Agricultural Policy Monitoring and Evaluation 2025

12. European Union

Main findings

Support to agriculture

Producer support in the European Union (EU),1 measured by the Producer Support Estimate (PSE), has stabilised since 2010, after falling in the 1990s and early 2000s. EU support to producers as a share of gross farm receipts stood at 16.4% in 2022-24, remaining above the OECD average.

While trade-protection measures remain in effect for several sectors – including import and export licensing, tariff rate quotas (TRQs), and special safeguards – their importance has declined substantially over the last two decades. In 2022-24, market price support (MPS) accounted for 22.8% of support to producers, down from 46.5% in 2000-02. Producers of poultry meat and of beef and veal are the most important beneficiaries, followed by rice producers. On average, prices received by farmers in 2022-24 were 5% higher than border reference prices, compared to 22% in 2000-02.

On average, 41% of budgetary support to individual producers in 2022-24 was based on non-current area or animal numbers not requiring production, while around 34.7% was based on current area or animal numbers requiring production, and 21.6% on input use. Almost half of payments to producers were contingent on mandatory environmental constraints, while an additional 17% were linked to voluntary constraints that go beyond mandatory requirements, namely agri-environmental measures and eco-schemes.

Expenditures on general services to the agricultural sector (General Service Support Estimate, GSSE) accounted for an average of 12.7% of total support in 2022-24, but only 2.7% of the value of agricultural production – down from 2000-02 levels and below the OECD average of 3.5%. Although spending on agricultural knowledge and innovation systems more than doubled in absolute terms over the past two decades, its share relative to the value of production has remained steady at around 1.5%. In contrast, while the share of infrastructure spending relative to production value has declined by more than half, the share of expenditures on marketing and promotion, as well as inspection and control, have increased significantly.

Total support to the sector declined in relative terms over the past 20 years. In 2022-24, total support is estimated at 0.61% of the Gross Domestic Product (GDP), compared to 1.0% in 2000-02.

Key recent policy changes

The Common Agricultural Policy (CAP) 2023-27 entails a new delivery model with more flexible implementation by Member States, which design and implement their own unique CAP Strategic Plans (CSP). This applies to interventions under both pillars of the CAP: direct payments and sectoral interventions (Pillar 1), and rural development (Pillar 2). As for Pillar 2, Member States have designed nearly 1 200 country-specific interventions, organised into eight broad intervention types. In 2024, most of the originally planned rural development interventions were launched, although the proportion of implemented initiatives varied across countries.

In addition to environmental conditionality requirements, newly introduced social conditionality links farmer payments to compliance with certain labour laws and provides for administrative penalties for non-compliance. Although a few members began implementing this mechanism in 2023, most did so in 2024, with the remaining ones set to do so in 2025, as required by the regulation.

In 2024, alongside amendments to conditions governing the granting of CAP support, two EU regulations of importance for the farming sector were adopted: the Carbon Removals and Carbon Farming (CRCF) regulation – which creates the first EU-wide voluntary framework for certifying carbon removals, carbon farming practices, and carbon storage – and the Nature Restoration Law, which aims to accelerate the restoration of ecosystems and habitats in Europe.

Two milestones in trade facilitation were also achieved in 2024. The EU-New Zealand FTA came into effect in May, followed by a political agreement in December between the European Union and the four founding Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay) on a comprehensive Partnership Agreement.

Assessment and recommendations

• The European Union has introduced a range of trade-related measures linked to the environmental sustainability of agriculture, reflecting its commitment to aligning trade policy with environmental objectives. Recent EU trade agreements include dedicated chapters on sustainable food systems to drive improvements of the sector’s performance. Evaluating the outcomes of these provisions is essential to ensure they deliver on their potential and to guide any needed adjustments. Ambitious climate mitigation policies were also introduced, including regulations that apply to both domestic production and imports. While these initiatives are promising, continued efforts to assess their effectiveness in achieving climate objectives and to understand their potential trade impacts would help ensure that they remain responsive to emerging challenges and address any unintended trade effects in a timely and balanced manner.

• The Nature Restoration Law includes important regulatory elements such as quantified targets, obligations on Member States, and an integrated connection with other EU environmental policies. Strong enforcement mechanisms are necessary to ensure that the outcome-oriented approach adopted to design this regulation will be also the guiding principle for its delivery.

• The CAP 2023-27 emphasises performance, simplicity and a modernised approach, introducing a new delivery model. While this approach has offered increased flexibility for Member States, it has also introduced new requirements and adds complexity. Further improvements are needed to simplify the CAP while maintaining adequate compliance. Future reform should focus on enhanced enforcement of a reduced number of interventions to reduce the administrative burden for both administrations and beneficiaries.

• On average, Member States plan to direct approximately a quarter of CAP direct payments to eco-schemes, which are the main tool to achieve environmental and climate goals. Similarly, Environment and Climate-related interventions are expected to receive the largest share (32%) of Pillar 2 funding. Nevertheless, available evidence shows a low level of climate and environmental ambition of Member States’ CSPs, which mostly favour economic rather than environmental outcomes. Additional efforts should be made to favour the adoption of innovative policy approaches such as collective agri-environmental schemes and result-based payments for a more effective delivery of environmental public goods and services.

• Amendments to the CAP came into force in May 2024, aiming to reduce the burden on farmers and to provide more flexibility for Member States regarding some conditionality standards. While these changes may have eased the implementation of some rules, they have also diminished the policy’s environmental ambitions and could further undermine its effectiveness in promoting public goods or reducing environmental harm. Flexibility could be reduced in critical areas to increase policy performance.

• The ongoing transition to Farm Sustainability Data Network (FSDN) is a valuable step toward better-informed policy design, as it addresses some data gaps on environmental and social sustainability. To fully adopt a performance-based approach, the European Union should continue to build evidence by ensuring that the FSDN encompasses a comprehensive and relevant range of variables to inform policy in key areas.

• The broad range of digitalisation initiatives undertaken by the European Union also represents a positive step forward. Due to the costs and risks involved, the adoption of digital technologies varies among farmers, who must refine their existing skills and acquire new ones. Further efforts could help reinforce data-driven approaches and digitalisation at the farm level to create awareness, facilitate knowledge exchange and foster innovative solutions to support sustainable productivity growth.

Development of support to agriculture

Table 12.1. European Union: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2022-24	2022	2023	2024p
Total value of production (at farm gate)	233 558	225 516	518 138	520 486	521 000	512 927
of which: share of MPS commodities (%)	74.95	73.34	73.28	75.09	73.04	71.72
Total value of consumption (at farm gate)	212 900	227 220	516 278	522 638	518 235	507 962
Producer Support Estimate (PSE)	95 385	79 935	97 320	88 729	101 800	101 431
Support based on commodity output	86 308	41 078	22 470	15 548	25 966	25 895
Market price support¹	80 672	37 140	22 207	15 295	25 702	25 624
Positive market price support	81 784	37 140	22 235	15 301	25 752	25 653
Negative market price support	-1 112	0	-28	-5	-49	-28
Payments based on output	5 637	3 938	262	252	264	271
Payments based on input use	5 056	6 846	16 223	15 391	16 672	16 607
Based on variable input use	960	3 053	6 717	6 053	6 869	7 229
with input constraints	0	0	43	41	37	51
Based on fixed capital formation	2 986	2 263	7 185	6 704	7 622	7 229
with input constraints	0	95	102	116	100	90
Based on on-farm services	1 109	1 530	2 321	2 634	2 181	2 149
with input constraints	90	275	16	1	28	18
Payments based on current A/An/R/I, production required	3 587	31 255	26 012	21 427	28 609	27 998
Based on Receipts / Income	147	99	1 150	1 454	1 196	799
Based on Area planted / Animal numbers	3 440	31 156	24 862	19 973	27 414	27 199
With input constraints	940	13 979	21 203	16 929	22 906	23 774
Payments based on non-current A/An/R/I, production required	0	0	15	11	18	16
Payments based on non-current A/An/R/I, production not required	0	10	30 720	35 150	28 707	28 303
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	0	10	30 720	35 150	28 707	28 303
with commodity exceptions	0	0	0	0	0	0
Payments based on non-commodity criteria	478	1 080	1 560	1 010	1 432	2 239
Based on long-term resource retirement	476	848	350	324	117	609
Based on a specific non-commodity output	2	176	943	598	1 075	1 157
Based on other non-commodity criteria	0	57	267	88	241	473
Miscellaneous payments	-43	-335	320	192	397	373
Percentage PSE (%)	38.43	29.77	16.39	14.94	17.05	17.23
Producer NPC (coeff.)	1.66	1.22	1.05	1.03	1.05	1.05
Producer NAC (coeff.)	1.62	1.42	1.20	1.18	1.21	1.21
General Services Support Estimate (GSSE)	9 144	8 370	14 192	13 149	14 324	15 103
Agricultural knowledge and innovation system	1 814	3 499	7 634	7 004	7 690	8 210
Inspection and control	194	281	1 351	1 203	1 327	1 524
Development and maintenance of infrastructure	1 331	2 226	2 076	1 856	2 152	2 221
Marketing and promotion	1 210	998	3 069	3 031	3 107	3 068
Cost of public stockholding	4 571	1 297	29	35	25	27
Miscellaneous	24	70	33	20	24	53
Percentage GSSE (% of TSE)	8.31	9.12	12.67	12.86	12.27	12.89
Consumer Support Estimate (CSE)	-69 408	-33 067	-21 471	-14 889	-24 402	-25 123
Transfers to producers from consumers	-80 268	-36 156	-21 561	-14 633	-24 765	-25 285
Other transfers from consumers	-1 699	-719	-682	-663	-627	-754
Transfers to consumers from taxpayers	4 992	3 544	539	401	598	620
Excess feed cost	7 567	265	232	7	392	297
Percentage CSE (%)	-33.38	-14.75	-4.15	-2.85	-4.71	-4.95
Consumer NPC (coeff.)	1.63	1.19	1.04	1.03	1.05	1.05
Consumer NAC (coeff.)	1.50	1.17	1.04	1.03	1.05	1.05
Total Support Estimate (TSE)	109 521	91 849	112 052	102 279	116 722	117 154
Transfers from consumers	81 967	36 875	22 243	15 297	25 392	26 039
Transfers from taxpayers	29 253	55 693	90 491	87 645	91 957	91 869
Budget revenues	-1 699	-719	-682	-663	-627	-754
Percentage TSE (% of GDP)	2.51	1.04	0.61	0.60	0.63	0.61
Total Budgetary Support Estimate (TBSE)	28 849	54 709	89 844	86 983	91 020	91 530
Percentage TBSE (% of GDP)	0.66	0.62	0.49	0.51	0.49	0.47
GDP deflator (1986-88 = 100)	100	149	230	219	232	239
Exchange rate (national currency per USD)	0.91	1.09	0.93	0.95	0.92	0.92

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. European Economic Community (EEC) with 12 members for 1986-88; EU15 for 2000-02; and EU27 from 2021. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for the European Union are: wheat, maize, barley, oats, rice, rapeseed, sunflower, soybean, sugar, milk, beef and veal, sheep meat, pig meat, poultry, eggs, potatoes, tomatoes, plants and flowers, and wine.

Source: OECD (2025), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

The Common Agricultural Policy (CAP) is the agricultural policy framework of the European Union. The CAP 2023-27 entered into force on 1 January 2023. In addition to the CAP, Member States may implement measures funded from national or sub-national budgets that target specific sub-sectors or objectives. These measures must comply with the European Union’s state aid rules and not distort competition within the common market (OECD, 2017[1]). The CAP 2023-27 is built around 10 specific objectives: to ensure a fair income for farmers; to increase competitiveness; to improve the position of farmers in the food chain; climate change action; environmental care; to preserve landscapes and biodiversity; to support generational renewal; vibrant rural areas; to protect food and health quality; and to foster agricultural knowledge and innovation.

The CAP is organised in two pillars: the European Agricultural Guarantee Fund (EAGF) finances Pillar 1, and the European Agricultural Fund for Rural Development (EAFRD) finances Pillar 2. Pillar 1 covers sectoral interventions, as well as direct payments to active farmers.2 Rural development policy is supported by Pillar 2. Pillar 1 is exclusively financed by the European Union3 and Pillar 2 programmes are co-financed by the Member States.4

The CAP 2023-27 lets Member States design and implement their own unique CAP Strategic Plans (CSP).5 This new delivery model gives Member States more flexibility to design schemes that meet the needs of their farming sector. This applies to interventions under both pillars of the CAP whereas previously only rural development interventions had such flexibility. There is one CSP for each Member State (except for Wallonia and Flanders in Belgium, which each have their own plan), making a total of 28 plans. The “Country snapshots” section below provides insights from all the 28 CSPs.

The planned CAP 2023-27 budget is EUR 307 billion (USD 332 billion) for approximately 2 500 interventions, of which nearly two-thirds is allocated to Pillar 1 (Figure 12.4). Member States can modify the budget allocation between the direct payments and rural development by transferring funds in either direction within predefined limits.6 Direct payments make up the bulk of CAP spending: these payments are largely decoupled from production as they are based on farm area, and do not depend on current production decisions. They represent an important part of farm income (OECD, 2023[2]). Expenditures for different types of Pillar 2 interventions vary according to Member States priorities as defined in their CSP (see the Country snapshots section). In addition to environmental requirements under conditionality, Member States plan to direct on average 24% of direct payments to eco-schemes (designed by each Member State), which are now a main tool to achieve environmental and climate goals (OECD, 2024[3]).

The CAP 2023-27 extended conditionality to social issues by introducing the concept of social conditionality, which links farmer payments to compliance with certain labour laws and provides for administrative penalties for non-compliance. All EU Member States are required to have social conditionality mechanisms in place by January 2025, though some countries have already introduced this mechanism in 2023 (Austria, France and Italy) and 2024 (Germany, Luxembourg, Spain, and Portugal).

Figure 12.4. CAP 2023-27, share of planned expenditures by type of intervention

Note: Sectoral interventions includes market measures in certain sectors defined in the CAP Strategic Plans, such as fruit and vegetables, apiculture, wine, hops, olive oil and table olives and other sectors (Art. 42(f) Reg. 2021/2115); Coupled payments include Coupled Income Support (CIS); Other decoupled payments include Basic Income Support for Sustainability (BISS), Complementary Redistributive Income Support for Sustainability (CRISS), and Complementary Income Support for Young Farmers (CIS-YF).

Source: Overview of EU countries’ CAP Strategic Plans interventions (EC, 2023[4]).

Direct payments

The Basic Income Support for Sustainability (BISS) is an annual payment decoupled from production paid on the basis of the number of eligible hectares declared by active farmers. The BISS is compulsory for all Member States and accounts for over half of the Pillar 1 envelope (OECD, 2024[3]). Member States have the flexibility to apply reductions of up to 85% of BISS received by a single farm (degressivity)7 for amounts exceeding EUR 60 000 (USD 65 000) and may also opt to set an upper limit (capping) for amounts exceeding EUR 100 000 (USD 108 000).

There are four other types of direct payments: Complementary Redistributive Income Support for Sustainability (CRISS), which is an extra payment for a small, fixed number of hectares for farmers receiving the BISS; Complementary Income Support for Young Farmers (CIS-YF), a voluntary scheme aimed at providing enhanced income support to young farmers;8 Coupled Income Support (CIS) paid per animal or hectare subject to various conditions to mitigate the risk of market distortion; Schemes for the climate, the environment and animal welfare (eco-schemes), which reward farmers who adopt more sustainable farming methods.9

Member States that joined the European Union after 2000 may continue to implement Transitional National Aid (TNA). TNA is granted from national budgets and is mostly disbursed as decoupled payments, though limited commodity-specific payments are allowed. It may apply on a per hectare basis to arable land, hops and starch potatoes; on a volume basis to milk; and as a headage payment to livestock. Member States may review TNA budgets and supported commodities on an annual basis.

