Interpreting Different Narratives about Land Services and Land Use Economics of Common Agricultural Policy

Abstract

Since 2023, a new format of the Common Agricultural Policy (CAP) has been implemented in Europe. Market forces alone cannot guarantee land services, which can be described as flows of goods and services from ecosystems to human systems as functions of nature. Market forces also cannot ensure food security everywhere and at all times, so deliberate measures should incentivize farmers to adopt sustainable agricultural practices and maintain necessary skills and resources. This study identifies, quantifies, and interprets four narratives that are typical in the approach to food security and the public debate about the land services in the CAP Strategic Plans: (A) provision of land services within the Pillar 1 economics; (B) small vs. large farms; (C) direct payments in comparison with rural development; and (D) choices by the old and new member states. Participatory processes, descriptive statistics, and partial component analysis were used in terms of the methodology. The key finding is that the importance attached to eco-schemes varies among member states, although a majority dedicate approximately 25% of the Pillar 1 budget to them. We showed that small-scale farming countries move resources from Pillar 2 to strengthen direct payments. In contrast, affluent countries with robust agricultural structures can afford to reinforce Pillar 2 rural development through transfers from direct payments. To support small-scale and medium farms, appropriate support requires a combination of several measures, including the sizable hectare payment in Pillar 1 and farmer-oriented agri-environmental measures.