EU report highlights shift towards sustainable farming

There's a need to strengthen approaches to climate adaptation, report finds
calendar icon 6 December 2023
clock icon 5 minute read

A European Commission report confirms the important role of CAP Strategic Plans for maintaining farmers' income and food security, while supporting EU agriculture's transition to a sustainable farming model in the 2023-2027 period.

The report analyses the intended impact of the Strategic Plans for delivering on the goals of the Common Agricultural Policy (CAP) 2023-2027, particularly those linked to environment, climate and societal expectations such as animal welfare.

The report confirms that the CAP Strategic Plans aim to deliver the most ambitious CAP ever from an environmental and climate perspective.

The report also points out the need to reinforce prevention and risk management tools and strengthen approaches to climate adaptation.

For the 2023-2027 period, the CAP is supported by €307 billion of which 264 billion from the EU budget, and an additional €43 billion from national funds. About 2500 interventions have been designed in the 28 CAP Strategic Plans submitted by Member States and approved by the European Commission. Today's report relies on the information contained in these Plans as well as on qualitative appraisal of the potential effects of the choices made by Member States.

A fairer distribution of farm income

Overall, CAP Strategic Plans show a significant joint effort to support farm income, ensure a fairer distribution to smaller farms and reduce income disparities in the most vulnerable sectors and disadvantaged areas. There is also an increased joint effort tomodernise farms and strengthen the sector's competitiveness.

On average, agricultural income is only 45% of the average wage in the economy, with variations between different agricultural sectors and farming systems. In 2020, CAP support accounted for 23% of EU farm income on average. It proves key to maintain agricultural activity and jobs in remote rural areas, slowing down land abandonment and rural depopulation. A strong and resilient farming sector is a prerequisite for a stable supply of food, one of the CAP's historical objectives, which remains as relevant as ever today.

More than 10% of EU direct payments, representing €4 billion annually, will be reallocated through redistributive payments benefitting small and medium-sized farms. This payment has more than doubled compared to the previous period. The ageing of farmers represents another challenge to safeguard long-term food security and rural livelihoods. The Commission welcomes that the Plans will support 377 000 young farmers in setting up in agricultural activity. This is an increase in almost all Member States who also go beyond the minimum financial allocations required.

A greener EU agriculture sector

To receive full CAP payments, farmers must respect an enhanced set of requirements and standards for the environment, climate, health, animal welfare, and decent working conditions. This principle of conditionality applies to close to 90% of the utilised agricultural area in the EU and plays an important role in mainstreaming sustainable farming practices.

The Plans allocate 32% of the total CAP budget to voluntary actions advancing the environmental, climate and animal welfare objectives. The largest financial contribution comes from eco-schemes and environmental and climate commitments under rural development, with €44.7 billion and €33.2 billion respectively. The flexibility granted to Member States in designing these tools allowed them to target specific needs in their national or regional contexts and exploit their complementarities.

For example, Portugal, Bulgaria, Croatia, Cyprus, Greece and Slovenia plan to promote organic fertilisers as an alternative to synthetic ones. Germany supports both investment and maintenance aid for agroforestry. Finland has a scheme for winter cover to protect soil while Spain offers extra funding for sustainable grazing and mowing practices on pasture to reduce soil degradation and improve biodiversity. One Polish eco-scheme provides significant support for better living conditions of livestock.

Overall, the Plans show potential to contribute to climate mitigation, especially through significant efforts on practices for carbon sequestration and storage in soil and in biomass. Overall, 35% of the EU's farmland should benefit from actions for both carbon sequestration and reduction of nitrous oxide emissions. There is also progress on protection of sustainable management of natural resources, with substantial efforts on soil protection, with voluntary practices covering 47% of EU farmland.

In terms of the EU Green Deal 2030 ambitions, the Plans willcontribute to reaching the target of 25% of EU agricultural area farmedorganically. By 2027, an estimated 10% of the EU's farmland should receive CAP support for organic production, up from 5.6% in 2020. Complementary national initiatives on market development and public procurement will help to achieve the overall target.

Drawing lessons

The report also acknowledges areas for which the Plans collectively could have showed higher level of ambition or pursued more optimal approaches. For example, considering increasing occurrence of extreme weather events and a world marked by crises and disruptions, the Commission calls for further reinforcement of risk management tools and their increased uptake across the Union. Despite the growing efforts, only about 14% of all EU farms are expected to benefit from such CAP support. The report acknowledges that Member States may not always use CAP funding for this purpose and apply nationally funded insurance schemes instead. Proactive measures to address underlying causes of crises and to increase farm resilience in the medium term are also needed.

In its assessment, the Commission also notes that further efforts are needed so that more farms adopt digital technologies and innovation. Similarly, the broad range of needs for advice, training and knowledge exchange will not be met by the planned financial allocation so far. The report notes the same challenges for rural communities. LEADER, a 'bottom up' approach, in which rural businesses, local organisations, public authorities and individuals from different sectors work together, accounts for 7.7% of the total EU rural development funds.

Finally, the Commission stresses in the report that the CAP Strategic Plans are not the only tool necessary to contribute to the Green Deal, Farm to Fork and Biodiversity Strategy ambitions and address the many associated challenges. Complementarity with other EU and national funds is key to achieve their overall impact. For example, generational renewal, antimicrobial resistance, and socio-economic needs of rural areas cannot be fully addressed without mobilising other national measures and EU funding, like EU cohesion funds and the Recovery and Resilience Facility.

The report is one element in the broader process of assessing the performance of the current CAP. Additional information will come from implementation data and assessment of the new delivery model in 2025, annual performance reports and the interim and final evaluation in 2026 and 2031, respectively. In line with its transparency and monitoring requirements, the European Commission provides detailed information on all Plans online with a summary of all Plans, a catalogue of CAP interventions and dashboards on result indicators and financial allocations.

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