Member States can also choose to implement the Payment for Small Farmers (PSF), a simplified income support intervention replacing all other forms of income support payment. Farmers applying for the PSF cannot receive any other direct payment and the payment may not exceed EUR 2 500 (USD 2 706). Small farms with an agricultural area of less than 10 ha are exempt from inspections regarding conditionality.

The POSEI scheme (Programmes dʼOptions Spécifiques à lʼEloignement et à lʼInsularité) supports farming in the European Union’s outermost regions by using production-related payments. The scheme supports access to food, feed and inputs for local communities, as well as the development of local agricultural production. It represented 1.2% of the direct payments’ envelope in 2024.

Sectoral interventions

Market-related support to specific sectors is now part of the Member States’ CAP Strategic Plans (European Parliament, 2023[5]).10 These sectoral interventions are financed under Pillar 1 and, unlike in the previous CAP, now extend to all agricultural sectors. This funding aims to promote farmer collaboration in marketing products, thereby strengthening their position within the food supply chain and enhancing market efficiency.

Support for the fruit and vegetables, as well as for sectors like hops and olive oil, is provided through operational programmes for producer organisation members. They cover measures such as production planning, quality improvement, market withdrawal, harvest insurance, training, promotion, and communication – some implemented at farm level, others at sector level. The wine and apiculture sectors are supported through specific interventions defined in the CSPs, as their beneficiaries are not producer organisations. The wine sector receives support for promotion, vineyard restructuring, green harvesting compensation, mutual funds, investments, income insurance, product and process development, and by-product distillation. The apiculture sector benefits from advisory services, technical assistance, training, hive preservation or expansion, and product quality enhancement, with measures co-financed by Member States at a minimum rate of 50%.

Other market-related measures

Member States continue to implement and finance certain market-related measures outside of the CSP, under the amended Common Market Organisation (CMO) Regulation to support specific food security and nutrition objectives. Those include special supply arrangements under the POSEI and Smaller Aegean Islands schemes (e.g. duty exemption and food aid), the promotion of agricultural products and quality schemes, and the implementation of school schemes. Pillar 1 funds the school schemes for the distribution of milk, fruit and vegetables, with a total budget of EUR 220.8 million (USD 239 million) per school year, of which up to EUR 130.6 million (USD 141.4 million) for fruit and vegetables and up to EUR 90.1 million (USD 97.5 million) for milk (European Parliament, 2023[5]).

Within the framework of the CMO, the European Union may resort to measures aimed at stabilising agricultural markets, including public intervention and aid for private storage. An entry price system (minimum import price) is in place for some products, along with ad valorem duties, but no export subsidies. In the dairy sector, intervention prices are used for butter and skimmed milk powder (SMP), while import tariffs are applicable to all milk and dairy products. While intervention purchases are allowed for butter and SMP, they have been rarely used.

During times of low market prices, the EU may provide support to private sector operators by paying for the cost of storage of their products for a set period. Private storage may be activated as an optional scheme for butter, SMP, certain cheeses, olive oil, flax fibre, beef, pig meat, sheep meat and goat meat. This opportunity was opened for butter, SMP, cheese, beef and sheep meat in 2020-21 in response to the COVID-19 emergency and for pig meat in 2022 in response to the war in Ukraine (OECD, 2023[6]).

In addition to internal market intervention, the European Union applies trade-related measures with non-EU partners such as import and export licences, import duties, tariff quotas, safeguards and export refunds. Market support measures for beef include not only floor prices but also tariffs and TRQ support, while pig meat benefits from import protection only.11 The market support regime for sheep meat involves tariffs and TRQs, with most country-specific TRQs granted at zero customs duty. TRQs also support the poultry and egg markets. The average applied most-favoured-nation (MFN) tariff on agricultural imports in 2023 was 10.8%, above the 4.1% faced by non-agricultural products. Certain sectors face significantly higher rates, such as dairy (29.8% on average), sugars (21.0%) and live animals and meat (15.6%) (WTO, 2024[7]).

Furthermore, exceptional measures are implemented when a crisis or the threat of a crisis arises requiring a targeted response toa prevent a sudden decline in prices or to mitigate its effects. They allow the European Commission to intervene during periods of significant market imbalances, a loss of consumer confidence due to public, animal or plant health risks, or other specific problems (EC, n.d.[8]). Over EUR 2.5 billion (USD 2.7 billion) was allocated through 63 exceptional measures between 2014 and 2023 (EC, 2024[9]).

An agricultural reserve of at least EUR 450 million (USD 487 million) can be directed towards measures such as emergency buying and private storage aid, as well as exceptional measures. This reserve is established in the EU budget at the beginning of each year and is now part of the EAGF (EC, 2024[9]). Since its first use in 2022, the reserve has been fully spent each year (IEEP, 2024[10]).

Farmers may also receive financial assistance from Member States to address market failures and the consequences of extreme weather events. These “state aids” are subject to approval from the European Commission but are not otherwise centrally monitored. In recent years, a series of crisis measures have resulted in an increase in state aid to agriculture in some Member States, with rules being relaxed following the war in Ukraine (IEEP, 2024[10]).

Rural development

Under the CAP 2023-27, rural development (RD) interventions will receive EUR 64 billion (USD 69 billion) from the EU budget and EUR 43 billion (USD 46.5 billion) from national funds. Seventeen Member States plan to allocate further national financing (national top-ups) amounting to an additional EUR 13 billion (USD 14 billion), mainly to actions for investment and practices related to environment, climate and animal welfare (EC, 2025[11]). This support extends to beneficiaries beyond farmers, including forest owners and municipalities, with most of it provided through multiannual area-based payments and a smaller portion based on animal numbers. In addition, financial instruments such as guarantees and loans are also used to reduce credit constraints and support investments aimed at improving producer viability (EC, 2025[12]). Member States have designed nearly 1 200 country-specific interventions, organised into eight broad intervention types (Box 12.1).

Box 12.1. The eight types of rural development interventions under the CAP 2023-27

Natural or other area-specific constraints (ANC, Article 71) provides payments to active farmers in areas facing natural or other specific constraints (e.g. mountain areas, other regions with natural constraints, and areas with specific environmental challenges). ANC payments compensate for the additional costs and income lost due to these constraints, with payment granted on a per-hectare basis and rates varying by the region’s physical characteristics. Payments are typically degressive.

Area-specific disadvantages resulting from certain mandatory requirements (ASD, Article 72) provides area-based payments to offset additional costs and income lost due to environmental requirements from EU directives. Support targets agricultural and forestry areas within the Natura 2000, other protected zones, and agricultural areas included in river basin management plans.

Cooperation (COOP, Article 77) aims to contribute to the cross-cutting objective of “fostering knowledge, innovation and digitalisation in agriculture” by supporting various cooperation activities, including the European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) operational groups;1 LEADER projects;2 quality schemes; producer groups. Specific funding limits or degressivity may apply.

Environmental, climate-related, and other management commitments (ENVCLIM, Article 70) include voluntary measures related to the environment, climate, biodiversity, plant health, and animal welfare. The payments are for longer term actions (spanning five to seven years) that go beyond conditionality requirements and are distinct from eco-schemes. A revision clause allows for adjustments if mandatory obligations change.

Setting-up of young farmers and new farmers and rural business start-up (INSTAL, Article 75) aims to foster generational renewal by providing financial support to both agricultural and non-agricultural rural businesses. It may help diversify farm household incomes into non-agricultural activities. Support may include lump sums, loans, guarantees, or a combination of these, with a maximum aid limit of EUR 100 000 (USD 108 000), adjustable based on objective criteria.

Investments, including in irrigation (INVEST, Articles 73-74) aims to support both productive and non-productive investments, on-farm and off-farm, and can cover up to 65% of eligible costs, with higher support rates for specific activities or regions, and up to 100% for non-productive or disaster-related investments.

Knowledge exchange and dissemination of information (KNOW, Article 78) supports training, advice, information sharing, including through demonstration farms, plans and studies, to facilitate knowledge transfer. It targets farmers, foresters, local authorities, and specific groups such as young and new farmers, smallholders, advisors, and women or young non-farmers. All actions must align with the Agricultural Knowledge and Innovation Systems (AKIS) as outlined in the CSPs.

Risk management tools (RISK, Article 76) assist active farmers in handling production and income risks beyond their control. It includes financial contributions to premiums for insurance schemes and mutual funds, including setup costs. Support covers for losses over 20% of farmer’s average income or production and is capped at 70% of eligible costs, with some exceptions.

1. The EIP-AGRI operational groups bring together farmers, researchers and other actors to tackle practical problems through bottom-up co-creation projects.

2. The LEADER (Liaison Entre Actions de Développement de l’Économie Rurale) programme promotes local partnerships and multi-sectoral solutions to regional and local issues. At least 5% of rural development funding from the EU budget must be spent on the LEADER approach.

Source: European Parliament and European Council (2021[13]), EC (2025[12]) (2023[14]), and selected CSPs.

Environment and Climate-related interventions (ENVCLIM) are expected to have the largest share (32%) of the total CAP-RD funding (Figure 12.5). This will finance 394 individual interventions, including those focused on organic farming, animal welfare, agroforestry, and the conservation of traditional varieties or local breeds. An additional 29%, is allocated to investments (INVEST), 17% to areas impacted by natural and other specific constraints (ANC), and 10% cooperation (COOP). Other intervention types – installation aid (INSTAL), risk management (RISK), knowledge and advice (KNOW), and areas with specific disadvantages (ASD) – receive smaller shares of the RD budget, at 5%, 4%, 2%, and 1% respectively.

Figure 12.5. Rural Development: Planned budget under CAP Strategic Plans 2023-27, by type of intervention

Source: Authors’ calculations based on EC (2025[11]), Catalogue of CAP interventions.

CAP measures to promote environmental and climate benefits

The “green architecture” of the CAP 2023-27 is based on a hierarchy of actions and compensation based on distinguishing between minimum obligations and extra effort. Conditionality is at the base of this hierarchy, tying direct payments and some rural development measures to a series of rules12 relating to the environment, food safety, animal and plant health, animal welfare and to maintaining agricultural land in Good Agricultural and Environmental Condition (GAEC) (OECD, 2023[2]).

The CAP 2023-27 introduces “enhanced conditionality”, defined in terms of nine GAECs. A new requirement for protection of wetland and peatland was introduced (GAEC 2), while previous greening obligations on the maintenance of permanent grasslands and on the protection of environmentally sensitive permanent grasslands are now reflected in GAEC 1 and GAEC 9. The requirements of GAEC 7 on crop diversification and GAEC 8 on areas beneficial for biodiversity were also added. Certain features were subsequently relaxed through the Regulation (EU) 2024/1468 (see section on recent policy developments).

Eco-schemes payments are granted per hectare (in a few cases per livestock unit) in two forms: either as compensation for additional costs incurred or income foregone (and possible transaction costs), similar to the agri-environmental support schemes of Pillar 2, or as fixed top-up payments in addition to decoupled direct payments. These aim to encourage the adoption of specific farming practices with environmental benefits. Each Member State sets up eco-schemes for their farmers based on the framework given in the EU Regulation 2021/2115. Member States must include at least one eco-scheme in their CSPs and allocate a minimum of 25% of direct payment funding for these new measures. However, the allocated share can be lower if over 30% of the EAFRD funds is allocated to certain interventions addressing environment and climate objectives (usually called “rebate”) (EU CAP Network, 2023[15]).

Part of the sectoral support is also targeted to environmental and climate objectives. For instance, support for the fruit and vegetables sector requires that 15% of operational programme expenditure be allocated to environment and climate change mitigation and adaptation, while 5% dedicated to strengthening research, development, and innovation (EC, 2025[12]).

Finally, at least 35% of EAFRD rural development funding must also be directed toward environmental and climate-related objectives, including animal welfare. Eligible interventions include environmental, climate and other management commitments (ENVCLIM, Article 70 of Reg. (EU) 2021/2115), compensation payments for area-specific disadvantages relative to the EU Birds and Habitats Directives as well as the Water Framework Directive (ASD, Article 72). Other qualifying expenditures are investments targeting environment and climate objectives (INVEST, Articles 73-74), and 50% of the allocation for areas with natural constraints (ANC, Article 71).

Policies for agricultural knowledge and innovation

Horizon Europe (HE) is the EU’s primary fund for fostering research and innovation, including in agriculture through Cluster 6, titled “Food, Bioeconomy, Natural Resources, Agriculture, and Environment”.13 Under HE, and its predecessor Horizon 2020, several projects have been financed with the objective of building solutions for more sustainable agricultural sector. These projects cover areas such as precision farming, sustainable fertiliser production, agroecology, as well as animal, plant and soil health (OECD, 2024[3]).

The European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) serves as the European Commission’s flagship policy tool channelling funding from CAP and HE to promoting bottom-up multi-actor public-private agricultural innovation partnerships. This approach aims to promote sustainable agricultural productivity by enhancing collaboration within the Agricultural Knowledge and Innovation System (AKIS) in Europe and bridging the gap between research and practical farming (OECD, 2024[3]).

EIP Operational Groups (OGs) were conceived to address practical problems and to explore new opportunities leading to innovative solutions. They bring together a variety of stakeholders with diverse expertise – practical, scientific, technical, and organisational – and include farmers, researchers, advisors, businesses, and environmental groups to foster innovation in agriculture, forestry, and rural areas. There were approximately 4 100 OG projects as of March 2025 (EU CAP Network, 2025[16]).

Overview of the CAP Strategic plans

The CAP 2023-27 offers more flexible implementation by Member States (Table 12.2). Member States must reserve at least 10% of their direct payments for the Complementary redistributive income support for sustainability (CRISS). Denmark and Malta received a derogation relieving them of this requirement. All Member States except the Netherlands planned Coupled Income Support (CIS) to redistribute direct payments to specific sectors: an estimated 2.1 million farms are expected to benefit from this type of support, equivalent to 21% of EU farms (European Commission, 2020[17]).

All Member States have allocated funds for sectoral interventions, with some differences in the financial allocation and the supported sectors. Apiculture is the only sector where support is mandatory for all Member States. In contrast, support for fruit and vegetables is mandatory only for Member States with recognised producer organisations. Wine support applies exclusively to wine-producing countries, while all other sectoral interventions are left to national discretion (EC, 2025[12]).

As for Rural Development, not all Member States have programmed all eight types of interventions; some have not prioritised certain schemes, while others have opted for fully nationally funded schemes. Additional details on these choices and the implementation of RD interventions in 2024 can be found in the “Country Snapshots” below.

