There has been considerable speculation since publication of the Commission’s proposals for the MFF and for the CAP 2028-2034 in July for what they might mean for climate and environmental ambition in the next programming cycle. The Commission’s Vision for Agriculture and Food Communication had underlined that the call in von der Leyen’s Political Guidelines for “a better balance between incentives, investments and regulation” should be interpreted as giving greater flexibility to farmers and shifting from conditions to incentives. To achieve the same level of climate and environmental ambition through a voluntary approach only using incentives implies the need for significant additional resources. But the Commission’s MFF proposal implies a cut in CAP resources, leaving open the question whether the existing level of ambition for these objectives can even be maintained.
In this post, I examine the Commission proposals under three headings: where climate and environmental action fit within the hierarchy of CAP objectives, innovations in the design of relevant interventions that can impact on the ability to achieve ambitious targets; and the likely level of resources to be available to support such action. I refer to a recent IEEP report by David Baldock and Kaley Hart which examines whether the proposed funding framework provides the necessary mechanisms and sufficient scale of funding to support a transition towards a more sustainable and lower environmental impact agriculture, land use and agri-food sector in the EU. I can recommend this policy brief for those who would like a thorough and detailed review of the relevant proposals.
Where sits climate and the environment in CAP objectives?
NRP Fund objectives. The MFF as a whole, and the National and Regional Partnership (NRP) Plan in particular, take a performance budgeting approach where spending should be justified by reference to specific objectives. In the Commission proposal, the CAP objectives are established in the NRP Regulation and not in the separate CAP Regulation. The latter merely elaborates on specific elements of the various CAP interventions already defined in the NRP Regulation. But unlike in the current CAP Strategic Plans Regulation which presents a clear list of specific objectives for the CAP, its objectives in the Commission proposal are less structured and less well organised.
The NRP Fund Regulation (COM(2025) 565) sets out five specific objectives in Article 3 for the overall Fund, with in turn each objective further divided into several sub-objectives.
The five objectives are:
a) To support the Union’s sustainable prosperity across all regions;
b) To support the Union’s defence capabilities across all regions;
c) To strengthen social cohesion by supporting people and strengthening the Union’s societies and the Union’s social model;
d) To sustain the quality of life in the Union; and
e) To protect and strengthen fundamental rights, democracy, the rule of law and to uphold Union values.
These are obviously very high-level objectives which can be interpreted in many different ways.
Agricultural policy objectives. Agricultural policy is addressed under specific objective (d) to sustain the quality of life in the Union. There are five sub-objectives under this heading which all refer to agricultural or fisheries policy though this is not explicitly flagged. It is odd to have an objective for the Fund as a whole to sustain (not improve!) the quality of life in the Union which only addresses these two sectors. One could also conclude that making agriculture a quality of life issue, rather than including it as an element that can contribute to specific objective (a) the sustainable prosperity of the Union puts more emphasis on the role of agriculture in producing public goods rather than private goods such as food or biomass. The five sub-objectives under this heading are:
(i) supporting fairer and sufficient income for farmers and their long-term competitiveness, including the farmers’ position in the value chain;
(ii) contributing to long-term food security;
(iii) improving the attractiveness and living standards, including access to healthcare, in rural areas and fair working conditions and fostering generational renewal; improving farmers’ preparedness and ability to cope with crises and risks; enhancing the access to knowledge and innovation and accelerating the digital and green transition for a thriving agri-food sector;
(iv)… fisheries…
(v) enhancing sustainable agriculture and forestry management practices to promote resilient climate action, provision of multiple ecosystem services, supporting efficient water management, quality and resilience, the implementation of nature-based solutions, strengthening sustainable development, environmental protection, enhancing the conservation and restoration of biodiversity, soil and natural resources, and improving animal welfare.
We gain further insight by looking at the way these objectives are expressed in several recitals in the NPR Regulation:
(9) The Union budget should continue to support a CAP that is simpler and targeted that has the right balance between incentives, investment and regulation and ensures that farmers have a fair and sufficient income, attractive for young farmers. The Union budget should ensure the predictability necessary for a common policy that provides income support.
