A fair deal for farmers
The new CAP places a greater priority on fairness for farmers and workers.
Redistribution of support
The new CAP takes further steps towards a fairer distribution of income support. It will better address the income needs of small and medium-sized family farms:
- a compulsory complementary redistributive income support mechanism will cover at least 10% of the direct payment envelope;
- EU countries can derogate from this obligation or minimum percentage, if the redistributive needs are adequately addressed through other means, for example the reduction of payments, internal convergence, or territorialisation of basic income support;
- the reduction and capping of direct payments for farms that receive large amounts will be optional for EU countries. The European Commission encourages all countries to include the reduction and capping of support in their strategic plans in view of the economies of scale of large farms;
- support to small farms will be reinforced by the possibility to replace the different direct payments by a single small farmer allowance.
In addition, EU countries may continue to grant a limited part of their direct payment envelope to support some sectors or types of farming therein, with enhanced efficiency. The coupled support will aim at addressing the difficulties undergone by improving their quality, sustainability, or competitiveness.
EU countries that still make direct payments based on historical references for payment entitlements will need to continue reducing the differences between payments per hectare in their Member State. This process, called internal convergence, must ensure that all payment entitlements have a value of at least 85% of the average in 2026.
Countries that receive a level of direct payments per hectare (ha) of agricultural land that is below 90% of the EU average per hectare payment will see an increase of their budget up to half of the difference to 90% of the average. Payments will be at least EUR 200/ha in 2022 and increase to EUR 215/ha in 2027. This process is called external convergence and continues the trend of bringing average levels of payments in EU countries closer together.
Definition of an active farmer
The new legislation includes a mandatory but flexible definition of an active farmer:
- minimum level of agricultural activity: this will be based on objective and non-discriminatory criteria such as income test (e.g. comparing farm income with income from other economic activities), labour inputs, company object and inclusion in a register;
- list of ineligible economic activities: EU countries may establish a list of economic activities that may not receive CAP direct support;
- pluri-active and part-time farmers: EU countries should ensure that pluri-active (farmers who also have other professional activities) and part-time farmers are not excluded from support;
- reduction of administrative burden: EU countries may presume that farmers receiving direct payments up to EUR 5 000 are considered active farmers.
CAP payments will be linked to compliance with certain European labour law provisions.
Under this new social conditionality mechanism, labour authorities in EU countries will need to inform agricultural paying agencies at least once a year on the results of their own controls. If necessary, the paying agency will apply a reduction to the farmer’s payment.
The new mechanism will cover directives on:
- transparent and predictable employment conditions: farm workers have to be informed of employment conditions in writing, regardless of the hours worked. This includes place and type of work, beginning and, where relevant, end of employment, information on probation period, paid leave, notice periods, remuneration, work pattern/schedule, social security information;
- on-farm safety and health: employers must ensure safety and protection of farm workers with regard to farm machinery and equipment, protective clothing and equipment or dangerous substances.
The feasibility of including provisions on free movement of workers will be assessed by 2025. As the social conditionality mechanism is created for the first time, an evaluation of its functioning by the Commission is foreseen after two years of implementation to see whether possible adjustments would be necessary.
Additionally, CAP strategic plans will support farmers to improve working conditions on farms, through the farm advisory system and under interventions in the different sectoral programmes.
Directive 2019/1152/EC on transparent and predictable working conditions
The new CAP will include stronger support for young farmers.
An amount equal to at least 3% of every EU country direct payments envelope must be used to support young farmers who set up a farm. This support may be granted as income support, investment support or start-up aid for young farmers (only 50% of relevant investment support would be counted towards this target).
Improving the gender balance
Gender equality and increasing the participation of women in farming are part of the objectives for CAP strategic plans. EU countries must assess these issues and design their measures to improve the situation.
A greener policy
The new CAP will support the transition towards more sustainable systems of food and farming, in line with the European Green Deal.
