Billions in Misspent EU Agricultural Subsidies Could Support the Sustainable Development Goals

Summary

The Common Agricultural Policy (CAP) is the guiding policy for agriculture and the largest single budget item in the European Union (EU). Agriculture is essential to meet the Sustainable Development Goals (SDGs), but the CAP's contribution to do so is uncertain. We analyzed the distribution of €59.4 billion of 2015 CAP payments and show that current CAP spending exacerbates income inequality within agriculture, while little funding supports climate-friendly and biodiverse farming regions. More than €24 billion of 2015 CAP direct payments went to regions where average farm incomes are already above the EU median income. A further €2.5 billion in rural development payments went to primarily urban areas. Effective monitoring indicators are also missing. We recommend redirecting and better monitoring CAP payments toward achieving the environmental, sustainability, and rural development goals stated in the CAP's new objectives, which would support the SDGs, the European Green Deal, and green COVID-19 recovery.

Graphical Abstract

Highlights

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  Prudent EU agricultural policy reform could greatly benefit sustainability

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  EU agricultural subsidies currently not being spent where they are most needed

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  More support for environment- and climate-friendly practices is required

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  Result-based payments and better monitoring of outcomes is necessary

Science for Society

Global agricultural subsidies total over $700 billion per year but often drive environmental damage and fail to provide broader social benefits beyond farming. In the EU, around €54 billion per year of public funds have been spent under the Common Agricultural Policy (CAP) since 2006. The CAP will be reformed after 2020, and we reveal the untapped potential for vast spending under the policy to contribute to sustainable agriculture in Europe. To do so, CAP payments will need to be redistributed from supporting income in regions where farming is already profitable to supporting farmers to implement environment- and climate-friendly practices. Member States will also need to play a role in monitoring and evaluating whether CAP spending is actually achieving the desired outcomes, using result-based payments and a better set of monitoring indicators. Our results can help researchers, NGOs, and citizens to participate in the CAP reform debate so that public spending provides public goods.

Abstract

The EU's 2021–2027 Common Agricultural Policy (CAP) has great potential to contribute to sustainable development, but changes are required to unlock this potential. Currently, vast CAP spending is not going where it is most needed, and more support for environment- and climate-friendly practices is required. Redistributing income support from already profitable farming regions to other goals of the CAP could unlock some of the policy's untapped potential. Result-based payments and better monitoring and evaluation are also necessary.