The Macaulay Institute

Land Allocation Decision Support System

CAP Reform

During 2003, the European Union adopted a reform of the Common Agricultural Policy (CAP), significantly changing how it supports the farm sector. With the new CAP the vast majority of subsidies will no longer be linked with production. However, to avoid abandonment of production, Member States can maintain a limited link between subsidy and production. These new "single farm payments" will be linked to the respect of environmental, food safety and animal welfare standards.


By severing the link between subsidies and production it is intended that EU farmers will become more competitive and market orientated, while providing necessary income stability. More money will be available to farmers for environmental, quality or animal welfare programmes by reducing direct payments for bigger farms. The different elements of the reform came into force in 2004 and 2005 although some member states may not apply the single farm payment until 2007.

Further Reading