How big will the CAP budget be in the next MFF?

The answer to this question is of course that we cannot know for certain at this stage. Under the Commission proposal the CAP will be merged into the proposed National and Regional Partnership Fund (NRPF) along with all other shared management funds where currently Member States receive pre-allocated amounts. Under the new arrangement, there would be only one pre-allocated envelope for Member States. There is a minimum ring-fenced amount for what is now referred to as CAP income support interventions (plus some fisheries support) of €295.7 billion. But the final amount allocated to CAP interventions will depend on how Member States allocate their NRPF resources in their NRP Plans.

It is no surprise that the initial response from farm organisations and stakeholder groups to the Commission’s CAP proposal focused on the budget allocation, although how the money is spent is at least equally important. I also did this in my first post following publication of the Commission’s MFF and CAP proposals (see “The Commission’s CAP budget proposal in the next CAP”). In that post, like most other observers in their immediate reactions, I focused on the minimum ring-fenced amount for CAP income support interventions and concluded there would be a reduction in CAP support even in nominal terms.

With the advantage of some more time for reflection, I would now argue that this is too pessimistic a conclusion (looked at from the perspective of those seeking to maintain support for farmers). Based on the Commission’s proposal, there is a good chance that the level of CAP support would be maintained in nominal terms. If this were to occur, it would follow the precedent of the current CAP where also the CAP budget was maintained in nominal terms compared to its predecessor.

I would still argue that the probability is there will be a reduction in CAP support, but not because of the Commission proposal, but because Member States will baulk at financing the sizeable increase in the MFF that the Commission has proposed. Because perceptions of the size of the budget will influence the debate on the Commission’s CAP proposal, it is important to emphasise this upside in the Commission proposal.

The potential for CAP spending in the MFF proposal

Let us start by spelling out the pessimistic outcome by examining the absolute minimum spending on the CAP in the Commission proposal. In this post, we are only concerned with EU spending. Additional national spending, either through national contributions (co-financing) to finance CAP interventions or through additional national financing is not considered here as the likely amounts are even more uncertain. The minimum amount of spending on the CAP is made up of three elements:

• The ring-fenced amount for CAP income support interventions as defined in the NPR Regulation Article 35(1) paragraph 1 amounting to €295.7 billion. For the truly committed, these cover CAP interventions (a) to (k) and (r) and paragraph 10 (which refers to reimbursements for direct payments paid in claim year 2027 plus any carryover of rural development commitments from the current CAP) and for interventions listed in article 35 paragraph 11 (fisheries);
• Amounts allocated to the other CAP interventions (l) LEADER (m) support for knowledge sharing and innovation (n) territorial and local cooperation initiatives (o) interventions in outermost regions (p) interventions in smaller Aegean islands and (q) the EU School Scheme. These are all mandatory elements for Member States but must be funded from the non-ringfenced elements of the NRP Fund. Thus, this expenditure will be additional to the ringfenced amount for the CAP. It should be added to the latter to make a like-for-like comparison with current CAP spending. We can derive a minimum estimate for this expenditure by assuming the Member States will choose to maintain the same relative share of CAP spending on these interventions as in the current CAP. Assuming that around 8% of the current CAP budget is allocated to these interventions, this would add a further €23.7 billion to the minimum CAP budget.
• Finally, we should add the projected expenditure allocated to the Unity Safety Net in the EU Facility that will substitute for the agricultural crisis reserve. This amounts to €6.3 billion.

Thus, our estimate for the minimum possible spending on CAP interventions in the Commission proposal is €325.7 billion. This would be a significant reduction compared to the amount set aside for the CAP in the current MFF of €387.8 billion, or 16% in nominal terms. It assumes Member States would not allocate more than the minimum amount from their NRP Fund ceilings to the CAP.

However, we can take another and more plausible outcome of how Member States might allocate their NRPF ceilings. This scenario assumes that Member States would allocate the same proportion of the General Allocation within the NRP Fund to the CAP as they receive for the CAP within the total of their pre-allocated shared management funds at present. And because this General Allocation is slightly higher than the nominal total of the pre-allocated funds which it replaces, so too would be the CAP budget on this assumption. (For those unsure about how the NRP Fund is distributed between its components and what exactly is the General Allocation, I give a short primer in the technical note at the end of this post).

