The proposed reform of the Common Agricultural Policy marks a major shift, giving national governments more control while cutting red tape and merging funding streams. While it includes welcome steps like a “starter pack” for young farmers, the removal of climate ringfencing and continued reliance on outdated land-based subsidies risk undermining sustainability and innovation.
By Alva Finn, Executive Director, European Liberal Forum
Understanding the array of documents that make up the EU budget, or the MFF as it is known in Brussels, is always difficult. This time, the lack of clear details makes it harder. Big reforms are proposed, showing ambition. Yet, these changes affect how the EU is governed, and are sometimes poorly explained. For instance, the reason for merging parts of the EU’s budget, like cohesion and agriculture, into national and regional plans is unclear. Key risks, such as political capture, are not fully addressed. The rule of law is supposedly strengthened, but practical details are missing.
Brand the EU better
During the pandemic, the Commission used a strong brand: “Next Generation EU” to launch its stimulus package. This time, new fund names are long and complicated, like the “European Fund for economic, social and territorial cohesion, agriculture and rural, fisheries and maritime, prosperity and security.” Our forthcoming paper on the future of cohesion policy suggests simpler names like “A Better Life Fund” or “European Prosperity Fund”. The EU needs to improve its branding so that people know the value and impact of the Euros provided to Member States.
New National and Regional Partnership Plans will follow the reforms-for-cash model established by the NextGenEU funds. This is a welcome shift to a full performance-based system, which the EU has resisted in the past. Importantly, these plans will use a multi-level governance, ensuring local, regional, civil society, and social partners have a say in setting priorities. This was missing in the recovery and resilience plans during COVID, causing problems.
Investing in Tomorrow’s Farms
If you want a broad view of the overall proposal, check out Lukas Sustala’s recent blog post. I want to focus on what MEP Emma Weisner described recently in a foreword to our recent publication as a thorn in the side of European liberals- the EU’s Common Agricultural Policy. The proposal sets aside €293.7 billion for agriculture, which is a significant reduction. It also merges the two agriculture funds (CAP and rural development), which ELF recommended in our vision paper, to cut bureaucracy and increase flexibility. There is also a €6.3 billion crisis fund.
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However, the most significant change is giving national governments much more power over how CAP funds are used. This includes the removal of ringfencing for climate-friendly farming funds. The latest proposals indicate agri-environmental funding will remain, but with more national flexibility to define practices. Some NGOs and farmer groups criticise this, seeing it as the Commission avoiding its shared responsibility for Europe’s agriculture policy. It appears that Ursula von der Leyen has had enough of farmers coming to Brussels to complain to Europe. Now, if they wish to be heard, they will have to stay at home and flood their own capitals with milk and tractors.
The outdated system of direct payments based on land size remains. While there is still a focus on “active farmers” and new limits on payments to large farms, which will shift the focus to smaller farms in need, this may not fully promote efficient land use or innovation.
As ELF suggested in our vision paper “Reconstructing the Common Agricultural Policy“, this policy could be revolutionary if it dumped land-based subsidies for a system rewarding efficient land use – what’s best for the specific piece of land, the soil, for productivity, for innovation. Imagine: this policy paired with a robust carbon and nature credit regime empowering farmers, foresters, and conservationists to truly transform Europe’s agri-food system and natural landscape with precision farming, soil tech, and genuine nature restoration.
Making farming attractive to the next generation
In ELF’s second vision paper on generational renewal in agriculture, we stressed helping young farmers with finance. The CAP proposal includes a welcome “starter pack” for young farmers. This aims to attract and help them get started. Each national plan must have a “Generational Renewal Strategy.” While no specific CAP-backed agricultural investment guarantee fund is proposed, as we suggested, the proposal allows Member States to use financial tools, including guarantees for rural development and financial instruments to help young farmers. Liberal politicians wishing to shape their Generational Renewal Strategy can have a look at our vision paper for interventions that can help the next generation.
Finally, liberals will appreciate that cutting red tape is a main goal of the new CAP. This includes ideas like one site visit per year for farmers, more lump sums, and merging interventions to safeguard future-oriented investments. These would ensure Europe’s strategic autonomy, global competitiveness, and long-term resilience. Otherwise, even ambitious visions might become lost in translation.