU long-term budget for 2028-2034, unveiled Wednesday. The CAP budget for the next spending period will be €300 billion, down from the current 2021-2027 budget of €387 billion. Adjusted to 2025 real prices, this represents a reduction of roughly 30%. Speaking at the European Parliament, EU Agriculture Commissioner Christophe Hansen said the amount would be ringfenced – meaning it cannot be reallocated to other policy needs. This will encompass area-based payments, as well as other types of compensation, including environmental incentives, investments, and support for young farmers, he added. Hansen described the proposal as a 'good outcome for agriculture and our farmers.' Budget cuts are not the only major change. The CAP will no longer be a standalone fund. Instead, it will be merged into a single mega-fund alongside cohesion and rural development spending, to be managed at the national level. 'Agriculture will be strengthened,' European Commission President Ursula von der Leyen said in a separate press conference, noting that in addition to the ringfenced budget, more member states could reallocate extra resources through the National Regional Partnerships, the single fund for cohesion, fisheries, agriculture and rural areas (€865 billion in total). The two-pillar structure, in place since 1999 and split between direct support for farmers and rural development, will also cease to exist from 2028, according to the proposal. There will be 'one policy and one set of measures', said Hansen, adding that this would be the end to 'limitations' to money transfers between pillars. But not all lawmakers were convinced. MEP Herbert Dorfmann, the European People's Parliament's (EPP) coordinator for agriculture, rejected Hansen's reassurances that farmers would not be worse off. 'Don't try sell us to as a success figure," he said, estimating a 25% decrease. Socialist MEPs also called for clarification. 'Where is the real increase?' asked Dario Nardella, S&D group coordinator on agriculture. What's new As previously reported, Hansen is following through on his pledge to re-think the distribution of area-based payments by reinforcing capping and degressivity mechanisms. He said the changes would allow for 'better targeted' payments, especially for those who need it the most, such as young farmers. Moreover, the minimum amount of direct payments for young farmers will increase from 3% to 6%. He said the new proposal would also improve the definition of 'active' farmer and introduce a method to better account for inflation. Additionally, a new 'farm relief service' will make it easier for farmers to take time off. What's gone Hansen announced the scrapping of the current green conditions attached to direct payments depended – the Good Agricultural and Environmental Conditions (GAECs). Instead, member states should define their own minimum sustainable practices. Environmental incentives, known as eco-schemes, are also set for a shake-up. These will be merged into the agri-environmental and climate measures (AECMs), which remain voluntary and require co-financing from member states. This story was updated.
Euronews
16-07-2025
- Business
- Euronews
5 key ideas behind the EU Commission's new farming rulebook
What the European Commission is set to unveil today marks only the first stage of a sweeping transformation that will redefine the Common Agricultural Policy (CAP) at its core. In many ways, the upcoming changes are the culmination of reforms initiated in response to farmers' protests, focused on simplification and reducing conditionality. Now, these efforts are being pushed to their logical extreme. Yet, EU Agriculture Commissioner Christophe Hansen faces a challenging road ahead, as the reforms are expected to be seen as drastic. At the heart of the shift is an unprecedented simplification: the CAP will be absorbed into a single fund—alongside previously distinct funding mechanisms like Cohesion Policy or the EU's fisheries subsidies—under a unified set of delivery rules for disbursing funds. One of the most symbolic changes is the abolition of the long-standing CAP structure built around two pillars, a structure in place since the 1999 reform. For CAP 'traditionalists', this is a major blow. Despite the clear rationale behind this overhaul—simplify the EU's farming rulebook—the new architecture of EU agricultural subsidies will be among the most complex elements of the upcoming EU budget. Here are five key ideas underpinning the reform: 1. Evolution toward revolution Since taking office, Commissioner Hansen has repeatedly pointed out that the next CAP would be an "evolution, not a revolution". But the reality seems to contradict his rhetoric. The new structure—and especially the shift to a single fund and removal of strong conditionality—has left many in the sector surprised, given Hansen's previously moderate stance, which enjoyed support from major stakeholders. In truth, it's a blend of both. The reform is indeed an evolution, building on recent simplification measures introduced after last year's farmer protests. Even the new delivery model, for instance, closely mirrors the current system agreed in 2021 based on 27 national strategic plans. However, these 'evolutionary' elements have now crystallised into a full-scale revolution: a single fund, a single budget heading, and minimal EU-level conditionality. 2. The 'Great Merger' is gentler on agriculture Another long-feared development has come to pass: the merger of regional funds and agricultural subsidies. Both CAP and Cohesion Policy, which account for two-thirds of the EU budget, will now be folded into a broader Single Fund. For the agricultural sector, the impact is softened. A ring-fencing mechanism ensures that a minimum share of the fund remains earmarked for agriculture, protecting it from budgetary flexibility that will affect other areas like cohesion policy more significantly. Despite agriculture receiving special consideration, the von der Leyen Commission's push for radical simplification of the program has proven unstoppable. 