12. European Union
Policy reforms undertaken in the European Union (EU)1 in the 1990s and early 2000s substantially reduced support to agriculture and shifted its composition to less production- and trade-distorting measures. EU support to producers as a share of gross farm receipts stabilised since 2010 and stood at 16% in 2020-22, close to the OECD average.
While trade-protection measures remain in effect for several sectors – including import and export licensing, Tariff Rate Quotas (TRQs), and special safeguards – market-distorting price transfers declined substantially over the last two decades. In 2020-22, Market Price Support (MPS) accounted for 16% of support to producers, down from 46% in 2000-02.
Most support to producers is budgetary, largely in the form of decoupled direct payments. On average, nearly half of budgetary support in 2020-22 was based on historical entitlements, while around 29% was based on current area or animal numbers requiring production, and 20% on input use. Moreover, 61% of payments to producers were contingent on mandatory environmental constraints, and an additional 12% came from voluntary agri-environmental schemes with conditions beyond mandatory requirements.
Expenditures for general services to the sector (General Service Support Estimate, GSSE) in 2020-22 averaged 12.9% of total support, or 2.8% of the value of agricultural production – a decrease compared to 2000-02 and below the OECD average. Expenditures on agricultural knowledge and innovation systems have increased over the past two decades and their share of GSSE rose from 42% in 2000-02 to 52% in 2020-22. Relative to the value of production, these expenditures remained at 1.5%, above the OECD average. The contribution of expenditures on marketing and promotion also rose, while the share of support for development and maintenance of infrastructure and public stockholding decreased over the same period.
Total support to the sector declined in relative terms over the past 20 years. In 2020-22, total support was estimated at 0.6% of Gross Domestic Product (GDP), compared to 1.0% in 2000-02.
The Common Agricultural Policy (CAP) 2023-27 entered into force in January 2023. The new CAP defines a new delivery model, with more flexible implementation by Member States compared to previous CAP reforms. The CAP 2023-27 is built around ten specific objectives, which form the basis for EU Member States to design their CAP Strategic Plans (CSPs). The CSP approval process was the focus of much agricultural policy activity in 2022. After bilateral consultations between the European Commission and each Member State, the 28 CSPs2 were revised and formally approved between August and December 2022. CSPs include interventions under the two CAP pillars and are expected to devote 32% (close to EUR 98 billion or USD 103 billion) of total public CAP funding to deliver specific environmental benefits for climate, water, soil, air, biodiversity, and animal welfare.
EU policies in 2022 also focused on mitigating the impacts of rising food prices and input costs for farmers and consumers, accelerated by Russia’s war of aggression against Ukraine. A raft of measures was implemented at the EU-level, including flexibilities under the CAP, exceptional market measures, direct support, and two successive temporary state-aid frameworks. In addition, EU Member States introduced their own measures, such as tax concessions, investment assistance, and allowances to consumers and farm households, to help farmers and agro-food businesses cope with the financial impacts. Finally, the European Commission and national governments, drawing on recent experiences with COVID-19 and the war in Ukraine, have undertaken a number of actions to strengthen the overall resilience of the agriculture and food sector against potential future crises. In addition, as a part of the solidarity response to Ukraine, the European Union implemented trade-facilitating measures, accounting for a significant share of Ukraine’s cereal exports, with some implementation problems in some neighbouring Member States due to the increased trade volumes.
In 2022, the European Union concluded negotiations for a comprehensive and ambitious trade agreement with New Zealand and a modernised Association Agreement with Chile. They are the first two agreements to include a dedicated chapter on sustainable food systems.
Adoption of the EU Strategy on Adaptation in 2021 was a step towards improving knowledge of the impacts of climate change and adaptation solutions in the European Union. Unlike the policy framework for mitigation, there are no adaptation targets or requirements for Member States, which makes it difficult to monitor efforts. Synergies should be sought between the broader range of EU policies (i.e. flood-risk management policies) and agricultural policies. Adaptation measures in the European Union tend to focus on actions that directly benefit farm businesses (e.g. support for more efficient irrigation systems) and would benefit from actions towards wider preparedness and public benefits (e.g. land management practices that reduce flood risks).
While CAP measures rarely make explicit reference to climate adaptation, several can contribute to agriculture’s adaptation to climate change. CAP support’s effectiveness in responding to adaptation challenges could be improved by prioritising measures that target knowledge transfer and preventive ecosystem restoration actions, responding to the challenges identified in the EU Strategy on Adaptation.
Efforts have been made to improve fairness and to better distribute direct payments to farmers. However, they do not target low-income farm households and are not always the most efficient tool to achieve productivity and socio-economic objectives. Income support objectives should be met with more targeted payments to low-income farm households, not only to be more effective, but also to free up more funds for voluntary payments for environmental services, and for investment in innovation and resilience.
Several environmental conditions are attached to direct payments with the objective of ensuring that EU farmers adopt sustainable agricultural practices. However, certain aspects of their design and implementation, such as weaknesses in monitoring and the use of many exemptions, limit the effectiveness of these mechanisms in promoting public goods or reducing environmental externalities. Efforts should be made to improve the targeting of measures aimed at environmental sustainability. Voluntary schemes should be transformed into multi-annual, results-based payments for environmental services, to increase policy performance and offer farmers additional sources of revenue.
Despite substantial progress on policy reforms, potentially most-distorting forms of support still represent nearly a quarter of support to producers. While the CAP 2023-27 includes promising new approaches and priorities, meeting the ambitious objectives of the European Green Deal will require further reforms, including phasing out remaining market price support and payments with strong potential to harm the environment and to distort markets and trade.
Agriculture productivity growth remains moderate, and innovation represents a low share of CAP expenditure, though some developments point to growing emphasis on innovation and knowledge exchange. The creation of new European Partnerships relevant to farming and food systems under Horizon Europe, and the inclusion of specific sections on Agricultural Knowledge and Innovation Systems (AKIS) in all the CSPs under the CAP 2023-27 are positive steps. Nevertheless, the sector could benefit from increasing the share of support to innovation in the agricultural policy mix, and from steering agricultural innovation efforts towards environmental sustainability.
The European Union and its Member States acted quickly to reduce the economic impact of the war in Ukraine on the EU agro-food sector. Most support was provided in the form of direct payments to farmers to absorb the shock, but there are also examples of actions adopted to strengthen the long-term resilience of EU food supply chains. These include ongoing mapping of risks and vulnerabilities, undertaken by the European Food Security Crisis Preparedness and Response Mechanism (EFSCM), and on-farm investment support provided by EU Member States to reduce the dependence of agricultural businesses on inputs such as energy and fertilisers. While Russia’s war of aggression against Ukraine has elevated food-security issues to the top of the political agenda, the European Union should ensure that derogations from environmental rules do not become a permanent solution and do not hamper environmental objectives.
Recent crises highlight the need to monitor Member States’ supply chains and markets, and co-ordinate long-term actions. Policy packages should be balanced, considering the EU’s broader food-system objectives, and far-sighted, beyond relief measures, creating incentives for agro-food business to adapt and transform, and consequently improve resilience against future shocks.
In the European Union the policy setting affecting the agricultural sector is mainly driven by an overarching framework established at EU level, which allows for policy space at Member State level. Whereas the first two sections on Overview of policy trends and Main policy instruments focus solely on policies at EU level, the following sections on Climate change adaptation policies in agriculture and Domestic policy developments discuss both EU and Member State level.
Overview of policy trends
The Common Agricultural Policy (CAP) has been the European Union’s agricultural policy framework since its institution in 1962, although the mix of policy instruments has evolved substantially over time (Table 12.2). The Treaty of Rome that established in 1957 the European Economic Community defined common policies on agriculture and trade (OECD, 2011[1]; European Parliament, 2021[2]). Agriculture made up a much larger share of Europe’s economy at the time, and the income gap between urban and rural households was increasing. Moreover, the region was a net food importer with concerns about securing adequate food supplies during the Cold War (Grant, 2020[3]). In this context, the Treaty of Rome laid down five main objectives for the CAP:
1. To increase agricultural productivity by promoting technical progress and ensuring the optimum use of the factors of production, in particular labour
CAP measures targeting these objectives were financed from the European Agricultural Guidance and Guarantee Fund (EAGGF), split into separate Guidance and Guarantee sections. Different rules governed the two: the Guidance section financed operations related to structural policy and development of rural areas, while the Guarantee section funded expenditures on market and price policies (European Parliament, 2021[4]).
For more than three decades until the 1990s, support prices under the CAP were high compared to world market prices, with an unlimited buying guarantee. As a result, European farmers produced increasing surpluses and the cost of managing stocks and subsidising exports grew accordingly. In response, by the 1980s the European Union introduced quantitative production restrictions in the form of quotas on milk production.
The CAP’s first major reform occurred in 1992, in conjunction with negotiations on the General Agreement on Tariffs and Trade (GATT) and following the result from the US-EU soya GATT panel. The MacSharry Reform brought a major shift in the delivery of the CAP. Instead of supporting production (through market intervention and export subsidies), the regime shifted the bulk of support to supporting producer incomes directly through area and headage payments, aiming to close the gap between supply and demand and reduce overall expenditures (European Parliament, 2021[5]). This wide-ranging reform reduced cereal intervention prices, introduced compensatory payments per hectare for cereals or per head for livestock, and introduced a mandatory set-aside scheme to take land out of production. In conjunction with the reform of budgetary support measures through the MacSharry package, market price support (MPS) also declined thanks to EU commitments under the 1995 Uruguay Round Agreement on Agriculture. Namely, bound tariffs were gradually reduced, and variable import levies were replaced with ad valorem or specific tariffs and tariff rate quotas (OECD, 2011[1]).
Subsequent reforms built on the foundation of the MacSharry Reform, reducing distortive support to the agricultural sector or changing how support is delivered. The Agenda 2000 reform focused on aligning EU and world prices, offsetting the reduction of price support with increased direct aid to producers under the now called Pillar 1 (European Parliament, 2021[5]). In addition, the Rural Development Regulation was introduced as Pillar 2 of the CAP. Finally, this package instituted two types of environmental cross-compliance conditions: an optional measure linked to the direct payment in Pillar 1, and the so-called “Good Farming Practice” requirements for the agri-environmental schemes in Pillar 2.
The 2003 Fischler Reform3 further developed and consolidated these measures, decoupling most support from production through the introduction of the single payment scheme (SPS) (European Parliament, 2021[5]). Furthermore, in this reform cross-compliance became obligatory and was extended to include not only environmental issues but also public, animal and plant health and animal welfare issues. Cross-compliance rules were enforced through a set of Statutory Management Requirements (SMR) and “Minimum Requirements for Good Agricultural and Environmental Condition” (GAEC). This package also introduced modulation, allowing Member States to transfer funds between the two pillars to reinforce rural development objectives. The reform also prioritised financial discipline, freezing the budget of Pillar 1 (covering the SPS and market measures) and imposing annual compulsory ceilings. This coincided with the splitting of the CAP budget into the European Agricultural Guarantee Fund (EAGF) to finance Pillar 1 and the European Agricultural Fund for Rural Development (EAFRD) to finance Pillar 2 from 2007. Additionally, this round of reform introduced the single common market organisation (CMO) in 2007, which codified the regulation mechanisms of the existing CMOs. Reform programmes for specific commodities (cotton, hops, olive oil, tobacco, sugar, fruits and vegetables, and wine) were introduced from 2003 to 2008, with the aim of reducing distortive payments, restoring market-based incentives and aligning them with the SPS (OECD, 2011[1]). Through the different rounds of CAP reform, as result of budgetary payments replacing MPS, but also as result of the additional Member States joining the European Union, the absolute budget figure for the CAP more than doubled from 1990 to 2010.
Measures taken under the 2009 Health Check sought to continue the direction of the 2003 reform. Namely, decoupling of aid continued and nearly all payments (with the exception of suckler cow, sheep and goat premia) were included into the decoupled direct payments scheme - SPS. It also further reduced market intervention for a number of products, abolished set-aside and introduced phase-out of milk quotas. Additional flexibility for direct payments was introduced as well (OECD, 2011[1]). The Health Check also resulted in changes to both SMR and GAEC of cross-compliance, with the addition of two water management standards.
The 2013 Reform set out a more global, integrated approach to agricultural support for the programming period 2014-20, undertaken through four lines of action (European Parliament, 2021[5]):
1. Converting decoupled aid into a multifunctional support system with aid directed toward specific objectives. Accordingly, the SPS was replaced by a system of multi-purpose payments with seven components: (1) a basic payment; (2) a greening payment for environmental public goods; (3) an additional payment for young farmers; (4) a “redistributive” payment for first hectares of farmland; (5) support for areas with specific natural constraints; (6) aid coupled to production; and (7) a simplified system for small farmers. Direct payments were still subject to cross-compliance rules, which were confirmed and simplified.
