EU to Reduce Agricultural Subsidies by 2028

2025-07-25 green

Amsterdam, Friday, 25 July 2025.
The EU will cut agricultural subsidies by over 20% starting in 2028, raising concerns about market inequality as nation-specific allocations may benefit some countries differently.

Impact of the Subsidy Reduction

The European Union’s decision to decrease the Common Agricultural Policy (CAP) budget by over 20% from €387 billion to €300 billion has sparked widespread concern among member states. This reform aims for more efficient allocation of resources but could exacerbate disparities as national governments gain flexibility in distributing funds [1]. The shifting focus emphasizes the EU’s strategic financial realignment towards other priorities such as defense and industry [2].

Reaction from EU Member States

Regional agricultural organizations such as LTO Nederland have expressed apprehension regarding the reformation of agricultural subsidies, fearing heightened inequalities across Europe [1][3]. As subsidies decrease, smaller farmers particularly in Southern and Eastern Europe stand to face significant challenges, potentially destabilizing the sector’s competitiveness [4]. Concerns have been raised about the extent to which national allocations could lead to an uneven playing field due to different financial capabilities of individual EU countries [3][6].

Support for Young Farmers

Despite budget cuts, the new CAP includes doubling the allocation for young farmers from 3% to 6% of the total CAP budget. This adjustment is meant to encourage generational renewal and sustainability practices within the agricultural sector [2][5]. This plan reflects the EU’s commitment to fostering a forward-looking agricultural environment capable of addressing climate change and supporting local innovation projects [6].

Future Outlook and Challenges

Negotiations concerning the allocation of the CAP budget are set to continue for several months as the European Commission navigates the complex dynamics between member states and the European Parliament [1][7]. The decrease in subsidies is part of a broader initiative to increase the overall EU budget to €2 trillion by 2034, reallocating resources towards burgeoning economic and strategic demands [7]. A potential contribution increase from environmental taxes and other sources is also under discussion to offset these cuts [4].

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EU funding agriculture reform