Ahead of negotiations with the Council of the EU, representing its 27 member countries, this fall, analysis reveals the countries most likely to be impacted by proposed changes to the Common Agricultural Policy (CAP) for the upcoming seven-year budget cycle, reports 24brussels.
Overview of Proposed Changes
In the 2023 financial year, 20 percent of EU farms received 80 percent of direct payments. These payments predominantly consist of decoupled area-based payments, whereby farmers receive compensation per hectare irrespective of their actual production levels.
This system primarily benefits large-scale farms, allowing them to obtain substantial payouts.
The EU’s new proposal aims to mitigate these disparities by permitting member nations to offer farmers average payments ranging from €130 to €240 per hectare. Furthermore, no single farmer would be eligible for more than €100,000 annually in area-based income support.
To enforce this cap, member states would need to apply progressive reductions. For instance, farmers earning between €20,000 and €50,000 would see their payments decreased by 25 percent, while those earning between €50,000 and €70,000 would face a 50 percent cut.
Financial Implications
In the 2023 financial year, over 54 percent of spending on decoupled payments exceeded €20,000. This indicates that more than half of the funding allocated for decoupled payments might have faced capping or degressivity had the Commission’s proposed regulations been in effect during that period.