2. Consolidating the two CAP pillars, with mostly decoupled direct aid and market measures funded through Pillar 1, and rural development funded through Pillar 2, which continued to be co-financed by the Member States.
3. Consolidating CMO tools into safety nets in case of market disruption or price crisis, and ending other supply control measures, namely the sugar and milk quotas.
4. A more integrated, targeted and territorial approach to Pillar 2 through rural development plans, simplifying the range of available instruments to focus on certain core objectives.
During the negotiations of the new CAP post 2020, a political agreement between the European Parliament and the EU Member States in the Council was reached on transitional rules for the CAP for 2021-22 on 27 November 2020. These transitional rules were based on the principle of continuity of the 2014-20 CAP rules, while also including new elements to ensure a smooth transition.
In January 2023, the European Commission and the European Union Member countries began to implement the new CAP 2023-27. Although with a similar annual budget as the transitional period, the new CAP entails a new delivery model (NDM), in which Member States play a critical role in designing and implementing their CAP Strategic Plans (CSPs), which include both Pillar 1 and Pillar 2 measures (the NDM and CSPs are covered later in the chapter).
While CAP budget has remained relatively stable in nominal terms since 2010, CAP expenditures as a share of the total EU budget declined sharply, from 65.5% in 1980 to 33.1% in 2021 (EP, 2022[6]).
Total support to the agricultural sector as percentage of agricultural gross value-added in the European Union largely comes from budgetary allocations. Market price support declined significantly from 1986 through the 2000s but has remained mostly unchanged since around 2010. The most substantial change to PSE composition began in the mid-2000s after the Fischler reform decoupled most payments to farmers from production (Figure 12.1, Figure 12.4).
Main policy instruments
The Common Agricultural Policy (CAP) is the agricultural policy framework of the European Union. The new CAP 2023-27 entered into force on 1 January 2023.4 In addition to the CAP, Member States may implement measures funded from national or sub-national budgets that target specific agricultural sectors or objectives. These measures must comply with the European Union’s state aid rules and not distort competition within the common market (OECD, 2017[7]).
The CAP is currently organised in two pillars: the European Agricultural Guarantee Fund finances Pillar 1, and the European Agricultural Fund for Rural Development and EU Member States jointly co-finance5 rural development measures under Pillar 2. Member States deployed Rural Development Plans (RDPs) for Pillar 2 over the seven-year CAP period 2014-20.
Usually, each CAP reform covers a seven-year period coinciding with the EU multi-annual financial framework. Programming for CAP 2014-20 ended in 2020. However, as for the 2021-27 programming period, the CAP 2014-20 structure remained in place also for 2021-22 under transitional rules while negotiations for the new CAP were concluded. This period will be referred to here and the support estimates reported as CAP 2014-22. CAP 2023-27 will refer to the support estimates from 2023.
The overall budget for the CAP during the years 2014-20 was EUR 408 billion (USD 465 billion), 76% of which was initially allocated to Pillar 1 (covering market related expenditure and direct payments), and the remaining 24% to Pillar 2 (rural development spending, including agri-environmental payments). The CAP 2014-20 allowed Member States to transfer up to 15% of each envelope6 between the two pillars and the transitional rules made available this option also for the years 2021 and 2022. Over the whole 2014-22 period, fifteen countries transferred amounts between the two pillars and net transfers from the first pillar to the second stood at some EUR 4 billion (USD 4.6 billion) (EP, 2022[8]).
Pillar 1 defines and funds market measures under the common market organisation, as well as direct payments that may or may not be connected to specific commodities but whose recipients must be active farmers. Rural development policy is supported by Pillar 2. Contrary to Pillar 1, which is entirely financed by the European Union, Pillar 2 programmes are co-financed by the Member States.
Direct payments make up the bulk of CAP spending: in 2022, they accounted for two-thirds of the CAP expenditures (Table 12.3). These payments are largely decoupled from production as they are based on farm area, and do not depend on current production decisions. They represent an important part of farm income (OECD, 2023[9]).
Direct payments under Pillar 1
The Basic Payment Scheme (BPS) and the Single Area Payment Scheme (SAPS) made up 50% of the EU Pillar 1 direct payments envelope in 2022 (Table 12.4).7 The proportion spent by Member States on these two schemes varies significantly and reflects their spending choices on optional measures under Pillar 1.
In the ten Member States that apply the SAPS, Transitional National Aid (TNA) may be granted from national budgets up to 50% of the level of SAPS. TNA is mostly disbursed as decoupled payments even if limited commodity specificity is allowed. In claim year 2020 (the most recent year for which these data are available), the TNA was paid in all SAPS Member States except for Latvia, with 15% of this amount paid as coupled support (EC, 2022[10]). It may apply on a per area basis to arable land, hops and starch potatoes; a volume basis to milk; and a headage basis to livestock. Member States may review TNA budgets and supported commodities on an annual basis.
Both the BPS and the SAPS required cross-compliance with environmental and other standards, though exceptions apply. In the CAP 2014-22 cross-compliance requirement were set out in 13 SMRs and 7 GAEC standards.8 Non-compliance with these standards and requirements could lead to a reduction in CAP payments to the farmer. Additional environmental conditions were attached to the per-hectare greening payment, that accounted for 29% of the Pillar 1 direct payments budget. Both cross-compliance and greening leave many details of design and implementation to the discretion of individual EU Member States (OECD, 2023[9]).
Ten Member States or regions have chosen to grant higher payments to the first hectares9 under the so-called redistributive payment, using 4.5% of the European Union’s direct payments envelope.
Under the so-called “degressivity”, Member States had to reduce by at least 5% BPS payments to individual farms which exceeded EUR 150 000 (USD 170 932). These funds were transferred to Pillar 2 and used to fund the Member State’s RDPs. In 2021, twenty-one Member States10 applied the reduction of payments: thirteen Member States11 applied the minimum reduction, and eight12 chose to cap the BPS at levels varying from EUR 150 000 (USD 170 932) to EUR 300 000 (USD 341 864). Ten Member States13 also used the option to increase the amount exempt from the 5% reduction by the value of salaries paid. Despite all these corrective measures, in some Member States a high share of direct payments still goes to larger farms with higher than average levels of income per farm (OECD, 2023[9]).
A top-up payment to young farmers (under 40 years old) in addition to the BPS and SAPS applied in all Member States. In 2022, this payment accounted for 1.3% of the European Union’s direct payments envelope, as reported in the general budget. Member States chose to implement this measure in different ways. Some offered recipients a flat payment rate on a limited number of hectares, while others applied a payment proportional to the BPS or SAPS received. In addition to this compulsory young farmer scheme, 25 Member States chose to attribute a portion of their rural development envelopes to support young farmers, representing 4.5% of total planned rural development expenditures (ENRD, 2016[11]). The bulk of this spending was directed toward business development and investments.
Denmark and Slovenia implemented the Pillar 1 direct payment to Areas with Natural Constraints (ANC). Under this payment, ANC were defined based on eight biophysical criteria.14 Denmark used 0.3% and Slovenia 1.6% of their national direct payments envelope for ANC payments (EC, 2021[12]). A payment targeted to areas with natural or other specific constraints can also be budgeted under the RDP. It is implemented in 25 Member States and accounts for 23% of Pillar 2 public expenditure funds (including Member States’ contributions from national budgets) in 2022.
In the CAP 2014-22, Member States could choose to allocate part of their direct payments envelope to commodity-specific payments within defined ceilings (up to 13%) and under defined conditions. This voluntary coupled support (VCS) could be granted to create an incentive to maintain current levels of production in the sectors or regions concerned, with the objective of safeguarding specific types of farming or specific agricultural sectors that are particularly important for economic, social or environmental reasons. Choices of Member States on take-up of the VCS varied greatly, both in terms of the level of support and the commodities supported. All except Germany choose to offer some VCS, using 11% of the EU direct payments budget in 2022.
Fifteen Member States chose to offer the Small Farmers Scheme that waived requirements attached to the greening payment and cross-compliance.15 The payment could not exceed EUR 1 250 (USD 1 424) per farm and depending on the method chosen by the Member State the overall envelope was limited to 10% of national direct payments.16
The POSEI scheme (Programmes dʼOptions Spécifiques à lʼEloignement et à lʼInsularité) supports farming in the European Union’s outermost regions by using production-related payments. The scheme supports access to food, feed and inputs for local communities as well as the development of local agricultural production. It represented 1% of the direct payments envelope in 2022.
Market measures under Pillar 1
Pillar 1 also funds market support measures, representing 5.6% of the overall agriculture and rural development budget in 2022 (Table 12.3). These cover mainly the fruit and vegetables and wine sectors, while other market-related expenditures include the POSEI and Smaller Aegan Islands (excluding direct payments), promotion of agricultural products, apiculture and school schemes.
Part of the Pillar 1 budget is held back each year as a crisis reserve in case of emergency. If unused, the envelope reverts for distribution as Pillar 1 direct payments in the same year. This emergency fund was activated for the first time in 2022 to fund EUR 350 million of the EUR 500 million (USD 368 million of the USD 526 million) package to support agricultural producers in sectors affected by market disturbance due to the war in Ukraine (see section on Domestic policy responses to Russia’s war of aggression in Ukraine).
Fruits and vegetables are supported through market intervention measures implemented through producer organisations. There is also an entry price system (minimum import price) for some products and ad valorem duties, but no export subsidies. Member States can provide co-financed support to the fruit and vegetables sector, and the olive oil and table olives sectors. This funds a wide range of actions from production planning, quality measures, market withdrawal and harvest insurance to training, promotion and communication. Some of these measures apply at farm level while others are provided to producer organisations or the sector at large. For olive oil and flax fibre private storage may be activated as an optional scheme. In the CAP 2014-22, recognition of producer and inter-branch organisations expanded beyond fruits and vegetables. Compensation may be greater when producers claim support via producer groups, as was the case with compensation payments related to Russia’s embargo on imports.
The “School Schemes” programme promotes consumption of fruits and vegetables by school children. It covers consumption of fresh and processed fruits and vegetables and banana products. The budget for this was EUR 175 million (USD 184 million) in 2022.
In the dairy sector, intervention prices are used for butter and skimmed milk powder (SMP), while import tariffs are applicable to all milk and dairy products. Intervention purchases cannot exceed 50 000 tonnes for butter, and 109 000 tonnes for SMP, respectively representing 2% and 7% of production in 2021. Above those limits, purchase is made by tender. Intervention purchases were opened for both products as a response to sector shocks due to COVID-19, prior to which no intervention purchases had been made for butter since 2009, while the last intervention purchases for SMP prior to the pandemic had taken place in 2019.
Livestock production benefits from certain market supports. For the beef market, this is in the form of floor prices, tariffs and TRQ support.17 Import protection is provided for pig meat. The market support regime for sheep meat comprises tariffs and TRQs, with most country-specific TRQs subject to a zero customs duty. TRQs also support the poultry and eggs markets.
During times of low market prices, the EU can provide support to private sector operators by paying for the cost of storage of their products for a determined period of time. Private storage may be activated as an optional scheme for butter, SMP, certain cheeses, beef, pig meat, sheep meat and goat meat. This opportunity was opened for butter, SMP, cheese, beef and sheep meat in 2020-21 in response to the COVID-19 emergency and for pig meat in 2022 in response to the war in Ukraine (see Domestic policy responses Russia’s war of aggression in Ukraine).
Since January 2016, new vine planting for wine is limited to 1% of the planted vine areas per year. The wine sector is also supported through promotional measures in both the European Union and third countries, restructuring and conversion of vineyards; compensation for green harvesting; setting up of mutual funds; investment in tangible and intangible capital; income insurance; development of new products, processes and technologies; and distillation of by-products.
Rural development programmes under Pillar 2
The Rural Development fund EAFRD is part of the EU-level Common Strategic Framework covering all support from European Structural and Investment (ESI) funds in Member States through partnership agreements.18 The EAFRD-financed Pillar 2 of the CAP 2014-22 covers six priority areas implemented through national (or regional) rural development programmes (RDPs). RDPs also supported projects using the LEADER approach (Liaison Entre Actions de Développement de l’Économie Rurale) based on a multi-sectoral approach and local partnerships to address specific local problems.
