CAP Reform

That the US now intends to impose additional tariffs of 25% on EU exports (along with those of other countries) is now stated US policy following remarks President Trump made at his first cabinet meeting yesterday. The question is not whether, but when. It would be prudent to plan for high tariffs on EU farm exports to the US.

‘Tariff Man’ Trump has threatened tariffs on other countries previously and then, at least temporarily, backed off. On February 1, 2025, he imposed a 25% additional tariff on imports of Canadian- and Mexican-origin goods (since suspended for 30 days, but he has now confirmed that they will be introduced on March 4th having previously stated April 2nd) and a 10% additional tariff on imports of Chinese-origin goods.… Read the rest

We are pleased to welcome this guest post by Pieter Zwaan. Dr. Pieter Zwaan is a Senior Research Fellow at the EU & Global Affairs Unit of the Clingendael Institute and an Assistant Professor Public Administration at the Radboud University. He is specialised in EU agriculture and food policies.

The cross-compliance regime of the Common Agricultural Policy (CAP) specifies several conditionality rules that farmers must follow to be eligible to receive EU funding, including the so-called direct (or basic income support) payments. These payments account for 20-25% of the total EU budget. The conditionality rules include so-called Statutory Management Requirements (SMRs), based on EU legislation (e.g.… Read the rest

All with an interest in EU policymaking must take note of current developments in Austria where the leader of the far-right Freedom Party FPÖ Herbert Kickl was given the task of forming a new government by the Austrian President Alexander Van der Bellen on Monday last. This followed the breakdown of government negotiations between the conservative, liberal and centre-left parties and the resignation of the former leader of the conservative ÖVP Karl Nehammer at the weekend.

Kickl is no stranger to the Austrian government. He previously served as Interior Minister between 2017 and 2019 when the Freedom Party was the junior party in a coalition with the ÖVP led by Chancellor Sebastian Kurz.… Read the rest

UK farmers are preparing to protest tomorrow November 19th outside Parliament against inheritance tax changes in the new Labour Government budget announced last month. They claim these changes will have a devastating impact on family farm businesses. Perhaps surprisingly, the accelerated phase-out of direct payments also announced in that budget has not been the focus of attention. In this post, I discuss the phasing out of direct payments, leaving the inheritance tax issue to one side.

The UK has been preparing and implementing its post-Brexit agricultural policy since 2018 with the most significant changes taking place in England among the four UK countries.… Read the rest

In this post, I look at Member State net budget balances when it comes to CAP expenditure – which Member States would be net gainers or losers from an increase or decrease in the CAP budget, assuming the allocation criteria in play in 2023 were continued. The justification for this exercise is that these net balances likely feed into Member States’ views on the appropriate size of the CAP budget. Net recipients are more likely to favour an expansion in the budget, net payers the opposite. We know that the ‘juste retour’ principle is alive and well when it comes to negotiating the next Multi-annual Financial Framework (MFF).… Read the rest

This post is a rather technical note on how we set and interpret climate targets where the underlying data series are subject to frequent revisions. In the EU’s climate architecture, the level of ambition is usually expressed in terms of reduction commitments relative to a base year. Sometimes these reduction commitments are in percentage terms but are then converted into absolute figures using data from the National Inventory Reports for a recent year or period. In other cases, the reduction commitments are already expressed in absolute terms, but the size of the required reduction has previously been determined by reference to national inventories in a base year or period.… Read the rest

My attention was caught by a post on X (formerly Twitter) this week from Franz Sinabell, economist at the Austrian Institute for Economic Research. He reproduced a graph based on European Central Bank data showing the evolution of the nominal effective exchange rate for the euro over time. As can be seen from the post below, this shows a steady, if uneven, upward trend indicating a gradual appreciation of the euro, reaching a peak in August 2024. Franz commented that “Sectors that earn money on international markets – e.g. with agricultural goods or food – are currently not having an easy time”.… Read the rest