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EU Direct Support to Agriculture Producers
€307 billion (2023-2027)
The Common Agriculture Policy (CAP) is financed by EU annual budget. The EU decides a multiannual financial framework and the last one is referring to the period 2023-2027, adopted on 2 December 2021. The total amount for all EU policies is €1.12 trillion, plus €808 billion from the Next Generation EU recovery instrument.
All 2023-2027 CAP financial measures
1. European agricultural guarantee fund (EAGF)
The European Commission’s approval of all 28 CAP Strategic Plans marked the launch of the new Common Agricultural Policy (CAP) from 1 January 2023. For the 2023–2027 period, the CAP provides €264 billion in EU funding, rising to €307 billion with national co-financing, while an extra €6 billion supports related programmes such as POSEI, the EU school scheme and promotion measures.
The new CAP is presented as fairer, greener and more social. On fairness, it maintains direct payments as a key safety net, with around €20 billion per year in basic income support, while strengthening environmental conditions through GAEC standards. It also shifts more support towards those most in need, especially small and medium-sized farms, through redistributive payments worth €4 billion annually, and expands risk-management support, coupled aid and sectoral assistance.
On the environmental side, the CAP sets a stronger climate and sustainability focus than before. Around €98 billion, or 32% of total CAP funding, is allocated to climate, natural resources, biodiversity and animal welfare objectives. Measures include support for eco-schemes, organic farming, crop rotation, integrated pest management, carbon storage, and renewable energy production, making this CAP the most ambitious so far in environmental terms.
The CAP is also more social. It devotes €8.5 billion to support young farmers, with an estimated 377,000 new young farmers expected to establish themselves by 2027. Rural communities will also benefit from LEADER local development funding, new links between CAP payments and social and labour standards, investment aimed at creating at least 400,000 jobs, support for digitalisation, and advisory and innovation measures expected to reach more than 6 million people.
Overall, the reform reflects the EU’s effort to modernise agricultural policy, align it with the Green Deal, and strengthen the resilience of farming and rural areas in response to recent shocks, including the consequences of the war in Ukraine, energy price increases and fertiliser dependence.
The new CAP is presented as fairer, greener and more social. On fairness, it maintains direct payments as a key safety net, with around €20 billion per year in basic income support, while strengthening environmental conditions through GAEC standards. It also shifts more support towards those most in need, especially small and medium-sized farms, through redistributive payments worth €4 billion annually, and expands risk-management support, coupled aid and sectoral assistance.
On the environmental side, the CAP sets a stronger climate and sustainability focus than before. Around €98 billion, or 32% of total CAP funding, is allocated to climate, natural resources, biodiversity and animal welfare objectives. Measures include support for eco-schemes, organic farming, crop rotation, integrated pest management, carbon storage, and renewable energy production, making this CAP the most ambitious so far in environmental terms.
The CAP is also more social. It devotes €8.5 billion to support young farmers, with an estimated 377,000 new young farmers expected to establish themselves by 2027. Rural communities will also benefit from LEADER local development funding, new links between CAP payments and social and labour standards, investment aimed at creating at least 400,000 jobs, support for digitalisation, and advisory and innovation measures expected to reach more than 6 million people.
Overall, the reform reflects the EU’s effort to modernise agricultural policy, align it with the Green Deal, and strengthen the resilience of farming and rural areas in response to recent shocks, including the consequences of the war in Ukraine, energy price increases and fertiliser dependence.
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​2. Rural development Fund (EAFRD)
Financial allocation: €95.5 billion
Period: 7 years (2021-2027)
Rural development is the "second pillar" of the common agricultural policy (CAP), reinforcing the 'first pillar' of income supports and market measures. Its fund complements national projects focusing on strengthening the social, environmental and economic sustainability of rural areas. This support is offered with national and regional programmes to address the specific needs and challenges facing rural areas.
For the EAFRD (the CAP’s “second pillar”), the total allocation amounts to €95.5 billion. This includes €8.1 billion from the next generation EU recovery instrument to help address the challenges posed by the COVID-19 pandemic. Around 30% of the recovery funds will become available in 2021, with the remaining 70% to be released in 2022.
Period: 7 years (2021-2027)
Rural development is the "second pillar" of the common agricultural policy (CAP), reinforcing the 'first pillar' of income supports and market measures. Its fund complements national projects focusing on strengthening the social, environmental and economic sustainability of rural areas. This support is offered with national and regional programmes to address the specific needs and challenges facing rural areas.
For the EAFRD (the CAP’s “second pillar”), the total allocation amounts to €95.5 billion. This includes €8.1 billion from the next generation EU recovery instrument to help address the challenges posed by the COVID-19 pandemic. Around 30% of the recovery funds will become available in 2021, with the remaining 70% to be released in 2022.
3. Market measures
In addition to direct support to the producers, the EU’s agricultural market measures are designed to stabilise markets, prevent crises from worsening, support demand and help agricultural sectors adapt to changing market conditions.
They include public intervention, aid for private storage and exceptional measures used in times of serious disturbance, alongside dedicated financial instruments to support rapid crisis response.
These tools are complemented by market transparency and monitoring systems, which provide data and early warning signals to support informed decisions and timely intervention.
Taken together, they form a broad EU policy framework aimed at preserving stability, managing volatility and strengthening the resilience of agricultural markets within the single market.
They include public intervention, aid for private storage and exceptional measures used in times of serious disturbance, alongside dedicated financial instruments to support rapid crisis response.
These tools are complemented by market transparency and monitoring systems, which provide data and early warning signals to support informed decisions and timely intervention.
Taken together, they form a broad EU policy framework aimed at preserving stability, managing volatility and strengthening the resilience of agricultural markets within the single market.
