The EU Common Agricultural Policy, its reform and future in brief
From supporting farmers to protecting the environment, the EU's farm policy covers a range of different goals. Learn how EU agriculture is funded, its history and its future.
Table of contents
What is the Common Agricultural Policy and how does it work?
The EU supports farming through its Common Agricultural Policy (CAP). Set up in 1962, it has undergone a number of reforms to make agriculture fairer for farmers and more sustainable.
The aim of the policy is to help farmers make a decent living, ensure food security in the EU and maintain rural areas while contributing to tackling climate change.
The agricultural sector is dependent on the weather and climate conditions, making it more vulnerable to price fluctuations than many other sectors. Food is an essential good but farmers’ income is still significantly lower than income in the rest of the economy.
The Common Agricultural Policy supports farmers via:
- direct income support (so called direct payments) that ensures income stability and rewards farmers for taking care of the countryside and the environment;
- market measures that protect the EU agricultural sector from market crises;
- rural development measures to address the specific needs and challenges facing rural areas.
The current CAP runs from 2023 until 2027.
What is the budget for EU agriculture subsidies?
The Common Agricultural Policy is funded through the EU budget. Under the EU's budget for 2021-2027, €386.6 billion has been set aside for the agriculture sector. It is divided into two parts:
- €291.1 billion for the European Agricultural Guarantee Fund, which provides income support for farmers;
- €95.5 billion for the European Agricultural Fund for Rural Development, which includes funding for rural areas, climate action and the management of natural resources.
Payments are managed at national level by EU countries.
The EU agriculture sector in figures
There are about 9 million farms in the EU and the farming sector provides 8.7 million jobs in the EU.
Crops (including vegetables, horticultural plants, cereals and fruit among others) represent half of the EU’s total farm output, while animal products (mainly milk, meat and eggs) account for about 40%.
In 2022, two thirds (67%) of the EU’s agricultural funding was used to direct income support to farmers, while 28% went into developing rural areas.
How is the EU reforming its agricultural policy?
In response to widespread farmers’ protests in different parts of Europe, the European Commission presented in March 2024 a proposal to amend the rules guiding the Common Agricultural Policy.
Farmers complained about low income, powerful distributors and retailers imposing unfair business conditions on them, and cheap imports from Ukraine and other countries undercutting their prices. They also said that receiving direct payments is linked to too many administrative formalities and environmental protection conditions.
The first simplification package of the EU’s agricultural policy, adopted in July 2024, lowered some of the environmental protection requirements and removed controls and penalties for small farms.
Another set of rules aimed at easing the burden on farmers was proposed by the Commission in May 2025. It includes:
- more flexibility regarding environmental requirements,
- simplified payments for small and medium-sized farms,
- less bureaucracy for organic farms,
- simpler procedures for supporting farms affected by climate change and extreme weather, and
- less red tape for national authorities.
The European Parliament is set to vote on the proposal during autumn 2025.
What will the European Union agriculture policy look like after 2028?
After the current EU long-term budget comes to an end at the end of 2027, the rules governing the EU’s agricultural policy will need to be adjusted for the new budget term starting in 2028.
In July 2025, the European Commission published its proposal on the future of agricultural policy. It envisages that the sector would be funded through national and regional partnership funds together with other priority areas such as regional development, fisheries or security and defence capabilities.
Rules would be significantly simplified and many decisions on what should be funded would be left to EU countries and regional authorities. A portion of the available funding would be separated to be used only for income support to farmers.
The European Parliament adopted its position on the future of EU agricultural policy on 10 September 2025. MEPs oppose the proposal to combine agricultural funding together with other policy areas and want instead an increased stand-alone agriculture budget. They want direct income support to be guaranteed for all active, professional farmers and the administrative burden to be reduced.
