Buckle up – July is shaping up to be a blockbuster month for the EU agrifood sector. In a double-whammy move, the European Commission is set to unveil not one but two major proposals on 16 July that will shape the sector’s future: the blueprint for the post-2027 Common Agricultural Policy (CAP) and the next €1.2 trillion EU budget. Natasha Foote talks you through what’s brewing in Brussels and the panic in the corridors of power.
Tensions are sky-high in Brussels at the moment, and with good reason.
At the heart of the buzz is talk of a potential budgetary mega-merge that could see the CAP folded into a new all-purpose pot of EU cash. It’s a move that would fundamentally shake up how money flows to farmers and rural regions.
Despite the looming deadline, details remain tightly guarded. According to insiders, Commission President Ursula von der Leyen is keeping the CAP proposal under lock and key, with only a “handful” of college members granted access. “What can I say? Join the last-minute club,” one EU source quipped, while others point to ongoing internal wrangling right up to the wire.
Whether this is a case of calculated control or eleventh-hour chaos is unclear — but what is clear is that it’s fuelling anxiety across the sector. Since the story first surfaced, the Brussels lobbying machine has kicked into gear. Meanwhile, the political landscape has shifted, with deep cracks in the coalition that put the current Commission in charge. So, what exactly is on the table? Here’s a look at the three main scenarios and where things stand today.
1. Money Melting Pot(s)
A leak at the end of 2024 suggested that the Commission was considering the option to roll all EU funding, including CAP, into a single new budget bucket under a catchy new moniker like the European Competitiveness Fund. The funds would then be distributed through national strategic plans. (Now where have we heard this before?)
The conversation has shifted somewhat since then, with more talk of consolidating funding streams into several streamlined money pots.
This appears to be supported by a more recent leak detailing plans for a Competitiveness Fund. According to the document, seen by ARC2020, the fund aims to “simplify and improve EU funding” by consolidating 12 existing programmes into one fund. This spans a broad range of policy areas, including health, defence and security. Most relevant to the agrifood side of things is the inclusion of the LIFE Programme, the EU’s flagship fund for environment and climate action, suggesting it may be heading for a major structural shake-up.
The development comes after months of sustained pressure from right-wing groups, who have taken aim at LIFE’s support for environmental NGOs and civil society organisations. If the merger goes ahead, it could mark a significant turning point in how the EU balances green priorities with industrial competitiveness.
However, any mention of the CAP is absent from the Competitiveness Fund proposal.
This suggests one of two things: that the CAP will be kept as a separate, standalone budget, or it will be lumped somehow into a different funding stream.
For instance, the leak references “synergies with nationally and regionally pre-allocated envelopes”, including with an overarching “Global Europe Fund” and “complementarities between the ECF and [National and Regional Partnerships]”, which appears to be the working title for a mechanism to bring together funds under shared management.
Ultimately, any merging of money pots still raises the same questions about governance, access, and who gets to shape the priorities. As ARC2020 previously reported, such a move risks a double-whammy of centralisation of power at both EU and national levels, cutting out regional authorities and risking the marginalisation of rural voices. This could lead to both recentralisation and renationalisation of EU funds.
That said, the current temperature check from Brussels is not warm, with the inclusion of the CAP in any Big Budgetary Merge proving unpalatable to both lawmakers who ultimately have the final say on the proposal.
Back in May, 20 EU countries signed a joint declaration demanding a “strong, separate and ring-fenced CAP” in the next budget. The Parliament is singing the same tune with a paper greenlighted this week on its vision for the future of the policy, while farming lobbies are out in full force fighting for a dedicated CAP budget.
The bottom line is that there’s little appetite for a full-scale merge – but it’s not impossible even at this late stage.
2. One Pillar To Rule Them All
Farmers have been crystal clear: the CAP should stay out of any merged mega-budget. Agriculture Commissioner Hansen has echoed this line repeatedly, insisting that the CAP needs dedicated agriculture funding.
Words matter. The emphasis has been on an “agriculture” budget, a phrase Commission officials have repeatedly emphasised. That could mean ring-fencing direct payments under Pillar I from any new funding structure.
But this doesn’t mean that the second pillar, which funds rural development and environmental measures, is safe in this story.
The farming lobby is out in full force, fiercely defending direct payments and demanding a standalone budget. And while there are internal disagreements — notably over issues like capping and degressivity — the message on maintaining a strong first pillar is unified.
But rumours have been milling for a while that the policy could be split, merging the environmental and regional development half with other funding pots – for example, this aforementioned square-bracketed [National and Regional Partnerships] fund.
And, amid ongoing rumours of backstage fighting over an overhaul of €400 billion in Cohesion funding, which is designed to narrow the gap between poorer and richer areas in Europe, this option doesn’t seem to be entirely off the table.
This has sparked concern from Europe’s regions, who are fighting to keep a direct line to Brussels and ensure a strong voice in the decision-making process. Against this backdrop, the Committee of the Regions convened a recent plenary session with Hansen himself, who stressed that the foundation of the CAP rests on both pillars. “It would be unwise to throw overboard this toolbox that we currently have,” he said, stressing the importance of “strong rural development instruments for the future”.
3. A Dedicated (But Downsized) CAP Budget
Even if a full-scale merger may be off the table, few believe the CAP will emerge unscathed amid mounting geopolitical tensions and growing pressure on the EU budget.
Despite Agriculture Commissioner Hansen’s recent warning that slashing farm funds in today’s volatile climate would be an “enormous mistake,” the writing is on the wall: defence and innovation are climbing the EU’s priority list, while agriculture risks losing ground.
There has also been a notable shifting of the goalposts among stakeholders over the past few months, with calls for a “credible” CAP backed by a “sufficient” budget. Few dare to dream of asking for more anymore — they’re mostly just trying to avoid the worst of the cuts.
Some in Brussels see this as expectation management at its finest: float the worst-case scenario, then sell a smaller CAP budget as a win.
It is also notable that, according to sources, it is a deliberate, strategic choice to present the CAP first in the list of those published following the budget. While the two always go hand-in-hand, this suggests that they may be even more intimately linked than usual – or that farmers might need a spoonful of sugar to help the medicine go down.
A reduced budget paired with proposals to preserve the policy’s core – aka, direct payments, income support – alongside a softer, simplified CAP with fewer rules and more incentives.
But it will still be a hard pill to swallow. And with farmers already signalling their readiness to return to the streets, Brussels will need to tread carefully.
The most likely scenario? A standalone CAP but with a slimmer budget.
Breaking new ground?
With battle lines drawn and the political temperature rising, all eyes are on Brussels as 16 July looms.
Whether this proposal breaks new ground with a merged mega-budget, a split CAP, or simply a slimmer standalone version, the direction taken on 16 July will set the stage for farming and rural policy for years to come. The choices made now will determine not just how money is spent, but who gets a say — and, crucially, who doesn’t.
Whatever happens, one thing is certain: the fight for the future of the CAP is far from over with this proposal, but only just the beginning of the fun to come. And ARC will be there to walk you through every step of the way.
This article is produced in cooperation with the
Heinrich Böll Stiftung European Union.
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