This scenario is shown visually in Figure 1. The figure shows that the Commission proposal represents a significant increase in MFF spending both in absolute terms and as a share of EU Gross National Income, GNI (I discuss these figures in greater detail later in this post). It also emphasises that all the additional spending will go to priorities outside the traditional shared management funds. The main beneficiary is the European Competitiveness Fund which will be managed by the Commission through direct and indirect management.  A share is also needed to pay back the borrowing for the NGEU. However, the total available for all shared management funds remains steady in nominal terms.

The amount shown for the CAP expenditure in Figure 1 assumes that Member States will maintain CAP spending at the same share of the NRF Fund General Allocation as currently for all shared management funds. This is a plausible outcome, although there are three caveats.

• In addition to the traditional priorities for the shared management funds, the NRP Fund General Allocation will also fund a new priority of defence and security. This will squeeze resources for the traditional priorities.
• Member States will have the option to transfer resources from the NRP Fund to the European Competitiveness Fund so its priorities may also compete with the traditional priorities of the shared management funds.
• In any event, the decision on how to allocate NRP Funds across priorities within a Member State will be made at government level. Agriculture ministries will no longer have a pre-allocated pot but will have to negotiate and argue their case at government level with other ministries and potential recipients of these funds. Although farm unions and stakeholders have criticised the loss of a stand-alone CAP funding instrument, I expect that in many Member States, given the emerging political complexion of national governments, support for farmers will be given a high priority. We could end up with an even higher share of the Fund allocated to CAP interventions than at present.

The size of the MFF

In my view, the biggest threat to the volume of EU resources available to finance the CAP in the next MFF is not the merging of the funds but rather the scale of the MFF increase proposed by the Commission. This can be measured both in absolute terms and as a share of EU GNI. My view that the MFF proposal is a very ambitious one in financial terms is at odds with a recent paper evaluating the proposal by the Hertie School Jacques Delors Centre (Hansum, Lindner, Redeker and Rubio, 2025). It describes the Commission proposal as “a very modest bump in volume” and “as [a] miniscule increase in size”. The paper is well worth reading and it is worth disentangling some of the reasons for the differing perspectives.

One measure of the MFF ambition is to look at its share in EU GNI. There can be no disagreement that the EU budget is very small in relation to overall EU GNI. The Commission used the slide shown as Figure 2 when presenting its MFF proposal. This suggests a steady increase from 1.05% of EU GNI in the earlier MFFs to 1.13% in the current MFF to 1.26% in the proposed MFF (or just 1.15% if NGEU repayments are excluded). This is a reassuring presentation for the onlooker.

The Commission points out that the agreement concluding the 2021-2027 MFF (excluding NGEU spending) represented a commitment to contribute 1.13% of EU GNI to the EU budget at the time of the agreement over the lifetime of the MFF. Like the Hertie School Jacques Delors Centre paper, I can only find evidence for a GNI share of 1.12% in the first Technical Adjustment of the MFF but let us leave this disagreement to one side. Because for many programmes amounts are held constant in nominal terms over the programming period, the EU GNI share tends to be higher at the beginning of a programming period and to decline over the course of the period. The latest technical adjustment of the MFF (Commission, 2025) shows that, in practice, MFF commitments are expected only to amount to 1.01% of EU GNI (which is the share shown in Figure 1).

The reason for this is that MFF GNI shares are based on forecasts of nominal GNI growth over the programming period. While MFF expenditure amounts are increased by the standard 2% deflator each year, the actual inflation rate in the current period has been higher. As a result, in each annual technical adjustment of the MFF the calculated share of EU GNI has fallen. Although Member States may have agreed to commit 1.13% of EU GNI to the EU budget, in practice they are only contributing 1.01%. For this reason, the Commission proposal to increase this percentage to 1.26% would represent a significantly increased transfer from Member States (whether through new own resources or Member State contributions) compared to what they actually pay at the moment.

