The EU’s Farm Deal, Explained

The third rail of European politics gets (the beginning of) a green makeover.

France cow
A cow in Nantes, France (Unsplash/Mathieu Odin)

Nobody is happy with the EU’s new farms policy. Greens argue ambitions for biodiversity and sustainability are too low. Agricultural groups complain they are too high, and farmers will receive lower subsidies to boot.

Which suggests the compromise — the outcome of two years of negotiations — may not be unreasonable.

Here are the most important things to know.

Outsized role

Agriculture plays an outsized role in EU politics. The bloc has around ten million farms, which employ 22 million workers, or 5 percent of the population, but the sector takes up a third of the European Union’s budget, or around €350 billion for the 2021-27 fiscal period.

The Common Agricultural Policy (CAP) dates back to 1962 and was one of the first two pillars of European integration, the other being industry.

To iron out then-substantial differences in productivity and pricing, keep food prices low for consumers and shield farmers from international competition, the CAP’s founders created an elaborate system of price controls and subsidies. These have changed over time. Price controls were relaxed in the 1990s. Subsidies were tied to farm size, which meant small, family-owned farms had to give way to intensive animal farming and monocultures. This in turn led to extra money being spent on the preservation of rural communities.

What the CAP hasn’t done is reduce European greenhouse gas emissions. The European Court of Auditors found that despite €100 billion in the 2014-20 budget being earmarked for climate change, emissions from farms have not changed since 2010.

Agriculture is responsible for around 10 percent of European greenhouse gas emissions.

What’s in the deal?

  • 20 percent of farm subsidies, rising to 25 percent after two years, will go to funding so-called eco-schemes, which can range from organic farms to wetlands being set aside for carbon sequestration.

EU farm ministers wanted to keep eco-subsidies at 20 percent through the next budget cycle. A majority in the European Parliament had called for 30 percent.

One weakness — and reason Green parties and environmentalists are critical — is that national governments will decide what qualifies as an eco-scheme. This shifts power back to the member states for the first time since the CAP’s creation. It’s not hard to imagine the climate change-skeptic government of Poland coming up with a broader definition of eco-friendly than that of the Netherlands, which was one of the few countries pushing for a 30 percent share.

The European Commission will still need to review and sign off on national plans.

There is a loophole: if countries increase spending on rural development, they can spend less than 20 or 25 percent on eco-schemes.

Eco-schemes won’t be required. If farmers don’t adopt any, they will just receive lower subsidies.

  • 10 percent of spending will go to small- and medium-sized farms.

Currently 80 percent of subsidies go to 20 percent of farmers.

  • 3 percent of farmland must be set aside for biodiversity.

This is a requirement; if farmers don’t meet it, they lose their subsidies altogether. But it falls short of the 10 percent scientists had recommended.