Aims of the common agricultural policy
Launched in 1962, the EU’s common agricultural policy (CAP) is a partnership between agriculture and society, and between Europe and its farmers. It aims to:
- support farmers and improve agricultural productivity, so that consumers have a stable supply of affordable food
- ensure that European Union (EU) farmers can make a reasonable living
- help tackling climate change and the sustainable management of natural resources
- maintain rural areas and landscapes across the EU
- keep the rural economy alive promoting jobs in farming, agri-foods industries and associated sectors
The CAP is a common policy for all the countries of the European Union. It is managed and funded at European level from the resources of the EU’s budget.
How the policy works
Farming is unlike any other business. Despite the importance of food production, farmers’ income is significantly lower compared to non-agricultural income (by around 40%). Agriculture depends more on the weather and the climate than many other sectors. Besides there is an inevitable time gap between consumer demand and farmers being able to supply: growing more wheat or producing more milk inevitably takes time.
While being cost-effective, farmers should work in a sustainable and environmentally friendly manner, and maintain our soils and biodiversity.
Business uncertainties and environmental impact of farming justify the important role that the public sector plays for our farmers. The CAP takes action with:
- Income support. Direct payments ensure income stability, and remunerate farmers for environmentally friendly farming and delivering public goods not normally paid for by the markets, such as taking care of the countryside
- Market measures. The EU can take measures to deal with difficult market situations such as a sudden drop in demand due to a health scare, or a fall in prices as a result of a temporary oversupply on the market
- Rural development measures. National and regional programmes address the specific needs and challenges facing rural areas
How it's paid for
The European Union supports farmers with €58,82 billion in 2018.
The money finances:
- income support: €41,74 billion
- rural development measures: €14,37 billion
- market measures: €2,7 billion
Funding for farmers comes from the EU budget. The overall budget for the EU amounts to €160,113 billion in 2018.
The CAP is financed through 2 funds as part of the EU budget. The European Agricultural Fund (EAGF) provides direct support and funds market measures. The European Agricultural Fund for Rural Development (EAFRD) finances rural development.
Payments are managed at the national level by each European Union country. Information about the recipients of CAP payments is published by each country, in accordance with EU transparency rules.
Why do we need it?
The CAP sets the conditions that will allow farmers to fulfil their multiple functions in society – the first of which is to produce food. There are around 11 million farms in the EU and 22 million people work regularly in the sector. They provide an impressive variety of abundant, affordable, safe and good quality products.
The EU is known throughout the world for its food and culinary traditions and is one of the world’s leading producers and net exporter of agri-food products. Due to its exceptional agricultural resources the EU could and should play a key role in ensuring food security of the world at large.
Farming is also about rural communities, the people who live in them and their life-style. It is about our countryside and its precious natural resources. Many jobs in the countryside are linked to farming. Farmers need machinery, buildings, fuel, fertilisers and healthcare for their animals, also known as ‘upstream’ sectors. Other people are busy in ‘downstream’ operations – such as preparing, processing and packaging food. Still others are involved in food storage, transport and retailing. The farming and food sectors together provide nearly 44 million jobs in the EU.
To operate efficiently and remain modern and productive, farmers, upstream and downstream sectors need ready access to the latest information on agricultural issues, farming methods and market developments. During the period 2014-20, the CAP is expected to provide high-speed technologies, improved internet services and infrastructure to 18 million rural citizens – the equivalent of 6.4 % of the EU’s rural population.
Farmers have a double challenge: to produce food whilst simultaneously protecting nature and safeguarding biodiversity. Environmentally sustainable farming, which uses natural resources prudently, is essential for our food production and for our quality of life – today, tomorrow and for future generations.
Contributing to the CAP
The European Commission regularly consults civil dialogue groups and agricultural committees to best shape law and policies governing agriculture. In addition, expert groups provide input to the European Commission, for example the Agricultural Market Task Force (AMTF) on unfair trading practices.
Responsible for planning, preparing and proposing new European legislation, the European Commission carries out impact assessments. Those examine whether there is a need for EU action and analyse the possible impacts of available solutions. They are key part of the EU’s better regulation agenda.
Impact assessments for agriculture and rural development took place in 2003 (“mid term review” (949.9 KB - PDF)), 2008 (“health check” – SEC(2008) 1885) and 2011 (“CAP towards 2020” – SEC(2011) final).
The EU's Court of Auditors also plays a major role in supervising expenditure in agriculture.
The European Commission regularly publishes public opinion reports on “Europeans, Agriculture and the CAP”. The Eurobarometer surveys, run in all EU countries, provide valuable information on citizens perception of CAP. This includes awareness of the support provided through the CAP, its performance, quality matters, environment, importance of the CAP and much more.
The CAP after 2020
To consolidate the role of European agriculture for the future, the CAP has evolved over the years to meet changing economic circumstances and citizens’ requirements and needs.
On 1 June 2018, the European Commission presented legislative proposals on the future of the CAP for the period after 2020.
The legislative proposals came after a public consultation launched in 2017 on the future of the CAP and the communication on the future of food and farming.
The communication outlines the way ahead for the CAP, focusing on making it simpler and ensuring the best value-for-money. Tracing the priorities the future CAP must address, the European Commission sets ground for a discussion on a more flexible approach to implementing the policy for more effective results.
The legal basis for the common agricultural policy is established in the treaty on the functioning of the European Union.
The following 4 regulations set out the different elements of the CAP work:
- rules for direct payments to farmers (EU regulation 1307/2013)
- a common organisation of the markets in agricultural products (EU regulation 1308/2013)
- support for rural development (EU regulation 1305/2013)
- financing, management and monitoring of the common agricultural policy (EU regulation 1306/2013)
The common agricultural policy is managed by the European Commission's department for agriculture and rural development. It can adopt delegated and implementing acts to implement the common agricultural policy.
Learn more about the EU's law-making process
The CAP is reformed to strengthen the competitiveness of the sector, promote sustainable farming and innovation, to support jobs and growth in rural areas and to move financial assistance towards the productive use of land.
The CAP provides income support. A new CAP reform cuts the link between subsidies and production. Farmers now receive an income support, on condition that they look after the farmland and fulfil food safety, environmental, animal health and welfare standards.
The CAP shifts from market support to producer support. Price support is scaled down and replaced with direct payments to farmers. They are encouraged to be more environmentally friendly.
The reform coincides with the 1992 Rio Earth Summit, which launches the principle of sustainable development.
Farms become so productive that they grow more food than needed. Several measures are introduced to bring production levels closer to what the market needs.
The common agricultural policy is born. The CAP is conceived as a common policy, with the objectives of providing affordable food for EU citizens and a fair standard of living for farmers.