THE EVOLUTION OF FINANCIAL INSTRUMENTS IN THE COMMON AGRICULTURAL POLICY IN LIGHT OF THE STRATEGIC PLAN FOR 2023-2027

Abstract

The article presents the origins and key transformations of the EU’s Common Agricultural Policy (CAP) and the most significant factors that have influenced its current shape. It is shown that since its inception, the CAP has undergone significant changes involving both its goals and operational tools. It was found that over the years and under changing circumstances, the CAP has transformed from a policy aimed at increasing agricultural production and productivity into a tool that determines the development of rural areas and stimulates pro-environmental measures. The validity of this perspective is also supported by an analysis of the financial aspects of its functioning. In the context of the findings, the second part of the study characterizes the current shape of the Strategic Plan for the Common Agricultural Policy for 2023-2027 (CAP SP), which defines the main financial instruments for achieving the objectives of the CAP. It was found that compared to the previous programming period, significantly less funds were allocated to payments according to agricultural area (a decrease in the share from 43% to 35%), redirecting them to various types of payments related to pro-environmental measures. These changes are in line with the direction of the CAP’s evolution. However, the way in which additional payments are linked to the implementation of pro-environmental measures is debatable, creating numerous implementation problems for farmers. The result is a low share of eco-schemes in the payment applications submitted by farmers in 2023, which will reduce the amount of EU support they will absorb.