3. Rural development is still there (but no longer as a pillar) Since 2000, the CAP has operated under a two-pillar system, separating direct payments (the so-called first pillar) from rural development projects (also known as the second pillar), with the latter funded through multi-annual, co-financed programs. The new EU budget proposal would eliminate the CAP's 'second pillar'—but this doesn't mean rural development will disappear completely. Under the new CAP architecture, rural development actions such as support for small farmers or agri-environmental measures will continue, but no longer as part of a distinct 'pillar' with its distinctive policy objectives. Critical elements such as the terminology, structural division, and foundational aspect are gone, though the substance of rural development (including its co-financed feature) remains. 4. Losing the 'C' in CAP The risk of renationalisation—where the "Common" part in the Common Agricultural Policy begins to fade—has been growing since the previous CAP reform proposed by the then agriculture Commissioner Phil Hogan and agreed on by lawmakers in 2021. That risk is now a reality. Post-2028, CAP implementation will lean heavily on bilateral negotiations between the European Commission and individual member states. Other influential actors, particularly local authorities but also the European Parliament, will have little say. With member states gaining significant autonomy over how funds are spent, the CAP is becoming increasingly national in character, which could undermine its 'common' objectives. 5. Familiar foundations with a few new twists Some foundational CAP elements will remain intact. Area-based income support and coupled income support—both central features of direct payments—will still be in place (with few tweaks). The crisis reserve, introduced in the last reform to address market shocks or disasters, also survives. But there are new features too. Notably, all member states will be required to establish farm relief services. These will provide support when farmers are unable to work due to illness, childbirth, or family care responsibilities, with co-financing from national governments.
Euronews
14-07-2025
- Business
- Euronews
Leak: EU Commission plans to merge agricultural and regional funds
A major shake-up in how the EU manages farming subsidies appears to be underway with the European Commission planning to unify delivery of its two largest budget items—cohesion funds and agricultural subsidies—under a single channel, according to a leaked draft of the EU's next long-term budget seen by Euronews. Crucially, the proposal would eliminate the CAP's 'second pillar', which currently funds rural development programmes. These programmes support agro-environmental initiatives, farm investments, and the development of rural communities. 'The new framework guarantees coherence by integrating the CAP interventions from the current two-funds structure under one single umbrella. Such alignment brings further flexibility and simplification,' the leaked document states. While farmers' associations—many of which protested against similar proposals last May—are likely to fiercely oppose the removal of the rural development pillar, the most transformative element may be the planned merger of CAP and cohesion policy. Rumours of such a move have circulated for months. The draft outlines a new mechanism tentatively called 'National and Regional Partnerships', which would be supported by a single fund. According to the Commission, this approach 'will help better exploit synergies between the policies covered by the scope of this initiative and hence support their delivery.' 'By bringing cohesion policy and the Common Agricultural Policy under a single programming approach, Member States will have a wider toolbox to address the challenges faced by farmers and communities in rural areas,' the draft notes. This expanded toolbox would include infrastructure development, access to digital, water, and energy services, as well as support for skills development and generational renewal. However, the proposal could face strong resistance. CAP and cohesion policy serve fundamentally different roles: the former provides direct subsidies to farmers, while the latter focuses on reducing regional disparities through investment. Many in the agricultural sector, including several EU agriculture ministers and Agriculture Commissioner Christophe Hansen, have expressed a desire to maintain the CAP's current two-pillar structure and standalone budget. This is a developing story.
LBCI
01-07-2025
- Business
- LBCI
EU strikes new trade deal with Ukraine covering farm imports
The European Union on Monday agreed to a new long-term trade deal with Ukraine, covering imports of food products from the war-torn country that have angered EU farmers. "With this modernized agreement, we are securing trade flows from Ukraine to Europe and global markets," says the president of the European Commission, Ursula von der Leyen. "At the same time, we continue to safeguard the interests of our farmers." Brussels and Kyiv have been wrangling over the deal after protests from farmers saw the EU slap quotas on tariff-free Ukrainian agricultural imports into the bloc. In the wake of Russia's February 2022 invasion, the EU gave tariff-free access to most Ukrainian agricultural imports to help the country's economy. But irate EU farmers said the Ukrainian produce unfairly undercuts their own. In response, Brussels added certain restrictions in 2024, when it extended the agreement for one additional year by introducing a maximum ceiling on certain tariff-free products such as cereals, poultry, eggs, sugar, and corn. The European Commission said that under the new deal -- which still needs to be finalized -- quotas would remain for those sensitive agricultural areas. The new terms "improve access compared to the previous 2016 agreement, but moderate imports compared to their peak," EU agriculture commissioner Christophe Hansen said. In return, Kyiv will cut its quotas for pork, poultry, and sugar imported from the EU and push to align its food production standards with those of the 27-nation bloc by 2028, Brussels said. Agricultural powerhouse Ukraine has been desperate to maintain preferential access for its products to the EU as it seeks to keep income flowing after three-and-a-half grueling years of war. AFP