(18) Sustainable Union’s quality of life should be supported by ensuring fairer and sufficient income for farmers and their long-term competitiveness and contributing to long-term food security. The general objectives of the Fund should in respect to the CAP be defined at the Union level and implemented by the Member States through their plans. The measures should also improve the attractiveness and living standards in rural areas and fair working conditions and foster generational renewal; improve farmers’ preparedness and ability to cope with crises and risks, enhance the access to knowledge and innovation and accelerate the green and digital transition for a thriving agri-food sector … They should actively enhance climate action by promoting greenhouse gas emissions reduction, supporting mitigation efforts, and facilitating adaptation to climate change impacts. They should enhance climate action, ecosystem services provision, supporting efficient water management and resilience, strengthening sustainable development, environmental protection, enhancing the conservation and restauration of biodiversity and natural resources, including soil, and improving animal welfare. To recognise the positive climate impacts of farmers and to facilitate their access to voluntary market-based incentives, the Commission and the Member States continue to work on developing carbon removals methodology and estimating greenhouse gas emissions reductions achieved by the CAP.
As a final reference, we should note recital (7) in the proposed CAP Regulation:
(7) In line with the objective of achieving a better balance between incentives and requirements, Member States should target support through their NRP Plans towards CAP priorities, which are essential for the long-term sustainability of agriculture. The CAP post-2027 should accelerate the transition towards more sustainable production methods, contributing to climate-neutrality objective by 2050. The new CAP should offer better rewards for delivering more ambitious ecosystem services which go beyond the results achieved through mandatory requirements. The new CAP should strike a new balance between a farm stewardship with a set of mandatory requirements, and agri-environmental and climate actions which support commitments beneficial for the environment, climate and animal welfare and a transition towards more resilient production systems.
Reverting to specific objective (d) in the NRP Regulation, this is the new formulation of the CAP’s objectives that Member States will work with in terms of designing the CAP strategic plan chapter in the overall NRP Plans. With some imagination, one can identify the two sub-paragraphs (i) and (ii) with the first general objective in the current CAP Strategic Plans Regulation Article 5, sub-paragraph (v) with the second general objective, and sub-paragraph (iii) with the third general objective. For what it is worth, in word length alone the environmental and climate aspirations account for just under half the total.
While the proposed CAP Regulation no longer contains the CAP objectives, we should highlight Article 4 in that Regulation which obliges Member States to provide support to farmers and other CAP beneficiaries in at least six defined environmental and climate priority areas: (a) climate change adaptation and water resilience; (b) climate change mitigation including carbon removals and on-farm renewable energy production, including biogas production; (c) soil health; (d) preservation of biodiversity, such as conservation of habitats or species, landscape features, reduction of use of pesticides; (e) development of organic farming; (f) animal health and welfare. Furthermore, Member States with areas affected by water pollution due to nitrate surplus shall provide support to farmers for extensification of livestock systems or for diversification to other agricultural activities.
We should also note the proposed new steering mechanism for the CAP where the Commission will adopt CAP national recommendations providing guidance to each Member State for the implementation of the CAP-relevant objectives set out above in paragraphs (i) through (v) in advance of the submission of the NRP Plans by the Member States. This would formalise the procedure used in preparation of the CAP Strategic Plans in 2020. In its Communication on the Farm to Fork Strategy in May 2020, the Commission committed to making recommendations to each Member State on the nine specific objectives of the CAP before the formal submission of the draft Plans. This was in an effort to try to align the CAP Plans with the Green Deal targets and those stemming from the Farm to Fork and Biodiversity Strategies. This procedure would now be given a legal basis in the proposed CAP Regulation.
Article 2 of the proposed CAP Regulation which establishes this steering mechanism sets out five criteria on which the Commission will base its national recommendations. One of the five criteria ensures that these recommendations will also reflect environmental and climate issues:
(a) contribution to fair and sufficient income for farmers and their long-term competitiveness, including the farmers’ position in the value chain;
(b) improvement of attractiveness of the profession and foster generational renewal;
(c) enhancing climate action, ecosystem services provision, circular solutions, the conservation of biodiversity and natural resources, sustainable farming and improve animal welfare;
(d) improving resilience, farmers’ preparedness and ability to cope with crises and risks;
(e) enhancing the access to knowledge and accelerate innovation and the digital transition for a thriving agri-food sector.
