EU countries approve deal to overhaul farming subsidies

By Kate Abnett

BRUSSELS (Reuters) – European Union countries on Monday gave the green light to reforms of the bloc’s huge farming subsidy programme, after a three-year battle over rules to make it greener and support smaller farms.

Negotiators representing the EU’s 27 countries and European Parliament struck the deal on Friday to reform the Common Agricultural Policy (CAP), which will spend 387 billion euros ($462 billion) on payments to farmers and rural development, roughly a third of the EU’s 2021-2027 budget.

“This deal is essential to ensure that this CAP enables the transition towards sustainable agriculture,” EU agriculture commissioner Janusz Wojciechowski said on Monday, at a meeting where EU agriculture ministers approved the deal. The new rules apply from 2023.

Europe’s farmers are already facing climate change impacts like drought, but agriculture is also the main pressure on Europe’s natural habitats and produces 10% of EU greenhouse gas emissions.

The new CAP will require countries to spend 20% of payments to farmers from 2023-2024, and 25% between 2025-2027, on “eco-schemes” that protect the environment. It does not define an eco-scheme, but examples could include restoring wetlands to absorb CO2, or organic farming.

The Commission will assess whether countries’ plans for spending CAP funds comply with EU environment laws, including the bloc’s recently-agreed target to cut emissions faster this decade.

Campaigners and some EU lawmakers said key environmental protections in the deal were weak or voluntary. Parliament, which pushed for more spending on eco-schemes and restrictions on subsidies for large businesses, will vote on the deal in the coming months.

EU countries must redistribute at least 10% of CAP funds to smaller farms, although they can dodge this requirement by using other methods to distribute funds fairly.

The deal also earmarks money for young farmers and creates a 450 million euro crisis fund in case agricultural markets are disrupted by an emergency such as a pandemic.

($1 = 0.8383 euros)

(Reporting by Kate Abnett; Editing by Toby Chopra)