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The contribution of recent price movements to farm income

Eurostat released its agricultural output and input price index numbers for the second quarter of 2026 in early September. While they only provide updated price developments for the first half of the year, the trends will have a major influence on the farm income outturn for 2026.

Eurostat notes that, in the second quarter of 2026, the average price of agricultural output in the EU fell by 5.8% compared with the second quarter of 2025. This was a third consecutive quarter of decline. The average price of agricultural inputs (goods and services consumed in agriculture and not related to investment, such as energy, fertilisers or feedingstuffs) increased by 4.7% in the second quarter of 2026. This followed a period of relative price stability throughout 2025, into the first quarter of 2026. The trends are shown in Figure 1.

Figure 1. Developments of agricultural input and output price indices in the EU, Q1 2021 – Q2 2026.
… Read the rest
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Redistributive payment or DABIS: Analysis of the Lins amendments

One of the many debates around the Commission’s post-2027 CAP proposal revolves around its proposal for the better targeting of area-based payments. This debate has at least five dimensions:

  • Article 6(2) of the draft CAP Regulation COM(2025) 560 requires that Member States differentiate these payments by groups of farmers or geographical areas, on the basis of objective and non-discriminatory criteria. The basis for the differentiation of payments shall be based on farmers’ income from agricultural activity in a representative reference period. Specifically, differentiated payments should focus on those most in need (with specific groups mentioned including young and new farmers, women farmers, small farmers, mixed enterprise farmers and those operating in less favoured areas).
  • Article 6(3) requires Member States to apply degressivity to area-based payments between €20,000 and €100,000.
  • Article 6(4) requires Member States to cap the amount of area-based payments any one beneficiary can receive at €100,000.
  • Article 6(5) requires that Member States ensure that area-based payments are primarily directed towards farmers who exercise an agricultural activity and actively contribute to food security.
… Read the rest
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Europe’s fertiliser dilemma: Balancing affordability, competitiveness and strategic autonomy

When the European Commission published its Fertiliser Action Plan (FAP) in May 2026, it set itself an ambitious objective:

“A successful strategy for fertilisation in the EU requires industry and farmers to work hand in hand in partnership and a transparent value chain: ensuring competitiveness for both farmers and the fertiliser industry and EU strategic autonomy, while helping to achieve EU climate and environmental objectives.”

That statement captures the central challenges of European fertiliser policy. Farmers need reliable supplies of nitrogen fertiliser at affordable prices to remain competitive. European fertiliser manufacturers seek protection from imports that they argue benefit from lower energy costs and weaker environmental standards. At the same time, the European Union wants to decarbonise fertiliser production, reduce nitrogen losses, and strengthen strategic autonomy.

Reconciling these objectives has become more difficult following the closure of the Strait of Hormuz in spring 2026 and the resulting increase in natural gas and fertiliser prices.… Read the rest

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The Future of Livestock. Navigating the Perfect Storm: Between Green Deal Ambitions, CAP Reform, and Market Realities

Today I had the pleasure to take part in a plenary session of the EAAP- European Federation of Animal Science annual conference in Hamburg. My contribution provided an overview and update of policy developments and challenges affecting the EU livestock sector. The talk was not a direct commentary on the Commission’s Livestock Strategy published in July this year, but it addresses many of the same issues. The presentation accompanying the talk can be downloaded here, and the whole plenary session can be viewed on the EAAP YouTube channel. I reproduce the talk more or less as delivered in this post.

The perfect storm

Let me begin by stating the obvious. Livestock is of major economic and political importance to the European Union.

It accounts for around 40% of agricultural value added. It generates some €400 billion in annual turnover and supports around 7 million people across the value chain.… Read the rest

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Amending the Common Market Organisation Regulation

Next Wednesday 2 September, the Agriculture and Rural Development Committee of the European Parliament will discuss the rapporteur Norbert Lins (EPP)’s draft report on the CAP Regulation post 2027 and the rapporteur Eric Sargiacomo (S&D)’s draft report on amendments to the Common Market Organisation (CMO) Regulation. Much attention has been devoted to the changes proposed for the CAP subsidy policy since the Commission announced its proposal in July last year. Less attention has been paid to the Commission’s proposals for amendments to the CMO Regulation.

