Common Agricultural Policy - Performance

The EAGF preserves a level playing field in the single market for agricultural products and enables a stronger common position in trade negotiations. Moreover, it responds more effectively and efficiently to cross-border challenges such as underpinning food security, mitigating and adapting to climate change, caring for natural resources such as soil and water, restoring biodiversity and strengthening economic and social cohesion. The EAGF supports balanced territorial development and encourages smart, sustainable and inclusive growth: analysis shows that less or no EAGF support would result in a higher concentration of agricultural production, meaning that small farmers and farmers in less profitable areas would go out of business and larger farms would become even bigger and more intensive. This would have a negative effect on jobs in rural areas (especially where job creation is difficult) and on the environment and the climate due to intensification.

The EAFRD finances rural development programmes that make a vital contribution to the economic, social and environmental performance of the EU in rural areas. Rural development programmes take into account national and regional specificities and ensure a consistent, coherent and results-oriented approach to a number of cross-border issues. The performance and results of the EAFRD are enhanced by the European Network for Rural Development, which allows for the exchange of experiences and best practices between national and regional authorities.

The CAP aims to support a resilient, sustainable and competitive agricultural sector, to ensure production of high-quality, safe and affordable food for EU citizens and a strong socioeconomic fabric in rural areas.

The CAP has three general objectives:

1. viable food production, with a focus on agricultural income, agricultural productivity and price stability;
2. sustainable management of natural resources and climate action, with a focus on greenhouse gas emissions, biodiversity, soil and water;
3. balanced territorial development, with a focus on rural employment, growth and poverty in rural areas.

The EAFRD part of the CAP has six key objectives:

1. fostering knowledge transfer and innovation in agriculture, forestry and rural areas;
2. enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and sustainable management of forests;
3. promoting food chain organisation, including processing and marketing of agricultural products, animal welfare and risk management in agriculture;
4. restoring, preserving and enhancing ecosystems related to agriculture and forestry;
5. promoting resource efficiency and supporting the shift towards a low-carbon and climate-resilient economy in the agriculture, food and forestry sectors;
6. promoting social inclusion, poverty reduction and economic development in rural areas.

The EAGF part of the CAP has the following objectives:

1. to improve the competitiveness of the agricultural sector and enhance its value share in the food chain;
2. to foster market stability, to better reflect consumer expectations and to sustain the stability of farmers' income by providing direct income support;
3. to promote more market-oriented agriculture by ensuring a significant level of decoupled income support;
4. to contribute to the enhancement of the environmental performance of the common agricultural policy;
5. to promote local agricultural production and to ensure a fair level of prices for commodities for direct consumption and for processing by local industries in the outermost regions of the EU and on the Aegean islands;
6. to provide the Commission with reasonable assurances that Member States have put in place management and control systems in conformity with EU rules;
7. to inform and increase awareness of the common agricultural policy by maintaining an effective and regular dialogue with stakeholders, civil society and specific target audiences;
8. to facilitate decision-making on strategic choices for the common agricultural policy and to support other activities of DG Agriculture and Rural Development by means of economic and policy analyses and studies.

The EAFRD pursues its objectives in the following ways.

• Financing the EU's contribution to rural development programmes. These programmes contribute to smart, sustainable and inclusive growth in the EU by supporting farms, the food and forestry sectors and other entities operating in rural areas – such as non-agricultural businesses, non-governmental organisations and local authorities – by fostering knowledge transfer and innovation, investing in green technologies, skills and training, promoting entrepreneurship and networking, supporting the preservation of natural resources, promoting environmentally sustainable land management, enhancing ecosystems and maintaining landscapes attractive for tourism.
• Supporting the shift towards a low carbon and a climate-resilient economy. EAFRD support helps farmers and rural businesses to reduce greenhouse gas and ammonia emissions, adapt to climate change consequences and manage renewable resources and waste, thus making a direct contribution to the energy union.
• Supporting other programmes. Examples include the digital single market (by supporting broadband infrastructure and various information and communications technology solutions in rural areas) and the European innovation partnership for agriculture (by supporting its interactive innovation projects). The EAFRD also contributes to the Europe 2020 objectives (e.g. by encouraging innovation and entrepreneurship, promoting inclusiveness and increasing the impact of EU-funded research on the economy).

The EAGF pursues its objectives by:

• Direct payments, which provide a basic protection of farm income against the particular shocks to which agriculture is exposed, such as price and weather. Direct payments are linked to standards concerning the environment, food safety, animal and plant health and animal welfare throughout the EU. Furthermore, through the 'greening' layer, direct payments reward farmers for additional environmental care related to crop diversity, permanent grassland and ecologically beneficial zones or landscape features.
• The common market organisation, which provides a framework of rules on issues such as market support measures, product standards, labelling and producer cooperation.

The implementation of the programme is in shared management. DG Agriculture and Rural Development is the lead for the Commission.