The other way to assess the MFF proposal is to look at the absolute numbers. Here, the Hertie School Jacques Delors Centre looks at the actual volume of resources available to finance EU priorities. They assess the MFF figures in real terms and also deduct the NGEU loan repayment to assess its spending power as does the Commission. By comparing the original MFF GNI commitment (which they identify as 1.12% rather than the 1.13% used by the Commission) with the size of the proposed MFF without the NGEU repayment (1.15%), they conclude that spending power will only increase by 0.03% of EU GNI. This is a valid comparison and helps us to keep the Commission proposal in perspective.

My concern is how Member States will respond to the Commission proposal. Here I would argue that we cannot exclude the repayment of the NGEU loans as these must be financed by the Member States. I also think that the jump from the current share of EU GNI (1.01%) to 1.26% will weigh heavier on Member States than what they were prepared to commit to in 2020. I see little willingness among Member States either to support the introduction of new own resources or to increase their national GNI contributions to match the Commission’s proposal. Recall that any increase in own resources also requires the unanimous approval of every national parliament in the Union.

A purely back-of-the-envelope calculation illustrates the dilemma. Compare the appropriations in the 2025 budget (€155.2 billion) with the Commission proposed commitments for 2034 in nominal terms (€279.7 billion). The GNI resource accounts for 64% of revenue in 2025, equal to €98.6 billion. Assuming no change in the VAT contribution, traditional own resources and no new sources of other revenue, then the entire increase in the budget would have to be funded by an increase in Member States’ GNI contributions. This would imply more than a doubling of Member State national contributions. These are extreme assumptions (the VAT base, for example, would be expected to increase over time, and the possibility of new own resources cannot be ruled out) but it is sufficient to illustrate the dilemma. Are Member States willing to approve a doubling of their national contributions to the EU budget over the next ten years?

Conclusions

This post reverts to examining the EU resources potentially available for CAP spending the proposed MFF 2028-2024. In contrast to previous commentary, which has taken the minimum ring-fenced amount as the likely outcome, this post suggests that there is a plausible outcome in which the share of the CAP is maintained at its current share in the shared management funds pre-allocated to Member States. Instead of a foreseen reduction in the CAP budget in nominal terms, this would maintain the CAP budget in nominal terms. This would be the same outcome as occurred for the present CAP in the current MFF.

I have identified some caveats and potential threats to this outcome, notably that agriculture ministers will now have to negotiate and bargain with other potential beneficiaries of the NRP fund within their national governments. Still, given the political complexion of many Member State governments in the Union today, this national bargaining will not necessarily lead to a worse outcome for farmers.

Instead, I identify the most likely threat to the CAP budget from an unwillingness of Member States to finance the overall increase in the MFF sought by the Commission. If the final MFF is smaller than proposed, cuts will have to be found. It is impossible to say whether these reductions will mainly focus on the new or traditional priorities of the EU budget, but it is unlikely that any budget heading would emerge unscathed from such an outcome. It would then be a question whether additional national financing would be made available to offset any potential cuts in EU financing.

A final point. The scale of the CAP budget is important, but even more so how it is used. As argued elsewhere on this blog, there is work to do for the co-legislature to ensure real EU value added from the CAP budget whatever its size.

Technical note. The National and Regional Partnership Fund is allocated €865 billion for the MFF period 2028-2034 in the proposed NRP Regulation. This amount is allocated between the three main components of the Fund:  the NRP Plans which encompass the existing shared management programmes, the EU Facility which will be managed by the Commission using direct or indirect management, and the Interreg programme (Figure 3).  €782.9 billion is allocated to the NRP Plans. In turn, this sum is divided between a Home Affairs allocation (covering issues such as asylum, migration and integration, border management and internal security) and a General allocation. The latter is allocated €748.7 billion and is intended to cover all the existing priorities funded by the existing shared management funds (agriculture, cohesion, social, fisheries) plus the new priority of defence and security. The Social Climate Fund will also be managed as part of the NRP Plans developed by Member States but its funding comes from the sale of allowances from ETS1 and ETS2 and is not dependent on the Fund.

Figure 3. Proposed structure of the new MFF.

This post was written by Alan Matthews.