Table 12.2. CSP Implementation choices

	Transfer between pillars	Direct payments				Sectoral interventions				Rural development interventions
		Capping	Degress-ivity	PSF1	Eco- scheme	Api- culture	F&V2	Wine	Other	Number	National top-ups3
Austria	No	Yes	No	No	5	Yes	Yes	Yes	No	52	6%
Belgium Flanders	P1 to P2	Yes	Yes	No	13	Yes	Yes	No	No	27	30%
Belgium Wallonia	No	Yes	Yes	No	5	Yes	No	No	No	23	-
Bulgaria	No	Yes	No	Yes	8	Yes	Yes	Yes	Yes	42	-
Croatia	P2 to P1	No	No	No	8	Yes	Yes	Yes	No	39	2%
Cyprus	No	No	No	No	2	Yes	Yes	Yes	No	31	4%
Czechia	P1 to P2	No	No	Yes	3	Yes	Yes	Yes	Yes	36	-
Denmark	P1 to P2	No	No	No	6	Yes	Yes	No	No	13	14%
Estonia	No	No	No	No	5	Yes	No	No	No	35	1%
Finland	No	No	No	No	4	Yes	Yes	No	No	92	31%
France	P1 to P2	No	No	No	1	Yes	Yes	Yes	Yes	77	11%
Germany	P1 to P2	No	No	No	7	Yes	Yes	Yes	Yes	30	11%
Greece	P1 to P2	No	No	No	10	Yes	Yes	Yes	Yes	40	-
Hungary	P2 to P1	No	No	No	1	Yes	Yes	Yes	No	63	59%
Ireland	No	Yes	Yes	No	1	Yes	Yes	No	No	20	-
Italy	P1 to P2	No	No	No	5	Yes	Yes	Yes	Yes	95	3%
Latvia	P1 to P2	Yes	No	Yes	6	Yes	Yes	No	Yes	35	27%
Lithuania	No	Yes	No	No	17	Yes	Yes	No	No	31	-
Luxembourg	P2 to P1	No	No	No	8	Yes	No	No	No	14	1%
Malta	P2 to P1	No	No	Yes	8	Yes	No	No	No	16	3%
Netherlands	P1 to P2	No	No	No	1	Yes	Yes	No	No	15	35%
Poland	P2 to P1	No	No	No	7	Yes	Yes	No	No	46	-
Portugal	P2 to P1	No	Yes	Yes	7	Yes	Yes	Yes	No	117	-
Romania	P1 to P2	No	No	No	7	Yes	Yes	Yes	No	36	-
Slovak Republic	P1 to P2	Yes	Yes	No	2	Yes	Yes	Yes	Yes	41	-
Slovenia	No	No	Yes	No	12	Yes	Yes	Yes	No	47	-
Spain	No	Yes	Yes	No	9	Yes	Yes	Yes	No	46	6%
Sweden	No	No	No	No	4	Yes	Yes	No	No	21	17%

1. Payment for Small Farmers.

2. Fruit and Vegetables.

3. Additional national financing as a percentage of the total planned rural development budget for the entire 2023-27 period, as available in the source below, accessed in February 2025.

Source: (EC, 2025[12]) for all the information included in the table except for eco-schemes, the number of rural development interventions and the percentage of additional national financing (EC, 2025[11]).

Policies for trade and sustainability in agro-food markets

For decades, the European Union has worked towards enhancing the sustainability of its agro-food sector through trade. Efforts have included engaging actively in agricultural trade and sustainability matters in multilateral forums – most notably in the UNFCCC, WTO, FAO and G20 – incorporating environmental clauses in the regional trade agreements (RTAs) and reinforcing domestic regulatory frameworks to ensure more sustainable imports.

Trade-related measures linked to the environmental sustainability of agriculture

The European Union has introduced a wide range of trade-related measures linked to the environmental sustainability of agriculture over the last three decades, following the Uruguay Round (Frezal and Deuss, 2025[18]). One mechanism used by the European Union has been the inclusion of specific provisions related to agriculture and the environment in its RTAs. Since 1997, 23 of the EU’s RTAs have included environmental co-operation clauses that explicitly relate to agriculture, covering issues such as organic agriculture, animal welfare, soil and water quality management, sustainable irrigation practices, carbon sequestration, greenhouse gas emission reductions, and biodiversity conservation. Some agreements emphasise agricultural knowledge generation, dissemination and capacity-building as well as innovation and technology adoption, while a smaller number of others include commitments to improve or harmonise agri-environmental laws, policies, and standards. While these provisions are generally included in broader co-operation, agriculture, or environment chapters, two recent EU RTAs – those with Chile and New Zealand – feature standalone chapters dedicated to sustainable food systems.

The agreements with Chile and New Zealand also include provisions addressing the importance of strengthening domestic environmental laws and policies. Similarly, in its RTA with Kenya, in force since 2024, both the EU and Kenya acknowledge the significance of adopting and implementing policies and institutional reforms that promote the sustainable use and management of natural and cultural resources by developing environmentally friendly and sustainable technologies that enhance agricultural productivity.

The European Union also uses environmental market access measures, which impose environmental conditions on agricultural products to be traded, used or made eligible for certain government programmes. For instance, the European Union implemented a conditional market access measure that applies to both domestic and imported agri-food products, including fruits, vegetables, livestock, and processed food. This regulation reduces the Maximum Residue Levels (MRLs) for two pesticides, clothianidin and thiamethoxam, to the lowest detectable levels, not due to food safety concerns but to protect biodiversity, particularly pollinators like bees. The measure targets the environmental impacts of the production process, aiming to prevent food and feed consumed in the European Union from contributing to the global decline of pollinators.

The EU Renewable Energy Directive (EU RED) sets environmental criteria for biofuels, biomass fuels and bioliquids made from agricultural biomass to qualify for the EU renewable energy target and for public financial support. These fuels must achieve at least 50-65% GHG savings compared to fossil fuels and cannot come from areas with high biodiversity or carbon stock, such as primary forests, wetlands, or peatlands. Operators who place those fuels on the EU market, including domestic producers and importers, must demonstrate compliance through national control systems or recognised certification schemes.

The EU Deforestation Regulation (EUDR) aims to reduce commodity-driven deforestation and associated GHG emissions. It applies to both domestically produced and imported agricultural commodities, including palm oil, cattle, coffee, cocoa, and soybean – drivers of global deforestation and forest degradation that account for a large portion of the EU’s deforestation footprint. Private operators must demonstrate that the relevant commodities are compliant with the regulations through due diligence ensuring that these commodities are sourced from land that has not been deforested after 2020 and are produced in compliance with local laws.

Other EU policy measures to mitigate GHG emissions in agriculture relevant to trade

The European Union does not have specific trade-oriented agricultural climate change policy measures, and agricultural climate change mitigation is primarily addressed through broader economy-wide frameworks. Nevertheless, given the EU’s position as both the world’s leading exporter and one of the top importers of agri-food products, policies that influence the environmental impact of agricultural goods – including GHG emissions reduction – directly affect both the products the European Union exports and the food consumed by its citizens. Similarly, policies affecting food processing and consumption – whether involving imports or domestic production – also influence EU imports in various ways.

Under its new green architecture, the CAP includes three types of measures that aim at promoting climate action: conditionality standards notably on soil cover and on crop rotation; eco-schemes; and rural development interventions that support sustainable practices. A 2024 study across the 18 Member States estimates that the CAP Strategic Plans for 2023-27 could mitigate up to 31 million tonnes of CO_2-eq per year, primarily through carbon sequestration and emission reductions in soil (EU CAP Network, 2024[19]), although this could be partially offset by emission leakage. The Industrial and Livestock Rearing Emissions Directive (IED 2.0), amended in 2024, is another EU instrument aimed at reducing emissions from industrial production and intensive livestock farming, addressing air, water, and land pollution, as well as waste generation.

The LULUCF Regulation, has a binding “no debit” rule that requires each Member State to ensure net neutral or negative greenhouse gas (GHG) emissions from the LULUCF sector annually and permitting the buying and selling of net accounted removals between Member States. At a wider level, the EU Effort Sharing Regulation on binding annual GHG emission reductions by Member States from 2021 to 2030 incorporates agriculture in its climate targets, while recognising the sector’s lower mitigation potential.

The European Commission’s ex-ante impact assessments of the above-mentioned regulations and policies (notably CAP, IED, RED and EUDR) reveal various trade-related effects. Stricter environmental and climate requirements within the CAP are expected to weigh on the EU’s short-term net trade balance. Price competitiveness remains largely unaffected, but lower production is likely to drive up imports and reduce exports of certain commodities (EC, 2018[20]). The original IED was reported to have supported exports of EU sustainable products and expertise. While the revised version may still impose some compliance costs on producers, these are expected to be modest and unlikely to be passed on to consumers, suggesting limited impact on price competitiveness (EC, 2022[21]). The RED could potentially reduce biomass imports from outside the EU, as stronger sustainability criteria may lead third-country operators to opt out of compliance and redirect their exports elsewhere (EC, 2021[22]). The EUDR Impact Assessment highlights trade implications, including shifts to deforestation-free supply chains, changes in EU consumption patterns, and unintended impacts such as leakage risks, limited access to commodities from a few countries, and the lack of compliant alternatives (EC, 2021[23]).

Policies for measuring the carbon footprint of traded agro-food sectors or products

The European Union has developed a multifaceted framework to enhance the measurement and management of GHG emissions within the agro-food sector by combining regulatory requirements with voluntary measures, data collection techniques, and enhanced transparency mechanisms that together aim to support the transition toward a sustainable and climate-resilient agricultural economy. There are also national projects that aim to advance farm-level GHG emissions measurement and complete the EU-wide framework while addressing region-specific challenges.

The Carbon Removals and Carbon Farming (CRCF) Regulation, published in December 2024 under Regulation (EU/2024/3012), creates the first EU-wide voluntary framework for certifying carbon removals, carbon farming practices, and carbon storage. This regulation establishes EU quality criteria, mandates third-party verification, and leverages standardised baselines and remote sensing technologies to streamline monitoring and reporting processes, including those provided by the Copernicus satellite system.

The Farm Sustainability Data Network (FSDN), building on the long-standing Farm Accountancy Data Network (FADN), collects farm-level data from approximatively 80 000 farms across the European Union. This data supports GHG emissions measurement at farm level, among other objectives (further details in the Recent policy developments section).

The Industrial and Livestock Rearing Emissions Directive amended in 2024 (IED 2.0) requires large pig and poultry farms to report detailed data on pollutant releases and resource use as part of their environmental permitting process. This information is publicly disclosed through the Industrial Emissions Portal Regulation (IERP) to enhance transparency and accountability (OECD, 2024[3]).

The Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) strengthen transparency, accountability, and climate action at corporate level. The CSRD enhances comparability by mandating companies to report under the European Sustainability Reporting Standards (ESRS), including climate change (ESRS E1) and biodiversity (ESRS 4), providing standardised data to investors and civil society. Complementing this, the CSDDD mandates large companies to perform due diligence across their value chains, addressing human rights and environmental risks. It also requires transition plans with time-bound GHG reduction targets, aligning corporate strategies with the Paris Agreement and the European Climate Law.

Several projects aimed at improving farm-level GHG emissions measurement are being conducted both domestically and through intra-European collaborations. For instance, the Institute for European Environmental Policy (IEEP) developed a Carbon Farming Projects Inventory, which compiles innovative practices aimed at reducing the carbon footprint of agricultural activities. While the inventory primarily includes projects funded by the Horizon Europe programme, it also highlights initiatives funded by other EU public sources and private sector efforts. A large variety of national initiatives across EU member states seeks to advance carbon footprint measurement in agriculture, including the development of innovative methodologies and the increasing use of digitalisation. A selection of those is outlined in Box 12.2.

Box 12.2. Examples of national initiatives addressing carbon footprint measurement in agriculture

Across Member States, public and private research institutes, along with government bodies, are actively developing methodologies for farm-level carbon measurement, gradually extending measurement from scope 1 and 2 emissions to include scope 3. An example of this is the sector-specific calculation standards for GHG balances at farm level, developed by a consortium of public institutions in Germany at both national and Länder levels. Harmonisation and the number of available calculation tools remain key challenges for this type of initiatives.

Digitalisation is increasingly an integral part of these measurement efforts, with many projects employing digital farm assistants to assess sustainability, efficiency and environmental impacts. NEU.rind, for instance provides Austrian dairy farms with tools for life cycle assessments (LCAs), eco-efficiency, and other sustainability metrics. Another example is AgNav, a free, nationwide Irish online platform that helps farmers model their emissions and develop tailored sustainability action plans. The platform generates baseline estimates for key environmental indicators (e.g. GHG and ammonia emissions, nutrient balance) and features a live decision-support tool.

Many measurement efforts focus on biomass production for biofuels. Article 31 of the Renewable Energy Directive (RED II) allows Member States to submit country-specific GHG data for Commission’s validation, enabling these figures to replace default values in biofuel sustainability assessments. For instance, Czechia has used newly documented data at local level to update carbon footprint values for rapeseed, enhancing the accuracy of emission calculations for rapeseed-based biodiesel.

Some projects stand out for their transnational scope, aiming to standardise research and mitigation practices across borders. An example is the LIFE Green Sheep – a collaborative research project in France, Ireland, Spain, Italy and Romania – which seeks to establish a demonstrative observatory comprising 1 355 sheep milk and meat farms, providing a platform to experiment mitigation strategies. Similarly, Wageningen University & Research in the Netherlands is leading several research projects focused on developing a harmonised sustainability measurement framework for North-West Europe across all food products. Special emphasis is placed on comparing the environmental impact of food products across different categories, promoting greater harmonisation, transparency and comparability.

Beyond measurement, some research projects focus on piloting climate-neutral farming models. Farm Zero C, an Irish public-private partnership, aims to develop a scalable model for climate-neutral, economically viable dairy farming. Researchers and farmers test a mix of established and innovative mitigation strategies, targeting both emission reduction and carbon sequestration at the farm level.

Research is underway on carbon credits. The online platform to implement carbon credits in agriculture developed by the Forum of Professional Farmers and Processors of Romania, for instance, aim at incentivise farmers to adopt low-carbon technologies and monitor carbon sequestration.

Lastly, advancements in labelling are emerging, with some countries developing climate labels for agricultural and agro-food products, such as the label under development by the Danish Ministry of Food, Agriculture and Fisheries. Other labelling initiatives target projects rather than products, like the Low Carbon label from the French Ministry for Regional Planning and Ecological Transition, under which six agricultural methods have already been approved. One of these is CarbonAgri, a multi-level method that quantifies emission reductions and carbon sequestration on beef and arable farms. It includes ten key mitigation strategies, such as improving energy efficiency, enhancing soil and biomass carbon storage, optimising organic nitrogen and mineral fertilisation, and better managing livestock effluents.

Recent policy developments

Domestic policy developments in 2024-25

Overall spending

The EU expenditure for agriculture and rural development in 2024 was EUR 50.5 billion (USD 54.7 billion), a decrease of EUR 1.9 billion (USD 2.1 billion) compared to 2023, largely due to the decrease of Pillar 2 budget. Expenditure under Pillar 1 was EUR 40 billion (USD 43.3 billion) (79.2%), and EUR 10.5 billion (USD 11.4 billion) (20.8%) under Pillar 2. Pillar 1 also funds market support measures, representing 6.3% of the overall agriculture and rural development budget in 2024 (Table 12.3).

Table 12.3. EU expenditure on agriculture by source and use, 2024

		Budget (EUR million)	Share in CAP expenditures
Pillar 1	Decoupled direct payments	31 900	63.1%
	Coupled direct payments	4 718	9.3%
	Interventions in agricultural markets	3 176	6.3%
	Other expenditures	235	0.5%
Pillar 2	Rural Development - EU funding	10 495	20.8%
	Other expenditures	20	0.0%
Total		50 543	100.0%

Note: Estimated funding. Numbers may not add up to 100 due to rounding. Other expenditures include administrative expenditures, clearance of accounts, technical assistance and completion of previous programmes.

Source: OECD calculations based on European Commission, EUR-Lex budget 2025.

Agri-environmental sustainability

An amendment of the CAP – the so-called targeted review – Regulation (EU) 2024/1468 – came into force in May 2024 with the objective of reducing the burden on farmers. It provides more flexibility for Member States regarding some conditionality standards (GAECs 1, 5, 6, 7, 8, and 9) and aims to avoid overlap with existing standards (OECD, 2024[3]). The obligation to devote a share of arable land to non-productive areas and features in GAEC standard 8 was removed. This followed several temporary derogations from GAEC 8 made available to Member States in 2022, 2023 and 2024.

The Nature Restoration Law (EC, 2024[24]) approved in 2024 sets the following targets that are those of most interest for the farming sector:14

• Measures should be put in place to restore at least 20% of the EU’s land and sea areas by 2030 as a Union target and for all ecosystems in need of restoration by 2050 (Article 1).

• Member States must put in place measures to restore to good condition at least 30% of habitats in poor condition by 2030, 60% by 2040, and 90% by 2050 (Articles 4 and 5).

