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The Commission’s CAP budget proposal in the next MFF

Please note that I have updated and revised some of the commentary in this post in a later one here. This later post gives a a more optimistic view of the likely size of the CAP budget though still with caveats. I would urge readers to also read this later post in conjunction with this one. I have left this post online for the record.

The publication of the Commission’s MFF proposals and related legislative proposals on Wednesday 16 July was chaotic, in part it seems because negotiations within the Commission went down to the wire right up to the afternoon of the day of publication. Publication of the key texts was delayed, and indeed the NPRF Regulation (see below) only became available on the EU Register of Commission Documents early morning Friday 18 July.

As far as concerns the CAP proposal in the MFF, this chaotic delivery led to a bit of a communications disaster.… Read the rest

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Navigating EU fertiliser policy through turbulent times

The governance of nitrogen fertiliser markets in the European Union has long been shaped by a fundamental and persistent tension between the competing interests of farmers and domestic fertiliser producers. On one side, European farmers advocate for unfettered access to nitrogenous fertilisers at the lowest possible prices—inputs that are critical to their productivity and competitiveness. On the other side, EU-based fertiliser manufacturers have lobbied for trade protection to shield themselves from what they view as unfair competition—particularly low-cost imports of ammonia and nitrogen fertilisers often linked to price dumping or state subsidies in exporting countries.

This traditional conflict has become significantly more complex in recent years, as new forces reshape the political economy of fertiliser trade. The Russian invasion of Ukraine in 2022 dramatically altered global energy markets, sending natural gas prices—the main feedstock for synthetic nitrogen fertilisers—soaring across Europe. This not only undermined the cost competitiveness of EU fertiliser producers but also exposed vulnerabilities in the Union’s supply chains, especially its reliance on imports from geopolitically sensitive suppliers such as Russia (see my previous post detailing trends in import sourcing of nitrogenous fertilisers to the EU).… Read the rest

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Import dependence for nitrogen supply

Nitrogen is a critical input to agricultural production. In the EU, approximately half of this nutrient is supplied from organic livestock-derived sources while the other half comes from mineral nitrogen (specifically in 2023, organic nitrogen supplied amounted to 8.3 million tonnes and mineral nitrogen 8.7 million tonnes across the EU27, UK, Switzerland and Norway, source Fertilizers Europe 2024).

A significant share of this mineral nitrogen (either directly or in the form of ammonia which is the main feedstock) is imported, which can be a significant source of vulnerability. In this post we examine the extent of this vulnerability in terms of the dependence on nitrogen imports and the main sources of import supply.

Nitrogen use and import dependency

The introduction of the Nitrates Directive in 1991, of the national action programmes for designated nitrate vulnerable zones and the CAP reforms decoupling payments from production levels, all led to steep declines in the use of nitrogenous fertilisers in the 1990s and early 2000s (DG AGRI, 2019) shown in the first figure below.… Read the rest

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Fitting the CAP into the next MFF long-term budget

The Commission Communication on The road to the next multiannual financial framework published in February 2025 put forward several proposals for the reform of the MFF structure prior to the formal legislative proposal now pencilled in for July 2025. For the Commission, the key priority is the scale of the budget and the means to finance what it sees as inevitably greater expenditure in the coming programming period. It notes in bold print on page one of the Communication that Europe needs to square the circle: “there cannot be an EU budget fit for our ambitions and notably ensuring the reimbursement of NextGenerationEU, and, at the same time, stable national financial contributions without introducing new own resources”.

The arguments for increased EU budget expenditure are well known. On this occasion they are amplified by the needs to support a surge in defence spending, to address the lagging competitiveness of European industry as identified in the Draghi report and to support the Clean Industrial Deal, as well as to start repayments of the borrowing undertaken to fund the Next Generation EU.… Read the rest

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Trump II tariffs and the EU agri-food sector

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. The additional tariff on Chinese imports is now in effect and China announced limited retaliatory measures a few days afterwards. Today President Trump announced a further 10% tariff on Chinese imports to take effect from March 4th.… Read the rest

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Addressing generational renewal: the situation in Ireland

Generational renewal in farming is a big topic in Brussels right now. It is likely to feature heavily in the Vision for Agriculture and Food that the Commission is expected to publish shortly in response to the report of the Strategic Dialogue on the Future of Agriculture. Von der Leyen’s Mission Letter to the incoming Commissioner for Agriculture and Food Christophe Hansen directed him “to present a strategy for generational renewal in agriculture, notably supporting family farms and young farmers to access capital”.  In his confirmation hearings with the European Parliament, Hansen stated that “Creating the conditions to turn the trend of lagging generational renewal, by making sure that farming remains a viable and attractive vocation decades from now, will be the central tenet of my Vision.” In line with this commitment, generational renewal was one of the issues addressed in the first Youth Policy Dialogue organised by DG AGRI last December.… Read the rest

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Exemptions to the Enhanced Conditionality of the Common Agricultural Policy: Exercised, Exploited or Eschewed?

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. Nitrates, Natura 2000 and Animal Welfare Directives) and several Good Agricultural and Environmental Conditions (GAECs), which are part of the CAP. Being linked to direct payments that most European farmers receive, the GEACs are considered an important instrument to move EU agriculture in a more sustainable direction.… Read the rest

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Rise of the far right in the EU

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. At the time Austria faced punitive measures from other EU member states for admitting a party founded by former Nazis into government. Now the new leader of the ÖVP, Christian Stocker, has indicated that he is open to talking with the Freedom Party.… Read the rest

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Limited impact of Mercosur Partnership Agreement on the EU beef market

The EU reached a negotiated agreement on the final texts of what is now called the EU-Mercosur Partnership Agreement on 6 December last (for details see this Commission web page). They include the texts agreed in June 2019, plus the political and cooperation components of the deal agreed in June 2020, as well as additional elements resulting from negotiations between March 2023 and December 2024.

The agreed texts have led to major upheavals within the EU. Several Member States, including France, Ireland, Austria and Poland, have come out to oppose ratification of the agreement over concerns about the deal’s potential impact on both European agriculture and the Amazon rainforest. Italy appears to be sitting on the fence and could go either way. These positions reflect opposition to the deal from farmer organisations as well as from environmental organisations in these countries and at EU level.

Much of this opposition has focused on the perceived negative impacts of the concessions the EU has made in the beef sector.… Read the rest

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Agricultural policy reform in England and the 2024 UK budget

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. The broad outlines were set in the White Paper Health and Harmony: the future for food, farming and the environment in a Green Brexit published in February 2018 when Michael Gove was the Secretary of State for Environment, Food and Rural Affairs in the UK Conservative government. This formed the basis for a public consultation that eventually led to the passage of the Agriculture Act 2020 in the UK. … Read the rest