Common Agricultural Policy (CAP)
Overview Summary
The Common Agricultural Policy (CAP) is the EU’s framework for supporting agriculture, ensuring food security, protecting the environment and sustaining rural communities. The current policy (2023–2027) represents a major modernization of EU farm policy with a strong shift toward sustainability, flexibility and performance‑based management.
Scope of Coverage
The CAP covers primary agricultural production sectors from crop farming on arable and permanent crops to livestock farming and beekeeping. The first pillar (founded by the EAGF) covers the following sectors:
– Fruit and vegetables
– Wine
– Olive oil
– Apiculture
The second pillar (financed by the EAFRD) covers the rural development and land-use sectors.
Affected Entities
The CAP covers:
– Farmers (of all sizes)
– The Agri-food supply chain—including input supply industries, food processors, distributors, retailers and producer organisations and cooperatives
– Consumers
– Rural communities
– The environment and biodiversity stakeholders
– National and regional governments, which have to implement CAP strategic plans
Applicability & Compliance Timeline
1 January 2023 → CAP entered into force.
It is structured around ten broad objectives: fair farmer income, competitiveness, stronger position in the food chain, climate action, environmental care, biodiversity protection, generational renewal, vibrant rural areas, food and health quality and knowledge and innovation.
What This Means for Companies
The CAP promotes greener, more sustainable farming: at least 25% of direct payments must support eco‑schemes, rewarding farmers for voluntary practices that benefit the climate, soil, water and biodiversity. Environmental conditionality is strengthened, linking payments to higher environmental and social standards. MCS provides support to stakeholders affected by the CAP in transitioning to a more sustainable, regenerative agriculture—enabling compliance with CAP requirements for direct payments.
Status
Adopted