• Member States must reverse the decline in the population of pollinators by 2030. Thereafter, they should achieve an increasing trend up to satisfactory levels (Article 10).

• For agricultural ecosystems, enhanced biodiversity by achieving an increasing trend in at least two out of three indicators (grassland butterfly index, stock of organic carbon in cropland mineral soils, share of agricultural land with high-diversity landscape features) until satisfactory levels - measured every six years after 2030 – are reached, while specific improvements in the common farmland bird index – measured in 2030, 2040 and 2050 – are also required (Article 11).

• EU countries must restore at least 30% of drained peatlands in agricultural use by 2030 (of which as least a quarter should be rewetted), 40% by 2040 and 50% by 2050 (both of which require rewetting by at least one-third) (Article 11).

Promotion

The European Commission adopted the 2025 promotion policy work programme in December 2024, allocating EUR 132 million (USD 143 million) to co-fund promotion activities for sustainable and high-quality EU agri-food products in the internal market and worldwide (EC, 2024[25]). This initiative seeks to create new market opportunities for EU farmers and the broader food industry while maintaining existing businesses. Marking ten years of EU promotion policy, the budget is split between non-EU and EU markets, with targeted campaigns focusing on Geographical Indications (e.g. PDO, PGI), organic and sustainable farming, and fresh fruit and vegetables. Additionally, the Commission will directly oversee key promotional activities, including participation in international trade fairs, high-level business missions to third countries, and market entry support initiatives.

Digitalisation and data

The European Commission has supported several research and innovation (R&I) projects under Horizon Europe, alongside deployment actions like the Common European Agricultural Data Space (CEADS) to facilitate data-driven approaches in farming. These initiatives explore the role of Internet of Things (IoT), sensors, data analytics, and decision support systems in agri-food production, with a particular focus on maximising the potential of collected data through interoperability solutions such as DEMETER and ATLAS.

The CAP 2023-27 introduces, for the first time, digitalisation strategies within Member States’ CSPs to enhance digital technology adoption and infrastructure development in agricultural and rural areas. In parallel, the Integrated Administration and Control System (IACS) supports the modernisation of CAP implementation and governance by integrating satellite imagery and geotagged photos for improved monitoring, while pre-filled online applications aim to reduce administrative burden for farmers. As digitalisation progresses, data governance has become a key consideration in ensuring the secure, fair, and transparent use of agricultural data. The European Union has introduced regulatory measures addressing data access and usage, especially the Regulation (EU) 2023/2854 on harmonised rules on fair access to and use of data (Data Act), which entered into force on 11 January 2024.

New rules were established for the Farm Sustainability Data Network (FSDN), an EU-wide survey that builds on the Farm Accountancy Data Network (FADN). With the transition to the FSDN in 2025, data collection will include economic, environmental and social dimensions, offering a more comprehensive view of agricultural sustainability. The first publicly available FSDN dataset is expected in 2026 or 2027. The FSDN also plans to implement a farm ID system, improving interoperability and enabling data sharing with other sources, such as Integrated Farm Statistics. This will provide farmers with access to benchmark data, helping them refine farm management strategies and improve sustainability.

Domestic policy responses to ongoing crises

The war in Ukraine and other geopolitical crises continued to drive high input costs and disrupt trade throughout 2024. Some previously implemented measures were extended in 2024, while others were newly introduced. At the EU level, CAP flexibilities and direct support to farmers were put in place.

A series of exceptional and temporary exemptions from certain conditionality measures on CAP payments were adopted to tackle food security issues amid the ongoing crisis, particularly concerning the EU’s production capacity (OECD, 2024[3]). The relaxation of specific GAEC requirements through the targeted review of the CAP in May 2024 further supported this.

A new regulation introduced in September 2024 allowed Member States to pay increased advances of up to 85% for rural development support measures in 2024, up from the usual 75%, and up to 70% for direct payments, compared to the usual 50%, to address liquidity issues. These increased payments aim to alleviate financial pressure on farmers caused by high input costs, disrupted trade, and low commodity prices (EC, 2024[26]).

Certain provisions of the State Aid Temporary Crisis and Transition Framework (TCTF), established in 2022 and amended several times, were extended in May 2024 to continue supporting the primary agriculture, fisheries, and aquaculture sectors affected by ongoing market disruptions, including the war in Ukraine. This delay in the phase-out of the TCTF applies exclusively to these three sectors, allowing Member States to provide limited state aid to businesses in these areas for an additional six months, until 31 December 2024, with a maximum of EUR 280 000 (USD 303 000) in aid for undertakings active in the primary production of agricultural products, in the form of direct grants, tax and payment advantages or other forms such as repayable advances, guarantees and loans (EC, 2024[27]).

Other responses to market imbalances and natural disasters

Further exceptional measures financed from the agricultural reserve of the CAP were introduced to alleviate effects of adverse climatic events and market disturbances on certain European farmers. In July 2024, a fund of EUR 77 million (USD 83 million) was mobilised from the agricultural reserve, which Member States could triple with national funds, to support farmers from the fruit, vegetables and wine sectors in Austria, Czechia and Poland, and wine producers from Portugal. The aid seeks to compensate losses from extreme weather events like frost and hail and assist Portuguese wine producers facing market imbalances (EC, 2024[28]; EC, 2024[29]).

Similarly, in October 2024, the agricultural reserve was activated to allocate a EU 119.7 million (USD 129.6 million) fund – potentially supplemented by national funds of up to 200% – to assist farmers in Bulgaria, Germany, Estonia, Italy and Romania affected by extreme events, including heatwaves, droughts, frost, floods, and storms (EC, 2024[30]). Then in March 2025, the reserve was activated once again, this time providing a EUR 98.6 million fund (USD 106.7 million) – also possibly complemented by national funds of up to 200% – to support farmers in Spain, Croatia, Cyprus, Latvia, and Hungary, who faced significant production losses due to exceptional climatic events and natural disasters since spring 2024 (EC, 2025[31]).

The de minimis aid limit for the agricultural sector was increased to EUR 50 000 (USD 54 120) over a three-year period in December 2024. This is up from EUR 25 000 (USD 27 060), which had been in place since 2019, and from the EUR 15 000 (USD 16 230) limit initially set in 2013. The new regulation also introduces adjustments to the national cap for de minimis aid and changes the monitoring period to a rolling three-year period, replacing the previous financial year approach (EC, 2024[32]).

On 10 December 2024, the European Commission proposed targeted amendments to the current legal framework set in the Regulation establishing a common market organisation of agricultural products (CMO) and a new Regulation on cross-border enforcement against unfair trading practices. These proposals aim to strengthen farmers’ positions and restore the trust between actors in the agri-food supply chain. Both proposals directly reflect several recommendations of the Strategic Dialogue on the future of EU agriculture and respond to some of the most pressing challenges that the EU agricultural sector faces.

The Vision for Agriculture and Food

The European Board on Agriculture and Food (EBAF) was created in January 2025. The EBAF is an expert group providing high-level advice on the development of future EU agricultural policy (EC, 2025[33]). It was created based on the final report of the Strategic Dialogue on the future of agriculture.

As a result of the Strategic Dialogue and in consultation with the EBAF, the European Commission also published the “Vision for Agriculture and Food: Shaping the future of farming and the agri-food sector for future generations in Europe” (EC, 2025[34]) in February 2025. The overall objective of the vision is to secure the long-term competitiveness and sustainability of the EU’s farming and food sector. It seeks to do so by fostering trust and dialogue across the entire value chain, as well as promoting close engagement with relevant institutions, farmers, food chain operators and civil society at local and regional levels. The plan also includes a greater role for the Agri-Food Chain Observatory (EC, 2024[35]), which was launched in 2024 in response to the concerns expressed by EU farmers on the need to improve their position in the food supply chain.

Trade policy developments in 2024-25

Trade agreements

In 2024, two key milestones in trade facilitation were achieved, reflecting significant progress in trade relations with major agri-food export powers. In May, the EU-New Zealand FTA came into effect (OECD, 2024[3]), followed by a political agreement in December between the European Union and the four founding Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay) on a comprehensive Partnership Agreement. Both agreements address tariffs, sanitary and phytosanitary measures, and sustainable food systems, with improving market access for agricultural products and protecting geographical indications for wine, spirits, and foodstuffs. While the EU-Mercosur agreement is hailed as a major step forward, the deal still requires ratification by both the European Parliament and individual EU Member States, as well as further legal processes before it can be fully implemented.

Recent developments in Asia reflect the EU’s focus on expanding its global trade network and strengthening economic ties with diversified international partners. Negotiations for an EU-Malaysia FTA, which were launched in 2010 and paused in 2012, resumed in January 2025 after both parties conducted a stocktaking exercise. This adds to the ongoing negotiations with Asian countries including India, Indonesia, Thailand and the Philippines.

Trade policy responses to ongoing crises

In May 2024, the EU extended its tariff-free trade measures with Ukraine and Moldova for another year until June and July 2025, respectively. These revised Autonomous Trade Measures (ATMs) allow for continued tariff-free imports of Ukrainian agricultural products, while introducing a reinforced safeguard mechanism to protect the EU market or the markets of one or more Member States against significant disruptions. In addition, an emergency brake applies to eggs, poultry, sugar, oats, maize, groats, and honey, which is automatically triggered once imports exceed average yearly volumes from 2021 to 2023 (EC, 2024[36]).

The emergency brake was triggered shortly after, with tariff-rate quotas being reintroduced for Ukrainian oat imports under the Deep and Comprehensive Free Trade Area (DCFTA) in June 2024, followed by tariff rate quotas for eggs, sugar, and groats in July, and for honey in August. These measures are set to remain in place until June 2025.

Poland, Hungary, and Slovakia have maintained their unilateral import bans, although the list of prohibited agricultural goods from Ukraine has been adjusted in some instances. For example, Hungary lifted the ban on honey in February 2024 and on millet in February 2025. Romania and Bulgaria have continued using a licensing system that allows Ukraine to import specific crops under certain conditions. Romania expanded the list of goods requiring import licenses, adding eggs and poultry meat in October 2024 to those already included in 2023. Similarly, Slovakia and Ukraine have agreed to establish an export licensing system to manage grain imports, which is currently being developed to replace the existing restrictions.

In response, the Ukrainian authorities on their side introduced an export licensing mechanism and export quotas for selected products destined to those five EU Member States, implementing voluntary export restrictions to prevent triggering the safeguard mechanism.

Country snapshots

This section presents 27 country snapshots, one for each EU Member State, providing an overview of their respective CAP Strategic Plans (CSP) for the 2023-27 period, with a particular focus on the allocation of rural development support budgets. The snapshots also detail amendments made to each country’s CSP and highlight key implementation achievements and challenges encountered during the second year of the 2023-27 period. Furthermore, they encompass concise descriptions of other important national policy developments during 2024-25.

Austria

CAP Strategic Plan: Implementation in 2024-25

• The CSP continued to be implemented successfully, with the number of area-related applications in 2024 similar to that in 2023. More than 80% of all farms participate in the agri-environmental programme ÖPUL combining 25 interventions in 2024 related to the environment, climate and animal welfare. Most rural development and sectorial interventions have been launched as well.

• The second amendment of the CSP, approved in August 2024, includes the implementation of the stimulus programme from application year 2024, featuring increased payment rates for ÖPUL programmes, compensatory allowances related to natural or other area-specific constraints, and higher eligible investments costs related to animal welfare, climate protection and climate change adaptation. It also includes changes from 2025, related to, among others, animal-friendly pig barn construction, added funding related to fruits and vegetables, additional options and premium components for agri-environmental measures, and simplification of conditionality requirements.

Table 12.4. Austria’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 9 024 million
Direct payments: ‒ EUR 3 388 million ‒ Share of eco-schemes: 15%
Sectoral support: ‒ EUR 103 million
Rural development: ‒ EUR 5 533 million ‒ Share of EU funding: 47% ‒ Number of interventions: 52

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In September 2024, the implementation of the policy strategy for sustainable agriculture in Austria “VISION 2028+” began; 170 measures across seven fields of action are being implemented by teams involving stakeholders, practicing farmers and scientists, in addition to the ministry.

• The National Coordination Centre for Sustainable Food Systems, established in January 2023 by the ministries responsible for agriculture, climate protection, and health originally for a period of two years, was extended until end of 2025. It is tasked with co-ordinating actions towards sustainable food systems.

• In 2024, the action plan on gender equality began to be implemented, focusing on measures including agricultural and forestry consulting, farm and diversification related investments, and others. The plan had been formulated in the working group on gender equality within the framework of the monitoring committee of the Austrian CAP Strategic Plan.

Belgium

CAP Strategic Plans: Implementation in 2024-25

• Key adjustments to the Flemish and Walloon CSPs in 2024 include greater flexibility in conditionality requirements related to GAECs, revised direct payment rules, and increased support for several eco-schemes, agri-environmental-climate measures (AECMs), and organic farming.

• Eco-scheme uptake has been strong in both regions.

Table 12.5. Flanders’ and Wallonia’s CSP planned budget and structure of rural development support

Main features		Rural development support by type of intervention Flanders (left) - Wallonia (right)
Flanders	Wallonia
Total budget :
EUR 2 046 million	EUR 1 860 million
Direct payments:
EUR 1 046 million	EUR 1 328 million
Share of eco-schemes:
25%	26%
Sectoral support:
EUR 389 million	EUR 2 million
Rural development:
EUR 611 million	EUR 530 million
Share of EU funding:
56%	37%
Number of interventions:
27	23

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In response to farmer protests, both Flanders and Wallonia established task forces to engage with sector stakeholders and introduce administrative simplifications to ease compliance burdens.

• Monitoring systems improved, with the use of geotagged photos in Flanders and satellite imagery in Wallonia, complemented by an interactive alert system for farmers.

• Flanders launched an open dialogue on food policies. Wallonia reinforced its efforts under the Food Wallonia action plan, focusing on sustainable food procurement, collective catering, local supply chains, and citizen engagement.

• In 2024, work carried out under Circular Flanders partly focused on circular agriculture and regulatory barriers. A study also started on biobased raw materials, emphasising biomass use. As part of its Recovery Plan, Wallonia started tackled food waste and composting in schools.

Bulgaria

CAP Strategic Plan: Implementation in 2024-25

• Two amendments were approved to Bulgaria’s CAP Strategic Plan in May and December 2024 aimed at addressing implementation challenges, particularly those related to meeting the mandatory standards related to GAEC. Adjustments to eco-schemes included: lowering the minimum stocking density, reducing the required number of pasture days to 90 for extensive pasture schemes, and combining vegetation cover with mulching to mitigate drought effects. The uptake of most eco-schemes covered only between 12% and 65% of the initially planned area. In turn, the eco-scheme focused on the reduction of pesticides achieved 460% of its planned area (almost 95% of this uptake occurred on arable land).

• Payments to areas facing natural or other specific constraints and to organic plant production constituted the largest disbursements under Rural development interventions.

Table 12.6. Bulgaria’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: EUR 7 726 million
Direct payments: EUR 4 119 million Share of eco-schemes: 25%
Sectoral support: EUR 125 million
Rural development: EUR 3 482 million Share of EU funding:41% Number of interventions: 42

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• A funding call under Rural development interventions was opened allocating EUR 50 million to irrigation projects. A new aid scheme is being developed for the supply of water for irrigation with BGN 1.5 billion (EUR 767 million) allocated for a 4-year period from the national budget.

• By September 2024, 53 000 farmers received BGN 300 million (EUR 153.4 million) to support producers affected by the economic implications of Russia’s war against Ukraine. In October 2024, the European Commission also approved a new EUR 84.9 million aid scheme to mitigate the impacts of Russia’s war against Ukraine. The scheme supports cattle and sheep meat, fruit and vegetables, oilseeds, and wine producers.