New green architecture
The new green architecture of the CAP represents an important step in the transition towards more sustainable systems of agriculture and forestry in the EU. The two pillars of the CAP are combined under a single CAP strategic plan, focusing all funding and policy tools towards the same environmental and climate objectives. In designing their strategic plans, EU countries will have the flexibility to tailor support schemes around local and agronomic realities.
EU countries are obliged to ensure that their CAP strategic plan has a greater overall ambition on environment and climate compared to the previous programming period (no “back-sliding”).
Moreover, the Commission is to assess the consistency and contribution of the proposed CAP strategic plans to the Union’s environmental and climate legislation and commitments and, in particular, to the Union's targets for 2030 set out in the Farm to Fork and the EU Biodiversity strategies.
EU countries will be required to assess the consistency of their CAP plan with revised EU environment and climate legislation and propose amendments to their plan when necessary.
All beneficiaries of the CAP will continue to have their payments linked to a set of mandatory rules (known as “conditionality” in the new CAP), comprising of statutory management requirements (SMRs) and good agricultural and environmental conditions (GAECs).
Compared to the current CAP, the rules for conditionality will include a higher level of ambition in several domains.
In the current CAP, farmers receive green direct payments for carrying out three practices: crop diversification, maintaining permanent grassland, and dedicating land to ecological focus areas. In the new CAP, the most effective aspects of these practices will be incorporated into new conditionality rules. For example:
- GAEC on soil protection and quality: crop rotation will be required on all farms of at least 10 hectares. Crop diversification (the current obligation) will only be permitted when this practice contributes to the objective of preserving the soil potential. There are exemptions for farms with a lot of grassland, and organic farms are considered as fulfilling the obligation;
- GAEC on biodiversity and landscape: 4% of land will be devoted to non-productive elements and areas, including fallow land, on all farms of at least 10 hectares. This is more than under the current “greening” system. The obligatory minimum for such non-productive features will be 3% where farmers “top up” that total to 7% through an eco-scheme, or where farmers devote significant additional land to catch crops or nitrogen-fixing crops (cultivated without plant protection products in each case).
25% of the direct payments will be allocated to eco-schemes, providing stronger incentives for climate and environment-friendly farming practices. Eco-schemes will focus on a common list of action areas defined at EU level and can be used to support practices such as organic farming, agro-ecological practices, precision farming, agro-forestry or carbon farming, as well as animal welfare improvements.
Eco-schemes will be mandatory for EU countries to include in their plans, but voluntary for farmers:
- annual or multi-annual commitments: eco-schemes will support annual or multi-annual commitments, according to the needs identified in the CAP plans. Premia can be set as “compensation” payments (for the additional costs and income loss stemming from the practices concerned) or as payments going beyond compensation – provided that the relevant Green Box rules of the World Trade Organisation (WTO) are respected. EU countries will use scoring systems or other methods of their choice to ensure the effectiveness of eco-schemes;
- two-year “learning period”: during a two-year “learning period” (2023 and 2024) an EU country may spend less than 25% in case of a lower take-up by farmers than planned, provided that it makes up the majority of the shortfall by the end of 2027.
Rural development, the so-called “second pillar” of the CAP, will dedicate ("ring-fence") a higher share of its resources to interventions relating to climate and the environment:
- support for environment, climate and animal welfare: at least 35% of funds will be allocated to agri-environment management commitments, Natura2000 and Water Framework Directive payments, environmental and climate investments, and animal welfare. This compares to 30% of rural development funds that must be dedicated to environment and climate today;
- areas with natural constraints (ANCs): 50% of payments for areas with natural constraints (ANCs) will count towards this ring-fenced amount (compared to 100% today).
Higher green ambitions in some sector specific interventions
At least 15% of funding that EU countries devote to sectoral interventions in fruit and vegetables will have to be spent on types of action serving the CAP specific objectives on the environment and climate, compared to 10% in the current period. Moreover, the reform introduces several new types of intervention serving the same environmental and climate objectives; EU countries will have to dedicate at least 5% of financial allocations for the wine sector to meet these objectives.
