This article is part of our ongoing series developed for our “Feed the Change” campaign, delving into the core themes and recommendations as outlined in our new Manifesto for the EU elections 2024.
Did you know that 80% of the EU farming budget goes to only 20% of the farms? Much like the wicked stepmother with her children in the world-known tale “Cinderella”, Europe does not treat all its farmers equally.
Agricultural subsidies are a cornerstone of the European Union’s agricultural policy, playing a crucial role in shaping the agricultural landscape and influencing farming practices across the continent. However, the current subsidy framework, primarily governed by the Common Agricultural Policy (CAP), has faced criticism for favoring large-scale, intensive farming operations at the expense of small-scale, sustainable farmers.
Recently, the EU adopted a revision of the CAP to weaken the (already weak) environmental conditions that farmers have to fulfill to receive CAP subsidies. Such a step backward is going to widen the gap between big industrial landowners and small-scale sustainable farmers who contribute to the vitality of rural communities.
The Inequities of the CAP Impact Farmers and Sustainability
The CAP, established in 1962, was designed to ensure food security, stabilize markets, and provide fair incomes for farmers. With a budget of approximately €387 billion for the 2021-2027 period, it constitutes a significant portion of funds contributed by EU taxpayers. However, a key issue lies in its payment system: the bigger the farm, the bigger the subsidy. According to a 2020 report, 80% of CAP subsidies go to just 20% of farms, mostly the largest ones.
This skewed distribution exacerbates inequalities within the farming community and often undermines environmental and social goals. Smaller farms, which are more likely to engage in sustainable farming practices, receive disproportionately less support. This financial disparity can force small farmers to either expand unsustainably or exit the field altogether. Between 2005 and 2020, the number of farms in the EU decreased by 37%, with small farms being the most affected.
Furthermore, the emphasis on production efficiency often leads to intensive farming practices, such as monocultures, heavy pesticide and fertilizer use, and high livestock densities. As a result, intensive farming has become a significant source of greenhouse gas emissions, accounting for approximately 11% of the EU’s total emissions, while contributing to biodiversity loss, with farmland bird populations declining by over 30% since 1990.
The CAP’s current structure thus perpetuates a cycle where large, industrial farms receive the most funding, reinforcing practices that are environmentally harmful and socially inequitable.
Rising Costs Are Squeezing Small-scale Farmers and Consumers
In addition to the structural issues within the CAP, EU farmers are grappling with the effects of inflation. Rising costs for fuel, feed, and fertilizers have placed substantial financial strain on farmers, particularly smaller operations that already receive minimal subsidies. According to Eurostat, agricultural input prices rose by 10% in 2022, with energy costs seeing the most significant increases. Meanwhile, farmers across Europe are now paid 9% less for their products than in 2022.
This inflationary pressure compounds the challenges faced by small-scale farmers, who are less able to absorb cost increases compared to their larger counterparts. Consequently, many are forced to pass on these costs to consumers, who are also dealing with inflation in their daily lives. A recent EU Commission report highlights that to cope with tighter budgets, consumers are increasingly turning to private brands[1], cutting back on purchases, and seeking alternative retailers. This comes as a result of the 7.5% increase in food prices in the past year, leading consumers to be less inclined to pay premium prices for high-quality goods.
Nonetheless, there has been a growing emphasis on overall health since the end of COVID-19, with consumers showing increased interest in healthier, more functional foods. Our societies are moving beyond seeing food as simply something to fill us up.
This presents an opportunity for EU farmers to add value to their production through quality schemes, organic and other specialized production systems, or by engaging in short-supply chains and direct sales. However, this potential is undermined by the new CAP proposals, which fail to align agricultural policies with consumers’ shifting priorities, instead of promoting sustainable practices and supporting small-scale farmers who are better positioned to meet these demands.
The Need for a Just and Inclusive Transition
The EU’s goal must be to shift CAP payments toward a “public money for public good” approach. This means directing funds to farmers who implement environmentally and socially beneficial practices, such as agroecology and biodiversity conservation.
- Supporting Small-Scale Farmers: Small-scale farmers are the backbone of rural communities, contributing to local economies, preserving proven farming practices, and promoting biodiversity. However, they face significant challenges in competing with large agribusinesses. By redirecting subsidies to support small and medium-sized farms, the EU can help these farmers thrive, maintain rural livelihoods, and ensure the continuation of diverse, local food cultures.
- Promoting Sustainable Farming Practices: Intensive farming practices, driven by the current subsidy structure, have led to soil degradation, water pollution, and loss of biodiversity. A just transition requires a shift towards sustainable farming practices, such as agroecology and organic farming, which are better for the environment and human health. By incentivizing these practices, the EU can help mitigate climate change, protect natural resources, and promote healthier food systems.
- Ensuring Fair Incomes and Working Conditions: Agricultural workers often face precarious working conditions and low wages. A reformed subsidy system should prioritize fair incomes and decent working conditions for all agricultural workers. This can be achieved by linking subsidies to social standards and ensuring that financial support reaches those who need it most.
Conclusion
Reforming the EU’s agricultural subsidies is essential for creating a just and inclusive food system. By supporting small-scale farmers, promoting sustainable practices, and ensuring fair working conditions, the EU can build a more equitable and sustainable agricultural sector. This reform is crucial not only for the well-being of farmers and rural communities but also for the health of our environment and the future of food production in Europe.
On June 6-9, #UseYourVote! Join our “Feed the Change” campaign to help us build a food system that benefits everyone!
Download our Manifesto for the EU Elections 2024
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[1] Also called store brands, which are private label products offered by retailers as a lower-price alternative to name brand products.
