The common agricultural policy explained
The EU’s common agricultural policy (CAP) ensures food security, encourages sustainable farming and supports rural areas.
Support for farmers and rural areas
Several laws in the European Union form a unified policy on agriculture – the common agricultural policy. Created in 1962, it is the longest standing EU policy, accounting for €386.6 billion of the EU’s budget for 2021-2027 or about €0.34 a day per EU citizen.
The common agricultural policy helps to:
- provide affordable, safe and high-quality food to 447 million EU citizens
- ensure a fair standard of living for farmers supporting 7 million beneficiaries
- preserve natural resources and contribute to climate action with 40% of its budget
The policy consists of three parts:
- direct payments for farmers
- measures to stabilise markets
- support for rural areas
Direct payments for farmers
The EU supports farmers with direct payments to:
- provide them with a stable income and safeguard them against fluctuating prices and bad crop years
- deliver public goods not normally paid for by markets, such as looking after their farmland and meeting food safety, environmental and animal welfare standards
- make farming profitable
This support ensures that there is a dependable and plentiful supply of food at affordable prices, and that farmers fulfil all safety, environmental, and animal health and welfare standards, which are among the highest standards in the world. Farmers who do not comply with the requirements receive less or no support (‘enhanced conditionality’).
Measures to stabilise markets
The CAP includes several market measures to stabilise agricultural markets, prevent market crises and counter-balance high price volatility, for instance due to short-term oversupply. These measures are:
- EU funding to member states to address problems in particular sectors
- specific rules for international trade in agricultural products
- ad-hoc intervention in times of crisis, either by governments that can purchase and store products, such as wheat, rice or milk powder, or as support to private operators to store products, such as sugar or olive oil
These market measures are part of the common market organisation regulation.
The EU has updated these rules in 2026 to strengthen farmers’ bargaining power and to ensure that they get a fair price for the food they produce. These changes make it is easier for farmers to:
- benefit from written, clear contracts and fair terms
- receive incentives to join producer organisations likes cooperatives and associations
- collectively negotiate contracts
- benefit from clear rules on the use of the ‘meat’ term and meat-related names
Support for rural areas
Since the early 2000s the common agricultural policy has been helping rural areas to develop, flourish and remain populated.
Nearly half of Europe consists of predominantly rural areas, which are home to 25% of the EU’s 447 million people. These rural regions are also some of the least favoured regions in the EU, with a GDP per capita well below the EU average.
EU rural development measures within the CAP help to:
- modernise farms
- increase investment in infrastructure including connectivity and basic services
- boost the competitiveness of the agricultural sector
- ensure generational renewal in farming
Additionally, the EU’s cohesion policy complements the rural development policy, particularly by supporting balanced development across different regions.
Simplification of the CAP
On 18 December 2025, the Council adopted new measures to simplify the CAP. The aim is to boost the competitiveness of the European agriculture by cutting red tape, supporting farmers, including small farmers and business start-ups, encouraging innovation and boosting productivity. The new measures would:
- reduce administrative burden and controls for farmers and national administrations
- increase payments to small farmers and simplify the rules on conditionality
- reduce on-the-spot checks and remove the annual performance clearance
- improve funding for farmers in times of crisis
The proposed measures could lead to yearly savings of up to €1.6 billion for farmers and more than €200 million for national administrations.
Funding period 2023-2027
The funding for the common agricultural policy is reviewed regularly to adapt it to new challenges faced by the EU’s farming sector.
The new funding period started in 2023 and will last until 2027. The main focus of this cycle is to:
- distribute funds more fairly to better support smaller farms and younger farmers
- contribute to EU environmental and climate goals
- provide greater flexibility in planning for member states
CAP funding rules 2023-2027
Post-2027 common agricultural policy
During the Agriculture and Fisheries Council on 22 September 2025, agriculture ministers discussed the Commission’s proposed framework for the future CAP.
Ministers exchanged views on how the new funding structure, including €293.7 billion for income and crisis support, will align with national and regional partnership plans to ensure sustainable agricultural growth and resilience across the EU.
The need for agricultural funding
The agri-food sector is one of the biggest economic sectors in the EU. It provides 40 million jobs and around 10 million farmers work to provide high-quality and affordable food while trying to preserve natural resources.
However, the farming sector faces unique challenges compared to other sectors:
- it is highly dependent on the weather and the climate, and affected by extreme weather events such as droughts or floods, leading to fluctuating production
- production requires time and planning, meaning there is a delay in adapting supply
This can cause market instability and lead to volatile prices.
In addition, the agri-food sector faces challenges such as global competition, economic and financial crises, climate change and volatile costs of inputs such as fuel and fertiliser.
Farmers’ income is still almost 40% lower than non-agricultural income despite the importance of food production and an increase in average incomes over the past 20 years.
What share of average EU income farmers earn
in 2005 - 31%
in 2010 - 37%
in 2015 - 41%
in 2022 - 64%
Financing the CAP
The common agricultural policy is financed through two funds (also called pillars) as part of the EU budget:
- the European agricultural guarantee fund (EAGF) provides direct support and funds market measures
- the European agricultural fund for rural development (EAFRD) finances rural development.
Payments are managed at national level by each EU member state. Rural development is co-financed by the member states.
The role of the Council in the CAP
The Council of the EU is responsible for adopting legislation, generally jointly with the European Parliament, based on proposals by the European Commission through the ordinary legislative procedure. At the end of 2021, the Council and the Parliament approved new CAP rules for 2023-2027, and in spring 2024, they made some changes to make them more flexible and cut red tape for farmers.
EU member states, in cooperation with the European Commission, manage the day-to-day running of the CAP. The Council ensures that member states are involved in every aspect of the policy, in particular when it comes to delegated acts, which the Commission can adopt, for example to update technical details in the legislation.
The Council’s work on all CAP-related matters is prepared by the Special Committee on Agriculture (SCA), which consists of representatives from member states’ governments. The committee has been in place since 1960.
Feeding Europe: 60 years of common agricultural policy
Six decades after its launch in 1962, the EU's common agricultural policy supports an open single market for EU agricultural food products. Hear more about the CAP from European farmers and beneficiaries.
See also
From farm to fork
Food security and affordability
Geographical indications for foods and drinks
Last review: 18 December 2025