The “modernised” Common Agricultural Policy (CAP) will have a budget of €365 billion and will continue to be built around two pillars – direct payments to farmers and rural development funding.

The figure – published in the ‘EU Budget for the Future’ document – follows today’s announcement that CAP is being reduced by 5% under the EU’s proposed multi-annual funding framework (MFF) budget – running from 2021 to 2027.

Speaking at the European Parliament in Brussels, Gunther Oettinger, the European Commissioner for Budget and Human Resources, also proposed that direct payments are to be reduced by no more than 4%.

According to the document, seen by AgriLand, the commission proposes to increase national co-financing rates for rural development funding.

In addition, an amount of €10 billion in Horizon Europe will support research and innovation in food, agriculture, rural development and the bio-economy.

The proposed “modernisation of CAP” is aimed at ensuring access to high-quality food; while maintaining a fully-integrated single market for agricultural goods in the EU.

The modernised policy will: place a greater emphasis on the environment and climate; support the transition towards a more sustainable agricultural sector; and support the development of vibrant rural areas. 

Under a new delivery model, the commission’s proposals will bring operations together under a single programming instrument – the Common Agricultural Policy Strategic Plan.

Based on common objectives set at EU level, member states will now have “more room” to match their needs with intervention schemes that they will set out in their national strategic plan.

It is hoped that this approach will lead to “more flexibility and simplification“.

Under the commission’s proposals direct payments will remain an essential part; but will be moderately reduced and better targeted.

A more balanced distribution of payments will be promoted though compulsory capping at farm level or degressive payments decreasing with farm size.

Environmental targets

This means that supports will be redistributed towards medium-sized and smaller farms. Direct payment levels per hectare between member states will also continue to converge towards the EU average.

Environmental objectives will also be reinforced. As such, direct payments will be subject to enhanced conditionality that will apply to all beneficiaries.

The document also details that voluntary eco-schemes will be introduced in the budget for direct payments.

“A significant part of funding will be ring-fenced for actions beneficial to the climate and the environment rural development. This system will provide greater flexibility for member states, allowing them to better target environmental objectives and be more ambitious,” the document states.

Crisis reserve

It is also outlined that a new crisis reserve will be created to address crises generated by unforeseeable developments in international markets or by specific shocks to the agricultural sector following actions undertaken by countries outside the EU.

Support for risk management tools – including income stabilisation – are also expected to be introduced in the strategic plans.

The future EU budget will improve synergies between the EU Cohesion Policy and the Common Agricultural Policy to finance investment in nature and biodiversity.

“In line with the Paris Agreement and the commitment to the United Nations Sustainable Development Goals, at least 25% of EU expenditure across all EU programmes should contribute to climate objectives,” the document states.

LIFE – the well-established programme for the environment and climate action – will also support measures promoting energy efficiency and clean energy.

The EU’s Space Programme, with its satellites Copernicus and Galileo, is also expected to help make precision farming a reality.

“Satellites monitoring agricultural land will send signals to farmers on where they can use fertilisers on their fields. This decreases unnecessary use of products, reducing the overall land and air pollution,” the document concludes.