• The Draft Law on the Agri-Food Chain was opened for public consultations mid-March 2025. It proposes mandatory written contracts with defined margins for key players, aiming to protect producers’ rights without disrupting market principles.

Croatia

CAP Strategic Plan: Implementation in 2024-25

• Based on first-year experiences and feedback from beneficiaries, some simplifications were introduced and several interventions in the CSP were modified. The second amendment of the CSP was approved in October 2024, which in particular introduced a sub-intervention on mutual funds as a new possibility for risk management, and the implementation of social conditionality requirements. Conditionality rules were amended following changes to relevant EU legislation.

• Eco-Schemes, notably the one related to conservation agriculture, faced stronger interest than expected. The Eco-Scheme intervention on “Intensified maintenance of ecologically important areas” was expanded, with funding reallocated from “Extensive pasture management”.

Table 12.7. Croatia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 3 746 million
Direct payments: ‒ EUR 1 874 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 62 million
Rural development: ‒ EUR 1 810 million ‒ Share of EU funding: 81% ‒ Number of interventions: 39

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• To further develop the Agricultural Knowledge and Innovation System (AKIS), the Croatian AKIS Coordination Body was established in 2024, bringing together various ministries and other stakeholders. Key tasks relate to the establishment of a functional AKIS system, the goals for the modernisation of the sector, and the creation of an AKIS plan. The AKIS platform was established as a central hub for AKIS-related information and is to be upgraded continuously.

• Major developments related to digitalisation and smart agriculture include the establishment of the eMonitoring service which collects and monitors various types of plant-growth related data; the eLearning system providing open online courses for farmers; and the eAdvisor system, a central platform to collect and distribute information and data to farmers and other AKIS stakeholders.

• In an effort to create a sustainable and prosperous agricultural sector that can respond to the challenges of the modern market, in 2024, measures for young farmers focused on providing financial and expert support to young farmers, equipping them to effectively manage agricultural holdings, implement modern technologies, and comply with ecological standards.

Cyprus

CAP Strategic Plan: Implementation in 2024-25

• Three new rural development interventions were introduced into Cyprus’ CSP as of February 2024, as part of the EUR 60 million investment plan announced by the Ministry of Agriculture, Rural Development and Environment to support large agricultural investments. These interventions include (i) funding for modernisation, improvement of competitiveness, overall performance and sustainability of farms, (ii) environmental protection and animal welfare, and (iii) livestock waste management.

• In February 2025, the government also decided to allocate an additional EUR 7.5 million for young farmers under the Young Farmers Installation intervention.

Table 12.8. Cyprus’ CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 454 million
Direct payments: ‒ EUR 238 million ‒ Share of eco-schemes: 20%
Sectoral support: ‒ EUR 18 million
Rural development: ‒ EUR 198 million ‒ Share of EU funding: 60% ‒ Number of interventions: 31

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In October 2024, a strategy for the agricultural sector was approved, focusing on sustainability, innovation and economic resilience. The strategy includes 11 key actions with a budget of EUR 109.3 million (from CAP and national funds) for the period 2024-28.

• In its 2024 National reform programme, the government outlined two initiatives to boost agricultural competitiveness: a national centre for excellence in agri-tech to drive digitalisation, and a cloud-based platform to streamline trade and enhance information symmetry across the supply chain.

• In March 2025, the e-khalati digital platform was launched to track prices of 478 essential products, enabling consumers to compare supermarket prices. This initiative is part of a broader strategy to reduce the price gap between producers and consumers, which also includes a 2024 legislation supporting farmers’ market and direct sales.

• In July 2024, the government approved regulations requiring producers and importers of agricultural plastic to set up collective waste management systems, with designated collection points for proper disposal for farmers. Recycling targets will also be set, aiming for up to 50% of agricultural plastic products to be recycled.

Czechia

CAP Strategic Plan: Implementation in 2024-25

• Amendments to the Plan in 2024 included adjustments to the eco-scheme (including reducing the non-productive area obligation) and modifications to payment conditions and interventions.

• Annual rebalancing of application rounds ensures stable and smooth allocation of funding to all rural development interventions. Challenges included managing the complexity of application processes, ensuring uptake of eco-scheme, and addressing administrative burdens.

Table 12.9. Czechia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 8 009 million
Direct payments: ‒ EUR 4 118 million ‒ Share of eco-schemes: 30%
Sectoral support: ‒ EUR 124 million
Rural development: ‒ EUR 3 767 million ‒ Share of EU funding: 37% ‒ Number of interventions: 36

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• After two years of preparation and collaboration with over 50 non-governmental organisations, the completed Update of the Strategy of the Ministry of Agriculture 2030 reflects the most recent EU and Czech objectives, notably in environmental sustainability, renewable energy, employment, and rural development, taking into account more realistic food self-sufficiency goals and climate impacts, in line with the strategic direction of the CAP and other key national policies.

• The recently adopted anti-bureaucratic package was designed to simplify processes, enhance digitalisation, and support sustainable agriculture. It includes measures such as switching to electronic documents, simplifying the rules for subsidies for organic farming, and improving the distribution of milk, fruit, and vegetables to schools.

• The fruit growers and vineyards affected by severe spring frosts received compensation under various programmes, including EUR 285 million in emergency aid from the EU, along with additional grants from the national budget totalling EUR 83 million.

• The Czech Agrifood Research Centre (CARC), established on 1 January 2025, unites experts from three research institutes to enhance research efficiency, focusing on topics like biotechnology, sustainable agriculture, and low-emission farming aligned with EU CAP goals.

Denmark

CAP Strategic Plan: Implementation in 2024-25

• In 2024, the Danish CAP Strategic Plan was amended to version 4.2. Amongst other changes, the Commission’s simplification regulation and social conditionality were implemented, Denmark introduced a national GAEC 10 targeting non-productive areas and landscape features on the holdings and adjusted several interventions under Pillar 2, including “maintenance of pastures and natural areas”, “biodiversity forest”, “water and climate projects” and “establishment support for young farmers”.

• In 2024, the second call for the IACS-interventions (BISS, Eco-schemes) was implemented and the uptake was improved compared to 2023, which had lower than planned uptake for eco-schemes. In 2024, most of the rural development interventions have had their first call under the CSP. Overall, the uptake for these interventions has been good, with several interventions in ENVCLIM, INVEST, and INSTAL exceeding the planned financial allocation for the call.

Table 12.10. Denmark’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 4 892 million
Direct payments: ‒ EUR 4 119 million ‒ Share of eco-schemes: 20%
Sectoral support: ‒ EUR 39 million
Rural development: ‒ EUR 734 million ‒ Share of EU funding: 89% ‒ Number of interventions: 13

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

The most significant policy development in Denmark in 2024 was the implementation of the multi-stakeholder Agreement on a Green Denmark. Within it, the most important measures include:

• The introduction of CO₂e taxes on emissions from the agricultural sector starting in 2028 covering liming and peatlands, and a tax on GHG emissions from livestock phased in from 2030, with an efficient tax increasing from DKK 120 (approx. EUR 16) per tonne of CO₂e in 2030 to DKK 300 (approx. EUR 40) per tonne in 2035.

• Public schemes to support the creation of more nature and forests, including 250 000 ha of afforestation, the rewetting and restoration of 140 000 ha drained peatlands in agricultural use, and the establishment of six additional national parks to protect and restore biodiversity.

• The launching of a comprehensive nitrogen programme, including a new regulation of nitrogen management, paving the way for compliance with the EU Water Framework Directive.

Estonia

CAP Strategic Plan: Implementation in 2024-25

• The first amendment of the CAP Strategic Plan was approved on 8 April 2024. Major changes included changes to the requirements of GAEC standards, and expansion of eligible practices and activities in several investment interventions.

• The second amendment of the CAP Strategic Plan was approved in December 2024. The gap between minimum and maximum unit amounts in most direct payment interventions was increased to facilitate the re-allocation of resources to other interventions when necessary. A description of the penalty and control system for social conditionality was also added.

Table 12.11. Estonia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 1 641 million
Direct payments: ‒ EUR 1 008 million ‒ Share of eco-schemes: 28%
Sectoral support: ‒ EUR 1 million
Rural development: ‒ EUR 632 million ‒ Share of EU funding: 70% ‒ Number of interventions: 35

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In Estonia investment support for biomethane production has been launched under the RRF (budget approximately EUR 24 million). The support will enable the construction of five new biomethane production units, which will significantly increase Estonia's biomethane production capacity, contribute to the reduction of greenhouse gas emissions both in the agricultural sector and in sectors using biomethane, and provide additional income to agricultural enterprises.

• Estonia is drafting the Climate-Resilient Economy Act, one of the largest public involvement processes in the country. The law will set national and sector-specific targets for reducing greenhouse gas emissions. A working group on sustainable food system has been set up since 2024 to map the sector’s potential for reducing GHG emissions. In agriculture, the goal for 2030 would be to reduce emissions by 14% compared to 2022 levels.

• The Estonian Agricultural Big Data project (launched in 2022) aims to link available datasets collected by the public and private sectors and create digital decision-making tools which enable agricultural producers to adopt climate- and environmentally-friendly technologies. In 2024, a digital solution enabling field-based precision fertilisation and nutrient balancing was developed.

Finland

CAP Strategic Plan: Implementation in 2024-25

• Full implementation of Finland's CAP strategic plan began in 2024. In 2023, only Pillar 1 direct payments and Pillar 2 payments for areas with natural constraints (ANC) and environmental and climate measures (ENVCLIM) were in place.

• Organic production expanded during the previous programming period, but this trend has since reversed across arable crops, vegetables and livestock production.

• Decision-making on agricultural investment and start-up aid began in June 2023, with payments starting in January 2024. Rising energy prices have spurred strong interest of farms in renewable energy, especially solar power.

• Finland applied the derogations allowed by Commission Implementing Regulation (EU) 2024/587 concerning the minimum requirement for non-productive sectors (GAEC 8) to mitigate the war in Ukraine’s impact on the supply of agricultural products.

Table 12.12. Finland’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 6 702 million
Direct payments: ‒ EUR 2 613 million ‒ Share of eco-schemes: 16%
Sectoral support: ‒ EUR 25 million
Rural development: ‒ EUR 4 064 million ‒ Share of EU funding: 44% ‒ Number of interventions: 92

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• The Finnish Ministry of Agriculture and Forestry launched studies on the food sector's wholesale trade and market efficiency and competitiveness. A working group was appointed to compile up-to-date statistics and indices to provide a clearer and more transparent overview of the food market. The amendment to the first phase of the Food Market Act took effect in early 2025, with work on the second phase underway. The new Food Market Ombudsman started work in September 2024, and a performance agreement for 2025–2029 was drawn up with the Authorised Office.

• The National Nutrition Council published new national nutrition recommendations in November 2024, sparking broad discussion on the relationship between nutrition and health. The Ministry of Agriculture and Forestry also helped draft guidelines to protect children from harmful food. Work on the 2024 Food strategy is underway, aiming to develop more sustainable and profitable food system for all actors in the food chain.

France

CAP Strategic Plan: Implementation in 2024-25

• Minor amendments were made to the Plan in 2024, including changes to the definition of “active farmer” to reflect the specific characteristics of certain farms, align cross-compliance rules with the amended EU Regulation, and adjust the requirements for accessing certain agri-environmental and climate interventions. More substantial changes are expected in 2025.

• The first two years of implementation involved significant regulatory work, including the adoption of legal texts, the definition of procedures, and communication with beneficiaries, in co-ordination with the regional level. The eco-scheme saw relatively high uptake by farmers, with more than 90% participating in 2023. Over 50 rural development interventions resulted in payments to farmers.

Table 12.13. France’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 49 829 million
Direct payments: ‒ EUR 34 123 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 1 411 million
Rural development: ‒ EUR 14 295 million ‒ Share of EU funding: 70% ‒ Number of interventions: 77

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• An agreement was reached with the European Investment Fund in late 2024 to enhance the impact of the “National Initiative for French Agriculture” guarantee fund, catalysing over EUR 2 billion in additional investments to support agricultural transformations, particularly for climate adaptation and generational renewal, while improving access to credit, especially for young farmers.

• Two investment aid programmes for agro-equipment in the fruit and vegetable and orchard sectors were launched in July 2024, with EUR 27.7 million to support climate-adaptive production systems. The struggling wine sector was also offered an EUR 80 million emergency fund for cash-strapped viticulturists and an EUR 150 million structural support plan to foster sector diversification.

• The Ambition Bio 2027 programme, aimed at providing a roadmap to develop the organic sector, allocated additional funds in 2024, including EUR 8 million for communication, EUR 18 million for supply chain structuring, and EUR 90 million in exceptional financial support for farmers.

• Launched in 2024, the Grand Challenge Biocontrol and Biostimulation for Agroecology (GDBBA) supports research and deployment of alternatives to synthetic products for crop protection and fertilisation, with a EUR 60 million budget, including 70% in grants and 30% in private contributions.

Germany

CAP Strategic Plan: Implementation in 2024-25

• As common at the start of funding periods, implementation faced challenges, particularly with regards to the programme uptake of new measures. Furthermore, several Rural Development measures started late, with funds from the previous CAP period being used first.

• Three-quarters of the eco-scheme funds were used, with varying uptake. Low interest in voluntary fallow was expected due to rising producer prices and GAEC 8 suspension. In response, eco-schemes were simplified and payment rates raised in 2024, improving uptake. Further adjustments are foreseen for 2025, including new eco-schemes and a budget increase planned for 2026.

Table 12.14. Germany’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 34 373 million
Direct payments: ‒ EUR 22 194 million ‒ Share of eco-schemes: 22%
Sectoral support: EUR 305 million
Rural development: ‒ EUR 11 874 million ‒ Share of EU funding: 69% ‒ Number of interventions: 30

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• As part of the German National Strategy for 30% Organic Production by 2030, support was increased for research targeting enhanced biodiversity and for advisory services for away-from-home catering companies on the labelling regarding the use of organic food and ingredients.

• The federal government’s Food and Nutrition Strategy “Good Food for Germany” was launched in January 2024. It includes several measures, e.g. a competition of model regions to initiate a transformation towards a healthier and more sustainable food system, and projects for communal catering.

• In the context of nature-based solutions for climate and biodiversity, two research and demonstration projects were launched focusing on creating new, near-natural peatland habitats, and on peatland revitalisation, water level optimisation and biomass harvesting in peatland areas.

• To support the digitalisation of agriculture, 11 projects on optimising the data and information exchange between e.g. agricultural machines, vehicles or with central data processing have received financing of EUR 15 million over three years from early 2025. The so-called interoperability aims to increase the efficiency of the use of digital applications by farms.

Greece

CAP Strategic Plan: Implementation in 2024-25

• The initial CSP 2023-2027 was amended twice in 2024 with several adjustments, notably:

  • New interventions (investments for greenhouses and plant production shelters, GHG emission reduction for arable intensive crops, investments for natural disasters prevention and recovery).

  • Full use by Greece of the increased flexibility given to MS for GAEC 6, 7 and 8.

  • Adjusted allocation for Pillars 1 and 2 payments and related indicators.

• Nine out of the ten implemented eco-schemes were taken up by farmers in 2024. Although Pillar 2 interventions remained funded in 2024 under the 2014-22 RDP, 9 new calls under the new CSP were issued or prepared. Sectoral support was implemented for all four related sectors (olive, wine, honey and fruits and vegetables). By end of 2024, around 20% of the CSP budget was executed.

Table 12.15. Greece’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 14 280 million
Direct payments: ‒ EUR 9 622 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 254 million
Rural development: ‒ EUR 4 404 million ‒ Share of EU funding: 83% ‒ Number of interventions: 40

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• Agriculture holdings in Greece were strongly affected by natural disasters in recent years, which triggered exceptional payments in 2024 (EUR 146 million for the 2023 “Daniel” and “Elias” storms and a total of EUR 23 million for wildfires and other natural disasters occurred in past years). An additional EUR 30 million was approved in 2024 for damages from 2023 natural disasters and wildfires.