Member States develop RDPs covering the entire CAP cycle based on a menu of 19 measures to meet the six priority areas of Pillar 2.19 At the aggregate, nearly 60% of the RDP budget for the period 2014-22 was allocated to just three of these measures: Areas with Natural Constraints; Investments; and Agri-environment and Climate. Of these, "investments” was a top-three measure in terms of expenditure in most Member States. At least 30% of rural development funding from the EU budget must be spent on measures related to the environment and climate change adaptation (including forestry and investments in physical assets) and another 5% must be spent on the LEADER approach.
Knowledge and innovation
The Pillar 2 of the CAP and the Horizon Europe programme are the two main EU funding streams supporting knowledge and innovation in EU agriculture. However, the vast majority of allocated resources (over 90%) is earmarked by individual Member States from national budgets, including non-agricultural budget lines (OECD, 2023[9]).
There were three main measures in RDPs for 2014-22 that target agricultural innovation: knowledge transfer, advice, and co-operation. Uptake of these measures was slower and more limited than other rural development measures (OECD, 2023[9]). The share of knowledge- and innovation-related spending in total public expenditure on agricultural support measures under Pillar 2 was around 2% in recent years.
The agriculture-relevant aspects of Horizon Europe fall under Cluster 6 on “Food, Bioeconomy, Natural Resources, Agriculture and Environment”. This cluster is important for the European Green Deal, with regard to the “Farm to Fork” Strategy, as well as for climate, circular economy and zero-pollution objectives. With an estimated budget of EUR 9 billion (USD 10 billion) over the seven-year programming period, it offers funding to stimulate public and private investment in research and innovation and fosters multi-actor projects and partnerships across EU countries.
“EU Missions” are a new element of Horizon Europe. These are a portfolio of collective actions like research projects, policy measures or legislative initiatives. There are five Missions in different thematic areas, of which “A Soil Deal for Europe” will help the agricultural sector by developing concrete solutions for restoring soil functions.
The European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) is the main EC policy tool bringing together CAP and Horizon funding for bottom-up multi-actor agricultural innovation projects. These projects tackle practical problems through a co-creation process involving farmers, researchers and other relevant actors.
Climate change mitigation policies
The European Climate Law codifies the goal set out in the European Green Deal for Europe’s economy and society to become climate-neutral by 2050.20 It also sets the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This package is part of the EU’s revised nationally determined contributions (NDCs).21 Although agriculture was not specifically mentioned in the European Climate Law, proposals on legislative tools to deliver on the targets include both agriculture and the land use, land use change and forestry (LULUCF) sectors.
Mitigation efforts for non-CO2 GHGs emitted by all sectors outside the Emission Trading System (ETS), including transport, buildings, small industry outside the ETS, waste and agriculture sectors are covered under the 2018 EU’s Effort Sharing Regulation, which was amended in April 2023. The new regulation22 lays down obligations on Member States with respect to their minimum contributions for the period from 2021 to 2030 to fulfilling the Union’s target of reducing its greenhouse gas emissions by 40% below 2005 levels. EU Member States now have emission reduction targets ranging from 10% to 50% compared to 2005 levels.
CO2 emissions relating to forestry, wetlands, cropland and grassland management are addressed primarily under the European Union’s LULUCF Regulation,23 which establishes a legislative framework for accounting emissions and removals from the land-use sectors between 2021 and 2030. Under the current framework, Member States must ensure that accounted CO2-eq emissions from the LULUCF sector are entirely compensated by an equivalent removal of CO2-eq from the atmosphere through action in the LULUCF sector.
Climate change adaptation policies in agriculture
The policies in place to support climate-change adaptation in the EU agricultural sector is complex and involves interaction of the general EU policy framework with more specific programmes and adaptation measures implemented at various geographical scales (EEA, 2019[13]):
The EU Policy Framework on adaptation sets objectives for action based on a range of strategies and policies, including the EU Strategy on Adaptation to Climate Change, the CAP, and EU laws, regulations, and directives (e.g. Climate Law, Water Framework Directive, Floods Directive).
Programmes supporting adaptation include EU programmes such as LIFE+, Copernicus, INTERREG, and Horizon Europe; and national or regional programmes such as rural development programmes, River Basin Management Plans, and Natura 2000 plans. Such programmes provide a framework for action at farm level and can provide knowledge and/or financial support.
The programmes supporting adaptation offer opportunities to introduce specific adaptation measures that can be implemented at national or regional level (e.g. farm advisory systems, irrigation infrastructure, flood prevention), and at farm level (e.g. risk management, early-warning systems, education, and awareness raising).
The sections below provide an overview of the EU’s and Member States’ main policies and programmes on climate-change adaptation in agriculture, including a selection of measures put in place by Member States since 2021 to adapt the agricultural sector to various climate pressures.
The EU policy framework and programmes
In the context of the European Green Deal, the European Climate Law (Article 5) states that the European Commission needs to adopt a Union strategy on adaptation to climate change in line with the Paris Agreement. In February 2021, the Commission adopted the Communication “Forging a climate-resilient Europe – the new EU Strategy on Adaptation to Climate Change” (EC, 2021[14]).
The new Strategy aims to improve knowledge of climate impacts and adaptation solutions, stepping up adaptation planning and climate risk assessments, accelerating adaptation action, and helping strengthen climate resilience globally. This strategy builds on the 2013 Climate Change Adaptation Strategy (EC, 2013[15]). Unlike the policy framework for mitigation, the European Union’s adaptation strategy does not set binding targets or requirements for Member States.
The European Climate Adaptation Platform (Climate-ADAPT) is part of the EU adaptation strategy. It is a partnership between the European Commission and the European Environment Agency to gather more and better data on climate-related risks and losses, and help users access and share data and information on the impacts of climate change and on EU, national, and transnational adaptation strategies and actions (EC and EEA, 2023[16]).
The CAP is the main policy instrument to stimulate adaptation solutions and improve the resilience of EU agriculture to climate risks. Climate action (including adaptation) was a cross-cutting objective of the CAP 2014-22, and the European Commission deemed a quarter of CAP spending as contributing to climate mitigation and adaptation (European Commission, 2019[17]). However, the CAP contains no legally binding or concrete, quantified objectives for adaptation and few CAP measures make explicit reference to climate adaptation.
CAP 2014-22 aimed to encourage climate adaptation of agriculture through both Pillar 1 and Pillar 2 measures. In Pillar 1, this was through the implementation of green payments and cross-compliance, especially those that helped maintain diverse farming systems (e.g. crop diversification, introduction of Ecological Focus Areas, protection of permanent grassland and landscape features). For Pillar 2, support for knowledge transfer, preventive or restoration actions, agro-forestry, co-operation, and risk management could all aid adaptation.
The new CAP 2023-27 can contribute to climate-change adaptation through enhanced conditionality, eco-schemes and agri-environment-climate commitments (AECCs). New conditionality rules related to climate have been introduced, notably GAEC 2 requiring protection of wetland and peatland, while GAEC 7 requires more-ambitious crop rotations and GAEC 8 requires larger areas beneficial for biodiversity.
The CAP 2023-27 requires stronger efforts for environmental and climate-change mitigation and adaptation within the new Common Market Organisation aid schemes for the fruit and vegetables sector. This attributes 15% of expenditure on operational programmes to such actions, and 5% of expenditure to strengthen research, development, and innovation (EC, 2023[18]). Overall, the European Commission estimates that 40% of CAP spending between 2021 and 2027 will contribute to climate mitigation and adaptation.
Other EU environmental policies that stimulate adaptation action and contribute to disaster-risk reduction include the EU biodiversity strategy, the Water Framework Directive, and the Floods Directive (EEA, 2019[13]). These set EU-wide objectives for outcomes that can improve the resilience of agricultural landscapes. The LIFE Climate Action Sub-programme supports projects for renewable energy, energy efficiency, farming, land-use planning, and peatland management. The INTERREG Europe Programme helps local, regional, and national governments across Europe develop and deliver better policy. Moreover, one of Horizon Europe’s missions for 2021-2027 focuses on supporting EU regions, cities, and local authorities in their efforts to build resilience against the impacts of climate change (EC, 2023[19]).
Adaptation measures in EU Member States
By the end of 2021, all EU Member States had issued a national adaptation strategy or plan, and all of them explicitly include agriculture as a priority sector. In addition, various Member States (e.g. Malta and Romania) mainstreamed climate change adaptation into national agricultural policies, and several Member States (e.g. Slovenia) developed specific adaptation strategies for the agricultural sector (EEA, 2019[13]). In Finland, the cross-sectorial climate-change adaptation strategy was revised in 2022 and the Ministry of Agriculture and Forestry is responsible for co-ordinating the overall national adaption policy.
Most short-term measures help manage extreme climate events (drought and floods), and most countries adopted programmes to tackle drought events. Croatia established a EUR 13.3 million (USD 14 million) programme in December 2022 to mitigate drought damage for agricultural producers, which aimed to reach 20 000 farmers. Similarly, Slovenia’s Ministry of Agriculture activated several national measures for farmers affected by drought. In 2022, Austria finalised the National Water Management and Flood Risk Management Plans to be published every six years. As response to the flood events of 2021, Germany provided damage compensation, liquidity programmes and tax-relief measures, and suspended loan repayments by up to two years. In 2021, Hungary put in place an Agricultural Crisis Insurance Scheme to stabilise farm revenues and partially compensate farmers for the loss of revenue caused by extreme weather events affecting crop production. In the Netherlands farmers can be reimbursed for a maximum of 64% of weather-based insurance premiums, aiming to cover 4 400 participants by 2027.
Measures and programmes to support incremental changes in the medium- and long-term include measures for the green transition of agriculture, monitoring and decision-support tools, investments in infrastructure, and dedicated R&D investments, as described below.
Programmes in Bulgaria encourage crop rotation, especially with nitrogen-fixing crops to prevent soil erosion and support carbon sequestration. In France, several actions to facilitate the transition towards sustainable and climate-resilient agriculture were undertaken as part of the recovery plan after COVID-19. The plan will add 7 000 km of hedgerows to limit soil erosion, store carbon, and increase resilience against wind. In 2021, EUR 24.5 million (USD 29 million) was invested to plant 2 800 km of hedgerows. The Good Carbon Diagnostic measure is also used to support a portfolio of adaptation actions for farmers, including improved management of organic matter. Portugal’s National Plan for Recovery and Resilience provides resources for adaptation to climate change to increase water-efficiency management in agriculture.
Several Member States adopted early-warning systems and decision-support tools to reduce risks for farmers. Estonia launched the Big Data Project in 2022 to connect public and private datasets to digital decision-making tools that help agricultural producers adopt climate- and environmentally friendly measures and technologies. Portugal’s Climate Portal platform disseminates climate data, and the National Adaptation Roadmap Project 2100 analyses the impacts of climate change and assess investments for adaptation and the costs of inaction. Romania’s updated 2021-30 climate-change adaptation strategy includes a dedicated knowledge platform (RO-ADAPT) following the model of the EU Climate-ADAPT platform. A frost warning app introduced in Greece alerts farmers to upcoming frost events, while Slovenia’s online tool Sušomer monitors drought. In the Czech Republic an online anti-erosion calculator was launched to support decision-making regarding soil erosion.
Infrastructure investments include modernising existing irrigation networks in Greece and a fund in Lithuania for investment in no-till farming. In Latvia, the implementation of projects on the restoration of 109 km of drainage systems in agricultural land was completed in 2022. Sweden’s Local Nature Conservation Initiative grants support to different kinds of nature-based solutions for climate adaptation, including the construction of wetlands and the restoration of watercourses. Spain is investing in the modernisation of irrigation infrastructure using a combination of European and national funds to further implement its irrigation policy, with the objective of improving the efficiency and sustainability of water use and ensuring the good quantitative and qualitative status of water resources.
Targeted R&D can improve the resilience of the farming sector to climate change. Ongoing collaborative research projects in Finland support and monitor adaptation measures on farms. Ireland recently funded five research projects relevant to climate change adaptation in agriculture, focusing on wheat and barley genetic diversity, soil biodiversity, soil health and climate-smart soil management. Slovenia financed programmes for new plant varieties that are better-adapted to new climate conditions.
RDP measures supporting climate change adaptation
Implementation of adaptation measures is supported by national (or regional) rural-development programmes (RDPs). As of October 2022, Croatia’s RDP had financed 19 irrigation system projects covering an around 8 200 hectares, at a total value of around EUR 104.8 million (USD 110.2 million). RDP funding has been used in Greece for “active systems” investments to protect against frost, hail, and rain in vineyards and orchards (e.g. hail protection nets). In Poland, Pillar 2 is financing the management of rainwater in river catchments on agricultural land through the modernisation of existing water and hydro-technical facilities. Portugal’s RDP provided EUR 1.75 billion (USD 1.84 billion) for the adaptation of agriculture and forestry to climate change (54.5% of total funding to agriculture and forests). In the Slovak Republic, 13 RDP calls totalling EUR 363 million (USD 382 million) were launched during 2014-22 to support investment, resilience, and preventive actions against fires, natural disasters, and catastrophic events.
