Charting the Course for a Greener Common Agricultural Policy

The Common Agricultural Policy (CAP) in the European Union (EU) has various costs and benefits associated with it, and different EU Member States have divergent agendas and expectations regarding it. The CAP involves multiple actors who participate in its formation, including bureaucrats, sectoral interests, governmental agendas, and pressure organizations interested in agriculture. This shared and binding policy significantly impacts how benefits are divided among these actors.

In addition to economic benefits, the CAP also integrates social and environmental aspects to promote a resilient and sustainable-oriented agricultural structure throughout the EU. This policy encourages favorable environmental conditions that allow farmers to benefit from natural resources and maintain financial stability by producing agro-food. Agricultural income not only supports farming households and communities in rural areas but also contributes to society’s overall gains from agricultural production (European Commission, 2021). In addition, agricultural activities are highly susceptible to climate change, but they can also help mitigate it by reducing greenhouse gas emissions and storing carbon while continuing to produce food.

The CAP policymaking process has been evolving toward the creation of a sustainable and eco-friendly framework for European agriculture, with an emphasis on promoting environmental consciousness at all levels of governance within the EU’s complex and multifaceted system. This chapter delves into the theoretical underpinnings of policy change, specifically examining the concepts of neo-institutionalism and historical institutionalism, to better understand the mechanisms driving this shift. These theories emphasize the role of institutional factors in shaping policy outcomes and the importance of historical context in understanding policy development.

Dynamics of Institutional Shifts: Exploring the Mechanisms of Change

For many years, scholars have studied organizations and their interconnections. During the second half of the nineteenth century and the first part of the twentieth century, social theorists created a body of literature (Meyer, 2017; Scott, 2004). They concentrated on how institutionalization is fostered by the bureaucratic structures of organizations, as well as the organizational structure within society (Hall & Taylor, 1996). Until the 1950s, political science was primarily concerned with analyzing the structures of government and state in the United States and the United Kingdom. This earlier approach, known as “old institutionalism,” focused on the formal structures and institutions that make up these political entities (Andreou, 2018). However, a behavioral movement that popularized new theories on how policies are created and changed, including behaviorism, positivism, and rational choice theory, emerged to complement it (Ostrom, 1998; Strom, 1990). This led to the limiting emphasis on institutions being dropped in favor of evaluating people instead of the institutions surrounding them (Tina Dacin et al., 2002). In 1977, John W. Meyer and Brian Rowan’s significant work transformed institutionalism (Andreou, 2018), leading to a resurgence of the subject in the ensuing decade, with various fields outside the social sciences contributing to its deluge of writing.

Neo-institutionalism was coined in 1983 by March and Olsen, distinguishing it from old institutionalism (March & Olsen, 1983). Neo-institutionalism focused on comparative investigations and the independent impacts of institutions on political behavior and results (Thelen & Steinmo, 1992). It emerged as a means of expressing disagreement with the dominant at the time behaviorist theoretical currents (Kraatz & Zajac, 1996). Behaviorist perspectives overestimated the degree that institutions have a direct impact on politics, ignoring that political institutions are more than passive platforms for political conduct, but also elements that influence political behavior (Andreou, 2018). Historical institutionalists have emphasized the idea that each and every political action takes place within the context of time and that history influences decisions, actions, and occurrences in the future (Christiansen & Verdun, 2020). This perspective considers history not as a collection of specific events but as a factor that shapes policy change (Hall & Taylor, 1996). The terms “new institutionalism” and “historical institutionalism,” which are characterized as progressive changes to existing institutions or new and inventive policies and their connection to reforms in policy (Bennett & Howlett, 1992), are highlighted in this study.

Historical institutionalism faced the challenge of institutional change despite its emphasis on institutional constancy (Pierson, 2000). A useful perspective for analyzing the persistence or absence of policy change may be provided by the published scholarly literature on route dependency (ibid). Path dependency refers to the fact that institutions, once established, tend to follow historically set, specific courses, making it costly to change course (Levi, 1997). Institutions “lock in” and develop along the trajectories that govern their dependency, including unintended outcomes and inefficiencies (Andreou, 2018). As a consequence, even when the existing model is inadequate, key players tend to defend it since it matches the needs of its founders, and altering policies is typically difficult due to institutions’ resilience (Greener, 2002). Due to the encouragement of policy continuity by earlier decisions, public policies, and formal frameworks often turn out to be difficult to modify (Pierson, 2000).

