EU payments to farmers fail to deliver on competitiveness and sustainability

Over 40 billion euro is given annually to European agriculture as direct payments under the Common Agricultural Policy. Yet, the policy fails to deliver on what EU citizens are promised. This is a key message from new research by AgriFood Economics Centre and Centre for Environmental and Climate Research at Lund University. Direct payments are area-based income support under the Common Agricultural Policy (CAP), aiming to improve competitiveness and environmental sustainability, contribute to the preservation of biodiversity and the agricultural landscape, and food security. At present, the direct payments consume 72 per cent of the CAP budget. AgriFood's report shows that direct payments are holding back rather than promoting competitiveness, particularly in productive regions. The payments encourage less profitable farms to stay in business, which creates difficulties for more productive farms to access land and expand.