We conclude that, in spite of the rather clumsy presentation in places, the revised CAP objectives give ample opportunity to Member States to use CAP funds to address the environmental and climate challenges that farmers face and to support a transition to more sustainable agricultural practices. It is clear, and inevitable, that there will be other demands on these funds. Thus, an important question is how Member States will allocate their CAP funds across these various priorities.
Design of environmental and climate-related instruments
The proposed CAP Regulation would introduce a significant change in the green architecture of the CAP. Instead of the current three-level hierarchy of compulsory conditionality for all in receipt of direct payments, voluntary annual eco-schemes, and voluntary agri-environment-climate measures (AECMs), the proposed architecture would consist of just two levels, compulsory farm stewardship for all payment beneficiaries, and voluntary agri-environment climate actions (AECAs). Essentially, farm stewardship would replace enhanced conditionality, while eco-schemes and voluntary AECMs would be merged into AECAs.
Farm stewardship. The farm stewardship system is set out in Article 3 of the proposed CAP Regulation. It has three elements that effectively collapse to two: statutory management requirements (SMRs) listed in an Annex, protective practices to be defined by Member States to achieve three specified objectives, and a social conditionality system that comprises additional SMRs set out in the Annex. The protective practices are analogous to the Good Agricultural and Environmental Conditions in the current CAP, while social conditionality which is a stand-alone obligation in the current CAP would now be integrated into farm stewardship.
No changes are proposed for the 11 SMRs in the current CAP. However, the GAEC standards are replaced by a more limited set of protective practices. The GAEC standards had already been weakened by changes introduced in 2024 and the additional flexibilities proposed under the May 2025 simplification package. Protective practices should target the following three objectives:
(a) protection of carbon-rich soils, landscape features and permanent grasslands on agricultural area;
(b) protection of soil against erosion, preservation of the soil potential, maintenance of soil organic matter, including through crop rotation or diversification, as well as protection against burning of stubble on arable land;
(c) protection of water courses and ground water against pollution and runoff.
These are elaborated with specific objectives in a separate Annex. As Baldock and Hart (2025) note, the proposals “weaken the requirements further by making the wording of the practices more generic and giving Member States far more discretion on which practices to put in place and the areas to which they would apply.” They note that the current ban on converting or ploughing permanent grassland in Natura 2000 sites would be replaced by an objective only to ‘protect’ these environmentally sensitive permanent grasslands, while there would no longer be a requirement to maintain a certain ratio of permanent grassland to arable land. They also question the provision that compliance with farm stewardship automatically guarantees compliance with the ‘do no significant harm’ principle (for background on this, see this earlier post), pointing out that the protective practices are not in themselves sufficient to ensure no environmental harm as a result of some of the support measures underpinned by farm stewardship conditions.
Conditionality with respect to SMRs and GAECs in the current CAP provide for an administrative penalty if CAP payment beneficiaries do not comply with Union law or the GAEC standards. The obligation on Member States to provide for a system of penalties for farm stewardship is set out in Article 62 of the NRP Regulation. This is a much simplified and slimmed down version of the controls set out in Articles 83-89 of the Horizontal Regulation (EU) 2021/2116 governing the current CAP. The proposed Regulation carries over the same levels of administrative penalty (normally, a deduction of 3% in the payment a farmer receives which should be increased to at least 15% in the case of intentional non-compliance). These amounts can now be reduced if the beneficiary has already paid a penalty under national legislation implementing the SMRs (which seems to undermine the whole point of an additional administrative penalty). A significant change is that controls should not apply in future to holdings not exceeding 10 hectares in size. In general, the much less prescriptive paragraph gives Member States greater freedom to design their control systems (e.g., level of checks, establishment and coverage of control sample) than is currently the case.
Agri-environment and climate actions. As noted, the relevant Article 10 in the proposed CAP Regulation that covers incentives for voluntary actions in favour of the environment, climate, animal welfare, and sustainable forestry merges both eco-schemes and the current AECMs, in that the commitments can be both annual and multi-annual. Again, the Article is much less prescriptive than the corresponding Articles in the CAP Strategic Plans Regulation but otherwise introduces only limited changes.
