Agriculture and Rural Development in the European Union

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The common agricultural policy ensures a secure supply of the 446 million consumers in the EU with sustainably produced and affordable food. It also promotes jobs and growth in rural areas.

The common agricultural policy is applied in all EU member states and financed from the EU budget. It supports the EU’s agri-food sector, one of the largest industries in the European Union, on which around 44 million jobs depend. In 2016, around € 61 billion (around 38% of the EU budget) was invested in helping farmers produce food in a sustainable manner while promoting agricultural growth and a vibrant rural area. In addition, the common agricultural policy supports environmentally and climate-friendly cultivation methods throughout the EU and promotes a health-conscious lifestyle.

What the EU is doing

The common agricultural policy provides support with the following measures:

  • Direct payments to support farmers' incomes. Farming can be a risky and expensive business. Often times, the weather and agricultural market conditions are unpredictable and can have a severe impact on production and income. This is bad for farmers, but also bad for consumers, as it can have negative effects on the food chain. The largest part (72%) of the current EU agricultural budget is earmarked for direct payments to European farmers, provided that they comply with strict rules on food safety and animal and environmental protection. The benefits for the environment and the climate include the protection of the soil and biodiversity and the preservation of permanent grassland. The latter is a very effective approach, in order to fix carbon and thus contribute to the containment of global warming. Direct payments also help to reward farmers for providing public goods that benefit society as a whole but for which the market does not pay;
  • Market support measures to compensate for difficult market situations, for example in the event of a sudden drop in demand due to a health warning, a price drop due to a temporary oversupply or unforeseen geopolitical developments, as well as measures for rural development (co-financed by the Member States) that promote innovation and competitiveness it becomes attractive to live and work in rural areas. This includes the modernization of farms and payments to young farmers and for traditional and organic food production;
  • the restoration of areas dependent on agriculture and forestry ecosystems and promoting resource efficiency and the transition to a CO 2 low-carbon and climate resilient economy also have high priority and make 51.7% (about 51 billion euros) of the total budget for the development of rural areas in the period 2014-2020.