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Financing the Common Agricultural Policy

Financing the Common Agricultural Policy

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CAP funding
Financing the Common Agricultural Policy

For over 50 years, the Common Agricultural Policy (CAP) has been the European Union's (EU) most important common policy. It has taken a large part of the EU's budget, with a declining percentage over recent years.

Fact-sheet "EU agriculture spending - focused on results"

The CAP is financed by two funds which form part of the EU's general budget.

>> Read the regulation on the financing, management and monitoring of the CAP


1. EAGF 

The European Agricultural Guarantee Fund (EAGF) primarily finances direct payments to farmers and measures regulating or supporting agricultural markets.

>> Read the regulation on direct payments

>> Read the regulation on market measures



The European Agricultural Fund for Rural Development (EAFRD) finances the EU's contribution to rural development programmes.

>> Read the regulation on rural development


Under Title 05 of the EU General Budget you find details on the budget for Agriculture and Rural development.

>> More on the budget for Agriculture and Rural Development


The European taxpayer rightly expects that these sums are correctly spent. It is therefore of paramount importance that management and checking systems are in place which give reasonable assurance that the sums are spent properly and that any irregular payments are detected and recovered.


Under the basic rules for the financial management of the CAP, the Commission is responsible for the management of the EAGF and the EAFRD. However, the Commission itself normally does not make payments to beneficiaries. According to the principle of shared management, this task is delegated to the Member States, who themselves work through national or regional paying agencies. Before these paying agencies can claim any expenditure from the EU-budget, they must be accredited on the basis of a set of criteria laid down by the Commission.


The paying agencies are, however, not only responsible for making payments to the beneficiaries. Prior to doing so, they must, either themselves or through delegated bodies, satisfy themselves of the eligibility of the aid applications. The exact checks to be carried out are laid down in the different sectoral regulations of the CAP and vary from one sector to another.


The expenditure made by the paying agencies is then reimbursed by the Commission to the Member States, in the case of the EAGF on a monthly basis and in the case of EAFRD on a quarterly basis. Those reimbursements are, however, subject to any subsequent corrections which the Commission may make under the clearance of accounts procedures.


>> More on the clearance of accounts procedure