One is that, in addition to voluntary management commitments, the proposal opens the possibility to provide incentives for a “voluntary transition towards resilient production systems carried out by farmers at the level of the holding or for part of a holding, including conversion to organic farming and extensification of livestock production systems.” This support would require a transition action plan drawn up by the farmer and approved by the Member State. Member States would have to describe in their NRP Plans the production systems that they deem beneficial for the climate and environment. This is a very welcome addition as it encourages Member States to move away from support for individual practices (e.g. planting of cover crops) to supporting farmers who want to embark on a more holistic transition to sustainable agriculture without necessarily wishing to convert to organic farming. However, as noted by Baldock and Hart (2025), the requirement in the current Regulation that farmers who embark on these practices should have access to training and expertise has been removed.
There is also an obligation (“shall”) on Member States to provide support to extensive livestock systems under both forms of action, that is, management commitments and transition plans.
The other change is that there is no longer a requirement in the proposed Regulation that payments should be made on the basis of the additional costs incurred and income foregone resulting from the commitments made, taking into account the targets set. The NPR Regulation, however, requires that expenditure on AECAs should be designed so they can be notified under the WTO Agreement on Agriculture Annex 2 (Green Box) criteria and identifies Paragraphs 5, 6 and 12 for AECAs (under the current CAP, eco-scheme expenditure is notified under either Paragraphs 5 or 6 but AECMs must be notified under Paragraph 12 of the Agriculture Agreement’s Annex 2, which is the paragraph that limits payments to costs incurred and income foregone). This change could allow an increase in payment rates under AECAs, although the constraints imposed by this principle on payment rates are, in my view, greatly exaggerated. There is also a further relaxation in that it is specified that the use of Paragraphs 5, 6 and 12 for AECAs is purely indicative, and this intervention can comply with a different paragraph in the WTO Agreement on Agriculture Annex 2 if that is specified and explained in the NRP Plan.
Environmental and climate ambition. Finally, there is no Article in the proposed CAP Regulation that corresponds to Article 105 in the CAP Strategic Plans Regulation that requires Member States to make a greater contribution to environmental and climate objectives than made in the previous CAP programming cycle. The requirement for a greater contribution was not explicitly tied to increased budgetary resources, but should be demonstrated through stronger environmental outcomes.
One can be sceptical whether this Article had a tangible impact. The implementation of this requirement was criticised by the European Court of Auditors (ECA) in its Special Report 20/2024, which found that many Strategic Plans did not clearly demonstrate how they would achieve a greater contribution compared to the previous period. Commission observations to Member States on their draft Plans highlighting deficiencies were only partially followed by amendments to the Plans. Nonetheless, the requirement gave the Commission some leverage to push for higher ambition and this would no longer be the case in the proposed Regulation.
Strong signals that funding for agri-environment and climate actions (AECAs) will be reduced
We noted previously that an important question is how Member States will allocate their CAP funds across various objectives. It is both desirable and possible to use the NRP and CAP Regulations to guide Member State priorities. In this section, we examine what the likely outcome for environmental and climate spending might be under the Commission proposals. I am not optimistic about the level of future funding for AECAs for several reasons.
Decline in overall amount of CAP spending also in nominal terms. We do not yet know how much of the NRP Fund will be allocated to the CAP, as this will depend on Member State decisions when drawing up their NRP Plans. A minimum sum of €296 billion has been ring-fenced in the Commission proposal for ‘CAP income support’ interventions and fisheries support. Member States could add to this by allocating additional resources from their NRP Fund ceiling. But this would imply even less funding would be available for the priorities supported by the other shared management funds, and in addition the new priority for defence and security spending. I expect few countries will be able to add to the minimum ring-fenced amount for CAP income support interventions although I expect some will try (see my earlier post for these arguments in greater detail).
We also need to keep in mind that the Commission’s CAP budget proposal is made within the context of an overall MFF proposal that would represent a very significant increase in EU budget spending (from €1.3 trillion in current prices in 2021-2027 to €2.0 billion in current prices 2028-2024). There seems to be little appetite among Member States to fund such an increase. If the overall size of the MFF is reduced in the coming negotiations, there is every likelihood so will the minimum size of the CAP ring-fenced amount.
Pressure within the CAP budget to spend on other CAP interventions. There will also be increased competition for spending within whatever CAP budget is finally agreed. The main competition will come from area-based payments for income support, where the proposed Regulation introduces both a minimum ring-fencing (at least EUR130 per hectare) as well as a maximum ceiling (EUR240 per hectare). In the CAP Strategic Plans 2023-2027, 44% of the EU CAP budget was allocated to area-based income support (adding together the basic payment BISS and the complementary redistributive payment CRISS).
