European Commission CAP reform

Website: ec.europa.eu/agriculture/capreform/




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Publications : Agriculture : Policy



Reform of the Common Agricultural Policy (CAP)

In december 2006 the European Commission adopted new rules on the granting of State aid in the agricultural sector. These rules are in two parts: an exemption regulation which allows Member States not to notify State aid given to small and medium-sized undertakings involved in agricultural production provided that certain requirements are met, and guidelines which complement the regulation and lay down rules applicable to notified aid. The two documents cover the period from 2007 to 2013.

The new rules have been designed to be fully in line with the Commission's rural development policy and therefore constitute a step in the by the Commission's simplification process.

These follow on from the widespread reform of the CAP brought about in June 2003. This reform completely changed the way the EU supports its farm sector. The new CAP was geared towards consumers and taxpayers, while giving EU farmers the freedom to produce what the market wants. Under this scheme vast majority of subsidies will be paid independently from the volume of production. These "single farm payments" were linked to the respect of environmental, food safety and animal welfare standards. The basis for reform was the beleif that severing the link between subsidies and production will make EU farmers more competitive and market orientated, while providing the necessary income stability. More money will be available to farmers for environmental, quality or animal welfare programmes by reducing direct payments for bigger farms. The Council further

In order to respect the tight budgetary ceiling for the EU-25 until 2013, ministers agreed to introduce a financial discipline mechanism. This reform will also strengthen the EU's negotiating hand in the ongoing WTO trade talks. Various elements of the reform entered into force in 2004 and 2005. The single farm payment entered into force in 2005.