EU's 2028-2034 Budget Plan Aims to Boost Innovation, Alters Agricultural Subsidies

2025-07-18 green

Brussels, Friday, 18 July 2025.
The EU’s budget proposal for 2028-2034 significantly increases innovation funding but reduces agricultural subsidies, sparking concerns in the farming sector while focusing on economic resilience.

Enhanced Focus on Innovation

The European Union has unveiled a comprehensive Multiannual Financial Framework (MFF) for 2028-2034, directing significant attention to innovation and competitiveness. The new Horizon Europe programme is set to double its budget to €175 billion, positioning research and innovation at the heart of the EU’s economic and investment strategies. This increase aims to boost Europe’s competitiveness and support innovative solutions in sectors such as climate transition and digital leadership [6].

Implications for Agriculture

While innovation funding is on the rise, the new budget plan proposes significant cuts in agricultural subsidies, leading to unrest among farming communities. The European Commission’s proposal cuts the Common Agricultural Policy (CAP) budget by 20%, a move perceived as a threat by large agribusinesses. In contrast, the budget retains support for smaller farms and young farmers, enhancing investment support and generational renewal strategies [2][3].

Sector-wise Allocation and Responses

This strategic budget reallocation reflects a shift in EU priorities, aligning financial resources with broader geopolitical and socio-economic goals. Notably, defense and security expenditures are expected to see a substantial increase, resembling an effort to enhance European self-reliance amid rising geopolitical tensions [6][4]. This reallocation has triggered a mixed response, with farmers and several EU Member States raising concerns over the diminishment of traditional EU sectors like agriculture, urging the Commission to reconsider its redistribution strategies [2][3].

Negotiations and Future Outlook

The expansive changes within the EU’s financial framework are subject to rigorous debate and negotiation among EU member states and the European Parliament. As these discussions progress, there is an anticipation of potential revisions before the framework’s implementation in 2028. Stakeholders are advocating for a balanced approach that upholds incremental innovation funding while ensuring sustainable support for essential sectors like agriculture, crucial for securing the EU’s socio-economic stability [2][6].

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innovation funding EU budget