We can quickly see what the Commission proposal implies given there were 146.6 million ha of potentially eligible area in 2022. With the lower minimum amount, area-based payments (before degressivity and capping, see below) would lay claim to €133 billion of the €296 billion ring-fenced amount for CAP income support over seven years, or 45% (the share of total CAP spending would be slightly lower as Member States are obliged to fund some CAP interventions using non-ringfenced resources). With the maximum ceiling amount, area-based payments would claim €246 billion of the ring-fenced amount, or a whopping 83% of the minimum total set aside for CAP income support. While degressivity and capping would reduce these percentages somewhat (see below), the proposal clearly allows Member States to prioritise area-based income support payments over all other CAP interventions.
The proposed CAP Regulation also increases the number of mandatory interventions that Member States must include in the agriculture chapter of their NRP Plans. This includes not only AECAs themselves and support for young farmers, as well as area-based payments, which are also mandatory in the current CAP, but also for the first time Member States would be required to finance coupled payments, payments to farmers in areas with natural constraints, investment support, and support for participation in risk management tools (where the relevant language in the proposed Regulation is changed to ‘shall support’ from ‘may provide support’). Furthermore, the ceiling on the scope to finance coupled payments is likely increased in the Commission proposal and we know this is a particularly popular intervention in many Member States. While there is no minimum ring-fencing for spending on these mandatory interventions, these requirements will further reduce the flexibility Member States might have to allocate more funding to AECAs.
Co-financing requirements for AECAs are less favourable. In the current CAP, eco-schemes are funded under Pillar 1 without the need for co-financing while the national contribution for AECMs can be as low as 20%. In the Commission’s proposal, eco-schemes and AECMs are merged into AECAs and there is a requirement that the minimum national contribution should be at least 30%. This will make prioritising AECAs relatively less attractive when Member States draw up their CAP plans.
No ring-fencing for AECAs. These pressures to diminish the share of CAP spending on AECAs could be prevented if there was a minimum ring-fencing within the CAP budget for these interventions. In the current CAP, at least 25% of a country’s Pillar 1 ceiling should be allocated to eco-schemes (with some exemptions), while at least 35% of a country’s Pillar 2 ceilings should be allocated to environment and climate-related interventions including animal welfare. This includes expenditure on AECMs, area-specific disadvantages, 50% of spending for natural and other area-specific constraints, plus spending on investments linked to these objectives. The Commission has estimated that 32% of the total CAP budget (around €98 billion over the five years 2023-2027) is allocated to voluntary actions advancing environmental, climate and animal welfare objectives in the current CAP Strategic Plans. The absence of ring-fencing, given the pressures and temptations to direct spending to other CAP interventions, makes it more likely that the relative priority for AECAs will not even be maintained.
Still, there are some offsetting pressures which could give more space for spending on AECAs and even require more spending.
Degressivity and capping. Degressivity and capping could potentially release some funds from area-based income support payments for other CAP interventions, although there is no requirement that any ‘savings’ obtained in this manner should be used for AECAs or indeed any other specific intervention. In contrast, proceeds of capping in the current CAP should be used primarily to increase the CRISS payment if implemented by a Member State, or other decoupled payments, but could also be transferred to Pillar 2 interventions without requiring co-financing.
In a previous post, I discussed the likely amount of resources that might be released by degressivity and capping. Two findings stand out. First, the average impact for all Member States will be limited, possibly somewhere between 10 and 20% of the amount allocated to area-based payments, depending on whether the average payment is closer to €130 per ha or to €240 per ha. Second, there will be very different impacts from country to country depending on the structure of their holdings. For those countries with large farm structures, like Czechia and Romania, this instrument could release significant funding. But for countries like Poland and Ireland, hardly anything.
Approval criteria for the NRP Plan. Another potential lever to ensure higher AECA spending is the requirement to obtain Commission and eventually Council approval for the NRP Plan. We saw in the previous section dealing with the CAP’s objectives that among the five criteria the Commission will use when communicating its national guidance recommendations for the CAP chapter of the NRP Plans to Member States will be environmental and climate issues. There are additional obligations in Article 22 of the proposed NRP Regulation which sets out requirements for the NRP Plan regarding the CAP chapter. These include to “(g) concentrate resources on: (i) supporting generational renewal in the agricultural sector…, to effectively contribute to …(ii) improving farm resilience and management of risks at farm level and supporting the digital and data-driven transition of agriculture and rural areas to enhance their competitiveness, sustainability and resilience”; and as well to effectively contribute to “(iii) the environmental and climate priority areas set out in Article 4 of the proposed CAP Regulation.” Recall that this Article requires that Member States provide support (“shall”) for the six priority areas specified.