• Several new projects related to food and agriculture were also launched under the National Recovery and Resilience Plan “Greece 2.0”, funded by the EU to respond to the economic impacts from the COVID-19 crisis for a total of EUR 97 million (on modernisation and restructuring of production, innovation and green transition in processing chains and green agrotourism).

• Public investments into irrigation infrastructure were continued in 2024 (national expenditure of around EUR 15 million in co-financing of EU RDP related measure) and new studies and land reclamation projects were initiated in the context of relevant legislative frameworks.

Hungary

CAP Strategic Plan: Implementation in 2024-25

• Hungary’s CSP saw two amendments in 2024, with the second approved in January 2025. These updates adjusted Pillar 1’s conditionality (e.g. wetland and peatland protection standards) and introduced new Pillar 2 measures (e.g. Organic Farm Grant). Amendments allowed using EU funds for the Agricultural Loss Mitigation Fund that compensates yield losses from extreme weather.

• Eco-scheme uptake kept exceeding expectations, covering 4.2 million ha in 2024 (the initial planned baseline for 2023 was 2.5 million ha), requiring resource reallocation. Two new practices became eligible for eco-scheme payments.

• Over 20 agriculture-related RD funding calls were issued in 2024, but spending occurred on only three agriculture-linked measures of the new CAP RD pillar (agri-environmental management, organic farming support, subsidised insurance). Social consultations precede funding calls, with a consultation window of only 10 calendar days.

Table 12.16. Hungary’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 10 075 million
Direct payments: ‒ EUR 6 633 million ‒ Share of eco-schemes: 15%
Sectoral support: EUR 208 million
Rural development: ‒ EUR 3 234 million ‒ Share of EU funding: 51% ‒ Number of interventions: 63

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• Legislative developments improved water management and irrigation. Decree 422/2024 permits temporary flooding of agricultural land with a water permit to enhance ecological water infiltration for improved water balance. Act LXXX of 2024, effective July 2025, ensures that land users renting land can recover irrigation investments, addressing disincentives for long-term irrigation projects.

• An amendment and government decree implementing the 2021 Act on Agricultural Farm Transfers facilitate generational renewal by clarifying the process for whole farm transfer contracts.

• An amendment of the 2007 Act on the Protection of Agricultural Land regulates the status of areas classified as landscape features. Farmers establishing or maintaining such areas do not breach their obligation to use land for agricultural purposes and remain eligible for support.

• An amendment of the 2013 Act on Land Turnover establishes special rules for rice farms: land set aside facilitating rice cultivation now forms a single indivisible property with land used for cultivation.

Ireland

CAP Strategic Plan: Implementation in 2024-25

• Three amendments to the CSP were completed in 2024. These adjusted the grant rates to the on-farm capital investment scheme, delaying the introduction of GAEC 2 until 2025, raising the ceiling for Protein Aid from EUR 7 million to EUR 10 million, introducing a ceiling on nutrient storage investments and introducing social conditionality in the CAP from 1 January 2025.

• Uptake of Pillar 1 remains in line with expectations, while uptake in environmental schemes was higher than expected. Ninety-seven per cent of farmers that made a BISS application also applied to eco-schemes. There is high interest in the intervention for improvements in emissions in the suckler beef sector. A high level of interest was also seen for calls for EIP-AGRI proposals.

Table 12.17. Ireland’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 9 834 million
Direct payments: ‒ EUR 5 931 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 45 million
Rural development: ‒ EUR 3 858 million ‒ Share of EU funding: 40% ‒ Number of interventions: 20

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• A new Women in Agriculture Working Group was tasked with facilitating and guiding implementation of the Women in Agriculture Action Plan, developed in 2023.

• The National Biomethane Strategy was launched in 2024, supported by a EUR 40 million Capital Grant scheme for biomethane production plants.

• The Agricultural Knowledge and Innovation System (AKIS) Coordination Group was established, which delivered a new AKIS map for Ireland that was published by CAP Network Ireland.

• The development of AgNav, a free nationally-available online farmer-centric sustainability platform, was accelerated in 2024 and 2025 via additional funding allocated by Teagasc, Bord Bia and the Irish Cattle Breeding Federation.

Italy

CAP Strategic Plan: Implementation in 2024-25

• In 2024 and early 2025 the Italian CSPs has undergone two amendments. The first one was adopted to respond to (i) the need to allocate more financial resources for investments in areas most affected by extreme climatic events; (ii) the need to strengthen interventions for human capital, with additional resources for the AKIS and cooperation interventions. The second amendment included an increase up to EUR 200 per hectare of the additional payment for young farmers to make it more attractive, as well as some changes in the financing mechanisms of some Rural Development interventions.

• During the first two years of implementation the CSP has required complex administrative procedures due to the need for coordination between national and regional authorities. The five eco-schemes have showed high level of uptake.

Table 12.18. Italy’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 36 613 million
Direct payments: ‒ EUR 17 608 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 3 258 million
Rural development: ‒ EUR 15 747 million ‒ Share of EU funding: 46% ‒ Number of interventions: 95

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• The Law No. 36/2024 introduced support for the installation of young farmers (EUR 15 million per year) and favourable tax regimes and incentives for purchasing agricultural land. The law also established the National Observatory for Youth Entrepreneurship and Employment in Agriculture.

• The so-called Agriculture Decree (Decree-Law No. 63/2024) increased funding for the coverage of interests on bank loans for farmers and granted additional support to farms impacted by specific events affecting their economic viability (e.g. the National Solidarity Fund’s was in increased by EUR 44 million in 2024). The decree also introduced strict limitations on the installation of ground-mounted photovoltaic plants, subject to specific exceptions.

• A new law (No. 24/2024) recognises farmers and agricultural cooperatives as guardians of the land and establishes the National Day of Agriculture (the second Sunday of November).

• The register of “Identity Cities” was established to acknowledge municipalities with at least 30% of agro-food products with quality certification and with a long-lasting tradition (at least 50 years).

Latvia

• In 2024, CAP beneficiaries received payments for 45 CSP interventions. All 24 direct payment interventions were fully implemented; 20 rural development interventions were implemented, and support was paid for 14; all 7 interventions in the beekeeping sector were fully implemented.

• For direct payments, farmers’ uptake was close to the planned levels in 23 out of 31 interventions. Uptake significantly exceeded expectations for eco-schemes promoting “agricultural practices beneficial for the environment and climate”, “agricultural practices that reduce nitrogen and ammonia emissions and pollution”, as well as for a measure on “ecological focus areas”.

• For rural development, activity was strongest in projects targeting small farms and young farmers, as well as in investments related to processing, innovative solutions, risk insurance, and subsidies for partial interest rate repayment. In contrast, there was lower engagement in investments in energy efficiency and renewable energy production for self-consumption.

Table 12.19. Latvia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 2 508 million
Direct payments: ‒ EUR 1 714 million ‒ Share of eco-schemes: 26%
Sectoral support: ‒ EUR 10 million
Rural development: ‒ EUR 784 million ‒ Share of EU funding: 88% ‒ Number of interventions: 35

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• Administrative burden on farmers was reduced by simplifying eligibility conditions and reporting requirements. The Rural Support Service took over the functions of the Agricultural Data Centre, enhancing monitoring and control processes, reducing the number of on-site visits by separate state authorities, and improving information exchange and integration with other agencies.

• The National Pesticide Residue Control Program was developed for 2025, 2026, and 2027. It updates the spectrum of pesticide residues detectable in food and strengthens the control of pesticide residues in food products from third countries.

• Latvia introduced an import ban on agricultural and animal feed products from Russia and Belarus, and spearheaded the EU’s increased tariffs on selected goods from these countries. Subsequent controls and inspections of cargo from Russia and Belarus, including surveillance and laboratory testing, were accordingly intensified.

Lithuania

CAP Strategic Plan: Implementation in 2024-25

• Two amendments to the CAP Strategic Plan were submitted and approved in 2024 and early 2025. Changes to GAECs were driven by compliance challenges and included postponed implementation and softened requirements, such as reduced buffer strips width.

• Coupled income support was adjusted to mitigate the impact of Russia’s war of aggression against Ukraine on farm incomes. Eco-scheme changes focused on removing the least effective options, strengthening requirements, and modifying payment levels to better reflect the cost incurred or the value of public goods delivered. Rural development measures were modified to reduce administrative burden by for example harmonising eligibility conditions across similar interventions.

• Applications have been received for 23 of the 31 rural development interventions. Some interventions were not yet launched in 2024 due to continued funding from similar CAP 2014-2020 measures, such as Natura 2000 areas support.

Table 12.20. Lithuania’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 4 234 million
Direct payments: ‒ EUR 3 012 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 11 million
Rural development: ‒ EUR 1 211 million ‒ Share of EU funding: 81% ‒ Number of interventions: 31

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In 2024, the Ministry of Agriculture implemented digitalisation across various departments to improve efficiency and reduce the administrative burden on producers. This included streamlining certification processes, digitalising key certificates, creating a risk assessment system for inspections in the dairy sector, and restructuring internally to modernise the management of export and import licenses for agricultural products.

• In October 2024, Vilnius held a study visit as part of the EAGER project “Easing AGrophotovoltaics for EuRope”. The visit provided a platform for stakeholders to exchange knowledge, explore national policy developments, and observe innovative agri-photovoltaic solutions in practice.

• The 6^th edition of the AgriFood Forum, held in November 2024, focused on rethinking agri-food systems through AI and innovation to boost sustainability and resilience, in line with EU priorities on green and digital transitions.

Luxembourg

CAP Strategic Plan: Implementation in 2024-25

• In 2024, several adjustments were made to the CSP in response to farmers’ requests, including the recognition of forage areas abroad for the livestock density reduction aid, changes in the maintenance period for permanent pastures, and reduction of minimum-on-site inspection rates from 5% to 1%. Additionally, the requirement for agricultural training to obtain the status of active farmer is suspended until 1 January 2028.

• The law on sustainable rural development (“loi agraire”) implementing the CSP launched in 2023, provides an additional EUR 20 million to support farmers mainly through eco-schemes and agri-environmental measures. Amended in November 2024, this law partially reverses restrictions that excluded individuals over 72 years old and retirees from receiving certain financial aid.

• Overall, the CSP’s greater ambition compared to the previous RDP is causing implementation challenges for both authorities and farmers. Uptake of eco-schemes exceeded expectations, and similarly, sectoral support for fruits and vegetables surpassed projected demand.

Table 12.21. Luxembourg’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 465 million
Direct payments: ‒ EUR 164 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 0.3 million
Rural development: ‒ EUR 301 million ‒ Share of EU funding: 20% ‒ Number of interventions: 14

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In 2024, three forums were held to strengthen dialogue and co-operation within the sector, leading to the creation of working groups on ammonia emissions and construction in green zones. Plans to develop a best practice guide on water protection was also agreed. Simplifying seasonal worker hiring, enhancing resilience and boosting marketing support for viticulture were also addressed.

• During 2024, national financial aid was allocated to 11 projects designed along the lines of the European Innovation Partnerships (EIP), 9 research projects and 7 demonstration projects.

• To reduce ammonia emissions, new rules introduced in August 2024 require slurry, liquid manure, digestate, and sewage sludge to be spread using band application at ground level or direct soil application.

Malta

CAP Strategic Plan: Implementation in 2024-25

• The lower-than-expected uptake of eco-schemes in 2023 led to the creation of two new eco-schemes focused on animal welfare, aimed at compensating farmers for income foregone due to lower stocking rates resulting from improving livestock housing conditions. Additionally, the list of eligible crops for the eco-scheme targeting Arable Land for non-productive elements was expanded to include more annual and perennial crops more readily available locally.

• Amendments were made to the Environment, Climate-related and other Management Commitments (AECC) scheme. First, its budget was increased, owing to high demand. Second, the complementarity between Integrated Pest Management (IPM) and the AECC was strengthened by allowing simultaneous participation in both schemes (as opposed to being mutually exclusive).

Table 12.22. Malta’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 163 million
Direct payments: ‒ EUR 43 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 0.1 million
Rural development: ‒ EUR 120 million ‒ Share of EU funding: 66% ‒ Number of interventions: 16

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• Malta’s Strategy for Resilient Food Systems covering the 2025-2034 period was launched in October 2024. The Strategy aims to set a common vision and direction for food systems in Malta and builds on three key pillars, namely a) Securing the viability of local production; b) Future-proofing food supply; and c) Re-igniting pride in local food products and nurturing a knowledge-driven food culture.

• As of 2024, the Riżorsi Agrikoli Malta agency has started the implementation of a system that exempts heirs of agricultural land from succession taxes.

• As part of the Stabbiltà initiative, major importers and retailers were required to reduce the recommended retail prices of staple foods by at least 15% compared to 31 October 2023 levels.

• As a response to the impact of the war in Ukraine, exceptional support was continued in 2024 to compensate farmers for the increase in the price of fodder and fertiliser.

Netherlands

CAP Strategic Plan: Implementation in 2024-25

• The uptake of CAP interventions remains strong despite the introduction of new elements in the current programming period. Applications for direct payment interventions have exceeded expectations, including participation in the eco-scheme where overall uptake and participation in the “Gold” category (where eco-activities have the highest value per hectare) have been higher than anticipated.

• The Vegetable and Fruit Sectoral Intervention is on track, with 11 operational programmes and four producers starting their first annual plans. Investments in renewable energy remain a priority.

• The transition to the new eco-schemes required significant efforts. As part of this process, all collectives of farmers and agricultural land managers have successfully undergone re-certification.

Table 12.23. Netherlands’ CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 4 995 million
Direct payments: ‒ EUR 2 978 million ‒ Share of eco-schemes: 32%
Sectoral support: ‒ EUR 635 million
Rural development: ‒ EUR 1 382 million ‒ Share of EU funding: 78% ‒ Number of interventions: 15

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• The Netherlands allocated an additional EUR 50 million in 2024 under the Temporary Crisis and Transition Framework (TCTF) to support farmers participating in new CAP eco-schemes.

• As part of the National Rural Area Programme (NPLG), a new policy instrument was introduced with a budget of EUR 105 million to facilitate voluntary farm relocation, reducing nitrogen deposition in Natura 2000 areas.

• A second NPLG policy instrument was launched with a EUR 60 million budget to support farm-level investments in proven technologies that significantly reduce nitrogen emissions.

• The 2025 edition of De Nederlandse agrarische sector in internationaal verband, which describes the development of Dutch trade in agricultural products, includes a dedicated section on the land and greenhouse gas footprints in agriculture.

Poland

CAP Strategic Plan: Implementation in 2024-25

• As of May 2024, Poland implemented changes under the EU’s “Simplification” Regulation (EU) 2024/1468, modifying six GAEC standards and other environment-related measures.

• Payments for small farms (PSF) were introduced in 2024 as a lump-sum payment of EUR 225/ha for farms up to 5 ha, replacing other types of direct payments. Furthermore, 11 interventions under the CSP were launched in 2024, including support for fruit and vegetables producers, areas facing natural constraints, farm competitiveness and land consolidation.

• The uptake of eco-schemes expanded in 2024, covering 13.2 million ha, up from 11 million ha in 2023. Applications for the animal welfare eco-scheme saw a 22% increase, reaching around 114 000 in 2024. Payment rate reductions were introduced to remain within the budget.

Table 12.24. Poland’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 25 234 million
Direct payments: ‒ EUR 17 327 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 129 million
Rural development: ‒ EUR 7 778 million ‒ Share of EU funding: 60% ‒ Number of interventions: 46

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In 2024, EUR 491 million was allocated to cereal producers and EUR 234 million to maize producers in Poland to address liquidity losses caused by market disruptions following Russia’s invasion of Ukraine.

