5 main ideas behind the new EU Commission's agricultural regulation

2025-07-16 09:16:00, Kosova & Bota CNA

The long-awaited reform of the EU budget marks a turning point for EU agricultural policy, giving member states greater control in a partial renationalization of the bloc's agricultural subsidies.

What the European Commission is expected to unveil today marks only the first phase of a comprehensive transformation that will redefine the Common Agricultural Policy (CAP) at its core.

In many ways, the upcoming changes are the culmination of reforms initiated in response to farmers' protests, focused on simplification and reducing conditionality.

Now, these efforts are being pushed to their logical extreme.

However, EU Agriculture Commissioner Christophe Hansen faces a difficult road ahead, as the reforms are expected to be seen as drastic.

At the heart of this change is a simplification: the CAP will be absorbed into a single fund - together with previously distinct funding mechanisms, such as Cohesion Policy or EU fisheries subsidies - under a unified set of funding rules.

One of the most symbolic changes is the removal of the long-standing structure of the CAP built around two pillars, a structure in place since the 1999 reform.

For the PPB "traditionalists", this is a major blow.

Despite the clear rationale behind this revision - simplifying EU agricultural regulation - the new architecture of EU agricultural subsidies will be among the most complex elements of the future EU budget.

Here are five main ideas that support the reform:

Evolution towards revolution

Since taking office, Commissioner Hansen has repeatedly stressed that the future Common Agricultural Policy (CAP) will be an “evolution, not a revolution.” But reality seems to contradict his rhetoric.

The new structure — and particularly the move to a single fund and the removal of strong conditionality — has left many in the sector surprised, given Hansen's previous moderate stance, which enjoyed support from key stakeholders.

In fact, it is a mix of both. The reform is truly an evolution, building on the recent simplification measures introduced after last year's farmers' protests.

Even the new service delivery model, for example, closely mirrors the current system agreed in 2021 based on 27 national strategic plans.

However, these “evolutionary” elements have now crystallized into a full-scale revolution: a single fund, a single budget line, and minimal conditionality at the EU level.

The 'Greater Union' is softer on agriculture

Another long-feared development has occurred: the merging of regional funds and agricultural subsidies.

Both the CAP and Cohesion Policy, which account for two-thirds of the EU budget, will now be included in a broader Single Fund.

For the agricultural sector, the impact has been mitigated. A ring-fencing mechanism ensures that a minimum part of the fund remains earmarked for agriculture, protecting it from budgetary flexibility that would affect other areas such as cohesion policy more significantly.

Despite agriculture receiving special consideration, the von der Leyen Commission's push for radical simplification of the program has proven unstoppable.

Rural development is still there (but no longer as a pillar)

Since 2000, the CAP has operated under a two-pillar system, separating direct payments (the so-called first pillar) from rural development projects (also known as the second pillar), with the latter financed through multiannual co-financed programmes.

The new EU budget proposal would eliminate the “second pillar” of the CAP, but this does not mean that rural development will disappear completely.

Under the new CAP architecture, rural development actions, such as support for small farmers or agri-environmental measures, will continue, but no longer as part of a distinct 'pillar' with its own distinctive policy objectives.

Critical elements such as terminology, structural division and the fundamental aspect have disappeared, although the content of rural development (including its co-financing feature) remains.

The loss of the "C" in CAP

The risk of renationalisation — where the "Common" part of the Common Agricultural Policy begins to fade — has increased since the previous CAP reform proposed by then Agriculture Commissioner Phil Hogan and approved by lawmakers in 2021.

This risk is now a reality. After 2028, the implementation of the CAP will rely heavily on bilateral negotiations between the European Commission and individual member states.

Other influential actors, especially local authorities, but also the European Parliament, will have little say.

With member states gaining considerable autonomy over how funds are spent, the CAP is becoming increasingly national in character, which could undermine its “common” objectives.

Popular funds with some new twists

Some fundamental elements of the CAP will remain intact. Area-based income support and coupled income support - both central features of direct payments - will still be in place (with some changes).

The crisis reserve, introduced in the recent reform to address market shocks or disasters, also survives.

But there are also new features. In particular, all member states will have to create support services for farmers.

These will provide support when farmers are unable to work due to illness, childbirth or family care responsibilities, with co-financing from national governments./ CNA