When carrying out its assessment of the submitted Plans, the Commission is obliged to ensure that the Plans comply with all the requirements laid down in the proposed NRP Regulation, in particular in Article 22 (Article 23). The Commission can request the inclusion of additional measures or the modification of proposed measures if it thinks justified. If, in the view of the Commission, the submitted Plan still does not comply with the Regulation’s requirements, it shall communicate a duly justified reasoning to the Member State. If no action is taken, the Commission should then include an identification of these deficiencies in its proposal for a Council implementing decision. If the Council decides to uphold the Commission’s position in its implementing decision, payment applications for the specific measures affected by deficiencies identified in the implementing decision can be submitted by the Member State concerned, but the Commission shall not make the corresponding payments until the deficiencies have been remedied.
It is not clear to me how this mechanism would work if, for example, the Commission were to conclude that the Plan submitted by a Member State did not give adequate funding to the environmental and climate priorities identified in Article 4 of the proposed CAP Regulation. A Member State might allocate some funding to some of these objectives, but the Commission might argue that it should allocate more. If this were identified as a deficiency, would it make sense for the Commission to withhold the reimbursement of payments made by a Member State to farmers who have implemented relevant management practices, simply because it felt these amounts should have been higher? Given that a Member State will always claim that its submitted Plan represents the outcome of a partnership process within the country, I remain sceptical that the Commission has real leverage in the approval process to force a Member State to adjust its spending priorities where there is no clear legal basis.
The need to meet EU and domestic regulatory targets. We should recognise that Member States may have some internal incentives to use CAP funding to support specific environmental and climate actions by farmers to meet States’ existing obligations under EU and possibly domestic legislation which can sometimes be more far-reaching. While the current Commission has made clear it is reluctant to introduce additional regulatory measures affecting farmers, Member States have legal obligations under existing laws that continue. Relevant examples include the Water Framework Directive (which sets targets for water quality), the Nature Restoration Law (which sets targets for the restoration of agricultural ecosystems), the Effort Sharing Regulation (which sets targets for the reduction of greenhouse gas emissions from covered sectors including agriculture), and the LULUCF Regulation (which sets targets for the carbon sink in forests and agricultural soils). Failure to reach these targets can, in some cases, lead to the imposition of lump sum penalties and daily fines, or in other cases (such as the two climate laws) can require the purchase of allowances from other countries to ensure compliance. To avoid these penalties, Member States can have an incentive to use CAP funds to encourage actions that can help to reach these targets.
Climate mainstreaming. Another potential factor that could help to push the AECA share upwards is the climate mainstreaming target that 43% of NRP Fund expenditure should be linked to combined climate and environmental goals using the EU coefficients approach (I discuss this horizontal principle in this post). Let us leave aside for the moment whether these EU coefficients are realistic or accurate. The CAP alone will not have any difficulty in reaching this target but the target applies to the NRP Fund as a whole. If cohesion and social spending has greater difficulty in demonstrating a link to climate and environmental objectives, this could create a demand to fund AECA’s which count 100% towards the overall 43% target. Whether this will be a realistic lever or not is difficult to say at this stage.
Some teeth is given to this mainstreaming target in Article 22(r) dealing with the requirements for NRP Plans in the proposed NRP Regulation. This allows the Commission to request Member States to contribute a lower or higher minimum percentage of the total allocation of the plan for climate and environmental objectives. Indeed, the specific percentage shall be established by the Commission in the context of the approval of the NRP Plan. The grounds for determining the percentage will take account of the Commission’s assessment of the Member State’s progress and projected trajectory towards achieving their targets under the Effort Sharing Regulation (EU) 2018/842 and their targets under the Nature Restoration Regulation (EU) 2024/1991, in accordance with their Nature Restoration Plans. As agricultural emissions will take up a larger share of Effort Sharing Regulation emissions in future, and land management initiatives are critical if Member States are to reach their nature restoration targets, this requirement could indirectly oblige Member State to increase their spending on AECAs.
