BRUSSELS — European farming leaders and green groups are girding for a long, hard fight following the Commission’s bombshell proposal for a new long-term budget and Common Agricultural Policy directly before the summer recess. 

They share two fears upon returning to Brussels: that funding is under threat, and that member countries could take drastically different approaches to divvying up the money.

Member countries will need to give out a minimum of €294 billion in income support for farmers between 2028 and 2034, according to the European Commission’s new proposal. That reduced cash pot includes subsidies based on the size of farms, incentives for eco-friendly practices, support for new and young farmers, and a host of other funding streams. 

“The competition within each member state that these priorities will have is really very high,” anticipated Marco Contiero, EU agriculture policy director at Greenpeace. 

Contiero wasn’t optimistic that environmental measures will triumph: “The budget dedicated to environmental measures and climate action — that’s where a massacre has taken place, unfortunately.”

“It’s up to member states,” he continued. “They can, if there is willingness, increase enormously the action to make our farming more sustainable … But looking at the history of member states’ decisions, this is extremely unlikely.”

The reform proposal follows a season of rural discontent across Europe earlier last year, with tractors lining the streets to express rage over cuts to fuel subsidies, high costs and cheap imports. As the European election that followed brought a farmer-friendly political tilt, lawmakers and farm lobbies expressed strong opposition to the Commission’s proposals.

Copa-Cogeca, the powerful EU farmers’ lobby, in a statement labeled the proposed new agricultural policy and long-term budget the “Black Wednesday of European agriculture,” and has vowed to “remain strongly mobilised.”

Feeling the squeeze

The restructuring of the EU’s agriculture budget makes direct comparisons to the 2021-2027 period difficult — but analysis by Alan Matthews, professor emeritus of European agricultural policy at Trinity College Dublin, suggests the new plan represents a 15 percent reduction. And that’s before taking inflation into account.

The new purse for the agricultural policy, commonly known as CAP, guarantees that around €300 billion will go into farmers’ pockets through various streams funded by the EU and co-financed by member countries. The burden of spending for things like climate incentives will be shared, while area-based support — paid out to farmers per hectare — will come from the EU’s coffers.  

Environmentalists worry that requiring member countries to chip in to unlock funding for climate-protection measures will deter their uptake, particularly given the overall budget reduction. 

“If you tell me ‘more incentives and less rules,’ and you don’t provide me with a decent ring-fenced budget for those incentives to exist, you’re cutting rules and not providing incentives,” said Contiero. “And that’s the overall trap of this new proposal.”

Similarly, young farmers are worried that their interests will fall by the wayside without a legally binding target for making sure they get their piece of the pie. Under the current CAP, 3 percent of funding goes to this group. In the fall, a 6 percent “aspirational” target will be announced — which leaves the European Council of Young Farmers unimpressed.

An aspirational target in the context of a constrained budget means that its members “have to fight for money for young farmers, rather than what is now the case: that they have a certainty of 3 percent,” explained the organization’s president, Peter Meedendorp. 

A Commission official familiar with the file, granted anonymity to speak candidly, dismissed those concerns, noting the legislation mandates member countries “shall” prioritize young farmers in their national plans, meaning they cannot be ignored.

Nonetheless, the wine industry shares similar worries. Interventions to support the sector in the past had dedicated budgets. Now, such support is a single item on the list of  income-support measures member countries provide to farmers from the overall CAP pot. 

“The Commission is sending the hot potato to member states,” said Ignacio Sánchez Recarte, secretary-general of the European Committee of Wine Companies. He argues that the plan risks damaging the level playing field and a bloc-wide approach to wine policy.

On the defensive

To deliver on promises to better target support for young or small farmers, European Agriculture Commissioner Christophe Hansen has large landowners in his sights. Traditionally, large farms win out on CAP payments: The latest data suggests that 20 percent of CAP beneficiaries receive 80 percent of direct payments.

Under the new proposal, member countries can choose to pay farmers an average of €130 to €240 per hectare — up to a limit of €100,000, with progressive reductions in payments to that point. 

Jurgen Tack, secretary-general at the European Landowners’ Organization, said that this proposal to limit subsidies risks ignoring professional farmers, who contribute significantly to European food security, in favor of less profitable and productive enterprises.

The new CAP budget is “exactly the opposite of what we should support. Because what we see is that it’s no longer productivity, it’s becoming more and more a social support to farms,” he argued. 

Several environmental organizations support limiting payments to large farms to encourage fairer distribution of funds and to free up money for environmental projects. In response, Tack contended that profitability and sustainability go hand in hand: The more money a farm has, the more it can spend on sustainable practices at scale.

That debate may be irrelevant, as several previous attempts by the Commission to introduce such limits to subsidies since the 1990s failed to overcome opposition from key EU countries dominated by large farms. The most recent attempt to introduce such limits only survived the legislative process as a voluntary measure. 

Contiero of Greenpeace wasn’t optimistic over how proposals to limit subsidies to large farms will fare over the next two years of negotiations: “This will be subject to the European Parliament and Council chainsaw. Everyone is waiting to see how horrible that massacre will be.”