• A 2025 amendment to the Agriculture Protection Fund broadened eligibility for compensation in cases of buyer insolvency and clarifies the de minimis aid status of such payments.

• Following the July 2024 revision of Poland’s National Recovery and Resilience Plan (NRP), funding for four investment measures on food chain resilience, research capacity, and sustainable water use rose from EUR 1.9 billion to EUR 2.6 billion, with calls for applications ongoing.

• Emergency support measures, including grants and tax refunds were implemented for farmers affected by climate-related crop damage since 2023. Notably, EUR 111 million was allocated for fruit, vegetable and wine producers hit by unprecedented frost and hail, with one-third from the EU agricultural reserve and two-thirds from national funds.

Portugal

CAP Strategic Plan: Implementation in 2024-25

• Portugal’s CAP Strategic Plan underwent two amendments approved by the European Commission in February 2024 and June 2024, aimed at refining intervention strategies. This included simplifications to eco-schemes requirements to address a low initial uptake, as well as enhancement of advisory services, and better alignment of the schemes with farmers’ capacities and environmental goals.

• The largest disbursements under Rural development interventions are linked to soil conservation, efficient use of water, permanent crops and traditional landscapes, and agroforestry mosaic. These are followed by risk management instruments, including incentives for farmers to adopt insurance schemes to mitigate the impacts of climate-related events.

Table 12.25. Portugal’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 6 956 million
Direct payments: ‒ EUR 3 487 million ‒ Share of eco-schemes: 25%
Sectoral support: EUR 338 million
Rural development: ‒ EUR 3 131 million ‒ Share of EU funding: 73% ‒ Number of interventions: 117

Note Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• The Portuguese Government approved EUR 320 million of support to the agricultural sector. The funds were allocated to programmes focused on sustainable agricultural practices and lowering emissions from agricultural production.

• To combat water scarcity and improve agricultural productivity, the government launched new investments in upgrading irrigation systems, particularly in the Alentejo region. These efforts aim to optimise water use efficiency.

• Initiatives have been launched to attract young individuals to agriculture by providing financial incentives, training programs, and support for adopting innovative technologies. This approach seeks to rejuvenate the farming population and enhance the sector's competitiveness.

Romania

CAP Strategic Plan: Implementation in 2024-25

• Romania implemented a second amendment (approved in May 2024) to its CAP Strategic Plan 2023-27 to address administrative challenges faced during the initial implementation phase. A new eco-scheme will be introduced in 2025 to enhance the welfare of cattle through extensive grazing on pastures under optimal sustainability conditions.

• For some eco-schemes, the uptake remains low: for instance, the eco-scheme “environmentally friendly farming on small, traditional farms”, targeting farms of up to 10 ha, achieved less than 5% of the planned area. In turn, the uptake of the eco-scheme “environmentally friendly practices on arable land – whole farm approach with increased baseline requirements” reached 109% of the originally planned agricultural area, mainly due to derogations from GAECs, making it easier to meet the criteria.

Table 12.26. Romania’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 15 836 million
Direct payments: ‒ EUR 9 783 million ‒ Share of eco-schemes: 25%
Sectoral support: ‒ EUR 182 million
Rural development: ‒ EUR 5 871 million ‒ Share of EU funding: 86% ‒ Number of interventions: 36

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• Romania implemented a series of measures to support farmers affected by drought: increasing state guarantees for farm loans, providing state aid compensation up to RON 1 000 (USD 224) per damaged hectare before fall crops are sown, and delaying agricultural loan repayments until December 2025.

• In August 2024, Romania updated the legislation on reducing food waste. It created the National Platform for the Prevention and Reduction of Food Waste to ensure a more efficient management and monitoring of measures to address the issue. Concerned economic actors in the agri-food supply chain will also have to submit reports on food donated.

• In October 2024, Romania approved subsidised credits to mitigate the consequences for farmers of Russia’s war against Ukraine. The subsidy is limited to 60 months or EUR 280 000 per beneficiary.

Slovakia

CAP Strategic Plan: Implementation in 2024-25

• The reviewed eco-scheme conditions simplify regulations and enhance flexibility. Whole-Farm Scheme updates include improved management of non-productive areas, alternative biodiversity strip requirements, and revised manure and compost use. Pasture farming changes include adjustments to grassland management (TTP) and simplified animal registration for grazing support.

• Adjustments were made to the GAEC conditionality requirements, in line with the updated EU regulation. The definition of an active farmer has been expanded to include agricultural educational and research institutions.

• In 2024, Coupled Income Support achieved 88.7% of the targeted funding for crop sectors, covering protein crops, hops, sugar beet, fruits, and vegetables, while 96.65% of the planned support was delivered to livestock sectors, including milk and dairy production, as well as sheep and goat farming.

Table 12.27. Slovakia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 4 123 million
Direct payments: ‒ EUR 2 003 million ‒ Share of eco-schemes: 28%
Sectoral support: ‒ EUR 65 million
Rural development: ‒ EUR 2 055 million ‒ Share of EU funding: 64% ‒ Number of interventions: 41

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In response to Russia’s aggression against Ukraine, Slovakia has reinforced its national protective policy by expanding its ban on Ukrainian imports to 10 products, including honey, sugar, soybeans, cattle cake, and other solid residues obtained from the extraction of vegetable fats and oils.

• Legislative amendments on agricultural land use establish a legal framework for agroforestry, introducing regulations for “agricultural functional greenery” aiming at strengthening protection of the most fertile agricultural soils and lands with the highest water retention.

• In 2024, an updated version of the Methodological Manual on Adaptive Drainage Canal Management was launched. The revised guide provides best practices for reconstructing drainage canals to improve water retention in the soil.

Slovenia

CAP Strategic Plan: Implementation in 2024-25

• The third amendment of the CSP in December 2024 aims to enhance food self-sufficiency, crop production, animal welfare, support for organic farming and for young farmers, and to improve the implementation of conditionality. New interventions include coupled income support for the vegetable sector, along with rural development support for investments in collective processing and marketing initiatives, as well as in restoring agricultural potential after natural disasters.

• In 2024, Slovenia granted nearly EUR 215 million in payments to 54 228 farms for applications submitted during the 2023 campaign, covering direct payments and rural development support for environmental protection, such as organic farming and organic beekeeping.

• Seventeen public calls for rural development interventions were launched in 2024, worth EUR 74 million in funds and covering initiatives to promote generational renewal in rural areas, knowledge dissemination, innovations in farming, and investments in climate change adaption.

Table 12.28. Slovenia’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 1 791 million
Direct payments: ‒ EUR 658 million ‒ Share of eco-schemes: 15%
Sectoral support: ‒ EUR 26 million
Rural development: ‒ EUR 1 107 million ‒ Share of EU funding: 49% ‒ Number of interventions: 47

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In 2024, Slovenia released its first annual climate report for the agricultural sector, outlining GHG emission mitigation and adaptation efforts. The report will serve as a scientific foundation to develop targeted agricultural policies in response to climate change.

• Slovenia also placed strong emphasis on organic farming in 2024. The CAP Network hosted an event for EU Organic Day, raising public awareness, alongside initiatives such as a new podcast on climate change and organic farming targeted at young farmers. Efforts were also made to inform farmers about the application process and requirements for organic farming support.

• The AKIS (Agricultural Knowledge and Innovation System) “Knowledge Portal” has recently been updated, to offer farmers, advisors, researchers, and others access to a comprehensive range of agricultural knowledge, including research findings, training materials, and reports.

Spain

CAP Strategic Plan 2023-27: Implementation in 2024-25

• A second amendment of the CSP was approved in 2024. It simplifies and makes more flexible some requirements in cross-compliance, eco-schemes and rural development interventions to address difficulties encountered in the first year of CSP operation. All interventions initially programmed will be implemented, with some adjustments made on specific interventions at the subnational level.

• Farmers’ uptake of eco-schemes improved in 2024, with 77.5% of applicants for support committed to implementing eco-schemes (against 75% in 2023). This accounts for 88% of the agricultural area for which support was requested. In 2024, the complementary support payments for young farmers doubled with respect to the annual payments corresponding to the previous CAP 2014‑22.

• Spain started applying CAP social conditionality in 2024. The full payment of certain aids is thus tied to compliance with basic standards on working conditions and employment of agricultural workers and occupational health and safety. Beneficiaries who fail to comply and who have a final sanction issued by the competent authority will be subject to a penalty, applied as a reduction of the payment amount.

Table 12.29. Spain’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 34 826 million
Direct payments: ‒ EUR 24 440 million ‒ Share of eco-schemes: 23%
Sectoral support: ‒ EUR 2 114 million
Rural development: ‒ EUR 8 272 million ‒ Share of EU funding: 65% ‒ Number of interventions: 46

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• A pluralistic body for the co-ordination and governance of the Agricultural Knowledge and Innovation System (AKIS) was approved and held its first meeting in 2024. Its three corresponding Agri-food R&D&I Coordination Working Groups began operating in 2025.

• ECOGAN, a digital tool for recording the use of best available techniques and estimate pollutant and greenhouse gas emissions at the farm level, has been used in the pig sector since 2022 and expanded to the poultry sector in 2024. Recent updates to the tool enable farm carbon footprint monitoring.

• In early 2025, Spain launched its National Food Strategy (ENA), a cross-sectoral roadmap to transform the country’s food systems. Developed through a participatory process involving agri-food stakeholders, the strategy aligns with EU priorities and the UN Sustainable Development Goals, and addresses six key challenges: strategic food supply, sustainability, rural and coastal resilience, healthy diets, innovation and technology, and consumer information.

Sweden

CAP Strategic Plan: Implementation in 2024-25

• The initial CSP 2023-2027 was amended twice in 2024 and the beginning of 2025. Changes include the expansion of the precision farming eco-scheme, which was initially limited to nitrate-sensitive areas but will now cover the entire country starting in 2025, and the introduction of a new eco-scheme aimed at promoting biodiversity and sustainability through flowering fields and field edges/margins.

• Around 20% of the CAP Pillar 1 budget was spent on eco-schemes, while 60% of the Pillar 2 budget was allocated to payments linked to the environment and climate.

• In addition, ongoing investments in wetlands under investment support for water management measures will be transferred from the rural development programme (2014-20) to the strategic plan (2023-27).

Table 12.30. Sweden’s CSP planned budget and structure of rural development support

Main features	Rural development support by type of intervention
Total budget: ‒ EUR 6 065 million
Direct payments: ‒ EUR 3 433 million ‒ Share of eco-schemes: 20%
Sectoral support: ‒ EUR 31 million
Rural development: ‒ EUR 2 601 million ‒ Share of EU funding: 41% ‒ Number of interventions: 21

Note: Data relate to the planned budget for the entire duration of the CAP 2023-27, as available in the sources below, accessed in February 2025. Total budget and its distribution include transfers between pillars and national co-financing, but do not include additional national financing.

Source: At a glance CAP Strategic Plans by country (EC, 2025[37]) for “Main features”; EC Catalogue of interventions (EC, 2025[11]) for the graph.

Other key policy developments in 2024-25

• In 2024, the organic co-ordination function at the Swedish Board of Agriculture was cancelled. The function was established in 2017 and aimed to promote the production, consumption and export of organic food.

• Several national knowledge hubs have been established to bridge the gap between research and practice, enhancing collaboration within AKIS and integrating advisors. In 2024, the knowledge hub for digitalisation was launched. Additionally, a knowledge database for farmers and advisors, providing verified and updated information, was developed and is set to launch in early 2025.

• The budget bill for 2025 introduced a support measure named the Nitrogen leap to fund investments aimed at reducing emissions of nitrogen to the air from the agricultural sector.

• The Nature Restoration Regulation was adopted in June 2024 as part of the EU Biodiversity Strategy. The regulation sets national requirements for various restoration measures, with a particular focus on the rewetting of agricultural land.

Policy context

Key economic and agricultural statistics

The European Union is the largest economic region covered in this report, accounting for 17.2% of the economic activity of all countries covered herein. Although the contribution of agriculture to both GDP and employment has declined since 2000, the share of agriculture in the region’s exports has increased over the same period to 8.7% of total exports (Table 12.31). More than 40% of the region’s landmass is dedicated to agriculture, of which 64% is dedicated to arable land use. Crops (including cereals, oilseeds, fresh fruit and vegetables, and plants and flowers) predominate in agricultural output, accounting for 55.8% of total production, although large differences exist across Member States. Livestock products – including dairy, beef and veal, pig meat, sheep meat, poultry and eggs – account for the remainder.

Table 12.31. European Union: Contextual indicators

	European Union		International comparison
	2000* (EU15)	2023 (EU27)*	2000*	2023*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	9 943	26 432	24.8%	17.2%
Population (million)	378	449	8.8%	8.5%
Land area (thousand km2)	3 124	3 997	3.8%	4.9%
Agricultural area (AA) (thousand ha)	140 380	162 711	4.7%	5.6%
			All countries1
Population density (inhabitants/km2)	114	106	52	64
GDP per capita (USD in PPPs)	26 341	58 620	9 368	29 013
Trade as % of GDP	10.9	15.1	12.3	14.9
Agriculture in the economy			All countries1
Agriculture in GDP (%)	2.2	1.6	2.9	3.5
Agriculture share in employment (%)	4.3	3.5	-	-
Agro-food exports (% of total exports)	7.1	8.7	6.4	8.1
Agro-food imports (% of total imports)	7.4	6.1	5.8	7.3
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	54.4	55.8	-	-
Livestock in total agricultural production (%)	45.6	44.2	-	-
Share of arable land in AA (%)	52.2	64.0	31.8	33.3

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

After a strong rebound in 2021, real GDP growth in the region remained positive but steadily declined, approaching near stagnation by 2023. This was followed by a slight recovery in 2024, with growth reaching 1% (Table 12.32). The unemployment rate has been on a steady decline since 2013, falling from a high of 11.6% that year to 5.9% in 2024. While a sharp rise in inflation – driven by increases in energy, food, and other commodity prices – hit the European Union economy in 2021-22. Inflation peaked at 9.2% in 2022 but has since returned to more moderate levels, falling to 2.6% in 2024.

The European Union has been the world’s largest agro-food exporter since 2013 and also remains one of the largest importers. The region is a net food exporter, with agri-food products exports rising to EUR 235.4 billion in 2024 (Figure 12.7A), with the UK representing 23% of EU exports, while exports to Russia and China declined. Imports in agri-food products also reached a record level of EUR 171.8 billion in 2024 (EC, 2025[38]). While the region’s agri-food exports are predominantly composed of processed goods for final consumption (61%), imports are more evenly distributed among the four categories shown in Figure 12.7B, with primary goods for industry representing the largest share (28%).

The European Union’s overall agri-food trade is broadly diversified across numerous trade partners, with a trend toward greater diversification since 2012. At the same time, for certain products – such as spirits, wine and pig meat on the export side, and oilseeds and maize on the import side – the European Union still relies heavily on key partners, which poses a risk of market instability if trade is disrupted (EC, 2023[39]).

There has been significant growth in the value of trade under the EU’s trade agreements, which in 2022 surpassed EUR 2 trillion for the first time. In February 2024, the Joint Research Centre (JRC) published a study entitled “Cumulative economic impact of upcoming trade agreements on EU agriculture - 2024 update”, which quantifies the effects of trade agreements recently concluded or in negotiation on key EU agricultural commodities. Comparing conservative and ambitious trade liberalisation scenarios with a baseline for 2032, the study projects an EU agro-food export growth of 27% to 38%. Despite potential negative impacts on beef, wine, processed food, dairy, and sheep meat, the overall benefits of the agreements are expected to surpass these losses, highlighting the need for diversified export markets and import sources (JRC, 2024[40]).