In the CAP 2023-27, Pillar 2 and sectoral interventions include measures to support investments that target environmental and climate-related objectives – both, “productive” investments (which also bring economic gain) and “non-productive” investments (which bring primarily environmental and climate-related benefits). Half of the investment interventions proposed in Member States’ CSPs target environmental and climate-related objectives (EC, 2022[20]). Examples of “productive” green investment interventions include those in manure management, production of renewable energy (explicitly including biogas in the case of Austria, Cyprus, Denmark, Finland, Greece, Italy, Latvia, Poland, Romania, Slovenia, and Spain), and more-efficient irrigation. In several plans, the latter is the only intervention planned specifically for adaptation purposes. The 28 proposed CSPs included investments worth around EUR 3.4 billion (USD 3.6 billion), which will mostly support renewable energy for 2023-27. “Non-productive” examples include investments in establishing landscape features, restoring dry stone walls, restoring wetlands and peatlands, restoring habitats and landscapes, and establishing protection against large predators.
Overall, the 28 CSPs include 59 agri-environment management commitments from 21 Member States linked to climate-change adaptation (EC, 2023[18]). Almost 180 000 farms (around 2% of all EU farms) will receive support for investments contributing to climate-change mitigation and adaptation and to the production of renewable energy or biomaterials. CSPs will finance afforestation or agroforestry restoration on almost 623 000 hectares, and 25% of Natura 2000 areas will be covered by specific, additional, focused actions to protect habits and species. The share of EU-utilised agricultural area under additional action for climate adaptation (result indicator 12 of the CSP EU Regulation 2021/2115) totals 25% (EC, 2022[21]).
Domestic policy developments in 2022-23
Overall spending
The EU budget for agriculture and rural development in 2022 was EUR 55.4 billion (USD 58.3 billion), an increase of EUR 0.4 billion (USD 0.4 billion) compared to 2021. Total expenditure under Pillar 1 was EUR 40.3 billion (USD 42.4 billion) (76.8%), with EUR 15.1 billion (USD 15.9 billion) (23.2%) allocated under Pillar 2.
The 2023-2027 CAP Reform
The European Commission presented its proposal for the post 2020 CAP reform in 2018, aiming to modernise and simplify the European Union’s policy on agriculture. Following extensive negotiations between the European Parliament, the Council of the European Union and the European Commission, agreement was reached, and the new CAP was formally adopted on 2 December 2021 (EC, 2021[22]).
The CAP 2023-27 entered into force in January 2023 and is built around ten specific objectives: to ensure a fair income for farmers; to increase competitiveness; to improve the position of farmers in the food chain; climate change action; environmental care; to preserve landscapes and biodiversity; to support generational renewal; vibrant rural areas; to protect food and health quality; fostering knowledge and innovation.
Member States implemented the CAP 2023-27 with new CAP Strategic Plans24 designed at national level (see Box 12.1). CSPs are expected to devote 32% (close to EUR 98 billion or USD 103 billion) of public CAP funding to specific environmental benefits for climate, water, soil, air, biodiversity, and animal welfare and to encourage practices that go beyond the conditionality. Twenty-four per cent of direct payments are dedicated to eco-schemes designed by each Member State and 48% of rural development spending from EU funds is earmarked for environment and climate.
CSP development started in 2020 with European Commission recommendations on specific issues to be addressed, including European Green Deal-related climate and environmental objectives and specific national values25 for Farm to Fork (F2F) and Biodiversity strategy targets at national level (EC, 2020[23]). The European Commission provided observation letters commenting on each Member State’s draft CSP. After bilateral consultations, CSPs were revised and formally approved in August 2022.
In September 2022, a Commission Implementing Regulation set out rules for the evaluation of the CSPs and their monitoring and evaluation (EP, 2022[24]). This regulation provides technical support for Member States and the relevant stakeholders and some common rules to ensure data availability for monitoring and evaluation. It includes standards of good agricultural and environmental conditions of land (GAEC), rules on Local Action Groups (LAGs) and data on European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) operational groups.
The new CAP introduces the concept of social conditionality (i.e. farmer payments are linked to compliance with certain labour laws), while environmental sustainability is addressed through a new “green architecture”. Greening payments were replaced by stricter environmental requirements in cross-compliance (enhanced conditionality), while eco-schemes were introduced to incentivise the adoption of specific farming practices with additional environmental benefits. Eco-schemes, as part of Pillar 1, are fully financed by the EU budget and the related payments are granted per hectare in two forms: either as compensation for additional costs incurred or income foregone, similar to the agri-environmental support schemes of Pillar 2, or as fixed top-up payments in addition to decoupled direct payments.
Member States can use eco-schemes to make their area-based rural development support more targeted in terms of area or issue addressed (EC, 2022[20]) and customise them to specific national environmental and climate needs. CSPs differ greatly in their level of environmental ambition and 158 eco-schemes have been developed across the 27 Member States (EC, 2023[18]). Among the 158 eco-schemes, 18% provide payments that go beyond the annual area-based decoupled payment,26 while the remaining 82% provide payments intended to compensate the additional costs and income loss (and possible transaction costs) incurred by farmers due to these commitments. While most Member States designed several eco-schemes, each of which is relatively specific to a given objective, six countries (the Czech Republic, France, Hungary, Ireland, the Netherlands and the Slovak Republic) adopted only one multi-dimensional eco-scheme that includes a package of options. Two CSPs (the Netherlands and Hungary) put forward points-based eco-schemes, with a scoring or weighting of the different practices according to their expected positive environmental impact, and some countries (e.g. Lithuania, Ireland and Portugal) request farmers to adopt more than one eco-scheme or a minimum number of practices.
The new CAP entails a new delivery model in which Member States play a critical role in designing and implementing their CAP Strategic Plans (CSPs). Each CSP combines a wide range of targeted interventions, with the view of delivering tangible results in relation to EU-level objectives, while contributing to the ambitions of the European Green Deal (EC, 2019[25]). The Commission asked EU countries to determine specific national values for these European Green Deal targets and align their CSPs with them.
This programming approach applies to interventions under both pillars of the CAP and not only to rural development interventions as in the Rural Development Plans (RDPs) of the CAP 2014-22. There is one CSP for each Member State (except for Wallonia and Flanders in Belgium, which each has their own one), a total of 28 plans compared to 118 RDPs that included regional plans in several countries (e.g. France, Germany, Italy, and Spain). The European Commission published a preliminary overview of the 28 CSPs in December 2022 (EC, 2022[21]), and a more detailed analysis of the approved Plans in April 2023, including the key elements and choices set out by the Member States (EC, 2023[18]).
Member States were required to carry out a thorough assessment of their territory and agro-food sector, based on a strengths, weaknesses, opportunities and threats (SWOT) analysis. Each CSP must include the following sections:
the intervention strategy, including targets and related milestones for each of the 10 specific CAP objectives
the elements common to several interventions, such as relevant definitions (e.g. status of “active farmer”, “eligible area”, etc.)
interventions: direct payments (including eco-schemes), sectoral interventions and rural development measures
target and financial plans, with Member States’ allocations for each type of intervention
the governance and co-ordination system and integrated administration and control system (IACS)
the elements that ensure modernisation of the CAP, and in particular how the CSP will contribute to foster and share knowledge, innovation and digitalisation in agriculture and rural areas
a description about the Member State’s national and regional set-up, and in particular which elements are established at national and at regional level
annexes (ex-ante evaluation, SWOT analysis, consultation process with partners, etc.).
Under the CAP 2023-27, EU Member States were required to include one or more eco-schemes in their CSPs and to integrate their regional Agricultural Knowledge and Innovation Systems (AKIS). The decision on the selection of actions and dedicated budget for knowledge and innovation lies with the Member States.
Agri-environmental sustainability
The European Green Deal aims to “boost the efficient use of resources by moving to a clean, circular EU economy and stop climate change, revert biodiversity loss and cut pollution, through a just and inclusive transition” (EC, 2019[26]). Key actions in 2022 relating to the roll-out of the European Green Deal, included proposals to modernise EU industrial emissions rules (EC, 2022[27]) to steer large industry in long-term green transition, including more large-scale intensive livestock farms; a Nature protection package (EC, 2022[28]), including a proposal for Nature Restoration Law, with quantified targets, indicators and milestones that the 27 Member States will be required to meet; an EU-wide voluntary framework to reliably certify high-quality carbon removals (EC, 2022[29]), focusing on innovative carbon removal technologies and sustainable carbon farming solutions, including those affecting agriculture and forestry sectors. As of 30 April 2023, all these proposals were under negotiations and not yet approved.
The Farm-to-Fork and Biodiversity Strategies, both adopted in May 2020, are part of the European Green Deal aim at transforming the EU food system into a global standard for sustainability and halting biodiversity loss (EC, 2020[30]). Key initiatives in 2022 included:
An Integrated Nutrient Management Action Plan (EC, 2022[31]) to help achieve the European Green Deal’s 2030 target of reducing nutrient losses by 50%, while ensuring no deterioration in soil fertility.
Proposals for a new Regulation on the Sustainable Use of Plant Protection Products (EC, 2022[32]), including legally binding targets at EU level to reduce by 50% the use and the risk of chemical pesticides as well as the use of the most hazardous pesticides by 2030.27
A proposal for a new regulation on Geographical Indications (GIs) and other quality schemes for agricultural products, to increase the uptake and the level of protection, especially online (EC, 2022[33]).
In the EU Biodiversity Strategy, the EU and its Member States committed to implement more than 100 actions to halt and reverse biodiversity loss by 2030. As of 30 April 2023, a total of 47 actions were completed.28 In addition, Ireland launched a EUR 5 million (USD 5.3 million) pilot Farm Environmental Study to provide an opportunity for farmers to learn more about farmland habitats and to have habitats and biodiversity on their land surveyed. These surveys are intended to establish baseline habitat and biodiversity data, as well as a baseline for future targeting of agri-environmental schemes. Croatia adopted a support programme for farmers using agricultural land protected as cultural heritage, which provides compensation for their loss of income due to the obligation to comply with the regulations on cultural heritage protection. Hungary launched an RDP initiative devoted to the “ex situ or in vitro” conservation of genetic resources of protected indigenous and endangered agricultural animal breeds and advisory activities to prevent genetic erosion.
Several Member States adopted new regulatory measures to reduce the environmental impacts of agricultural inputs. In Austria, the Ammonia Reduction Directive entered into force, setting requirements for the timely incorporation of fertilisers and the addition of urease inhibitors on nitrous fertilisers, as well as the coverage of storage facilities for liquid manure and digestate. Austria also launched a new Nitrate Action Programme focusing on improved fertiliser measurement, optimisation of the storage and spreading of farm manure.29 Spain updated its regulation on nitrates, which established action programmes in nitrate vulnerable zones, as well as codes of agricultural good practices related to fertiliser use and manure management. Spain also established standards for sustainable nutrients management in agricultural soils accompanied by a Digital Farm Notebook, which will register fertilisation practices in the farm. Poland revised its Nitrate Action Programme, allowing the use of a flexible spring fertilisation date and updated the production coefficients for natural fertilisers and the related nitrogen contents. The Czech Republic introduced an obligation for agricultural entrepreneurs farming more than 20 hectares of agricultural land to keep electronic records of fertilisers to help create a tool to calculate nutrient balances. Regarding plant protection products, Croatia adopted a new act on the sustainable use of pesticides. France temporarily permitted neonicotinoid use as seed coating in sugar beet fields in 2022, while launching a EUR 7 million (USD 7.4 million) research programme to identify alternatives. Romania released its first Code of Good Agricultural Practices regarding water protection against pollution caused by nitrates from agricultural sources.
With the aim to promote the development of renewable energy on farmland, Greece enacted two new regulations on renewable energy source licensing and on photovoltaic power stations in highly productive agricultural lands, Ireland included the aid for installation of Solar PV technology along with battery storage in its Targeted Agricultural Modernisation Schemes, and Estonia launched a EUR 28.8 million (USD 30.3 million) fund to support investment in biogas and biomethane production plants in addition to the EUR 20 million (USD 21 million) available under the framework of REPowerEU.30 Poland adopted the Energy for Rural Areas scheme with a budget of EUR 214 million (USD 225 million) from the Modernisation Fund to provide rural communities, including farmers, with grants and loans for the use of renewable sources.
