National Responses to the Modernization Challenges of Agricultural Production in the EU-2023-27 Planning Period

Fehér, István

Keywords: agricultural policy, greening, rural development, different priorities, subsidies JEL: Q10, Q18

The CAP - the Common Agricultural Policy, together with the cohesion policy - still represents a major weight in the EU budget: almost one third (31.3%) of resources are devoted to support the agriculture and rural areas. As a Member State, the SPR (Strategic Plan Regulation) has defined the allocations for both pillars and sectors. Under the SPR, a total of €260.5 billion will be allocated to the CAP between 2023 and 2027, of which 77% will be allocated to the EAGF (European Agricultural Guarantee Fund) and 23% to the EAFRD (European Agricultural Fund for Rural Development). The Member States receive different shares of these funds. In absolute terms, France, Germany, and Spain receive the most aid from the EAFRD. This fund also finances interventions in specific sectors, with Italy, Greece and France being the main beneficiaries. France, Italy, and Poland receive the highest amounts from the EAFRD.
In summary, there is still a clear asymmetry in the relative share of the funds between Member States: the "new" Member States (those that joined since 2004) (EU-13) receive less than 26% of EAGF allocations, but 36% of EAFRD allocations. This reflects the specific challenges of structural development in agricultural and rural areas, for which the EAFRD has (more appropriate) instruments. However, the EAFRD must be co-financed from national resources and is therefore less attractive from a budgetary point of view. If financial allocations are expressed in terms of UAA (Utilised Agricultural Area), there are still significant differences, especially for the new Member States.