Latest news with #CommonAgriculturalPolicy
Euractiv
4 hours ago
- 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.
Euractiv
5 hours ago
- Business
- Euractiv
MFF: EU proposes historic €2 trillion budget
The European Commission proposed the largest long-term EU budget in the bloc's history Wednesday, merging historically separate farming and regional spending programmes into country-specific national plans and creating a €400+ billion fund to boost ailing industry. Brussels' proposed post-2027 "Multiannual Financial Framework" will amount to just under €2 trillion, or 1.26% of the bloc's gross national income, Ursula von der Leyen told reporters. This is well above the current budget, which amounts to 1.13% of the bloc's GNI. "The next MFF will be the most ambitious ever proposed. It is more strategic, more flexible, more transparent, and we're investing more in our capacity to respond and more in our independence," von der Leyen said. Europe's Common Agricultural Policy (CAP) and Cohesion Policy, which for decades have consumed a third each of the bloc's budget by providing subsidies to farmers and development funds to Europe's poorer regions through some 500 separate funding schemes, should be combined into just 27 'national and regional partnership plans' , Serafin said. The plans collectively amount to €865 billion, or less than half of the total budget. "The goal of the next of this next MFF is a modern, more flexible budget that builds on past successes and responds to the challenges of today, but also tomorrow," Serafin said. "You will see that reflected in overall figures, in new spending categories, and in the changes we have made to the structure and principles of the budget." A much-vaunted Competitiveness Fund (ECF), which will also seek to 'crowd in' hundreds of billions of euros of private investments in strategic sectors, will merge up to twelve distinct initiatives to bolster the EU's beleaguered industry and prevent the bloc falling further behind China and the US, he added. This is a developing story. (mm)
RTÉ News
7 hours ago
- Business
- RTÉ News
What do proposed CAP changes mean for Irish farmers?
EU financial supports for farmers could be radically overhauled under a draft proposal from the European Commission. a single National and Regional Partnerships fund from the start of the next EU budgetary cycle in 2028. Here we look at what the changes will mean to Irish and other EU farmers. What is the Common Agricultural Policy? The policy was introduced in 1962 and sought to provide affordable food and a fair standard of living for farmers in the then-European Economic Community. Its main aims are to support farmer incomes, ensure food security, protect the environment and rural development across the European Union. It is a significant part of the EU budget, amounting to nearly €400bn, which is around one-third of the entire budget. There are around 7 million beneficiaries of CAP payments across the EU. How do Irish farmers benefit from CAP? Irish farmers receive around €2 billion annually in CAP payments to help support the rural economy and food production, with around 120,000 farmers receiving payments. Farmers receive funding through CAP in different ways, including direct payments and through specific projects with environmental or production goals that offer financial rewards for achieving them. Projects under Ireland's CAP Strategic Plan include the Agri-Climate Rural Environment Scheme (ACRES) and the LEADER Programme, which funds enterprise development. ACRES has a fund of €1.5 billion to help address biodiversity decline on farms, focusing on things like planting new hedgerows, native trees, and protecting watercourses. Over 50,000 farmers signed up for the scheme since it began in 2023. CAP payments are seen as crucial for the Irish agriculture sector as they help ensure family-run farms are viable. So what are the proposed changes? The proposal would mean CAP would no longer be a stand-alone fund within the EU budget from 2028 and would instead be merged with EU cohesion, migration and infrastructure funding. This could result in certain funding for agriculture within the EU budget no longer being ringfenced and see financial supports funnelled away from farming and into other areas. The draft Commission document proposes to guarantee "coherence by integrating the CAP interventions from the current two-funds structure under one single umbrella". The proposal suggests member states would have more power to reallocate funding "based on their specific needs rather than uniform allocations". The Commission says the funding merger will create "stronger synergies between policies". It says it will create a more flexible, crisis-responsive budget that better reflects the EU's shared priorities and reduce bureaucracy. Under the current system, CAP funding is divided into two pillars, direct payments to farmers and projects for rural development. However, the draft Commission document proposes to guarantee "coherence by integrating the CAP interventions from the current two-funds structure under one single umbrella". The proposal suggests member states would have more power to reallocate funding "based on their specific needs rather than uniform allocations". The Commission's plans also recommend CAP funding "should be focused on active farmers", meaning supports would be "targeted towards farmers who exercise agriculture as a principal activity". In addition, the proposals would increase supports for younger farmers significantly, with funding for the costs of establishing a new farm potentially rising from €100,000 to €300,000. What has been the reaction in Ireland? "Very concerning" is how the Irish Farmers' Association described the draft proposals. IFA President Francie Gorman said the Commission is "downgrading the importance of the CAP" and said it is being turned into an environmental and social policy. He described CAP as the cornerstone of the Irish agriculture sector. The group that represents dairy farmers is warning that the changes could "have an immediate inflationary effect on food prices". ICMSA President Denis Drennan said: "Any merging of the CAP pillars as a pretext towards further reduction in already inadequate direct payments to farmer primary-producers will have an immediate inflationary effect on the costs of food." "It's utterly bizarre – in light of the anxiety being cause by rising food prices – for the Commission to consider cutting the very payments to farmers that were at least going some small way to preventing the full cost of food production being borne by consumers," he added. While Minister for Agriculture Martin Heydon said that the proposals are "just the beginning of a protracted process". Mr Heydon said member states will start the process of agreeing on a "general approach" to the proposals and will take part in "line-by-line negotiations" with the EU Parliament and the EU Commission. He said his priority during the process will be to "ensure that the legislation finally agreed reflects Ireland's concerns, and provides certainty and stability for farmers".