Through the Farm to Fork and the Biodiversity strategies, the European Commission has committed to reach the target of 25% of the EU’s agricultural land being under organic farming by 2030. Building upon the EU Organic Action Plan launched in 2021 (OECD, 2022[34]), Austria included in its Organic Farming Action Plan 2023 the EU targets and measures, as well as the new ambition to expand its organic area up to 30% of its agricultural area by 2027. Poland updated its Framework Action Plan for Organic Food and Farming 2021-2030, committing to have at least 7% of agricultural area under the organic production scheme by 2030, i.e. doubling compared to 2019. Croatia’s National Action Plan for the Development of Organic Agriculture 2023-2030 covering a wide range of areas was sent out for public consultation. In 2022 Estonia developed an action plan containing various targets to promote organic farming for the period 2023-2030. Under this plan, it started to support organic food supply in educational institutions to compensate additional costs and raise children’s awareness through a budget of EUR 0.8 million (USD 0.8 million) in 2022 that increased to EUR 10.2 million (USD 10.7 million) in 2023. France accelerated support to the organic food supply chain through more funding for the Agence Bio in charge of studying the reasons behind the reducing demand, a new promotion campaign for organic products, and revised eligibility criteria of the Avenir BIO Fund to finance more projects. France also reinforced the requirements for granting the “high environmental value” (HVE) level of its national environmental farm certification scheme, including more rigorous biodiversity protection, lower use of phytosanitary products and better management practices for fertiliser use. Finally, most Member States have indicated a national value for organic area in their national CAP Strategic Plan for 2023-27, as a contribution to the corresponding Green Deal target.
Member States’ CSPs include several measures related to climate mitigation, including support for investments in biogas production, manure management and genetic improvement and optimised feeding to reducing methane and ammonia emissions (EC, 2022[21]). Among the most recent initiatives outside the CAP, Ireland published its Climate Action Plan 2023 including core agriculture measures to achieve its sectoral GHG emission reduction goal, such as the reduction of chemical nitrogen use to a maximum of 300 000 tonnes, reducing the first calving age of suckler beef cows, and the upscale on carbon farming in line with the EU’s proposal to develop a new regulatory framework for the certification of carbon removals. Germany provided additional support to implement the ten measures in its Immediate Climate Action Programme for 2022. On the production side measures focus on increased fertiliser efficiency, conversion of animal husbandry and the promotion of natural carbon sinks through appropriate management practices. On the consumption side measures focus on promoting plant-based diets and the reduction of food waste. Spain set out a legal basis for a computer tool that verifies the implementation of best available techniques (BATs) and support the calculation, monitoring and reporting of emissions at the farm level by establishing a general registry for BATs. Austria launched its Moor Strategy Austria 2030+, which guides actions to protect peatlands and peat soils throughout Austria until 2030.
In the period 2022-23, the European Commission has adopted various measures and proposals under the framework of its 2020 Circular Economy Action Plan. Among those most directly affecting the agro-food sector are the proposals to empower consumers in the green transition and for a Directive on green claims, adopted in March 2023. Both initiatives aim to combat misleading claims and greenwashing, as well as to increase consumer confidence in environmental labelling. Meanwhile, in 2022, Greece adopted its National Road Map for Circular Economy 2021-2025, which shows alignment with the goals and commitments of the 2020 EU Circular Economy Action Plan and covers various issues including reducing food waste actions and pesticide packaging management, among others.
Animal health and welfare
In the context of the Farm to Fork Strategy, the European Union is expected to review and evaluate the existing animal welfare legislation, including on animal transport and slaughter, by the last quarter of 2023. Without waiting for the next EU framework to be developed, Austria and France enacted animal welfare legislation to end the culling of male chicks in egg-laying hen production units as of January 2023, becoming the second countries after Germany to do so. Germany introduced new rules on the transport of calves, which must be at least 28 days old to be transported within the country. Spain also established new regulations on animal health and protection standards during transport in November 2022, as well as for the management of bovine farms in December 2022. These basic rules determine the minimum conditions for infrastructure, equipment and handling, biosecurity, hygiene and sanitation, and environmental requirements, among others.
Regarding support to farmers, Austria increased subsidy rates for animal welfare investments from 25% to 35% for pigs and to 30% for turkeys. In February 2023, Romania introduced a compensatory payment for income losses and additional costs incurred by farmers implementing pig and poultry welfare, which takes the form of a fixed annual payment per livestock unit. In the frame of its RDP, in 2022 Croatia implemented payments for animal welfare in cattle breeding, pig breeding, poultry farming, goat and sheep breeding, while Hungary announced several new calls for applications in 2022 with animal welfare components in the sheep and goat, poultry and dairy sectors. In Hungary, a new RDP call was also opened aiming to improve the ecosystem serving capacity of bee colonies by providing support to ensure hygienic and animal protection conditions for the welfare of bees.
Animal and plant disease
The Avian Influenza epidemic, which started in October 2021, continued during 2022 and affected wild birds, poultry or captive birds in 25 EU Member States. Overall, the 2021-22 epidemic has been the largest observed in the European Union so far as it has been difficult to rapidly contain the spread of the virus once it entered areas with high concentration of poultry establishments. Several large clusters have developed in certain parts of France, Italy and Hungary. However, the epidemiological situation started to improve during the second quarter of 2022.
Affected Member States introduced specific measures in response to the outbreak of pathogenic avian influenza. The Czech authorities stated a ban on outdoor poultry farming as of 12 December 2022 and launched an information campaign for farmers, veterinarians and hunters on disease detection, prevention and reporting. In addition, the Czech Republic launched an avian influenza vaccination campaign targeting genetically valuable geese. In July 2022, France established a new avian influenza plan that complements its action plan approved in 2021: two sets of compensatory payments were made available with an overall budget of EUR 1.5 billion (USD 1.6 billion), vaccination against avian influenza was launched on a pilot basis on 10 May 2022 and integrated into an action plan on 22 December 2022. In December 2022, Poland implemented a EUR 34 million (USD 35.8 million) exceptional compensation scheme targeting poultry and egg producers whose holdings were located in protection zones established due to outbreaks of avian influenza between December 2019 and July 2021. More broadly, Hungary amended its national legislation regarding the support for the prevention and control of animal diseases, enabling a more targeted use of resources while introducing stricter conditions for aid.
With regard to Plant Health, several initiatives have been put in place. Since 2023 in Austria, forecasting models for the rape pests in spring have been available free of charge for more than 40 sites throughout the country. Regarding the Xylella emergency, in September 2022 Italy established the criteria and methods for granting contributions for the replacement of olive trees damaged by the bacterium. Under its Development Sectoral Programme (2021-25), Greece has provided funding for the improvement of laboratory infrastructure in the field of sanitary and phytosanitary standards. In Hungary, from 1 January 2023, farmers with agricultural land of more than 10 hectares will have to keep up-to-date records of insecticide treatments for arable crops on the electronic spray register interface provided by the authority. Finally, Croatia adopted the Act on Amendments to the Plant Health Law, which aims to protect the territory from harmful organisms and consequently reducing the use of plant protection products.
Food safety, health and traceability
As of March 2022 in France, country-of-origin labelling became mandatory for all meats served in restaurants. Similarly, by mid-2023 in Austria country-of-origin labelling is compulsory for meat, eggs and milk in collective catering such as hospitals, retirement homes, schools and companies.
Institutional arrangements were also developed. In December 2022, Croatia inaugurated its Food Safety and Quality Centre. In March 2022, the Czech Government approved the Action plan for the implementation of the Food Safety and Nutrition Strategy 2030. Since 2021 Belgium, France, Germany, Luxembourg, the Netherlands, Switzerland and Spain form part of a transnational co-ordination mechanism to facilitate the use of the front-of-pack nutrition label Nutri-Score. In July 2022 and March 2023, these countries adopted the modifications of the Nutri-Score algorithm proposed by the scientific committee to strengthen the effectiveness of this label in classifying products in accordance with the dietary guidelines of the various countries, with the aim of guiding consumers towards healthier food choices.
Addressing antimicrobial resistance (AMR) was also part of the agenda. Following up on the EU legislative package on veterinary medicinal products and medicated feed,31 which came into force on 28 January 2022, Hungary began implementing mandatory collection and reporting of data on antimicrobial use in food-producing animals via a verified online platform, while France banned all imports of meat and meat products from animals that received antibiotic growth hormones as of 22 April 2022. Meanwhile, Malta has been implementing its Strategy and Action Plan for the Prevention and Containment of Antimicrobial Resistance and Portugal has set up an eco-scheme under its CAP Strategic Plan 2023-27 focused on promoting a more rational use of antimicrobials. Finally, four Member States, the Czech Republic, France, Malta and Poland, have indicated a national value for the use of antibiotics in their CAP Strategic Plan for 2023-27 as a contribution to the corresponding Green Deal target.
In March 2022, the French Presidency of the Council of the European Union organised a High-Level One Health Ministerial Conference on Antimicrobial Resistance (AMR) during which the Trio Presidency of the Council of the EU, constituted by France, the Czech Republic and Sweden, presented a Declaration on antimicrobial resistance,32 underlining that AMR will be a priority of the three presidencies from January 2022 to June 2023, suggesting possible work options on the topic at the EU Level.
Market infrastructure and institutions
Several Member States have implemented measures to strengthen their market infrastructure. Croatia is investing EUR 81.8 million (USD 86.0 million) in the construction of logistics distribution centres for fruits and vegetables under its National Recovery and Resilience Plan 2021-2027. Malta has undertaken a reform of its Ta’ Qali’ Fruit and Vegetables Market, to improve its governance, legislative framework and overall infrastructure. In early 2023, Ireland adopted the Agriculture and Food Supply Bill establishing a new independent statutory body, An Rialálaí Agraibhia, to promote fairness and transparency in the agro-food supply chain. The agro-food regulator will have powers to levy fines of up to EUR 10 million (USD 10.5 million) on buyers, including retailers, food producers and processors, who engage in unfair trading practices with farmers and other suppliers.
Land tenure policies
Hungary introduced new legislation in 2022 prohibiting the creation of more undivided common property and strengthens the right of farmers in the case of purchases and usufructuary leases following property inheritance. Meanwhile, Malta has undertaken the reform of its legal framework for the protection of Maltese agricultural land, which aims to strike a balance between the public interest and the landowner’s interest.
Risk management
In 2022, various Member States’ risk management policies focused on supporting producers in coping with disaster related impacts. In Poland, two disaster schemes were introduced to assist agricultural producers who suffered damage from adverse weather events, including drought. The first disaster aid scheme of EUR 100 million (USD 105 million) targeted crop producers affected in 2021. The level of aid granted to each farmer depends on the area of arable land affected and the extent of yield losses. The second disaster aid scheme with a budget of EUR 130 million (USD 137 million) provided a lump-sum to families at risk of losing their financial liquidity due to damage to farms caused by natural disasters in 2022. The payment depends on the extent of damage to the farm’s agricultural production and the number of applicants. The Slovak Republic has implemented exceptional disaster aid for specific sub-sectors; EUR 5.7 million (USD 6.0 million) was paid to 1 800 fruit and winegrowers to compensate for the consequences of frost damage and EUR 4.4 million (USD 4.6 million) was granted to 9 500 livestock farmers who suffered from fodder shortages due to drought and high feed prices in 2022. Croatia provided EUR 13.3 million (USD 14.0 million) to 20 000 producers to mitigate the effects of drought on corn, soybeans, sunflowers, fruits, vegetables, sugar beets and tobacco, EUR 3.3 million (USD 3.5 million) to alleviate the effects of hail from June 2022 and EUR 160 000 (USD 168 265) for beekeepers who suffered damage from Colony Collapse Disorder in 2022. Additional funds were dedicated to longer-term investments in the restoration of agricultural land affected by natural disasters, adverse weather conditions and catastrophic events. France announced EUR 76 million (USD 80.0 million) to support farmers affected by the April 2022 frost, mainly in the arboriculture sector, with payments starting in November 2022, and EUR 1.8 million (USD 1.9 million) to compensate for damage caused by the May 2022 hailstorms. Feeding of grazing animals in the Czech Republic was exceptionally allowed on species-rich pastures, based on a notification of force majeure – drought in 2022.
In parallel, several Member States continued to grant insurance premium subsidies, including Croatia, Romania, and the Slovak Republic, among others. In 2022, Spain increased the budget for insurance subsidies by 30% with respect to 2016-20, which allows to finance new subsidies for farms in shared ownership by couples and for newcomers. Reforms to strengthen the reinsurance scheme and stabilisation reserves were also introduced. In February 2022, France adopted the reform of the harvest insurance, which establishes a universal coverage against climatic risks, accessible to all farmers. Entering into force on 1 January 2023, this reform doubles the budget envelope to EUR 600 million (USD 631 million) per year.
