EU Commission Proposes Budget Cuts and Changes to Agricultural Policy

Summary

The European Commission’s pro­posal for the E.U. bud­get for 2028 to 2034 includes sig­nif­i­cant cuts to the Common Agricultural Policy (CAP), trig­ger­ing back­lash from farm­ers across the E.U. The plan aims to mod­ern­ize CAP and inte­grate it with Cohesion Policy fund­ing, sim­pli­fy­ing admin­is­tra­tion and pro­mot­ing syn­er­gies between farm­ing and regional devel­op­ment, but has faced crit­i­cism from farm­ers’ orga­ni­za­tions con­cerned about the impact on core agri­cul­tural needs and sta­bil­ity.

The European Commission’s pro­posal for the EU bud­get for 2028 – 2034 intro­duces sweep­ing changes to the Common Agricultural Policy (CAP), which has trig­gered back­lash from farm­ers in sev­eral coun­tries.

Presented as a mod­ern­iza­tion effort to ensure food secu­rity, rural sus­tain­abil­ity and eco­nomic resilience, the plan pro­vides CAP with €302 bil­lion.

Since the cur­rent CAP funds amount to €386.6 bil­lion, account­ing for infla­tion, the cuts will eas­ily exceed 20 per­cent.

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A total of € 296 bil­lion will be allo­cated as income sup­port for farm­ers, while €6.3 bil­lion will be set aside for cri­sis man­age­ment.

Overall, the CAP would con­tinue to account for approx­i­mately one-third of the EU’s over­all bud­get.

The reduced funds con­firm a his­tor­i­cal trend of declin­ing CAP allo­ca­tions. In the 1980s, it accounted for 70 per­cent of the over­all European bud­get, whereas it now accounts for barely more than 30 per­cent.

Besides the cut, the pro­posed new approach sig­nif­i­cantly rede­fines the rela­tion­ship between farm­ing and regional devel­op­ment.

The heart of this reform is the inte­gra­tion of CAP with Cohesion Policy fund­ing. In the E.U., cohe­sion funds account for about one-third of the bloc’s bud­get. These funds are designed to reduce eco­nomic, social, and regional dis­par­i­ties across mem­ber states.

Including both CAP and cohe­sion pay­ments in a sin­gle fund rep­re­sents a strate­gic depar­ture from the past. The new com­bined fund should total approx­i­mately €865 bil­lion out of the over­all bud­get of around € 2 tril­lion.

According to the European Commission, the move will improve syn­er­gies between the two areas and mul­ti­ply their long-term impact.

A sec­ond cru­cial aspect of the pro­posed CAP is the dras­tic sim­pli­fi­ca­tion of its admin­is­tra­tion and the sig­nif­i­cant involve­ment of local insti­tu­tions in its man­age­ment.

Currently, CAP is gov­erned through var­i­ous bod­ies and reg­u­la­tions at the EU level. In con­trast, the new CAP would instead define a sin­gle legal frame­work and refer to stan­dard def­i­n­i­tions, sim­pli­fied forms, and dig­i­tal report­ing sys­tems.

In addi­tion, the new CAP will be deliv­ered through the National and Regional Partnership Plans, which merge CAP with cohe­sion and social funds.

That means that mem­ber states’ local insti­tu­tions will play a sig­nif­i­cantly larger and more cen­tral role in admin­is­ter­ing CAP funds to their farm­ers.

While the new CAP would pro­vide a ​“starter pack” to sup­port young farm­ers start­ing their activ­i­ties, it would also inter­vene in pay­ments per hectare to EU farm­ers.

Today, pay­ments range from more than €400 per hectare in France and Germany to less than €200 per hectare in Romania and Bulgaria, a dif­fer­ence rooted in decades-old his­tor­i­cal fac­tors.

E.U. farms receive those pay­ments per hectare to sta­bi­lize income, encour­age land use and sup­port food pro­duc­tion. The sys­tem is meant to reward active farm­ing, not just land own­er­ship.

Brussels now plans to set min­i­mum and max­i­mum pay­ment thresh­olds per hectare to force con­ver­gence. That means wealth­ier coun­tries may face down­ward adjust­ments, while newer mem­ber states could see gains.

According to the com­mis­sion, the new mea­sures will ensure fairer sup­port across Europe’s farms. However, crit­ics warn that it could penal­ize pro­duc­tive large farms while fail­ing to address the east-west divide fully.

The pro­posed reform also aims to estab­lish strate­gic links between farm sup­port and other major EU pro­grams, includ­ing the European Competitiveness Fund and the EU. Research Framework Program.

According to the com­mis­sion, break­ing down silos will allow agri­cul­ture to become part of the E.U.’s broader eco­nomic, dig­i­tal and inno­va­tion strat­egy.

Farmers, coop­er­a­tives and rural busi­nesses would then be able to tap into funds for research and devel­op­ment, green tech­nol­ogy and inno­v­a­tive farm­ing, in addi­tion to tra­di­tional sub­si­dies.

Just days after the for­mal pre­sen­ta­tion of the pro­posed bud­get, many farm­ers’ asso­ci­a­tions across sev­eral mem­ber states voiced their crit­i­cism, argu­ing that the shared fund might dilute focus on core agri­cul­tural needs.

In south­ern Europe and parts of east­ern Europe, where large-scale farms depend heav­ily on direct pay­ments, some are already count­ing the expected losses.

Farmers’ orga­ni­za­tions are par­tic­u­larly alarmed about the real-term cuts to agri­cul­tural spend­ing. They fear that small and medium-sized farms may be left behind.

Copa-Cogeca, the E.U.’s largest farm­ers’ orga­ni­za­tion, wrote in a state­ment that the pro­posal ​“lacks trans­parency and under­cuts the sta­bil­ity that farm­ers need.”

“Beneath the euphemisms, account­ing debates and pol­ished talk­ing points lies a more unset­tling truth: the very foun­da­tion of European agri­cul­tural pol­icy is being under­mined and dis­man­tled in what could go down as a Black Wednesday in Brussels,” the orga­ni­za­tion wrote, refer­ring to the day offi­cials pre­sented the new pro­posed pol­icy.

Sensing the commission’s posi­tion, the orga­ni­za­tion recently launched an online peti­tion against the pro­posed revi­sion of the CAP.

According to the farm­ers’ orga­ni­za­tions, local gov­ern­ment pri­or­i­ties might include dig­i­tal infra­struc­ture, roads, hous­ing or green energy. 

As they are now directly involved in CAP admin­is­tra­tion, this raises fears that core agri­cul­tural needs may lose vis­i­bil­ity and urgency.

Recently, experts have warned that small­holder olive farm­ers, par­tic­u­larly in south­ern Europe, may face reduced access to direct aid.

The CAP reform for 2028 through 2034 is not yet final­ized: the entire approval process typ­i­cally takes between 18 and 24 months.

Given the mas­sive vol­ume of funds involved and the cru­cial role of agri­cul­ture in the sta­bil­ity of the block, the pro­posal will undergo intense nego­ti­a­tions across the whole European Union.

Despite the sig­nif­i­cant reforms to the CAP, observers have noted that nego­ti­a­tions over how best to sup­port the bloc’s farm­ers are not new, with con­flicts between Brussels and farm­ers dat­ing back to the very ori­gins of the European Union.