Common Agricultural Policy Regulation

Introduction

Regulation (EU) 2021/2115, commonly known as the Common Agricultural Policy (CAP) Strategic Plans Regulation, establishes the legal framework for the European Union's Common Agricultural Policy for the period 2023-2027. It represents a significant evolution of the CAP, moving from a compliance-based system to a performance-oriented New Delivery Model. Under this model, each Member State designs a national CAP Strategic Plan to achieve nine specific economic, environmental, and social objectives set at the EU level. The regulation is a cornerstone of the European Green Deal, aiming to align agricultural policy with the EU's ambitious climate and environmental goals.

This regulation repeals and replaces the previous rules for direct payments (Regulation (EU) No 1307/2013) and rural development (Regulation (EU) No 1305/2013), integrating them into a single, coherent framework. Support under the CAP Strategic Plans is financed by two funds: the European Agricultural Guarantee Fund (EAGF) for direct payments and market measures, and the European Agricultural Fund for Rural Development (EAFRD) for rural development interventions.

Main Goal

The primary goal of the regulation is to foster a sustainable future for European agriculture. It aims to ensure a stable supply of affordable food while contributing to the EU's environmental and climate objectives. This is pursued through three general objectives:

• To foster a smart, competitive, resilient, and diversified agricultural sector ensuring long-term food security.
• To support and strengthen environmental protection, including biodiversity, and climate action.
• To strengthen the socio-economic fabric of rural areas.

These are further broken down into nine specific objectives, including ensuring viable farm income, enhancing competitiveness, improving the farmers' position in the value chain, climate change action, sustainable management of natural resources, protecting biodiversity, attracting young farmers, promoting rural development, and improving the response to societal demands on food, health, and animal welfare.

Who It Applies To

The regulation primarily applies to EU Member States, which are responsible for drafting, implementing, and managing their national CAP Strategic Plans. The ultimate beneficiaries of the support are farmers and other land managers who engage in agricultural activities. The regulation requires Member States to define key terms in their plans, including:

• Farmer: A natural or legal person (or group) whose holding is within the EU and who exercises an agricultural activity.
• Active Farmer: A farmer engaged in at least a minimum level of agricultural activity, ensuring that support is targeted at genuine farmers. Member States define the specific criteria.
• Young Farmer: A farmer under a certain age (between 35 and 40) who is setting up a holding for the first time and possesses adequate skills or training.

Key Dates

• Application Period: The regulation and the national CAP Strategic Plans cover the period from January 1, 2023, to December 31, 2027.
• Enhanced Conditionality: The new, stricter baseline rules became mandatory for beneficiaries from January 1, 2023.
• Social Conditionality: A key new feature, linking CAP payments to compliance with specific EU labor laws, becomes applicable from January 1, 2025.

Key Provisions

• CAP Strategic Plans: Each Member State must develop a single national plan outlining how it will use EAGF and EAFRD funding to meet the nine specific CAP objectives based on a SWOT analysis of its specific needs.
• Enhanced Conditionality: A set of mandatory baseline requirements (Statutory Management Requirements - SMRs, and Good Agricultural and Environmental Conditions - GAECs) that beneficiaries must respect to receive CAP payments. This includes stricter standards for soil protection (e.g., crop rotation), protection of wetlands and peatlands, and dedicating a share of arable land to non-productive areas.
• Eco-schemes: A new, voluntary scheme funded under direct payments. It is mandatory for Member States to offer eco-schemes, which reward farmers for implementing agricultural practices beneficial for the climate, environment, and animal welfare that go beyond the baseline conditionality.
• Redistributive Income Support: Member States are required to allocate at least 10% of their direct payments to this tool, which redistributes support from larger to smaller and medium-sized farms.
• Support for Young Farmers: At least 3% of the direct payments budget in each Member State is reserved for young farmers, through income support or investment aid.
• Sectoral Interventions: The regulation provides for specific support programs for certain sectors, such as fruit and vegetables, wine, apiculture, and olive oil.

Obligations & Requirements

• For Member States: To design and implement a CAP Strategic Plan, establish a governance system (Managing Authority, Paying Agency), set targets and milestones, and report annually on performance. They must dedicate minimum shares of their budgets to eco-schemes (25% of direct payments), redistributive support (10%), and young farmers (3%).
• For Farmers and other Beneficiaries: To receive full CAP support, they must comply with the rules of enhanced conditionality. This includes maintaining permanent grassland, protecting wetlands, establishing buffer strips along water courses, and implementing crop rotation. From 2025, they must also comply with social conditionality related to working conditions and employer obligations.

Affected Products/Actors/Processes

The regulation affects the entire agricultural sector in the EU.

• Actors: Farmers, forest holders, rural businesses, producer organisations, and national/regional public authorities.
• Processes: All farming practices are influenced, including land management, crop cultivation, livestock rearing, nutrient management, and the use of pesticides. It also impacts business planning, investment decisions, and knowledge exchange through the Agricultural Knowledge and Innovation System (AKIS).
• Products: All agricultural products listed in Annex I to the TFEU are covered by the policy.

Penalties

If farmers or other beneficiaries fail to comply with the requirements of conditionality (including environmental, climate, public health, animal welfare, and, from 2025, social standards), they will be subject to administrative penalties. These penalties typically involve a reduction of or, in severe cases, exclusion from their CAP payments. The penalty system must be proportionate, effective, and dissuasive, and is managed by the Member States' paying agencies.