Euronews
16 hours ago
- 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.
RTÉ News
21 hours ago
- Business
- RTÉ News
European Commission to propose merging CAP funding with other funds
The European Commission is set to propose merging Common Agricultural Policy (CAP) funding with other funds, in a radical overhaul of how farmers receive financial supports from the European Union budget. Draft documents of the proposals, seen by RTÉ News, indicate that from the start of the next EU budgetary cycle in 2028, the commission plans to pool dedicated agricultural and rural financial supports into a single National and Regional Partnerships fund. The proposal would mean CAP would no longer be a stand-alone fund within the EU budget but would instead be merged with EU cohesion, migration, and infrastructure funding. This could result in certain funding for agriculture within the EU budget no longer being ringfenced and see financial supports funnelled away from farming and into other areas. In the draft, the commission argues the change would allow for "stronger synergies between policies", and create a more flexible, crisis-responsive budget that better reflects the EU's shared priorities. The commission will outline its proposals to MEPs later today for the next EU budget - known as the Multiannual Financial Framework (MFF) - which comes into effect in 2028. Irish farmers receive around €2 billion annually in CAP payments to help support the rural economy and food production. This funding is divided into two pillars - the first comprising direct payments to farmers, with the second focusing on rural development. However, the draft commission document proposes to guarantee "coherence by integrating the CAP interventions from the current two-funds structure under one single umbrella". The proposal suggests member states would have more power to reallocate funding "based on their specific needs rather than uniform allocations". Some Irish MEPs who have seen the leaked commission proposals say they risk CAP funding to farmers being considerably reduced, with some estimates suggesting they could see a drop of up to 30%. Fine Gael MEP Maria Walsh, who is a member of the European Parliament's Agriculture Committee, said they "highlight a real risk of the already insufficient CAP budget being further decreased. "While the relevance of some pillar-two tools - from farm advisory services to LEADER programmes - is maintained in the proposal, the funding is uncertain. "Without guaranteed investment, our rural communities and farmers will suffer. For example, the ringfenced funding for LEADER programmes has been abolished - I will be fighting within the Agriculture Committee to reverse this decision," she added. The commission's plans also recommend CAP funding "should be focused on active farmers", meaning supports would be "targeted towards farmers who exercise agriculture as a principal activity". In addition, the proposals would increase supports for younger farmers significantly, with funding for the costs of establishing a new farm potentially rising from €100,000 to €300,000. Independent Ireland MEP Ciaran Mullooly said he is "alarmed and concerned" by the reported proposals "to scrap a fund with millions of euros of Pillar 2 rural development grants. "These grants provide a lifeline to many parts of the midlands, west, north west and north east," he said. He added that "the Commissioner is proceeding against the advice of all farmers and community groups with a single fund to be merged with cohesion funds paid to member states. "The scale of cuts in the budget being proposed are absolutely disastrous for Irish farmers." 'Big battle ahead' - IFA The Irish Farmers' Association (IFA) has described the draft proposals as "very concerning". IFA President Francie Gorman said: "it is clear that the EU Commission is downgrading the importance of the CAP and food production to allow for greater spending elsewhere. "The CAP is being turned into an environmental and social policy. Support for farmers who are producing the most food is being consistently reduced. "At a time when Ireland is a net contributor to the overall EU budget, this level of investment in every parish takes on even more significance," he said. "CAP has been the cornerstone of the multi-billion export sector that underpins thousands of jobs in regions far from the urban centres. "There is a big battle ahead to retrieve a coherent policy from what the EU Commission is proposing," he added. 'Beginning of a protracted process' Minister for Agriculture Martin Heydon has said that the commission's budget proposals are "just the beginning of a protracted process". The minster said: "Member States will, through the Council of Ministers, begin the process of agreeing a general approach to the commission's proposals, before engaging in line-by-line negotiations with the EU Parliament and the EU Commission. "This will take some time, and I fully expect the progression of these proposals to be a significant feature of Ireland's Presidency of the EU Council in the second half of next year. "My priority throughout will be to ensure that the legislation finally agreed reflects Ireland's concerns, and provides certainty and stability for farmers," the minister added. Once the commission sets out its proposed EU budget, this will start a process of debate and negotiation that will ultimately lead to a final vote on the next budget for the bloc, that would begin in 2028. Ireland is expected to play an important role in this process, especially regarding CAP funding, given that we will hold the rolling six-month EU presidency for the second half of 2026.
