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, ensuring a stable supply of affordable food;
- safeguard European Union farmers to make a reasonable living;
- help tackle climate change and the sustainable management of natural resources;
- maintain rural areas and landscapes across the EU;
- keep the rural economy alive by promoting jobs in farming, agri-food industries and associated sectors.
The CAP is a common policy for all EU countries. It is managed and funded at European level from the resources of the EU’s budget.
The CAP in practice
Farming is unlike most other businesses, as the following special considerations apply:
- despite the importance of food production, farmers’ income is around 40% lower compared to non-agricultural income;
- agriculture depends more on the weather and the climate than many other sectors;
- 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 the environmental impact of farming justify the significant role that the public sector plays for our farmers. The CAP takes action with the following measures:
- income support through direct payments ensures income stability, and remunerates farmers for environmentally friendly farming and delivering public services not normally paid for by the markets, such as taking care of the countryside;
- market 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 with national and regional programmes to address the specific needs and challenges facing rural areas.
The level of support for EU farmers from the overall EU budget reflects the many variables involved in ensuring continued access to high quality food, which includes functions such as income support to farmers, climate change action, and maintaining vibrant rural communities.
The CAP is financed through two funds as part of the EU budget:
- the European agricultural guarantee fund (EAGF) provides direct support and funds market measures;
- the European agricultural fund for rural development (EAFRD) finances rural development.
Payments are managed at 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.
The benefits of the CAP
The CAP defines the conditions that will allow farmers to fulfil their functions in society in the following ways:
- There are around 10 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 exporters of agri-food products. Due to its exceptional agricultural resources the EU could and should play a key role in ensuring food security for the world at large.
Rural community development
- Within our countryside and its precious natural resources, there are many jobs 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, as well as in food storage, transport and retail. The farming and food sectors together provide nearly 40 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 resources of the CAP were directed towards providing high-speed technologies, improved internet services and infrastructure to 18 million rural citizens – the equivalent of 6.4% of the EU’s rural population.
Environmentally sustainable farming
- Farmers have a double challenge – to produce food whilst simultaneously protecting nature and safeguarding biodiversity. Using natural resources prudently is essential for our food production and for our quality of life – today, tomorrow and for future generations.
Key contributors to the CAP
The European Commission regularly consults civil dialogue groups and agricultural committees to best shape law and policies governing agriculture. Expert groups provide input to the European Commission, such as the agricultural market task force on unfair trading practices.
The European Commission carries out impact assessments when planning, preparing and proposing new European legislation, examining a need for EU action and the possible impacts of available solutions. They are a key part of the EU’s better regulation agenda. Impact assessments for agriculture and rural development took place in 2003 (mid term review), 2008 (health check – SEC(2008) 1885), 2011 (CAP towards 2020 – SEC(2011) 1153 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 (also called Eurobarometer) on Europeans' views on agriculture and the CAP. The Eurobarometer surveys, run in all EU countries, provide valuable information on citizens’ perception of the CAP. This includes awareness of the support provided through the CAP, its performance, quality matters, environment, the importance of the CAP and much more.
Evaluation of the CAP
The European Commission assesses the CAP through the common monitoring and evaluation framework (CMEF).
The aim of the CMEF is to demonstrate the achievements of the CAP during the 2014-20 period and improve its efficiency through CAP indicators.
The new CAP
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 for a new CAP. The proposals outlined a simpler and more efficient policy that will incorporate the sustainable ambitions of the European Green Deal. After extensive negotiations, the European Parliament, the Council of the EU and the European Commission reached an agreement on a new CAP on 25 June, 2021. The new CAP is due to be implemented from 1 January 2023, pending final agreement between the European Parliament and the Council of the EU.
The legal basis for the common agricultural policy is established in the Treaty on the Functioning of the European Union.
The following four 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).
For the years 2021-22, a transitional regulation (Regulation (EU) 2020/2220) is in force. The regulation lays down conditions for the provision of support from the EAGF and EAFRD during these years, extending and amending provisions set out in the preceding regulations. It will remain in force until the new framework of CAP strategic plans is implemented (due to begin on 1 January 2023).
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.
Once the new legal framework has been agreed, the new CAP strategic plans are due to be implemented in all EU countries from 1 January 2023.
During these years, a transitional regulation is in force. The regulation extends most of the CAP rules that were in place during the 2014-20 period, while also ensuring a smooth transition to the future framework of the CAP strategic plans.
After extensive negotiations, the European Parliament, the Council of the EU and the European Commission agree on further reform of the CAP. This provisional political agreement paves the way for the formal approval of the necessary legislation by the European Parliament and the Council in the autumn of 2021.
The CAP is reformed to strengthen the competitiveness of the sector, promote sustainable farming and innovation, support jobs and growth in rural areas and to move financial assistance towards the productive use of land. The reformed CAP is in place for the 2014-20 programming period.
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.