Healthy natural environment

A healthy natural environment is essential to sustaining the EU’s agricultural sector. However, agricultural policies and practices also play an increasingly influential role in sustaining a healthy natural environment.

Around half of the EU's land is used for farming. Agricultural land management has helped to create and maintain a rich variety of landscapes and habitats, including a mosaic of woodlands, wetlands, wild species, and extensive tracts of open countryside. 

The ecological integrity and scenic value of landscapes also make rural areas attractive places to live, work, and visit. 

On the other hand, inappropriate agricultural practices and land use can also have a negative impact on natural resources, such as

  • pollution of soil, water and air
  • fragmentation of habitats
  • loss of wildlife

Integrating environmental concerns into the common agricultural policy (CAP) aims to avert the risks of environmental degradation and enhance the sustainability of rural ecosystems.

Integrating environmental concerns

The integration of environmental concerns into the CAP is based on a distinction between

  • ensuring a sustainable way of farming by avoiding environmentally harmful agricultural activity
  • providing incentives for environmentally beneficial public goods and services

For ensuring sustainable agricultural activities, farmers are obliged to respect common rules and standards for preserving the environment and the landscape. The common rules and standards are mandatory and form the very basis for ensuring that agricultural activity is undertaken in a sustainable way. These rules and standards form the "reference level" up to which the costs for complying with these obligations have to be born by the farmer, according to the "Polluter-Pays-Principle".

However, environmental objectives often go beyond what we can expect farmers to deliver by respecting compulsory legislation. If we want farmers to engage voluntarily in action to enhance the environment beyond the mandatory requirements, we have to provide appropriate incentives. After all, we have to take into account that, beyond their obligations, farmers employ their own private resources and factors of production to deliver environmental public goods and services which are of interest to the wider public and society. Where farmers are remunerated for voluntarily engaging in environment-related activities, we speak about  the "provider-gets-principle".

The CAP reflects the two principles, the "polluter pays principle" and the "provider gets principle", in integrating environmental concerns into the policy via two mechanisms:

Linking the respect of selected statutory requirements (cross-compliance) to most CAP payments and sanctioning non-compliance by payment reductions.

Paying for the provision of environmental public goods and services going beyond mandatory requirements (agri-environment measures).

Since 1992, the CAP has progressively been adapted to better serving the aims of sustainability, including environmental protection. This development became manifest in a reform process designed to moving from price and production support to a policy of direct income aid and rural development measures.

Today making the CAP compatible with market requirements goes hand in hand with environmental integration with the latter being reflected via four types of measures:

  • measures targeted towards objectives such as market stability or income support having positive secondary effects on the environment or contributing to maintaining environmentally beneficial structures or types of farming (e.g. LFA payments).
  • measures targeted towards objectives such as income support, designed to contribute to the enforcement of mandatory environmental requirements and the polluter pays principle (e.g., decoupled payments in combination with cross-compliance).
  • measures targeted towards encouraging the provision of environmental services on a voluntary basis (agri-environment measures).
  • measures targeted towards facilitating compliance with compulsory environmental requirements (e.g., "meeting standards" measure) or compensate the relative economic disadvantage resulting from a region-specific pattern of environmental requirements (e.g. Natura 2000 and Water Framework Directive).

Assessing the integration process

To be accountable, policy outcomes need to be assessed against declared objectives. Also the process of integrating environmental concerns into the CAP needs regular assessments. In the EU, an elaborated approach towards regular policy evaluation has been established at European, national, or regional level.

Assessing environmental integration is a difficult exercise that must identify the state of the environment, the interaction between agriculture and environmental outcomes, as well as other intervening factors such as general market trends, technology development, and weather events.

Specific agri-environmental indicators are a helpful tool for the policy assessment as they capture well trends and developments over time. Agri-environmental indicators need to be filled with concrete quantitative data. Furthermore, policy-relevant context information is needed in view of arriving at meaningful policy conclusions.

Some agri-environment indicators form also part of the common monitoring and evaluation framework for rural development. The evaluations of the rural development programmes look in detail into the impacts of the policy on the environment.