As rational actors incorporate into the institutional environment, its effects grow, and systemic factors increasingly constrain and define the strategic options available to them (Beckert, 1999). Therefore, institutional change may occur in a specific environment whose breadth and attributes were influenced by earlier political and institutional decisions (Clemens & Cook, 1999). The idea of “punctuated equilibrium” was extensively studied in historical institutionalism examinations of institutional evolution (Thelen, 1999). Institutions tend to be in a condition of equilibrium throughout the majority of their history, operating based on the decisions made at the time of their founding or the most recent punctuation point. The “punctuated equilibrium” emphasizes how crucial the institutional atmosphere is in influencing policy dynamics and the success of future reforms (Romanelli & Tushman, 1994). Long periods of institutional stability and adherence to historical patterns can lead to critical junctures, where pivotal decisions are made that can greatly impact the trajectory of a system or policy (Collier & Collier, 1991). When opportunities for significant institutional transformation are both evident and practical, a critical juncture is characterized to be a brief span of time whereby uncertainties regarding the prospects of an institution create the grounds for policymakers to place the institution on an alternative path of growth and development (Hall & Taylor, 1996). However, a critical juncture point does not always happen at a moment when its effects may be seen in retrospect (Capoccia, 2015). Thelen and Steinmo contend that the critical juncture actually happens much sooner in the process, prior to its impacts becoming apparent (Thelen & Steinmo, 1992). “Short periods” term relates to how briefly institutions may alter their direction before reverting to their prior dependencies. Actors can select how an institution should evolve over time and what new policies to put in place to deal with new issues (Di Bartolomeo et al., 2021).

In their systematic approach to institutional transformation, Streeck and Thelen (2005) added additional concepts to the conceptual framework of the historical institution. According to their research, policies that establish norms, assign rights and duties to players that are backed by norms, and enable third-party enforcement can also be thought of as institutions (ibid). The theory of institutional transformation can therefore be a theory of policy change (ibid). Thus, policies can constitute rules for players other than policymakers themselves, and if required, they will be enforced by agents acting in the interests of society (ibid). This gives policies the status of legitimate institutions (ibid). According to Streeck and Thelen (2005), there are five institutional change categories: displacement, layering, conversion, drift, and shock (ibid) (see also Fig. 1).

Fig. 1
A model diagram categorizes institutional change. Five categories are displacement, layering, conversion, drift, and shock. Arrows indicate the degree of discretion and power, the degree of institutional ambiguity, the purpose of change, and resilience as the degree of success.

Institutional change model. (Adapted from Hu and Yang (2019))

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Displacement refers to the gradual modification of existing regulatory structures (ibid). This is the most basic form of institutional change and occurs when preexisting arrangements are contested or ignored in favor of new institutions and related behavioral logic (ibid). The second category, layering, involves actively supporting changes made to an established group of institutions by adding new regulations and/or institutions alongside or over the older ones (ibid). Andreou (2018) suggests that in highly partisan states, layering is a prevalent practice where new frameworks and/or laws are created to “control” party supporters without directly affecting state institutions. This creates tension between institutions and policies that can lead to conflicts and institutional change. Moreover, recent studies have shown that the COVID-19 pandemic has created a shock to institutional structures, resulting in significant policy changes – and more – across the globe (Alaimo et al., 2022; Bol et al., 2021; Chantzaras & Yfantopoulos, 2022; Trebesch et al., 2020). This sudden and unexpected shock has forced governments to implement new policies and regulations in order to address the health and economic consequences of the pandemic (Katsikas, 2022).

Streeck and Thelen (2005) highlighted the possibility of institutional drift, gradual deterioration, or atrophy of institutions due to the failure to adapt to shifting political and economic conditions. This drift may be caused by gaps in regulations, and political maturity is essential to implementing necessary changes (Streeck & Thelen, 2005). The neglect may or may not be intentional, but institutions may be diverted to new goals, functions, or purposes due to fresh environmental issues, changes in the balance of power, or political struggles (Polishchuk, 2012). As a result, unexpected outcomes are to be expected, and change requires compromise, which may take time. Additionally, in contrast to the other four shift cycles, Streeck and Thelen (2005) identified exhaustion as a process that causes failure and can happen when an institution’s normal activities degrade its external environment and available resources (ibid). It usually happens gradually rather than suddenly (ibid). When an institution experiences exhaustion, activities within the organization degrade its functioning, contrary to drift, where the formal integrity of an organization is retained, despite becoming progressively dysfunctional (ibid).

Recent studies have emphasized the importance of institutional resilience, which refers to an institution’s ability to adapt to changing circumstances and maintain its functions and goals (Barasa et al., 2018). Institutional resilience can be achieved through proactive strategies such as scenario planning and regular assessments of the institution’s performance (Lengnick-Hall et al., 2011). Furthermore, institutional resilience can be strengthened through the establishment of flexible structures and decision-making processes that allow for quick adaptation to changes (Carmichael, 2015). Finally, studies have shown that successful institutional adaptation requires the involvement of multiple stakeholders, including policymakers, private sector actors, and civil society organizations (Wamsler, 2017). The engagement of diverse perspectives can enhance the institution’s capacity to identify and respond to emerging challenges (Holley, 2009).