In part, this is because the Commission’s amendments were rather narrowly focused on a selected number of issues: the school scheme, sectoral interventions, creation of a protein crop sector, hemp, new marketing standards, import safeguards, and crisis preparedness. However, the rapporteur’s draft report and the range of amendments tabled by MEPs turn the CMO legislation into a broader debate about the future role of market intervention, strengthening farmers’ position in the food supply chain, and livestock, meat and alternative proteins.… Read the rest

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The three regulatory fixes that could turn Europe’s food labels into a One Health instrument

This post is contributed by Pablo Palencia Garrido-Lestache who is a veterinarian and consultant with over 25 years of experience in One Health and agrifood strategy. He served as the Regional Minister for Rural Development, Livestock, Fisheries, and Food in Cantabria, Spain. Throughout his career, he has led the development of strategic projects for cooperatives and the establishment of PGI (Protected Geographical Indication) frameworks, focusing on integrating living heritage and ecosystem services into legal structures to ensure the resilience of livestock production systems. info@iberap.com

Three targeted regulatory reforms could turn Europe’s system of protected food names into the most powerful instrument for public health, economic sustainability and commercial differentiation currently on the table. The cost of inaction is incomparably greater than the cost of acting.

Europe holds the world’s most powerful agri-food instrument and does not know it. Its three thousand Protected Geographical Indications (PGIs) and Protected Designations of Origin (PDOs) are recognised in trade agreements with Mercosur, India and dozens of international partners.… Read the rest

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Financing accession for new Member States

At the end of June, the Commission presented a Communication with a draft financial package for the accession negotiations with Montenegro for debate in the Council. This is the first step in concluding Chapter 33 on financial and budgetary provisions in the accession negotiations. It will allow the Council to debate these financial issues alongside work on the other remaining chapters, and on this basis the Commission will subsequently present to the Council a draft common position for negotiations on financial and budgetary provisions.

The package presented in the Communication assumes that Montenegro joins the EU on 1 January 2028 when the new MFF is planned to begin. This is a technical assumption, and the Communication makes clear that accession will happen only when Montenegro has fulfilled the conditions for membership and when its accession treaty is ratified by all parties. If Montenegro joins at a later date during the MFF period, the dates for phasing in payments will be adjusted accordingly.… Read the rest

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A CAP built to last: four adjustments towards a durable farm budget

Cora Petrick and Nikolai Pushkarev are associated with the Think Tank Agora Agriculture based in Germany and Brussels.

The proposed reduction in earmarked funding for agriculture in the EU’s next budget has generated significant controversy. Yet, financial pressure on the Common Agricultural Policy (CAP) is not new. Adjusted for inflation and per hectare of agricultural land, the CAP budget has declined by about 40 percent over the past 25 years, as shown in the figure below.

This downward trend could continue in the next budgetary period. Under current proposals, the minimum annual CAP budget per hectare from 2028 onward would be about half the funding level in 2000. The final allocation of EU funding for the CAP will depend on national decisions and the size of the overall EU budget. Even if the CAP budget ultimately turns out to be higher than initially proposed, it is unlikely to reverse the long-term decline.… Read the rest

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Incentivising climate action in Irish agriculture and land use

Two weeks ago, I had the pleasure of giving an invited talk at the Irish Environmental Protection Agency’s annual Climate Change Conference 2026 in Dublin. My topic was “Incentivising climate action in the agriculture and land use sectors”. Irish agriculture has shown a steady improvement in emissions intensity, but almost no reduction in absolute emissions since 1990. As it accounts for 36% of emissions in the national inventory (excluding energy use and soil emissions), there is an urgent need to adopt lower-emission technologies and to shift to lower-emission land uses at scale.

The key issue I raise is, if we want lower-emissions agriculture and land use in Ireland, then how do we make lower-emissions land use economically viable at farm level? And how do we incentivise that change? Land use systems do not change simply because alternative systems appear environmentally desirable. They change when there are viable markets, reliable income streams, manageable risks, functioning supply chains, and credible long-term incentives.… Read the rest

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The Commission’s proposal to replace the ‘active farmer’ definition appears more bureaucratic

There are two parallel debates taking place in this CAP reform round under the general rubric of targeting, or who deserves support. One issue is around the definition of an active farmer. The other is that support should be targeted on farmers in need. In this post, I want to focus on the changes proposed by the Commission in the way active farmers are defined.

Active farmers in the current Regulation are a sub-set of all farmers. Only active farmers are eligible to receive direct payments (decoupled and coupled payments). While we can use the concept ‘active farmer’ which was introduced in the current CAP Strategic Plans Regulation as a shorthand, its specific implementation has changed in the proposal for the post-2027 CAP.

Active farmers in the CAP Strategic Plan Regulation

Under the current CAP Strategic Plans Regulation, the distinction is made between a farmer and a beneficiary of direct payments.… Read the rest