Support to specific groups of farmers
To advance gender equality, a National Dialogue on Women in Irish Agriculture was convened on 1 February 2023, providing an opportunity for stakeholders to provide input on how to increase the visibility and status of women in agriculture. In their CSP for the 2023-27 CAP, the majority of Member States recognised the importance of gender issues and the need to increase the participation of women in farming and to improve the socio-economic situation of rural women. The Czech Republic, Italy, Portugal, and Spain introduced conditions for selection or access to support that target the involvement of women in farming. Spain also increased the complementary direct payment for young farmers if the beneficiary is female and owns or co-owns the farm (EC, 2023[18]).
Most Member States plan additional income support and installation aid for young farmers in their CSP. Several countries, including Cyprus, the Czech Republic, France, the Netherlands, Portugal and the Slovak Republic, propose to provide investment support at higher rates as part of an intervention exclusively for young farmers, while more Member States provide for higher support rates for young farmers as part of a general investment intervention.
Innovation and knowledge
In 2022, the European Commission presented its final proposals of four new European Partnerships with particular relevance to farming and food systems: the “Accelerating Farming Systems Transition: Agroecology living labs and research infrastructures” partnership (EC, 2022[35]), the “Agriculture of Data” partnership (EC, 2022[36]), the “Animal Health and Welfare” partnership (EC, 2022[37]) and the “Sustainable Food Systems for People, Planet and Climate” (EC, 2022[38]) partnership. EU partnerships are key implementation tools of Horizon Europe, the Research and Innovation Framework Programme for 2021-27.
At the country level, France amended its roadmap for innovation, digitalisation and investment in the agro-food supply chain. Four actions are foreseen: (1) digitalisation of product information for quality and consumer confidence, (2) development of proteins of the future, including from leguminous plants, by providing start-up support and additional help, (3) R&D to support the supply chain and enhancement of the value of ferment banks, and (4) the “Pass Industry” approach to develop solutions to skills needs in companies.
The Flemish Government (Belgium) dedicated EUR 2 million (USD 2.1 million) to research and innovation on drought-resistant crops and innovation-driven water efficiency in agriculture and horticulture. It also made available EUR 2.8 million (USD 2.9 million) for agriculture and horticulture projects that bring together companies and research centres to tackle water and drought problems, climate change, sustainable energy and more efficient management of natural resources. France awarded the National Research Institute for Agriculture, Food and Environment (INRAE) the first public contract since the establishment of INRAE in 202033 to support research, innovation, expertise in agriculture, food and environment and improving INRAE’s impacts. Greece decided to support crop restructuring and animal genetic improvement projects under the National Recovery and Resilience Plan “Greece 2.0”. Ireland, together with New Zealand, launched a new research initiative for 2022-24. The Joint Research Mechanism (JRM) will fund collaborate on projects in the areas such as reduction of greenhouse gas emissions and enhanced carbon sequestration in ruminant, and pasture-based production systems.
In the Netherlands, the educational subsidy vouchers programme Subsidieregeling Agarische Bedrijfsadvisering en Educatie (SABE) has been extended to allow farmers to apply for knowledge transfer courses about nature-inclusive farming and precision farming from 2022 onward. For 2021-22, SABE also subsidised demonstration farms and business plans for sustainable fundamental business transition of farmer’s operations.
Data and digitalisation
The European Commission has taken further steps in the process of converting the Farm Accountancy Data Network (FADN) to become a Farm Sustainability Data Network (FSDN). In June 2022, a regulation amendment (EC, 2022[39]) was proposed with the aim to reinforce the relevance of the network for policy-making, research, evaluation and policy analysis. The basic legislative act for the establishment of the FSDN is projected to enter into force in 2023, with the secondary legislation foreseen to be finalised in 2023 or 2024. The FSDN aims to introduce new environmental and social variables to their data collection. The first FSDN data set will reflect 2025 data and will be publicly available in 2026 or 2027 (EC, 2022[40]).
In 2022, the European Commission presented two major data-related initiatives in the context of the European strategy for data: the Data Governance Act (DGA), in force from September 2023, and the Data Act (EC, 2022[41]) still to be adopted. The DGA promotes sharing of non-open access data in a variety of sectors, including agriculture, by establishing safeguards and reducing technical barriers to use the data (European Parliament and European Council, 2022[42]). The Data Act proposes a set of rules to determine who can use and access data generated via connected devices. For the EU agricultural sector this helps to address the transfer of data generated by farm machinery to the manufacturer, who could use the information about the farm’s performance to their advantage (EC, 2022[43]).
Several Member States have introduced new digital tools to support the development and implementation of their agri-food policies. Belgium has developed an application with the use of geotagged photos to monitor compliance with CAP direct payments requirements. On 22 September 2022, France launched the digital platform “Ma cantine” to help collective catering services, such as canteens, achieve the Egalim law target of 50% sustainable and quality food, including 20% from organic farming.34 Croatia has implemented two projects aiming at digitising the food donation process and the food waste prevention system. Poland has created the Agrophage Signalling Platform to provide access to up-to-date plant protection programmes. In Spain, Digital Farm Notebooks that record on farm practices such as fertilisation, are expected to come into use in mid-2023 for larger irrigated farms. Finally, Romania and Poland set up the issuance of electronic phytosanitary certificates to facilitate trade in agricultural products in July 2022.
To promote the digitalisation of the agricultural sector, Croatia has invested EUR 9.6 million (USD 10.1 million) for the acquisition of equipment for precision agriculture, software solutions for data collection, GIS technologies and automatic equipment, and plans further investment in digital public services under its National Recovery and Resilience Plan 2021-26. Likewise, Greece has included funding for precision agriculture projects under its 2021-25 Development Sectoral Programme. In Italy, producers of organic wines and wines with a protected designation of origin or geographical indication (PDO/PGI) benefited from a contribution to invest in digital systems. Meanwhile, France has presented a roadmap on “Agriculture and Digitalisation” around seven priorities for French AgriTech and has planned to invest EUR 3 million (USD 3.1 million) in public support to the digitisation of product information for quality and consumer confidence through the Numalim platform. In Bulgaria, more than 8% of farms are expected to receive financial support for introducing digital farming technologies under the new CAP 2023-27.
Tools to monitor the digitisation of the sector have also been developed. In 2022, Spain made progress in implementing its Digitalisation Observatory, which aims to assess the degree of penetration and adoption of new technologies in the agro-food sector and the situation of the sector’s digitisation. Six Member States, the Czech Republic, Finland, Ireland, Latvia, Poland, and Spain, have indicated a national value – or non-binding target under F2F – for fast broadband in rural areas in their CAP Strategic Plan for 2023-27, as a contribution to the corresponding Green Deal target. Malta has indicated a target already attained.
Rural Development Policy
In June 2021, the European Commission published its communication, “A long-term vision for the European Union’s rural areas – Towards stronger, connected, resilient and prosperous rural areas” (EC, 2021[44]) to create a debate on the future of rural areas and the role they have to play in our society. In January 2022, the European Committee of the Regions (2022[45]) adopted its opinion on the long-term vision for the European Union’s rural areas, recognising it as a crucial step towards the sustainable development of rural areas and territorial cohesion but regretted that its publication came after the conclusion of negotiations on the CAP 2023-27. In March 2022, the European Economic and Social Committee adopted its opinion (EESC, 2022[46]) on the rural vision: it broadly welcomed the long-term vision but found it unclear what the implications of the design and content of the Commission’s new CAP and CSPs for each Member State will be for the long-term vision, and how the Commission should ensure consistency and added value between the CAP and other policies. On 13 December 2022, the European Parliament adopted a resolution on the rural vision (EP, 2022[47]), which welcomed the Commission’s communication on a long-term vision for the European Union’s rural areas and agreed with its general aims and emphasised that the development of rural areas must remain high on the EU agenda.
Domestic policy responses to the COVID-19 pandemic
Under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (2020/C 91 I/01) of 19 March 2020, the European Commission allowed Member States to provide time-bound aid from their own budget to sectors confronting economic difficulties due to the coronavirus outbreak. The Temporary Framework came into force in March 2020 and its duration was extended until 30 June 2022. Under this umbrella, most EU Member States continued with the implementation of their COVID-19 pandemic measures expiring in 2022, although some new regimes were established in 2022.
In March 2022, Greece implemented two new state aid measures targeting the vulnerable sectors of potatoes, mandarins, lavender cultivation, dried figs and table olives, the fur and pig sectors, and agricultural co-operatives. Also in March 2022, Hungary introduced an aid scheme granting income support for the rearing of breeding sows. Poland also established new schemes to assist producers of pig sows and hops producers. In April 2022, Romania adopted an Emergency Ordinance to support the activity of breeders in the cattle, pig and poultry sectors and in May 2022 it announced support for agri-food entities in the form of micro-grants and working capital grants. In April 2022, Lithuania provided aid to chicken broiler producers, while Malta introduced support to recognised swine co-operatives and Luxembourg notified the third part of an aid scheme directed to the pig sector. In May 2022, Cyprus announced aid to cheesemakers, after supporting pig, poultry, cow and rabbit farmers. In February 2022, France notified a new aid scheme to support more than 10 000 pig farmers. Moreover, under its Recovery plan to the COVID-19 pandemic “France 2030”, France launched in 2022 new calls for applications and measures to encourage innovation in natural fermentation techniques, protein source diversification, food packaging, digital technologies and territorial food projects.
Domestic policy responses to Russia’s war of aggression in Ukraine
The war in Ukraine accelerated rising food prices and input costs in 2022, such as energy, fertilisers and animal feed. As stated in the Commission Communication entitled “Safeguarding food security and reinforcing the resilience of the food systems” (EC, 2022[48]), there was no immediate threat to food security in the European Union. However, the European Union remains a considerable net-importer of specific products, such as feed protein, sunflower oil and fertilisers. Hence, the main impact of the war lies in the increase of costs throughout the food supply chain.
At the European Union level, the main areas of interventions included: CAP flexibilities, exceptional market measures, direct support to farmers and rural areas, and actions to foster the overall resilience of the sector. Within this framework, Member States chose which measures to implement, based on their own specific circumstances. Member States also put in place their own regulatory flexibilities, tax concessions, investment assistance, and allowances to consumers and farm households to help farmers and agro-food enterprises cope with the financial impacts. Moreover, as discussed in Chapter 2, the European Union provided assistance to Ukraine’s agriculture and food security, as well as employment for its citizens.
On CAP flexibilities, in March 2022, the Commission adopted an exceptional and temporary derogation to allow the production of any crops for food and feed purposes on fallow land, while maintaining the full level of the greening payment for farmers in 2022 (EC, 2022[49]). This derogation, aimed at enlarging the European Union’s production capacity, was taken up by several Member States, including Austria, Belgium (Wallonia), the Czech Republic, France, Germany (partly), Italy, Latvia, Luxembourg, and Poland. Subsequently, in July 2022, the Commission authorised the derogation of the application of Good Agricultural and Environmental Conditions (GAEC) Standards 7 and 8 required under the CAP 2023-27 (EC, 2022[50]). In practice, farmers could keep producing the same crop on a specific plot of land in 2023 – except for maize and soybeans – and not take the compulsory 3% or 4% of their land35 out of production for biodiversity purposes until 2024. Almost all Member States used derogations for both GAECs.
To increase the cash flow of farmers, Member States were allowed to increase the advances for direct payments from 50% to 70% and for certain rural development measures from 75% to 85%. Countries taking advantage of the direct payment advance include the Czech Republic, Spain and Poland, while advanced RDP payments were applied in Poland. Farmers started receiving these advances from mid-October.
On exceptional market measures, in April 2022, the European Commission granted private storage aid for pig meat (EC, 2022[51]). The scheme provides financial support to cover part of the cost of storing pig meat withdrawn from the market for a period of between two and five months. This flexibility was intended to alleviate the prolonged economic difficulties of the European pork sector by limiting the available pig meat supply and thus rebalancing the market.36 The EC regulation argues that Russia’s invasion of Ukraine has created additional market disturbance and caused a sharp drop of export demand for certain pig meat products.
Member States also introduced regulatory flexibilities at the national level to allow certain products to remain on the market. Belgium introduced temporary packaging and labelling exception measures to make it easier for food producers to replace ingredients affected by supply shortages. Italy put in place derogations in the wine production regarding the percentage of grapes harvested outside the Protected Denomination of Origin (PDO) or the Protected Geographical Indication (PGI) areas.