The new CAP will incorporate climate tracking. To ensure that the contribution of the CAP to climate action is correctly measured and accounted for, the Commission will propose an improved methodology through a delegated regulation for application after 2025.
Making agriculture competitive and rewarding
The new CAP will strengthen the position of farmers and boost the competitiveness of the agri-food sector.
Strengthening the position of farmers
The new CAP further strengthens the position of farmers in the food supply chain. The changes to reinforce producer cooperation are in line with the Farm to Fork strategy:
- support to competitiveness through sector specific interventions: under CAP strategic plans, the support to producer organisations, following the fruit and vegetables model, will be extended to all agricultural sectors, other than wine and apiculture. All the sector specific support programmes currently covered under the common market organisation (CMO) will form part of the CAP strategic plans and will be governed by the new performance based approach of the new delivery model (including current national programmes on wine and apiculture);
- exceptions from competition law: under the reformed CMO regulation, some exceptions from competition law have been expanded, allowing farmers to work together and/or with other stakeholders in the food chain with a view to ensuring higher sustainability standards;
- supply management for PDO and PGI schemes: the new CMO will also extend the current supply regulation instrument for protected designations of origin (PDOs) and protected geographical indications (PGIs) to all sectors - so far limited to ham and cheese - providing a significant boost for EU farmers who produce PDO and PGI products.
The new CAP maintains the overall market orientation from the previous reforms, aligning supply from EU farms with demand in Europe and beyond:
- making the most of the opportunities offered by global markets: with the support of the new CAP strategic plans and the rules of the common market organisation (CMO), EU farms will continue to operate according to the market signals and will be well-equipped;
- new financial reserve: to cope with future crises, the reformed CAP will include a new financial reserve. The reserve amounts to at least €450 million every year and can be directed towards measures such as emergency buying and private storage aid.
The Council, the European Parliament and the Commission adopted a common statement that recognises “the need to engage proactively at the multilateral level in increasing the ambition on international environmental objectives when enforcing and improving international trade rules”.
In line with the European Commission Trade Policy Review Communication, they confirm through this statement, that “it is appropriate for the European Union, under certain circumstances as defined by WTO rules, to require that imported agricultural products comply with certain EU production requirements so as to ensure the effectiveness of the health, animal welfare and environmental standards that apply to agricultural products in the European Union and to contribute to the full delivery of the European Green Deal and Farm to Fork strategy communications”.
New rules for the wine sector
Specific rules have been agreed for the wine sector, including:
- vine planting authorisation scheme: prolongation of this scheme until 2045 with two mid-term reviews in 2028 and 2040;
- hybrid vine varieties: the authorisation to use hybrid vine varieties of "Vitis vinifera" and other species of "Vitis" for the production of quality wines covered by PDOs, a big step towards more resilient vine varieties;
- de-alcoholised wines and partially de-alcoholised wine products: the authorisation to market de-alcoholised wines and to protect partially de-alcoholised wine products as PDOs and PGIs, affording the EU wine sector to benefit from promising new opportunities;
- nutrition and ingredients labelling: the implementation of new rules on nutrition and ingredients labelling for wines and aromatised wine products to improve consumer information, requiring wine producers to indicate the energy value of their products, and ensuring full nutrition and ingredients information is provided on the label or by electronic means.
New rules for geographical indications
The new CAP establishes further rules regarding geographical indications (GIs) in line with some of the steps taken to strengthen the position of farmers and the new rules for the wine sector:
- PDO and PGI supply regulation: the PDO and PGI supply regulation will be extended to all sectors;
- product specifications: sustainable processing criteria can be included in the product specification on a voluntary basis;
- further safeguards for PDO and PGI products: PDOs and PGIs will be protected expressly on the internet and against goods in transit within the EU. The protection of PDOs and PGIs will also be extended to the use of the names of ingredients;
- aromotised wines GI: this scheme will be merged with the agricultural products and foodstuffs scheme;
- application of new rules for the wine sector: PDO and PGI wine producers will be permitted to use hybrids;
- consistency between sectors: procedures will be simplified, streamlined and made consistent between sectors.