Brussels – A proposed overhaul of the European Union’s Common Agricultural Policy (CAP) has drawn criticism from the EU’s financial watchdog, the European Court of Auditors (ECA), which warns the new system could lead to payment delays, increased uncertainty for farmers and potentially undermine the policy’s core objectives. The concerns center on the radical restructuring of the EU’s long-term budget, known as the Multiannual Financial Framework (MFF), set to run from to .
The ECA’s report, released this week, highlights potential complications arising from the shift away from the traditional ‘Pillar One’ and ‘Pillar Two’ funding structures – direct payments to farmers and rural development funding respectively – towards a single allocation for each member state. This allocation will be integrated with cohesion and other regional supports under a new ‘European Fund’ worth €865 billion, the largest component of the MFF.
“Clarity, predictability and fairness are essential for a Common Agricultural Policy that truly supports farmers and rural communities,” stated ECA member Iliana Ivanova. “This proposal on the table is not completely ready yet to be harvested.”
For over six decades, since , agricultural funding has been distinct within the EU budget. The proposed changes represent a significant departure, aiming for greater emphasis on innovation and competitiveness. However, auditors fear the complexity of the new system, and the joint management of funds by member states and the European Commission through National and Regional Partnership Plans (NRPPs), could create bottlenecks and delay crucial payments to farmers.
A key concern is the unpredictability surrounding the overall CAP budget, which won’t be finalized until after the NRPPs are adopted. This lack of clarity, according to the ECA, could disrupt planning and investment within the agricultural sector. The report acknowledges the potential benefits of increased flexibility for member states to address specific rural challenges, but warns this could also lead to an uneven playing field across the EU.
“This…creates a risk for the common character of the policy,” Ivanova explained. “A significant divergence across member states may hamper the alignment of CAP spending with the EU’s priorities, and it could lead to distortion of competition and an uneven playing field.”
The ECA also raised concerns about the integration of climate goals into the CAP, specifically the merging of eco-schemes with agri-environmental and climate measures. The auditors suggest this streamlining effort could be undermined by the fragmented nature of the relevant regulations, potentially causing confusion for both national authorities and farmers attempting to navigate the new rules.
The European Commission, however, has signaled a willingness to address these concerns. EU Agriculture Commissioner Christophe Hansen, speaking before the Irish Oireachtas European Affairs Committee last week, acknowledged the challenges and suggested changes are possible. “Here’s not a sprint, it is a marathon,” Hansen said. “Now that the proposals are on the table, the co-legislators have to contribute to this fine tuning. And this fine tuning will be about the governance, it will be about the change, it will be about uncertainties.”
The proposed budget has already faced criticism from agricultural organizations. The Irish Farmers Association (IFA) has warned of a potential cut to the agriculture budget and is calling for the restoration of Pillar Two with a specifically ring-fenced farm budget. The IFA supports potential changes that would move relevant articles from the NRPPs back into a dedicated CAP regulation.
“We would share many of the observations noted within the Auditors report and have highlighted them in our interactions on CAP both at National and European level,” said IFA President Francie Gorman in a statement. “there is more risk than opportunity with the Commission proposals; more complexity, and more financial uncertainty which won’t be of benefit to genuine active farmers – either existing or the next generation.”
Gorman further emphasized the potential economic consequences of a reduced farm budget, warning it could lead to lower farm incomes and negatively impact economic activity and employment in rural Ireland. The concerns raised by the ECA and the IFA underscore the delicate balance the EU faces in reforming its agricultural policy – a policy vital not only to the livelihoods of millions of farmers but also to the stability of rural communities and the broader European economy.
The debate over the MFF and the future of the CAP is expected to intensify in the coming months, as member states and EU institutions work towards reaching an agreement before the end of the Irish presidency later this year. The outcome will have significant implications for the agricultural sector and the future of rural Europe.