In March 2022, a support package of up to EUR 500 million (USD 526 million) was made available to Member States to provide direct support to agricultural producers most affected by the war in Ukraine (EC, 2022[52]). This funding included EUR 350 million (USD 368 million) from the crisis reserve under the CAP, which had never been used before. Member States could supplement this funding with national aid up to a maximum of 200% of the amount set out for each country (Table 12.6). This prioritised farmers who engage in environmentally sustainable practices. Member States distributed these direct payments either among all farmers, as in the case of Denmark, or more often to producers of targeted crops or animal products (or both), including but not limited to, poultry, dairy, pig meat, greenhouse crops and horticulture.
A new rural development measure (Measure 22) was introduced in June 2022 to ensure the continuity of business activities in response to the impact of the war in Ukraine (European Parliament and European Council, 2022[54]). A one-off lump sum is provided to farmers and for small and medium-sized enterprises (SMEs) active in processing, marketing or development of agricultural products. Member States providing this support had to include the measure in the rural development programmes via a programme modification. The payment is financed by EAFRD appropriations under the 2023 budget, offset by a corresponding reduction in payments in subsequent years (EU Monitor, 2022[55]). For instance, Croatia decided to provide EUR 31.7 million (USD 33.3 million) to agricultural holdings with an economic size of more than EUR 3 000 (USD 3 155) that implement agri-environmental climate measures or are beneficiaries of support for organic production. These farms are awarded payment between EUR 1 000 to EUR 15 000 (USD 1 052 to USD 15 775). Processors of organic products can receive support of EUR 3 000 to EUR 25 000 (USD 3 155 to USD 26 291) depending on the reduction in their incomes in 2022 compared to 2021. Greece, Bulgaria and Poland have also made use of this measure to support Greek livestock farmers, such as goat, sheep, cattle, poultry and pig breeders, Bulgarian small and medium-sized enterprises in the cereals, oilseeds, medicinal and essential oil crops, potatoes, dairy products, honey, fruit and vegetables sectors, and Polish pig farmers, respectively.
The third direct support measure was a new self-standing Temporary Crisis Framework (TCF) allowing Member States to use state aid flexibilities to cushion the economic impact of the war in Ukraine, adopted in March 2022 and originally due to expire in December (EC, 2022[56]). In the face of the continued war, the Commission prolonged and amended the Temporary Crisis Framework three times, with the latest changes and the creation of the new Temporary Crisis and Transition Framework (TCTF) adopted in March 2023. Successive frameworks allow financial assistance from national budgets to farmers affected by significant increases in input costs and for energy-intensive undertakings such as fertiliser production. Member States can grant liquidity support, including State guarantees and subsidised loans, and aid for increased gas and electricity prices. The temporary support can be also provided to facilitate the rollout of renewable energy and decarbonisation of the industrial processes. While measures to mitigate impacts of the war in Ukraine should be phased out by the end of 2023, the aid for fostering transition towards a net-zero economy is planned to be available for an additional two years.
Under the TCF (and TCTF), most Member States granted subsidies or direct payments to mitigate the impact of increased input prices. For instance, Austria introduced the electricity cost subsidy, which is provided to all farms as a lump-sum payment per area or number of animals. Particularly energy-intensive businesses can apply in a second stage for a subsidy based on their actual electricity consumption, taking into account the deduction of the flat-rate grant awarded in the first stage. France proposed a subsidy for agricultural and agro-food businesses for which electricity or gas exceeded 3% of turnover in 2021 and which faced a doubling of gas or electricity prices compared to 2021. It also allocated EUR 400 million (USD 421 million) to support breeders heavily dependent on animal feed. In December 2022, Croatia adopted energy support measures, worth over EUR 26.5 million (USD 27.9 million), for processors of agricultural commodities. Further measures for alleviating input price rises were taken by Greece, Poland, and Spain, which provided support for the purchase of fertilisers. While in the case of Greece the level of support was around 11% of fertiliser purchases, in the latter countries it was granted in the form of payments per hectare. Ireland provided a EUR 56 million (USD 59 million) Fodder Support Scheme to grow sufficient grass and conserve fodder for the winter in the form of a direct payment for up to a maximum of 10 hectares. Latvia provided assistance to producers of selected agricultural products to partially (70%) offset the increase in expenses on feed (pig and poultry sector), fertilisers (selected vegetables sector), diesel, electricity and heating in the period from July to October 2022 (compared to the same period of 2021). To cope with rising input and electricity costs, Sweden introduced a EUR 154 million (USD 162 million) state-aid scheme, providing direct payments per farmed animal and per heated square metre of greenhouse used for the production of fruits, berries, vegetables, mushrooms, sprouts, spices or ornamental plants.
Within the TCF and TCTF, a number of Member States have also introduced specific financial measures for the agro-food sector. The Czech Republic provided EUR 10 million (USD 10.5 million) in direct payments to reduce the outstanding principal of operating loans to SMEs active in food production. Hungary, Italy, the Netherlands and Estonia opted to provide aid in the form of guarantees on loans. EUR 226 million (USD 238 million) was available to support Hungarian SMEs active in agriculture, food production and the bioeconomy, EUR 180 million (USD 189 million) to support Italian SMEs in the agriculture, forestry, fisheries and aquaculture sectors, EUR 70 million (USD 74 million) to support Dutch SMEs in the field of greenhouse production and horticulture, and EUR 15 million (USD 15.8 million) to support Estonian primary producers of agricultural products, fisheries and aquaculture operators.
Several EU Member States complemented their intervention by implementing tax measures to mitigate the rise in agricultural input prices. Some of these measures had been introduced earlier to cope with high inflation and were extended in the wake of the crisis caused by Russia’s war of aggression in Ukraine. Austria, the Czech Republic, Estonia and Luxembourg granted a flat-rate tax allowance of EUR 0.06 to EUR 0.08 per litre (USD 0.06 to USD 0.08) for diesel used for agricultural purposes. Poland increased the limits for the reimbursement of excise duty on the consumption of diesel used for farm work from 100 litres to 110 litres per hectare of utilised agricultural area and from 30 litres to 40 litres per annual average livestock unit (cattle). Italy put in place a tax credit for the purchase of fuel for agricultural activities. Temporary reductions in VAT rates were also implemented for other affected agricultural inputs, such as fertilisers, animal feed and plant protection products, as for instance in Greece, Portugal, and Poland. Other tax flexibilities were also reported: Spain established exceptional income tax reductions for the purchase of fertilisers, France granted social contribution rebates for farms facing significant higher costs and Italy postponed the deadline for payment of tax and administrative duties for young farmers.
On consumer policies, some Member States, such as Croatia, intervened in the retail prices of certain basic foodstuffs, and others, such as Poland and Spain, temporarily reduced VAT on selected food products. The Czech Republic increased the budget to support the operation of food banks. Portugal provided an additional EUR 60 (USD 63) for the most vulnerable households.
On resilience of the sector, starting in March, the expert group on the European Food Security Crisis preparedness and response Mechanism (EFSCM)37 met eleven times in 2022 with the aim to ensure a better flow of information throughout the food supply chain, co-ordinate responses at all levels and identify priorities. The work of the EFSCM continues in 2023, with the mapping of risks and vulnerabilities expected to be completed in the last quarter of the year.
Under the EFSCM, in December 2022, the Commission launched a dashboard on food security in the European Union. The dashboard presents a wide range of indicators affecting food supply and food security in the European Union, such as weather and drought events, freight and energy costs, development of animal diseases and possible trade restrictions, as well data on self-sufficiency rates of the most significant agricultural commodities, import dependency for these commodities and for fertilisers; and monthly rates of food inflation (EC, 2022[57]). Additionally, a dashboard on the “Impact of Russia’s invasion of Ukraine on selected agricultural sectors” was developed and is constantly updated.
In addition to initiatives at EU level, national governments continued to strengthen their preparedness in various ways. France elaborated its resilience plan for agriculture. Denmark revised its contingency plans. Member States have been also monitoring market mechanisms and security of food supply. Finland committed additional resources to reinforce the information systems of the Finnish Food Authority. Portugal created the Price Observatory “National is Sustainable” to monitor the impact of market disruptions on consumer prices.
EU Member States have also been promoting investments contributing to the green transition of the sector, including by making farms more energy self-sufficient. For instance, Finland provided aid for on farm investment in renewable energy and biofuels. It also introduced investment support, e.g. in advanced processing techniques for biogas digestates; in nutrient recycling and carbon sequestration; as well as in the start-up of the production of fertilising products when the starting material for production is manure or waste from biogas plants. Italy approved further measures for agricultural and agro-food companies to increase the production capacity of electricity from renewable sources. Portugal introduced subsidies for the installation of photovoltaic panels.
In its Communication on “Ensuring availability and affordability of fertilisers” of 9 November 2022, the Commission outlined the various actions available to help farmers to optimise their fertiliser use and reduce their dependency while safeguarding yields (EC, 2022[58]). In the area of research and innovation, Horizon Europe continues to invest, among others, in projects aiming to substitute the use of synthetic fertilisers. Also, the European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI) supports operational projects across Europe, e.g. on improving nitrogen efficiency (Germany), developing the production process of bio-fertilisers (Italy), integrating cover crops into the field crop rotation (Slovenia) (EC, 2022[59]).
Trade policy developments in 2022-23
The European Union’s trade policy plays an important role in supporting the European agricultural sector, through the use of a number of measures. On 22 June 2022, the Commission presented a communication on “The power of trade partnerships: together for green and just economic growth” (EC, 2022[60]), to further strengthen the implementation and enforcement of Trade and Sustainable Development chapters of the EU’s trade agreements.
In June 2022, the Commission also published a report entitled “Application of EU health and environmental standards to imported agricultural and agri-food products” (EC, 2022[61]). The conclusion was that: there is some scope to extend EU production standards to imported products provided this is done in full respect of the relevant WTO rules; and it is essential to make a case-by-case assessment before applying production standards to imports. This report assessed the legal and technical feasibility of doing this via multilateral, bilateral or autonomous instruments the constraints that apply, and the wide range of areas where the European Union has already extended to imported products its domestic production standards. The prohibition on the import of beef produced with growth hormones is an early example of the application of reciprocity measures to imported agricultural products and, more recently, the European Union has stated that it will not permit the import of meat where antibiotics have been used for growth promotion.
Trade agreements
On 30 June 2022, the European Union and New Zealand concluded negotiations for a trade agreement (EC, 2022[62]). For the first time ever in an EU trade agreement, the deal has a dedicated sustainable food systems chapter38 covering: closer co-operation on animal welfare standards; initiatives to phase out the use of antimicrobial agents as growth promoters and to reduce the use of antimicrobial agents in animal production; and co-operation on food loss and waste, pesticides and fertilisers, and on the security and resilience of food supply chains.
On 9 December 2022, the European Union and Chile announced the finalisation of their modernised Association Agreement (EC, 2022[63]), which, regarding agro-food trade, includes a chapter on Sustainable Food Systems, with the goal of building more sustainable and resilient food supply chains, and a dedicated Trade and Gender chapter.
On 11 October 2022, the Commission published its annual Report on Implementation and Enforcement of EU Trade Agreements (EC, 2022[64]). According to this report, EU agro-food trade with the 74 preferential partners grew by 4.7% in 2021, thus more modestly than agro-food trade between the European Union and all trading partners (which grew by 7.2%). On the other hand, the inclusion of the United Kingdom among the European Union’s preferential partners also led to an increase in the European Union’s trade surplus with preferential partners in goods, which grew from EUR 124 billion (USD 141 billion) in 2020 to EUR 208 billion (USD 246 billion) in 2021, albeit on a much-reduced level of trade because of COVID-19. Around 20% of the surplus with preferential partners can be attributed to agro-food.
Trade policy responses to Russia’s war of aggression in Ukraine
In May 2022, the European Parliament and the Council (2022[65]) suspended for one year import duties on all Ukrainian exports to the European Union and granted Ukraine zero tariff, zero quota access to the EU market. This step was designed to help boost Ukraine’s exports to the European Union and to help to alleviate the difficult situation of Ukrainian producers and exporters in the face of Russia’s military invasion.
