A targeted regional approach could make CAP more effective

The European Union's Common Agricultural Policy (CAP) supports farmers and contributes to a stable and affordable food supply, fair farm incomes, nature and climate protection, and thriving rural communities. A new CAP funding period will begin in 2028, with a budget 20% lower than in the current period. Nevertheless, €294 billion will still be available across the EU for 2028-2034.

The budget is shrinking, but the challenges facing agriculture are not. These include water quality, climate change and biodiversity loss, as well as disruptions to international trade caused by growing geopolitical tensions. WUR therefore brought together panels of experts to identify the most pressing challenges facing agriculture and explore how the Netherlands could best use CAP funding to address them. According to WUR researcher Allard Jellema, careful consideration is essential because individual EU Member States, including the Netherlands, have considerable freedom in deciding how to allocate CAP funding nationally. The study was commissioned by the Dutch Ministry of Agriculture, Fisheries, Food Security and Nature.

'The CAP could be used much more strategically, making a greater contribution to future-proof agriculture,' says Jellema. Currently, farmers receive most CAP subsidies through general income support, based on a fixed amount per hectare of agricultural land. 'This does not provide sufficient incentives for farmers to adopt more sustainable practices, and it makes only a limited contribution to improving their long-term earning capacity. Furthermore, some of this support goes to farmers who do not financially depend on it.' Neither of these outcomes helps create a thriving agricultural sector that is both more sustainable and able to provide farmers with a decent income.

Jellema argues that it would be more effective to first identify the challenges facing a particular area and then determine how CAP funding could best address them. Subsidies could be linked to contributions towards specific objectives, such as restoring biodiversity, improving water quality or tackling climate change.
These challenges vary considerably between regions. On sandy soils, for example, drought and nutrient leaching are major concerns, while water management is an important issue on clay soils. Targeted subsidies could encourage farmers to take measures that contribute to the specific objectives for their area. 'Different areas have different needs, so you need to use different policy instruments,' Jellema explains.

The new CAP offers a wide range of policy instruments. 'The challenge is to combine them in a modular way, like building blocks that together create a suitable policy approach. Rather than applying a one-size-fits-all solution, we need policies tailored to local circumstances.' This requires policymakers to make clearer choices than they have in the past, Jellema argues. 'Don't spread the budget too thinly across too many objectives. Instead, concentrate funding on a limited number of clear priorities for each area.'

A more focused approach would ensure that subsidies are better aligned with the government's objectives for each area. However, the system does not need to change overnight. A gradual transition would give farmers time to adapt. For most farmers, CAP subsidies account for only a small proportion of their income. In 2024, subsidies represented an average of 2.4% of total farm revenue. However, there are exceptions: for a small number of farms, subsidies can account for as much as half of their income.

Jellema stresses that the government must also provide farmers with long-term certainty. This means making support schemes available for several years, keeping their conditions as stable as possible, and communicating clearly and well in advance about the availability of subsidies.

Making Dutch agriculture future-proof will require more than the CAP alone. CAP funding must therefore form part of a broader approach in which policies on agriculture, food, nature, climate, water management, spatial planning and the economy are better aligned. 'If the government has a clearer vision of the future of agriculture, the CAP can be used more effectively to achieve those goals,' says Jellema.

There needs to be greater clarity about which types of farming and agricultural sectors should be given room to develop in each region, and which may need to reduce their activities. The Netherlands already has long-term objectives in areas such as water management, the protein transition and the proportion of agricultural land under organic farming. However, these objectives could be better coordinated within an integrated vision. 'Such a vision would make the use of CAP funding much more effective.'

An integrated vision and coherent policies are also important because the responsibility for making agriculture more sustainable does not lie with farmers alone. Food processors, supermarkets and consumers must also contribute to a fairer distribution of the costs and benefits. 'The government could take a more active role by introducing policies that encourage the production and consumption of more sustainable products,' Jellema says.

Meanwhile, the European Commission is shifting its emphasis from sustainability towards food security, according to Jellema. Geopolitical tensions are one reason for this shift. Russia's invasion of Ukraine, conflicts in the Middle East and tariffs introduced by Trump have all affected international trade in fertilisers, raw materials and agricultural products. These disruptions are putting pressure on agriculture and, consequently, food security. During the European Green Deal, sustainability was a central priority of EU agricultural policy. Now, ensuring sufficient food production has also become a major focus.

Jellema believes this shift is partly justified. Dutch agriculture is also heavily dependent on imports of animal feed, fertilisers and energy, for example. WUR therefore recommends that future agricultural policy should pay more attention to building a resilient food system that is better equipped to manage these dependencies.

'At the same time, we argue that food security and sustainability should not be seen as competing priorities. We need both to create a more resilient system.' Biodiversity loss and extreme weather events caused by climate change, such as last summer's drought, will increasingly threaten agriculture and food security.

'If we don't do enough to tackle climate change and biodiversity loss, we will be shooting ourselves in the foot. Food security itself will be at risk. Sustainability challenges will only become more important,' Jellema warns. His conclusion is clear: 'For the CAP to contribute to future-proof agriculture, funding must be more closely linked to measures that make agriculture more sustainable.'