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European agricultural fund for rural development (EAFRD)
The European agricultural fund for rural development (EAFRD) is the second pillar of the Common Agricultural Policy and finances the EU’s contribution to the sustainable development of rural areas.
It supports long-term objectives such as improving the competitiveness of agriculture and forestry, strengthening climate and environmental action, and promoting balanced territorial development in rural economies and communities.
Through national and regional implementation, the EAFRD helps finance environmental measures, local development strategies, innovation, smart villages, financial instruments and investment in rural businesses and services.
Taken together, these functions make the EAFRD one of the EU’s main instruments for reinforcing the resilience, sustainability and vitality of rural Europe.
Click to read (consolided text 2023)
The European agricultural fund for rural development (EAFRD) is the second pillar of the Common Agricultural Policy and finances the EU’s contribution to the sustainable development of rural areas.
Under the current CAP financial framework for 2021–2027, the EAFRD has a total allocation of €95.5 billion, including €8.1 billion from the Next Generation EU recovery instrument introduced to address the effects of the COVID-19 crisis. The fund operates alongside national co-financing and supports long-term rural development objectives rather than direct annual income support. (
The EAFRD is built around three broad long-term objectives. The first is to foster the competitiveness of agriculture and forestry, helping rural businesses and farm structures become more productive, resilient and innovative. The second is to ensure the sustainable management of natural resources and climate action, which places environmental performance, biodiversity, soil, water and climate adaptation at the heart of rural spending. The third is to achieve balanced territorial development of rural economies and communities, including employment, social inclusion and the wider vitality of rural areas. These objectives show that the EAFRD is not limited to farming support narrowly understood, but is also a territorial development instrument for rural Europe as a whole.
Under the CAP Strategic Plans, these objectives are implemented through interventions co-financed by the EAFRD and national budgets. In the earlier programming logic described on the linked rural development page, countries used rural development programmes (RDPs), prepared at national or regional level, with the Commission approving and monitoring them while national and regional managing authorities selected projects and granted payments. This means that, although the EAFRD is an EU fund, implementation is adapted to national and regional needs, allowing rural development policy to reflect territorial diversity across the Union.
The linked rural development page explains that EAFRD support has historically been structured around six priorities. These include knowledge transfer and innovation, farm viability and competitiveness, food chain organisation and risk management, resource efficiency and the shift to a low-carbon and climate-resilient economy, ecosystem restoration and preservation, and social inclusion and economic development in rural areas. These priorities were further translated into 18 focus areas, with countries setting targets and strategies according to their own circumstances. To deliver them, they could choose from a broad menu of policy measures tailored to national and regional conditions.
A central feature of the EAFRD is its strong environmental and climate orientation. The rural development page states that at least 30% of funding for each rural development programme had to be dedicated to measures relevant for the environment and climate change, much of it channelled through grants and annual payments to farmers adopting more environmentally friendly practices. This confirms that the EAFRD has been one of the main CAP instruments for supporting the green transition in rural areas, complementing the environmental conditionality and eco-schemes financed elsewhere in the CAP architecture.
Another important dimension is local development. At least 5% of RDP funding had to be allocated to the LEADER / community-led local development approach. LEADER is described as a bottom-up model in which farmers, rural businesses, local organisations, public authorities and residents come together in local action groups (LAGs) to design local development strategies and manage local budgets. This gives rural communities a direct role in shaping projects with economic, cultural, social and environmental benefits. The Commission page also notes that LEADER has become influential well beyond agriculture, inspiring wider community-led local development approaches in other EU funds.
The EAFRD also supports innovation, digitalisation and smart rural development. The rural development page highlights the smart villages initiative, which aims to foster innovation in rural territories and provide practical tools for responding to common local challenges. In addition, the EAFRD contributes to knowledge transfer, advisory services and better connections between agriculture, forestry, rural communities and innovation actors. This makes the fund relevant not only for traditional farm investment, but also for the modernisation of rural economies and services.
Another operational feature of the EAFRD is the use of financial instruments. According to the CAP funds page and the linked rural development page, the fund can support rural enterprises and projects through loans, guarantees, equity and microcredit, helping recipients undertake financially viable investments aligned with EAFRD priorities. This is significant because it expands rural policy beyond grants and annual payments, allowing public funds to leverage broader investment in agriculture, forestry and rural business development.
The governance dimension is also important. The main CAP funds page explains that 99.3% of the CAP budget, including rural development, is implemented under shared management between the Commission and EU countries. Member States must establish management and control systems, accredited paying agencies, and reporting systems capable of preventing, detecting and correcting irregularities, while the Commission exercises a supervisory role and can make financial corrections when necessary. This means the EAFRD combines EU-level strategic objectives with decentralised implementation and strong audit and control requirements.
The EAFRD also sits within a broader policy ecosystem. The rural development page points to the role of the EU CAP Network, which supports networking among administrations, stakeholders and rural actors, facilitates exchanges of good practices, and helps with the design and implementation of CAP Strategic Plans, innovation, knowledge exchange and evaluation. This network function is important because rural development policy often depends not only on funding, but also on the circulation of models, project experience and territorial know-how across the Union.
Looking ahead, the Commission presents rural development under the new CAP as increasingly tied to broader EU priorities such as the European Green Deal and the long-term vision for rural areas. The objective is to make rural interventions more responsive to challenges such as climate change, generational renewal, sustainability and the attractiveness of rural life and work. In this sense, the EAFRD is both a financing tool and a strategic framework for helping rural areas adapt to long-term structural, environmental and demographic change.