Also in May 2022, as part of the European Union’s solidarity response with Ukraine, the Commission presented a set of actions to help Ukraine export its agricultural produce (EC, 2022[66]). Following Russia’s invasion of Ukraine and its blockade of Ukrainian ports, Ukrainian grain and other agricultural goods could no longer reach their destinations. The situation was threatening global food security and there was an urgent need to establish alternative logistics routes using all relevant transport modes. Based on an action plan set out by the Commission, the European Union established “EU-Ukraine Solidarity Lanes” to ensure Ukraine can export grain, but also import needed goods such as animal feed and fertilisers. The export of Ukrainian commodities was resumed first via road, rail and inland water ways through neighbouring countries thanks to the Solidarity Lines, and then from August 2022 via maritime routes thanks to the Black Sea Grain Initiative. 39
The implementation of measures facilitating the imports of Ukrainian agricultural produces into the European Union resulted in part of the cereals intended for transit being marketed in neighbouring countries. The price of cereals and farmers’ incomes in these Member States were affected. In this context, in March 2023, the European Commission approved further schemes supporting the wheat and maize producers (EC, 2023[67]) under the State aid Temporary Crisis and Transition Framework (discussed in the section above). On 15 April 2023, Poland unilaterally introduced a temporary complete import ban on a range of agricultural products from Ukraine (Minister of Development and Technology, 2023[68]). The transit ban was lifted six days later (Minister of Development and Technology, 2023[69]; Minister of Finance, 2023[70]). Similar import restrictions on imports from Ukraine were announced by Hungary (15 April), the Slovak Republic (17 April) and Bulgaria (19 April), two of which also border Ukraine. As of 30 April 2023, negotiations are ongoing between these Member States, Romania, and the European Commission on additional support measures for affected agricultural producers.
On 9 November 2022, the European Commission presented the Communication on “Ensuring availability and affordability of fertilisers” (EC, 2022[59]) highlighting the need to diversify the supply sources of fertilisers and intermediate products. The European Commission has reached out to alternative suppliers of fertilisers to compensate for shortfalls from Russia and Belarus.40 On 12 December 2022, an amendment to the regulation was announced suspending until 17 June 2023 tariffs on inputs used for the production of nitrogen fertilisers for all countries except Russia and Belarus (EC, 2022[71]; European Council, 2023[72]). The objective of this amendment was to increase the stability and diversification of supply, thereby alleviating costs for EU fertiliser producers and EU farmers.
Specific temporary flexibilities to existing import requirements on animal feed were adopted to contribute to alleviating the pressure on the feed market. Regulatory flexibilities were also implemented to facilitate the import of certain agricultural inputs. As an example, Spain relaxed the Maximum Residue Limits (MRLs) for pesticides in maize destined exclusively for animal feed imported from Brazil or Argentina for the period between March and September 2022.
The European Union is the largest economic region covered in this report, accounting for 18% of the economic activity of all countries covered herein. Although the contribution of agriculture to both GDP and employment has declined since 2000, the share of agriculture in the region’s exports has increased by approximately 50% during this period (Table 12.7). More than 40% of the region’s landmass is dedicated to agriculture, of which nearly 60% is dedicated to arable land use. Crops (including cereals, oilseeds, fresh fruit and vegetables, and plants and flowers) predominate in agricultural output, accounting for 61% of total production, although large differences exist across Member States. Livestock products – including dairy, beef and veal, pig meat, sheep meat, poultry and eggs – account for the remainder.
Real GDP in the region rebounded strongly in 2021 after the contraction of economic activity due to the fallout of the COVID-19 emergency in the previous year. Prior to 2020, GDP growth had been positive since 2013 (Figure 12.5). A sharp rise in inflation under the pressure of energy, food and other commodity prices hit the European Union economy in 2021-22. Geographical proximity to war and dependence on imports of fossil fuels make the European Union one of the most exposed economies in this respect. The unemployment rate returned in 2022 to pre-covid level (6%).
The European Union has been the world’s largest agro-food exporter since 2013, and remains one of the largest importers as well (Figure 12.6). The region is a net food exporter, with agro-food products accounting for 8.9% of all EU exports and 5.9% of all EU imports. The region’s agro-food exports are overwhelmingly composed of processed goods for final consumption (61%), while imports are more evenly distributed among the four categories shown in Figure 12.6, with processed goods for final consumption accounting for the largest share of imports (26%).
At 0.66%, agricultural output growth in the European Union over the period 2011-20 was significantly below the world average of 1.9% (Figure 12.7). Total Factor Productivity (TFP) growth was also below the world average over the period at 1.04% on average, but it was still sufficient to more than offset the impact of reduced primary factor input use, including labour, land, livestock and machinery, on agricultural output.
The moderate TFP growth has been achieved in the sector along with a reduction of certain environmental pressures, as illustrated through various environmental indicators (Table 12.8). From 2000 to 2021, the region’s nitrogen balance fell by more than 35%, the phosphorous balance declined by nearly 80%, while the share of agriculture in water abstractions fell by 13 percentage points. At the same time, although the European Union has achieved reductions in these indicators, some still remain high by comparison. For example, the region’s nitrogen balance is nearly 50% higher than the OECD average, with some Member States with nitrogen surpluses more than three times above the EU average. While the region achieved improvements in most environmental indicators, agriculture’s GHG emissions as a proportion of total European Union GHG emissions increased over the period, from 8.8% in 2000 to 11.6% in 2021.
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Notes
← 1. For 2020, estimates include the United Kingdom. Although the United Kingdom withdrew from the European Union on 31 January 2020, the UK budget for agricultural expenditures in 2020 continued to be sourced largely from the European Commission, and the United Kingdom remained part of the Common Market in 2020.
← 2. There is one CSP for each of the 27 EU Member States, except for Wallonia and Flanders in Belgium, which each has their own one, for a total of 28 plans.
← 3. Also referred to as the June 2003 reform or the 2003 “Luxembourg” reform.
← 4. This section provides an overview of the main policy tools in place; the new elements of the CAP 2023-27 framework and its implementation are described later in the domestic policy developments section.
← 5. Co-financing rates vary by measure and by Member State.
← 6. Member States with average direct payment per hectare below 90% of the EU average can transfer up to 25% of rural development funds to direct payments.
← 7. The SAPS was an alternative to the BPS in place in most Member States that joined the European Union after 2000. It offered a uniform decoupled per hectare payment rate. The SAPS applies to all Member States joining since 2004 except Slovenia, Malta, and Croatia, which implement the BPS with the EU15.
← 8. These standards were designed to: establish buffer strips along water courses (GAEC 1); comply with authorisation on water for irrigation (GAEC 2); protect ground water from pollution (GAEC 3); ensure minimum soil cover (GAEC 4) and minimum land management practices (GAEC 5); maintain soil organic matter level (GAEC 6); ensure the retention of landscape features (GAEC 7) (EC, 2015[81]).
← 9. Payments are granted on a maximum number of hectares, which varies by country or region: Belgium (Wallonia), 30 ha; Bulgaria, 30 ha; Croatia, 20 ha; France, 52 ha; Germany, 46 ha with a higher per hectare payment rate for the first 30 ha; Lithuania, 30 ha; Poland, from 3 to 30 ha (with no payment below 3 ha); Portugal, 5 ha as from claim year 2017; Romania, 30 ha with a smaller per hectare payment rate for the first 5 ha; and the Slovak Republic, 28 ha with different hectare payments for 3 size ranges (below 4.99 ha, from 5 to 14.99 ha, above 15 ha).
← 10. Member States that implemented the redistributive payment with more than 5% of the national ceiling allocated to the scheme could opt-out of this mechanism and the following six Member States and regions used this option: Belgium (Wallonia), Croatia, France, Germany, Portugal, and Romania.
← 11. The Czech Republic, Denmark, Cyprus, Estonia, Finland, Latvia, Luxemburg, Malta, the Netherlands, Slovenia, the Slovak Republic, Spain, and Sweden.
← 12. Austria, Belgium (Flanders), Bulgaria, Ireland, Greece, Hungary, Poland and Portugal.
← 13. Austria, Bulgaria, Estonia, Greece, Italy, Latvia, Luxembourg, Portugal, Slovenia and Spain.
← 14. The criteria are low temperature, dryness, excess soil moisture, limited soil drainage, unfavourable texture and stoniness, shallow rooting depth, poor chemical properties, and slope.
← 15. The fifteen Member States that opted for the SFS were: Austria, Bulgaria, Germany, Estonia, Greece, Spain, Croatia, Italy, Latvia, Hungary, Malta, Poland, Portugal, Romania, and Slovenia. No strict definition of “small farmer” was provided for under the scheme, which was available to the farmers eligible under the basic payment scheme (BPS) or the single area payment scheme (SAPS) and wishing to participate in the scheme.
← 16. Member States could choose their preferred method to calculate their SFS payments: lump-sum payment (an equal amount to all farmers in the scheme); payment due each year (individual farmers receive a single payment equivalent to what would have been due under other payment schemes); and payment due in 2015 (individual farmers received a single payment that depends on the amount that would have been due in 2015). Member States that opted for the “payment due each year” method were not subject to the 10% maximum, provided they did not round up lower payment amounts to EUR 500 (USD 570). For more information, see (EC, 2017[80]).
← 17. If the average market price in an EU country or in a region of an EU country drops below EUR 2 224 (USD 2 339) per tonne over a representative period, the European Commission may use public intervention to support beef prices (EC, n.d.[79]).
← 18. In addition to the EAFRD, these include the European Regional Development Fund (ERDF), Cohesion Fund, European Social Fund (ESF), and the European Maritime and Fisheries Fund (EMFF).
← 19. Exceptional temporary support was added to the list in response to the COVID-19 outbreak (2020[76]) and the impact of Russia’s invasion of Ukraine (2022[54]).
← 20. Regulation (EU) 2021/1119.
← 21. The European Unions’ National Determined Contribution covers all 27 of its Member States.
← 22. Regulation (EU) 2023/857.
← 23. Regulation (EU) 2018/841.
← 24. Rules on support for CSPs are established by EU Regulation 2021/2115 (EP, 2021[73]), which also sets the rules on the Performance Monitoring and Evaluation Framework (PMEF), which applies for the CAP from 2023 until 2027.
← 25. EU Member States have been encouraged to set non-binding national targets – referred to as “national values” – in relation to the EU-level targets from the Farm to Fork (F2F) and Biodiversity strategies.
← 26. In the CAP 2023-27 the Basic payment scheme has been renamed as Basic income support for sustainability (BISS).
← 27. In both cases, the trend would be compared to a three-year baseline, comprising the average of 2015 to 2017.
← 28. Progress can be monitored online via the “EU Biodiversity Strategy Actions Tracker” (EC, 2022[74]) providing regular updates on the implementation of the strategy.
← 29. All EU Member States are required to produce and periodically update Nitrate Action Programmes as part of the Nitrates Directive.
← 30. REPowerEU is the European Commission’s plan to make Europe independent from Russian fossil fuels well before 2030, in light of Russia's invasion of Ukraine (https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en).
← 31. Regulations (EU) 2019/6 and (EU) 2019/4.
← 32. Trio Presidency of the Council of the European Union France, the Czech Republic and Sweden: Declaration on antimicrobial resistance (March 2022).
← 33. The National Research Institute for Agriculture, Food and Environment (INRAE) was established in 2020 from the merger of the National Institute of Agricultural Research (INRA) and the National Research Institute of Science and Technology for Agriculture and Environment (IRSTEA).
← 34. The EGalim law, is actually called “law for the balance of commercial relations in the agricultural and food sector and a healthy, sustainable and accessible food for all”. As of 1 January 2022, it requires public catering to offer at least 50% sustainable and quality products, including at least 20% organic products (Ministère de l'Agriculture et de la Souveraineté Aimentaire, 2022[77]).
← 35. GAEC 8 requires a minimum share of 4% of arable land to non-productive areas but the share to be attributed to compliance with this GAEC is 3 % when at least 7% of arable land is devoted to non-productive areas under an eco-scheme.
← 36. The pig meat industry has been experiencing difficulties due to the slowdown in exports to the People’s Republic of China, the spread of African swine fever among EU Member States, the impact of COVID-19 restrictions and Russia’s war of aggression in Ukraine.
← 37. The European Food Security Crisis preparedness and response Mechanism (EFSCM) was established following the adoption of the “Contingency plan for food supply and food security in times of crisis” under the Farm to Fork Strategy (EC, 2021[75]). Its aim is to improve co-operation between the public and private sectors and evaluate risks when crises arise. It relies on a dedicated group of experts, and stakeholders from the food supply chain.
← 38. From 2021, all future trade agreements with the European Union are expected to include a chapter on sustainable food systems as stated in the European Commission’s Communication “Trade Policy Review: An Open, Sustainable and Assertive Trade Policy” (EC, 2021[82]).
← 39. The “Solidarity Lanes” and the Black Sea Grain Initiative allowed the export of about 25 million tonnes of Ukrainian grain, oilseeds and related products between May 2022 and the end of October 2022 (EC, 2022[78]).
← 40. Oman, Turkmenistan and Qatar were identified as alternative sources of nitrogen fertilisers, while imports from Egypt and Algeria have already increased.