EU farm budget cut by a fifth as Commission calls it protection

The European Commission has proposed cutting the Common Agricultural Policy budget by more than a fifth for the next seven-year cycle, setting off the sharpest confrontation between Brussels and the farm sector in a decade. Ursula von der Leyen unveiled a €300 billion envelope for 2028-2034 on Wednesday, down from the €386.6 billion allocated for the current period. The reduction amounts to 22 percent before inflation is taken into account, a figure the Commission insists represents a strengthening of agriculture.

Outside the Berlaymont, several hundred farmers waved flags and chanted "Welcome to Vonderland", a play on the Commission president's name. Inside the European Parliament's agriculture committee, MEPs from von der Leyen's own European People's Party joined Socialists, liberals and Greens in rejecting the arithmetic. "Don't try and sell us a 25 percent CAP cut as a success story," said Herbert Dorfmann, a veteran of previous budget rounds. His Italian colleague Dario Nardella put it more bluntly: "Maybe I've misunderstood, but €300 billion is not more than €386 billion. How is this a success story?"

The accounting behind the claim

Christophe Hansen, the Agriculture Commissioner, spent the day defending a distinction that has convinced almost no one outside the Commission. He argued that not all of the current €386.6 billion reaches farmers directly. Of that sum, €291.1 billion is earmarked for income and sectoral support, direct payments and market measures, while €95.5 billion goes to rural development programmes. The new €300 billion, he said, is a legally ring-fenced floor covering both pillars, protected from being diverted to defence or competitiveness priorities.

The problem for Hansen is that rural development money overwhelmingly flows to farmers too. Investment support, agri-environment schemes, and payments for areas facing natural constraints, mountains, remote regions, poor soils, are all funded through the second pillar. In practice, the separation is administrative, not economic. When the envelope shrinks by €86.6 billion, both pillars shrink. The Commissioner acknowledged that member states can top up their national allocations, but few finance ministers in cash-strapped capitals are expected to volunteer extra billions for agriculture.

A post-war compact under strain

The Common Agricultural Policy was born in 1962 as a bargain between France and Germany: French agricultural market access in exchange for German industrial exports. For more than sixty years it has consumed the largest share of the EU budget, peaking at 73 percent in 1985 before a long decline to roughly one third today. The policy has survived MacSharry, Agenda 2000, Fischler and Cioloș reforms, each time recalibrating but never facing a nominal cut of this scale. Massimiliano Giansanti, who heads Copa, the EU's main farming lobby, called the proposal a betrayal of that history. "They're dismantling 70 years of European history," he said. "They want to have a declaration of war to the farmers. OK, we are ready."

The language is deliberate. Farmers' organisations have long treated the CAP as a birthright, not a subsidy. The sector's political weight is disproportionate to its economic size, agriculture accounts for 1.3 percent of EU gross value added but commands a budget larger than the next three policy areas combined. That weight rests on rural votes, cultural symbolism, and the memory of post-war food insecurity. Von der Leyen's team appears to have calculated that the political cost of cutting the CAP is lower than the cost of squeezing cohesion, research or defence budgets. The farmers' protest on Wednesday, notable for the absence of tractors and the presence of an AI-generated anthem, suggested the calculation may be premature.

Political fault lines in the Parliament

The agriculture committee hearing revealed fractures that cross party lines. Dorfmann's intervention carried particular weight because the EPP is von der Leyen's political family; his public dissent signals that the Commission cannot rely on automatic support from its own base. Nardella, speaking for the Socialists and Democrats, framed the cut as a betrayal of rural communities that already feel abandoned by Brussels. Renew Europe and the Greens echoed the criticism, though for different reasons, liberals want more market orientation, Greens want stronger environmental conditionality. The only group broadly supportive was the European Conservatives and Reformists, which has long argued for a smaller, more targeted CAP.

That alignment is awkward for the Commission. A legislative proposal needs a majority in Parliament and a qualified majority in the Council. If the EPP splits, von der Leyen must build a coalition that includes groups fundamentally opposed to her approach on other files. The agriculture committee will produce an opinion, but the decisive vote sits with the Committee on Budgets and the plenary. Negotiations with the Council, where member states hold the purse strings, will run in parallel. The current budget cycle ends on 31 December 2027; agreement must be reached before then to avoid a legal vacuum.

The co-financing illusion

Hansen's fallback argument, that national governments can supplement the EU envelope, runs into the reality of European public finances. France, Germany, Italy and Spain, the four largest agricultural producers, are all running deficits above the 3 percent of GDP threshold set by the Stability and Growth Pact. The new fiscal rules, agreed in 2024, require debt reduction paths that leave little room for new permanent spending. Poland, the fifth largest recipient, faces its own budget pressures from defence and reconstruction commitments. The Commission knows this. By making the €300 billion a floor rather than a ceiling, it shifts the political burden to capitals: if farmers lose out, blame your finance minister, not Brussels.

This dynamic played out during the 2021-2027 negotiations, when several member states topped up direct payments from national budgets. The amounts were modest, a few hundred million euros each, and temporary. Making good a 22 percent shortfall would require billions annually. Álvaro, a farmer from Toledo who gave only his first name, summed up the mood on the protest line: "They've got us tied down. I wish we could survive without subsidies, but we need them. The Spanish countryside and European agriculture are being ruined from here."

Environmental conditionality and the missing debate

Lost in the noise over the top-line figure is the question of what the smaller budget buys. The current CAP introduced eco-schemes, voluntary environmental payments worth 25 percent of direct payment envelopes, and strengthened conditionality rules linking basic income support to climate and biodiversity practices. The Commission's proposal for the next cycle has not yet been published in full, but leaked drafts suggest a shift toward performance-based payments: member states would design strategic plans with measurable targets, and funding would be tied to results. That model, championed by Hansen during his time as Luxembourg's agriculture minister, requires administrative capacity that many national paying agencies lack.

Environmental groups have been notably quiet on the budget cut. Some see a smaller, better-targeted CAP as preferable to a larger one that rewards hectares farmed regardless of impact. Others fear that a reduced envelope will be used to argue that environmental ambition is unaffordable. The European Court of Auditors has repeatedly found that CAP spending on climate action is overstated; a 2023 special report concluded that most "climate-relevant" payments fund practices with little or no mitigation effect. If the new model delivers genuine conditionality, the €300 billion could achieve more than the €386.6 billion. But that is a large if, and the Commission has not yet made the case.

What happens next

The legislative process formally begins when the Commission transmits its proposal for the Multiannual Financial Framework regulation, expected in the coming weeks. The Council will negotiate in parallel with the Parliament, aiming for a political agreement by late 2026 or early 2027. The agriculture committee's opinion, due this autumn, will set the tone. Meanwhile, farmers' organisations are planning a larger mobilisation for September, when ministers meet informally in Warsaw. The Polish presidency of the Council, which takes over in January 2026, has signalled it wants to protect the CAP envelope. Whether that translates into a Council position that defies the Commission remains the central unknown.