Overall, the EAFRD can be understood as the CAP instrument that gives the strongest territorial and developmental dimension to EU agricultural policy. While the first pillar focuses mainly on direct payments and market measures, the EAFRD supports a wider agenda: farm competitiveness, climate and environmental action, local development, innovation, rural services, social inclusion and economic resilience. Taken together, these functions make it one of the EU’s main tools for sustaining the long-term vitality and diversity of rural Europe.
Proposal for specific measures under the EAFRD to provide additional assistance to Member States affected by natural disasters
Under the current CAP financial framework for 2021–2027, the EAFRD has a total allocation of €95.5 billion, including €8.1 billion from the Next Generation EU recovery instrument introduced to address the effects of the COVID-19 crisis. The fund operates alongside national co-financing and supports long-term rural development objectives rather than direct annual income support. (
The EAFRD is built around three broad long-term objectives. The first is to foster the competitiveness of agriculture and forestry, helping rural businesses and farm structures become more productive, resilient and innovative. The second is to ensure the sustainable management of natural resources and climate action, which places environmental performance, biodiversity, soil, water and climate adaptation at the heart of rural spending. The third is to achieve balanced territorial development of rural economies and communities, including employment, social inclusion and the wider vitality of rural areas. These objectives show that the EAFRD is not limited to farming support narrowly understood, but is also a territorial development instrument for rural Europe as a whole.
Under the CAP Strategic Plans, these objectives are implemented through interventions co-financed by the EAFRD and national budgets. In the earlier programming logic described on the linked rural development page, countries used rural development programmes (RDPs), prepared at national or regional level, with the Commission approving and monitoring them while national and regional managing authorities selected projects and granted payments. This means that, although the EAFRD is an EU fund, implementation is adapted to national and regional needs, allowing rural development policy to reflect territorial diversity across the Union.
The linked rural development page explains that EAFRD support has historically been structured around six priorities. These include knowledge transfer and innovation, farm viability and competitiveness, food chain organisation and risk management, resource efficiency and the shift to a low-carbon and climate-resilient economy, ecosystem restoration and preservation, and social inclusion and economic development in rural areas. These priorities were further translated into 18 focus areas, with countries setting targets and strategies according to their own circumstances. To deliver them, they could choose from a broad menu of policy measures tailored to national and regional conditions.
A central feature of the EAFRD is its strong environmental and climate orientation. The rural development page states that at least 30% of funding for each rural development programme had to be dedicated to measures relevant for the environment and climate change, much of it channelled through grants and annual payments to farmers adopting more environmentally friendly practices. This confirms that the EAFRD has been one of the main CAP instruments for supporting the green transition in rural areas, complementing the environmental conditionality and eco-schemes financed elsewhere in the CAP architecture.
Another important dimension is local development. At least 5% of RDP funding had to be allocated to the LEADER / community-led local development approach. LEADER is described as a bottom-up model in which farmers, rural businesses, local organisations, public authorities and residents come together in local action groups (LAGs) to design local development strategies and manage local budgets. This gives rural communities a direct role in shaping projects with economic, cultural, social and environmental benefits. The Commission page also notes that LEADER has become influential well beyond agriculture, inspiring wider community-led local development approaches in other EU funds.
The EAFRD also supports innovation, digitalisation and smart rural development. The rural development page highlights the smart villages initiative, which aims to foster innovation in rural territories and provide practical tools for responding to common local challenges. In addition, the EAFRD contributes to knowledge transfer, advisory services and better connections between agriculture, forestry, rural communities and innovation actors. This makes the fund relevant not only for traditional farm investment, but also for the modernisation of rural economies and services.
Another operational feature of the EAFRD is the use of financial instruments. According to the CAP funds page and the linked rural development page, the fund can support rural enterprises and projects through loans, guarantees, equity and microcredit, helping recipients undertake financially viable investments aligned with EAFRD priorities. This is significant because it expands rural policy beyond grants and annual payments, allowing public funds to leverage broader investment in agriculture, forestry and rural business development.
The governance dimension is also important. The main CAP funds page explains that 99.3% of the CAP budget, including rural development, is implemented under shared management between the Commission and EU countries. Member States must establish management and control systems, accredited paying agencies, and reporting systems capable of preventing, detecting and correcting irregularities, while the Commission exercises a supervisory role and can make financial corrections when necessary. This means the EAFRD combines EU-level strategic objectives with decentralised implementation and strong audit and control requirements.
The EAFRD also sits within a broader policy ecosystem. The rural development page points to the role of the EU CAP Network, which supports networking among administrations, stakeholders and rural actors, facilitates exchanges of good practices, and helps with the design and implementation of CAP Strategic Plans, innovation, knowledge exchange and evaluation. This network function is important because rural development policy often depends not only on funding, but also on the circulation of models, project experience and territorial know-how across the Union.
Looking ahead, the Commission presents rural development under the new CAP as increasingly tied to broader EU priorities such as the European Green Deal and the long-term vision for rural areas. The objective is to make rural interventions more responsive to challenges such as climate change, generational renewal, sustainability and the attractiveness of rural life and work. In this sense, the EAFRD is both a financing tool and a strategic framework for helping rural areas adapt to long-term structural, environmental and demographic change.
Overall, the EAFRD can be understood as the CAP instrument that gives the strongest territorial and developmental dimension to EU agricultural policy. While the first pillar focuses mainly on direct payments and market measures, the EAFRD supports a wider agenda: farm competitiveness, climate and environmental action, local development, innovation, rural services, social inclusion and economic resilience. Taken together, these functions make it one of the EU’s main tools for sustaining the long-term vitality and diversity of rural Europe.
Proposal for specific measures under the EAFRD to provide additional assistance to Member States affected by natural disasters
