The Common Agricultural Policy (CAP) is one of the EU's oldest and financially most important policy areas. It originally supported farmers by providing price guarantees for their products. From the mid-1980s until reform in 2003, the CAP was on a clear reform path. Supported prices were replaced by direct payments, which were meant to have a less distorting effect on the market and would not be dependent on the production of a particular animal or plant. At the same time, a more target-oriented rural development policy was established in the form of the so-called ‘second pillar’ of agricultural policy. Since then, however, the development of the CAP has stagnated. Subsequent reforms have been minor, concealing the lack of content with a lot of ‘cosmetics’.

Approximately 70 percent of the budget is still paid out in the form of ‘direct payments’ – flat-rate payments linked to farm size that do not serve any of the defined targets of agricultural policy. Since large farms receive more, this cannot be justified in terms of income distribution. Nor are the payments consistently related to the reduction of damage to the environment or to positive environmental performance. The challenge of the CAP reform is therefore to dedicate funds to improve animal welfare, environmental conservation and climate protection.

On 1 January 2023, the regulations for the Common Agricultural Policy (CAP) for the financing period 2021-2027 came into force with a two-year delay.

The key elements of the new CAP are the requirement for the EU Member States to present their proposed interventions in the form of a Strategic Plan and the shift away from an action-based to a performance-based delivery model. 

This result-oriented strategic approach is giving member states the autonomy to put together their strategic plans, based on their needs and in line with EU-wide goals. This means that measures at national level can theoretically be better targeted to local specificities without undermining the common nature of the policy.  

The Commission will oversee the delivery of results and the respect of basic EU rules and international commitments. To what extent Member States will have to take responsibility in practice and be accountable to the Commission for how they achieve the targets and implement the agreed objectives remains to be seen. 

For the period 2014-2020, agricultural spending totals €408 billion (38% of the EU budget). This includes €308 billion for the 1st pillar (€291 billion for direct payments) and €99 billion for the 2nd pillar which is intended for the rural development. 

For the period 2021-2027, agricultural spending totals €387 billion (31% of the EU budget). This includes €291 billion for the 1st pillar (€270 billion for income support schemes) and €87 billion for the 2nd pillar. Additional €8.1 billion from the next generation EU recovery instrument can be used to address the challenges posed by the COVID-19 pandemic. 

As a result, too much of the budget - here meant are the income support schemes in the 1st pillar - is still being used without any steering effect. Fortunately, an instrument was also created in the 1st pillar to support, among other things, animal welfare (see eco schemes). 

Mandatory commitments

Mandatory commitments used to be called cross-compliance and are now referred to as enhanced conditionality. Farmers must each meet certain basic requirements in order to be fully eligible for area-based payments and animal-based payments.  

These requirements consist of Statutory Management Requirements (SMRs) and Good Agricultural and Environmental Conditions (GAECs) of the areas. 

For animal welfare, only some SMRs are relevant. In the current regulations, the requirements have even been reduced compared to the old funding period. The animal-related requirements for the identification and registration of animals have been deleted. 

In the past, violations of these requirements were regular reasons for a so-called cross-compliance reduction (usually a 3% deduction from the subsidy). The fact that the most frequently violated animal-related requirement has now been removed from the SMRs could encourage critics to assume that the benefits of cross-compliance or enhanced conditionality for the animals are rather small. 

Voluntary commitments 

1st pillar: Schemes for the environment and climate and animal welfare (eco-schemes) 

With the eco-schemes, voluntary environmental and climate measures as well as measures to improve animal welfare for farmers are financed from first pillar funds for the first time. Therefore, significantly more money will be available for measures designed to provide environmental, climate and animal welfare benefits. Eco-schemes are theoretically like the schemes of the 2nd pillar and a participation is voluntary. A key difference is that farmers are legally entitled to eco-scheme payments. 

2nd pillar: Schemes for animal welfare 

As in the previous funding period, Member States may offer measures to support animal welfare. Part of the rural development funds are ringfenced. At least 35% have to be allocated to measures to support climate, biodiversity, environment and animal welfare. 

In general animal welfare measures in the 2nd pillar are very valuable as the payments cover only those commitments going beyond the relevant mandatory standards. From a purely quantitative point of view, it can be positively stated that significantly more Member States offer animal welfare-related measures. A look at the "Animal Welfare Map of Europe" shows this clearly. 

By its very nature, there is a close link between existing animal welfare legislation and the promotion of better animal farming. In the Farm to Fork Strategy, the European Commission has formulated the will for a green transformation of the European agricultural economy. This must be reflected in the upcoming revision of animal welfare legislation and the CAP must support this. 

The EPO is lobbying for the revision of EU agricultural policy to provide important financial and innovation incentives with the goal of improving animal welfare. These include: 

• the reallocation of funds from the first to the second pillar of EU agricultural policy
• changes in the conditions for animal welfare payments under the second pillar
• the introduction of an option for animal welfare payments under the first pillar of the CAP.