At 0.21%, the average annual growth of agricultural output in the European Union over the period 2013-22 was significantly below the word average of 1.76% (Figure 12.8). However, total factor productivity (TFP) growth – averaging 1.18% over the same period – exceeded the global average and was sufficient to offset the decline in the use of primary factor inputs, including labour, land, livestock, and machinery (which fell by an annual average of 0.79%), as well as the reduction in intermediate inputs such as feed and fertiliser (down by -0.18% on average).

Moderate TFP growth has been achieved in the sector along with a reduction of certain environmental pressures, as illustrated through various environmental indicators (Table 12.32). From 2000 to 2023, the region’s nitrogen balance fell by 37.7%, the phosphorous balance declined by 82.2%, while the share of agriculture in water abstractions fell by 13.9 percentage points. At the same time, although the European Union has achieved reductions in these indicators, the region’s nitrogen balance is 43.4% higher than the OECD average. While the region achieved improvements in most environmental indicators, agriculture’s GHG emissions as a proportion of total European Union GHG emissions increased over the period, from 8.8% in 2000 to 10.9% in 2023.

Table 12.32. European Union: Productivity and environmental indicators

	European Union		International comparison
	1991-2000	2013-2022	1991-2000	2013-2022
			World
TFP annual growth rate (%)	1.0%	1.2%	1.7%	0.8%
			OECD average
Environmental indicators	2000* (EU15)	2023 (EU27)*	2000*	2023*
Nitrogen balance, kg/ha	68.4	42.6	32.0	29.7
Phosphorus balance, kg/ha	7.3	1.3	3.3	2.5
Agriculture share of total energy use (%)	2.0	2.8	1.7	2.0
Agriculture share of GHG emissions (%)	8.8	10.9	8.7	10.1
Share of irrigated land in AA (%)	..	..	-	-
Share of agriculture in water abstractions (%)1	41.7	27.8	47.0	49.5
Water stress indicator	..	..	8.7	..

Note: * or closest available year. EU27 for TFP annual growth rate:1993-2002.

1. Due to the data availability, the EU15 aggregate does not include Austria, Germany, Ireland, Italy and the United Kingdom; while the EU27 aggregate does not include Austria, Finland, Hungary, Ireland, Italy and Portugal.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

The Common Agricultural Policy (CAP) has been the European Union’s agricultural policy framework since its institution in 1962, although the mix of policy instruments has evolved substantially over time (Table 12.33). The Treaty of Rome that established in 1957 the European Economic Community defined common policies on agriculture and trade (OECD, 2011[41]; European Parliament, 2021[42]). Agriculture made up a much larger share of Europe’s economy at the time, and the income gap between urban and rural households was increasing. Moreover, the region was a net food importer with concerns about securing adequate food supplies during the Cold War (Grant, 2020[43]). In this context, the Treaty of Rome laid down five main objectives for the CAP:

1. To increase agricultural productivity by promoting technical progress and ensuring the optimum use of the factors of production, in particular labour

2. To ensure a fair standard of living for farmers

3. To stabilise markets

4. To assure the availability of supplies

5. To ensure reasonable prices for consumers.

CAP measures targeting these objectives were financed from the European Agricultural Guidance and Guarantee Fund (EAGGF), split into separate Guidance and Guarantee sections. Different rules governed the two: the Guidance section financed operations related to structural policy and development of rural areas, while the Guarantee section funded expenditures on market and price policies (European Parliament, 2021[44]).

For more than three decades until the 1990s, support prices under the CAP were high compared to world market prices, with an unlimited buying guarantee. As a result, European farmers produced increasing surpluses and the cost of managing stocks and subsidising exports grew accordingly. In response, by the 1980s the European Union introduced quantitative production restrictions in the form of quotas on milk production.

The CAP’s first major reform occurred in 1992, in conjunction with negotiations on the General Agreement on Tariffs and Trade (GATT) and following the result from the US-EU soya GATT panel. The MacSharry Reform brought a major shift in the delivery of the CAP. Instead of supporting production (through market intervention and export subsidies), the regime shifted the bulk of support to supporting producer incomes directly through area and headage payments, aiming to close the gap between supply and demand and reduce overall expenditures (European Parliament, 2021[45]). This wide-ranging reform reduced cereal intervention prices, introduced compensatory payments per hectare for cereals or per head for livestock, and introduced a mandatory set-aside scheme to take land out of production. In conjunction with the reform of budgetary support measures through the MacSharry package, market price support (MPS) also declined thanks to EU commitments under the 1995 Uruguay Round Agreement on Agriculture. Namely, bound tariffs were gradually reduced, and variable import levies were replaced with ad valorem or specific tariffs and tariff rate quotas (OECD, 2011[41]).

Subsequent reforms built on the foundation of the MacSharry Reform, reducing distortive support to the agricultural sector or changing how support is delivered. The Agenda 2000 reform focused on aligning EU and world prices, offsetting the reduction of price support with increased direct aid to producers under the now called Pillar 1 (European Parliament, 2021[45]). In addition, the Rural Development Regulation was introduced as Pillar 2 of the CAP. Finally, this package instituted two types of environmental cross-compliance conditions: an optional measure linked to the direct payment in Pillar 1, and the so-called “Good Farming Practice” requirements for the agri-environmental schemes in Pillar 2.

The 2003 Fischler Reform15 further developed and consolidated these measures, decoupling most support from production through the introduction of the single payment scheme (SPS) (European Parliament, 2021[45]). Furthermore, in this reform cross-compliance became obligatory and was extended to include not only environmental issues but also public, animal and plant health and animal welfare issues. Cross-compliance rules were enforced through a set of Statutory Management Requirements (SMR) and “Minimum Requirements for Good Agricultural and Environmental Condition” (GAEC). This package also introduced modulation, allowing Member States to transfer funds between the two pillars to reinforce rural development objectives. The reform also prioritised financial discipline, freezing the budget of Pillar 1 (covering the SPS and market measures) and imposing annual compulsory ceilings. This coincided with the splitting of the CAP budget into the European Agricultural Guarantee Fund (EAGF) to finance Pillar 1 and the European Agricultural Fund for Rural Development (EAFRD) to finance Pillar 2 from 2007. Additionally, this round of reform introduced the single common market organisation (CMO) in 2007, which codified the regulation mechanisms of the existing CMOs. Reform programmes for specific commodities (cotton, hops, olive oil, tobacco, sugar, fruits and vegetables, and wine) were introduced from 2003 to 2008, with the aim of reducing distortive payments, restoring market-based incentives and aligning them with the SPS (OECD, 2011[41]). Through the different rounds of CAP reform, as result of budgetary payments replacing MPS, but also as result of the additional Member States joining the European Union, the absolute budget figure for the CAP more than doubled from 1990 to 2010.

Measures taken under the 2009 Health Check sought to continue the direction of the 2003 reform. Namely, decoupling of aid continued and nearly all payments (with the exception of suckler cow, sheep and goat premia) were included into the decoupled direct payments scheme - SPS. It also further reduced market intervention for a number of products, abolished set-aside and introduced phase-out of milk quotas. Additional flexibility for direct payments was introduced as well (OECD, 2011[41]). The Health Check also resulted in changes to both SMR and GAEC of cross-compliance, with the addition of two water management standards.

The 2013 Reform set out a more global, integrated approach to agricultural support for the programming period 2014-20, undertaken through four lines of action (European Parliament, 2021[45]): (1) converting decoupled aid into a multifunctional support system with aid directed toward specific objectives; (2) consolidating the two CAP pillars, with mostly decoupled direct aid and market measures funded through Pillar 1, and rural development funded through Pillar 2, which continued to be co-financed by the Member State; (3) consolidating CMO tools into safety nets in case of market disruption or price crisis, and ending other supply control measures, namely the sugar and milk quotas; (4) a more integrated, targeted and territorial approach to Pillar 2 through rural development plans, simplifying the range of available instruments to focus on certain core objectives.

During the negotiations of the CAP post-2020, a political agreement between the European Parliament and the EU Member States in the Council was reached on transitional rules for the CAP for 2021-22 on 27 November 2020. These transitional rules were based on the principle of continuity of the 2014-20 CAP rules, while also including new elements to ensure a smooth transition.

In January 2023, the European Commission and the European Union Member countries began to implement the CAP 2023-27. Although with a similar annual budget as the transitional period, the new CAP entails a new delivery model, in which Member States play a critical role in designing and implementing their CAP Strategic Plans (CSPs), which include both Pillar 1 and Pillar 2 measures.

While CAP budget has remained relatively stable in nominal terms since 2010, CAP expenditures as a share of the total EU budget declined sharply, from 65.5% in 1981 to 24.6% in 2023. The share of CAP expenditure on the total EU budget was 34.9% in 2020. The stronger decrease since 2021 is linked to additional overall EU expenditure for the Next Generation EU funds (EC, 2024[46])

Table 12.33. European Union: Agricultural policy trends

Years	Main Milestones	Key Policy Features
pre-1992	Coupled support phase: CAP financed by the European Agricultural Guidance and Guarantee Fund (EAGGF), European Economic Community with 12 members1	Support prices greater than world prices Unlimited buying guarantee Production quotas for certain products, including dairy and sugar
1992-1999	MacSharry Reform: CAP, EU Expansion 1995 (Austria, Finland, Sweden), Uruguay Round Agreement on Agriculture	Shift from product support through prices to producer support through income-supporting measures, with the reduction in intervention prices compensated by increased direct aid per hectare or livestock headage payments Establishment of set-aside payments to encourage land retirement Tariffication of border measures and gradual reductions in bound tariffs
2000-2002	Agenda 2000 CAP Reform: CAP divided into Pillar 1 and Pillar 2 (Rural Development)	Further reduction of EU market support prices in closer alignment with world prices, partly offset by direct aid to producers in the form of increased area or headage payments First introduction of environmental cross-compliance Introduction of Rural Development Regulation as a second pillar of the CAP
2003-2008	Fischler Reform: CAP Pillars 1 (financed by EAGF) and 2 (financed by the European Agricultural Fund for Rural Development EAFRD), EU Expansion 2004 (Malta, Cyprus, Estonia, Latvia, Lithuania, Poland, Czechia, the Slovak Republic, Slovenia, Hungary) and 2007 (Bulgaria and Romania)	Decoupling much of CAP support from volume of production, with fixed single farm payment (SPS) introduced based on historical references Cross-compliance for environmental and public health objectives compulsory for receiving full payments. Introduction of Statutory Management Requirements (SMR) and “Minimum Requirements for Good Agricultural and Environmental Condition” (GAEC) Single common market organisation (CMO) introduced Reform programmes initiated for cotton, hops, olive oil, tobacco, sugar, fruit and vegetable and wine regimes
2009-2013	Health Check: CAP Pillars 1 and 2	Further reduction of EU market intervention for certain products Phasing out of milk quotas initiated Abolition of set-aside Integration of nearly all payments into SPS New cross-compliance requirements introduced
2013-2020	2013 Reform: CAP Pillars 1 and 2, EU Expansion 2013 (Croatia) and Contraction 2020 (United Kingdom)	Decoupled aid converted to multifunctional support (including basic payment, greening payment, small farmer payment, etc.) Consolidation of two pillars of CAP, with direct payments and market measures under Pillar 1 Consolidation of CMO tools, abolition of supply control measures (including ending milk and sugar quota schemes) External and internal convergence, with payment envelopes gradually adjusted to move toward a uniform minimum per hectare payment
2021-2022	Transitional rules	Continuity of the 2014-2020 CAP rules, while also including new elements to ensure a smooth transition
2023-2027	CAP 2023-27 Introduction of new delivery model and CAP Strategic Plans	The new delivery model requires Member States to programme both CAP Pillar 1 and Pillar 2 expenditures within the context of their CAP Strategic Plans. Enhanced conditionality and eco-schemes were introduced.

1. When the Maastricht Treaty establishing the EU was signed in 1992, Belgium, Denmark, France, Germany, Ireland, Italy, Greece, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom were part of the Union.

Source: European Parliament (2021[45]) and OECD (2011[41]).

Total support to the agricultural sector as percentage of agricultural gross value-added in the European Union largely comes from budgetary allocations. Market price support declined significantly from 1986 through the 2000s but has remained mostly unchanged since around 2010. The most substantial change to PSE composition began in the mid-2000s after the Fischler reform decoupled most payments to farmers from production (Figure 12.9).

References

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[8] EC (n.d.), Market measures explained, https://agriculture.ec.europa.eu/common-agricultural-policy/market-measures/market-measures-explained_en (accessed on  September 2024).

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Notes

← 1.  The OECD Producer Support Estimate database calculates support for the European Union as a whole, without reflecting possible variations between individual Member States.

← 2.  CAP legislation contains a mandatory but flexible definition of an active farmer. Applicant farmers have to comply with the requirements set by Member States such as income tests, labour inputs on the farm, company object or inclusion in national or regional registers. Member States may complement their criteria by drawing a negative list of non-agricultural activities compared to which the agricultural activities are typically marginal. The active farmer definition aims at granting support only to farmers engaged in at least a minimum level of agricultural activity (EC, 2023[47]).

← 3.  Sectoral support for apiculture is the only intervention co-financed by Member States under Pillar 1.

← 4.  Co-financing rates vary by intervention and by Member State, within rules established at EU level.

← 5.  Rules on support for CSPs are established by EU Regulation 2021/2115, which also sets the rules on the Performance Monitoring and Evaluation Framework (PMEF), which applies for the CAP from 2023 until 2027.

← 6.  Member States may choose to transfer up to 25% of the corresponding allocations between the two funds. This percentage may be increased by up to 15%-points for transfers from Direct Payments to Rural Development provided that the corresponding increase is used to finance EAFRD interventions linked to specific environmental and climate-related objectives and up to 2%-points provided that the corresponding increase is used for the installation of young farmers under EAFRD.

← 7.  While under the CAP 2014-22 the reduction of the basic payments (BPS and SAPS) by at least 5% for the part of the amount exceeding EUR 150 000 (USD 158 000) was mandatory, with the CAP 2023-27 this “degressivity” became voluntary and thresholds were modified.

← 8.  CIS-YF may be a lump-sum payment or an amount per hectare with the number of eligible hectares per farmer defined by the Member States. CAP support to young farmers generally involves combining CIS-YF with Pillar 2 interventions. Overall EU countries must dedicate an amount corresponding to at least 3% of their direct payments budget to support young farmers.

← 9.  Coupled support aims to address difficulties in sectors, types of production or specific types of farming that are important for socio-economic or environmental reasons. Among the sectors that CAP strategic plans can target, protein crops can be counted without any specific justification, as this could contribute to reducing the EU’s dependency on imports in the sector and the use of nitrogen fertilisers.

← 10.  Through the CMO/Amending Regulation (EU) 2021/2017, provisions concerning aid schemes set out in Part II, Title I, Chapter II, Sections 2 to 6, of Regulation (EU) No 1308/2013 on the common organisation of agricultural markets have been deleted, as all types of intervention in the sectors concerned are now set out in Title III, Chapter III (Types of intervention in certain sectors) of Regulation (EU) 2021/2115 on the CAP strategic plans.

← 11.  If the average market price in an EU country or in a region of an EU country drops below EUR 2 224 (USD 2 339) per tonne over a representative period, the European Commission may use public intervention to support beef prices.

← 12.  Rules that farmers are expected to comply also include statutory management requirements (SMRs), which apply to all farmers whether or not they receive support under the CAP.

← 13.  The structure of Horizon Europe lists a total of six clusters that are broken down into individual expected impacts around overarching themes. The other five clusters are: (1) Health; (2) Culture, Creativity and Inclusive Society; (3) Civil Security for Society; (4) Digital, Industry and Space; (5) Climate, Energy and Mobility.

← 14.  Member States are responsible for achieving these targets and must submit National Restoration Plans (Article 14) quantifying the areas to be restored and describing the restoration measures planned to meet the restoration targets. Participation in restoration measures is voluntary for individual landowners.

← 15.  Also referred to as the June 2003 reform or the 2003 “Luxembourg” reform.