Despite these offsetting pressures, I maintain my opening view that we will most likely observe a reduction both in absolute and also relative EU spending on agri-environment and climate actions under the Commission’s CAP proposal. This would run counter to the expressed ambition to achieve additional progress towards enhancing the environment, conserving biodiversity and protecting natural resources through voluntary measures alone.
Conclusions
This post has reviewed the contribution that the new CAP now located within the proposed NRP Fund would make to addressing the environmental and climate challenges that face agriculture and to which certain types of agricultural production significantly contribute. We recall that the CAP is a subsidy policy that provides support for certain practices. The regulatory environment which sets the crucial targets and establishes Member State (and also farmer) obligations determines the all-important context in which the CAP operates. The current Commission in its Political Guidelines has indicated that it does not intend to further tighten regulatory constraints on farmers, but intends instead to incentivise the practice changes needed to improve environmental outcomes. Unfortunately, the proposal put forward is wanting in this respect, and should be significantly amended by the co-legislature to achieve this objective.
Environmental and climate action is prominently identified in the objectives for the future CAP. As is the case with the current CAP, there is scope in the proposed Regulations for Member States to support farmers in pursuing ambitious efforts to improve environmental and climate outcomes. A feature of performance-based budgeting is the need to follow up on outcomes through a system of indicators. I have not covered this aspect in this post.
The proposed Regulations are much less prescriptive than the current CAP and give Member States considerable flexibility to design effective environmental and climate interventions. Noteworthy in this respect is the new possibility to design transition action plans to support farmers wishing to more towards more sustainable production systems. There will be criticism that farm stewardship makes fewer demands on farmers than the GAECs they replace, although it will not be possible to make a full assessment until we see how Member States define ‘protective practices’ in their NRP Plans.
The GAEC standards agreed in the 2021 CAP reform have already been hollowed out by the removal of GAEC 8 (the obligation to devote a share of their arable land above a certain size to non-productive areas and features, see this post for further discussion) and the weakening of other GAECs in 2024 (see Pieter Zwaan’s post on how several Member States made use of the exemptions made available at that time). Further relaxations have been proposed by the Commission in its Simplification Package in May 2025 that is currently being discussed in the co-legislatures. Taking these changes into account, farm stewardship arguably codifies what will be the status quo at the end of this CAP programming period.
It can still be argued that there should be stronger obligations attached to the receipt of direct payments. But conditionality at present and farm stewardship in the future only have teeth because a significant share of the CAP budget is allocated to area-based income support. To the extent that the value of this support per hectare diminishes, so does the incentive for farmers to apply for direct payment support and to be subject to these constraints. NGOs and others who call for the elimination of area-based income support should recognise they are effectively calling for the elimination of conditionality and farm stewardship. Under a system where CAP payments are exclusively directed to paying for public goods, and in the absence of any change in the regulatory baseline, farmers would need to be compensated for undertaking the practices now covered by the various GAECs. This is the position the Commission took when it abolished GAEC 8. On this aspect, environmental NGOs and the Commission have more in common than might appear at first sight.
Ultimately, in the absence of regulatory changes, the success of environmental and climate action will come down to the resources made available to support such action (on this topic, readers may be interested in my article in New Medit discussing the balance between regulation and subsidies in driving the green transition in agriculture). But maintaining even the existing funding for environmental and climate action in the next CAP seems highly unlikely. Taking the Commission’s estimate that €98 billion has been allocated for this purpose over five years in the CAP Strategic Plans would imply an allocation of €137 billion over the following seven years even to hold expenditure constant in nominal terms.
While Member States have the possibility to make this allocation under the proposed Regulations, the likelihood of this happening depends on the way these Regulations guide and direct Member States in making their allocations. Here, the incentives go in the wrong direction. Minimum ring-fencing is introduced for area-based income support with a very generous maximum ceiling, the ceiling for coupled payments is also relaxed, there is no minimum ring-fencing for AECAs and other environmental actions as under the current CAP, and the increase in national contribution rates for AECAs will make them less attractive.
The premise in the Vision that a better balance between regulations, investments and incentives implies the need to increase support for voluntary actions does not seem to hold.
O artigo foi publicado originalmente em CAP Reform.