The impact assessment of the EAGF and EAFRD was carried out in April 2018. Please see https://europa.eu/!Rd79mr

The application of the current CAP regulations will continue through the end of 2022 within the budgetary framework of the 2021-2027 multiannual financial framework. The new CAP, which will be implemented from 2023 for the 2023-2027 period, has been designed to address the challenges identified for the 2021 2027 period. The central elements of the CAP will be the new performance-based delivery model, focusing on results rather than compliance and 28 national CAP strategic plans (one for each Member State except Belgium, where there is one for Wallonia and one for Flanders).

As regards the EAGF:

• Sector-specific support programmes, implementing the market expenditure, are operating at various points in their respective life cycle. For example, the wine national support programme follows a 5 year cycle, whereas the programmes for support to producer organisations in the fruit and vegetable sector are annual. As to the direct payments, Commission services have assisted Member States in preparing and implementing the direct payments; implementation of payments has thus gradually reached a high level.
• Between 2013 and 2019, the average EU factor income per worker increased by 15% in real terms, mainly due to major gains in labour productivity. The CAP as a whole has helped to support and stabilise farm income. Overall, since 2014, EU price volatility has been lower than price volatility on the international markets for all products. Direct payments and rural development support represent close to 50% of farmers' income in mountain areas and CAP funding helps to make farms viable in the most remote rural areas. Nevertheless, the high level of total income support in mountain areas does not fully compensate for the income gap with non-mountain areas.
• The CAP continued to make a significant contribution to food security by achieving productivity gains and resilience in trade markets. It also provided support to improve supply chain organisation. The EU accounted for 18% of global agri-food exports in 2019, despite some adverse external factors (including the Russian import ban on EU products) that weakened the competitive position of the EU's agricultural farm sector to some extent.
• The CAP provided an extensive level of 'baseline protection' for the environment via mandatory cross compliance and greening obligations, which together comprised more than 80% of the EU's agricultural land. It also provided for more targeted but voluntary commitments under rural development, such as agri-environment climate measures and organic farming. Support was decoupled from production and linked to compliance with standard environmental and climate practices and was therefore not an incentive to increase production intensity. Since CAP payments are conditional to respecting a basic set of environment-related rules, the CAP helps enforce the implementation of existing legislation relevant for the environment.
• The CAP has facilitated generational renewal by supporting the economic sustainability of jobs. While it mainly supports farming, evidence shows the significant spill-over effects on the wider rural economy, because it boosts local spending and provides employment. CAP support can be key to improve infrastructure, services and connectivity, especially in remote areas, and can also help slow the rate of depopulation and land abandonment in the EU. However, the CAP support is insufficient on its own to remove the main entry barriers to farming, namely limited access to land and capital and the (perceived) disadvantages of the working and living conditions of rural areas.

As regards the EAFRD:

• The implementation of the 2014-2022 rural development programmes continues at a satisfactory pace.. A number of initiatives were launched to improve efficiency and effectiveness of EAFRD expenditure and to ensure a smooth transition with the CAP strategic plans. Examples of these are the amendments to the basic act as a response to the COVID-19 crisis, reductions in the administrative burden, the sharing of best practices and experience between stakeholders and ex ante assessments of the rural development measures by Member States. However, measures in the form of investments take a longer time to be fully implemented compared to annual (or 'current') measures, which explains to a large extent the persistent gap vis-à-vis the targets.
• The uptake and achievement of results is not yet fully in place for the cross-cutting objective of transferring knowledge and fostering innovation in rural areas. This can partly be explained by the type of actions contributing towards the objective – as they need a lot of preparatory work with reportable results emerging only at a later stage – and by long administrative procedures in some Member States.
• For the objective of improving farm viability and competitiveness, the level of achievement of the targets continues to be satisfactory; investment support increases the economic performance and market participation of the supported farms and may also bring about environmental benefits.
• As to the objective of promoting food chain organisation, Member States report several achievements, such as better integration in the food supply chain and the introduction of quality schemes, increased quality of food production, promotion of local markets and short supply, increased participation of farms in risk prevention and management schemes and greater prevention of risks from flooding.
• The largest share of the fund is allocated to the objective of restoring, preserving and enhancing ecosystems. Here, reported achievements include an increased area of agricultural and forest land covered with management contracts to enhance biodiversity and landscape; restoring, preserving, and enhancing biodiversity; improvement of water quality and management; prevention of soil erosion and improvement of soil management; and preservation of genetic species in grasslands and livestock.
• For the objective of promoting resource efficiency and supporting the shift towards a low-carbon and climate-resilient economy, uptake was generally lower than planned. This was due to the nature of the interventions as investment projects can take some time to materialise. Implementation delays have been the subject to continuous dialogue with the Member States.
• In the objective of promoting social inclusion, poverty reduction and economic development in rural areas, several achievements related to small enterprises and jobs have been reported, such as diversification, creation and development of small enterprises and job creation and maintenance in rural areas. There has also been progress in development and access to services and local infrastructure in rural areas, participation in local development strategies, employment opportunities created via local development strategies, broadband expansion and better use of information and communications technology in rural areas. The indicator value for services/infrastructures is relatively low, partly due to the fact that many of these projects are large and may require several years to be implemented.

^{(*) % of target achieved by the end of 2020.}

^{(**) Latest results in 2021.}

^{(***) Latest results in 2019.}