BRUSSELS / Belgium, 8 July 2025: Amid growing demands to reprioritise its financial allocations, the European Commission is preparing to ringfence hundreds of billions of euros in direct farm subsidies under the Common Agricultural Policy (CAP) in its upcoming multiannual budget, officials familiar with the plan said.
The proposed budget, to be unveiled in mid-July, will see several funding streams merged into national and regional partnership envelopes, granting EU member states greater flexibility. However, agricultural subsidies will remain as a distinct, protected component, reflecting continued pressure from the bloc’s powerful farming lobbies.
Officials acknowledged that small-scale farmers remain heavily dependent on CAP income support, and a withdrawal of direct payments could jeopardise their survival. “Farmers must have their direct payments,” one official said.
Established in 1962, the CAP accounts for nearly one-third of total EU spending in the current seven-year budget cycle. Of the €386 billion allocated to CAP, about €291 billion supports income payments to farmers, while the remaining quarter is tied to environmental compliance, such as biodiversity protection and sustainable land use.
However, following widespread farmer protests last year — some involving haystack burnings and highway blockades — the Commission relaxed certain green requirements to ease access to funds. These moves have drawn criticism from environmental groups, who argue that the simplification weakens EU ecological commitments.
Célia Nyssens-James of the European Environmental Bureau called the CAP payments “broken subsidies,” asserting that the system is in urgent need of “a genuine overhaul.”
The proposed budget, which will take effect from 2028, has sparked internal divisions within the EU executive, with commissioners seeking to defend allocations for their respective portfolios. While some have proposed merging CAP with regional and social funds, stakeholders fear this would dilute its focus.
In a petition signed by over 3,100 farming organisations — including dairy giant Arla Foods and the European Landowners Organisation — concerns were raised about undermining CAP’s identity. “A single fund risks dissolving the CAP with fewer guarantees and no shared vision,” the statement said.
EU executive vice-president Roxana Mînzatu has also advocated for social spending protections, stating that competitiveness must not come at the expense of welfare. Meanwhile, a bloc of 14 countries — including Italy, Spain, and Poland — have argued for a distinct regional development budget, calling it essential for long-term cohesion and convergence across EU regions.
The European Commission has declined to comment ahead of the official release of the budget blueprint.
Image credit: foodunfolded.com