Extensive research in public policy has thoroughly examined the significance of concepts and knowledge in systemic change. According to this approach, a significant part of the political debate is a stage of advancement in society expressed through public policy. With the previous policy having the most significant cognitive influence, and the current policy (in time t1) reacting to the effects of earlier initiatives, public policy functions as an educational endeavor, as a means of learning. Hall (1993) refers to this mechanism as “the purposeful endeavor to adjust the goals or tactics of public policy in order to conform with old knowledge and new facts” which he defines as social learning. The majority of those involved in this learning process are professionals in public policy who advise or serve the public sector from high-ranking positions at the intellectual subcultures of society and bureaucracy nexus. Three stages make up the process of changing public policy: the broad objectives that guide policy in a given area, the methods or tools employed to accomplish those objectives, and the real costs associated with those methods and instruments. Each stage is composed of an equal number of variables. Historical institutionalists contend that the creation of institutions and policies frequently leads to conflict between groups with different spheres of influence because they understand that institutions reflect, organize, and reproduce uneven power relations. This conflict often leads to changes in the institution or policy under consideration (Andreou, 2018).

Promoting Sustainable and Climate-Friendly Practices

A supportive environment is required for agricultural operations in order to use natural resources, generate agro-food, and maintain farmers’ financial stability. Agriculture benefits the entire society, far beyond sustaining farming households and communities in rural areas (Birkhaeuser et al., 1991). However, has a twofold impact on the environment. Firstly, it directly impacts agricultural practices. Secondly, it contributes to climate change by releasing greenhouse gases into the atmosphere. To create a sustainable agricultural system throughout the EU, the CAP integrates social, economic, and environmental concerns. The EU has committed to additional international agreements to address climate change and sustainable development challenges (see also Vardopoulos & Karytsas, 2019), building upon a more innovative, more impactful, more comprehensive in its solutions to the challenges of climate change and sustainable development, and more ambitious and forward-thinking framework for environmentally friendly action. The original principles of the CAP did not prioritize environmental preservation and conservation, but this perception shifted as environmental issues became more politicized in the early 1970s. During the 1980s, several publications were released that highlighted the significance of safeguarding the environment. These include the “Green Paper” on the future of the CAP, a 1988 Communication on “Environment and Agriculture,” and the guidebook “The Future of Rural Society.” This literature emphasized the urgency of minimizing environmental degradation (Louloudis et al., 1999). The Green Paper report identified the importance of establishing institutionalized measures to mitigate and prevent environmental degradation caused by intensive farming practices (Vardopoulos et al., 2018). Techniques that prioritize reducing greenhouse gas emissions, storing carbon, and maintaining food production have the potential to alleviate the impacts of climate change (European Court of Auditors, 2021).

In the late 1980s and early 1990s, there was a surge in consumer and environmental activism that advocated for policy reform. This movement was prompted by several food-related scandals and the adverse ecological consequences of the agricultural practices supported by the CAP. Moreover, the EU intensified its international efforts to address environmental issues with global consequences (Carpenter, 2012), particularly after the United Nations Conference on the Environment and Development in Rio in 1992. These internal and external forces led to a major reform of the CAP in 1992, whereby environmental concerns became increasingly critical in the subsequent revisions of the policy. The 1992 agri-environmental measures were novel and reflected the first substantial effort for the support of agriculture as a providing pillar of goods and services that enhance the environment. The notion of the “second pillar” for rural development, which was initially introduced in Agenda 2000, continued to develop and expand this concept (Maravegias, 1983; Maravegias et al., 2023). The rural development pillar of the CAP was included in the Agenda 2000 reform package, which emphasized safe agri-food products and environmental outcomes. This reform package aimed to strike a balance between the need for environmental conservation and providing direct incentives to producers. Member States were required to take adequate environmental safeguards while being granted flexibility in how they supported farmers alongside environmental measures. When Member States failed to comply with regulations, their support funding was reduced or revoked, and the unpaid amounts were redirected to their respective rural development programs (Doukas, 2018; Louloudis & Maraveyas, 1997). Additionally, Member States were incentivized to spend a portion of these funds on developing more environmentally friendly production techniques in the dairy and cattle industries and training farmers in ecologically friendly practices to assist forests with high ecological value and underserved areas. The measures put in place aimed to enhance the efforts toward environmental preservation and climate action by requiring Member States to develop complete national or regional programs that included environmental conservation among other rural activities.

In the 2003 Mid-Term Review (MTR) of the CAP, cross-compliance became a mandatory requirement for all direct payments. The cross-compliance criteria are designed to ensure that farmers meet environmental and other standards before becoming eligible for subsidies. The regulations for statutory management under Union law and the requirements for maintaining excellent agricultural and environmental conditions were included in the cross-compliance norms (OECD, 2010). The MTR also introduced a “one farm payment” system, which is not based on output and is linked to compliance with environmental, food safety, and animal welfare criteria, as well as the obligation to maintain all farms in excellent agricultural and environmental condition. To promote the environment, quality, or animal welfare, direct payments were reduced for larger farms, freeing up more funds for programs that meet these goals (Cortignani et al., 2017; Maravegias & Martinos, 1997).

Over the last two decades and in order to maximize the use of natural resources, the CAP has urged farmers to adopt eco-friendly procedures for growing plants and raising animals as well as incorporating new technology into their production processes. Farmers that satisfy three environmental criteria are eligible for the green direct payment, which makes up to 30% of the direct payment program budget under the CAP system, diversifying their crops, preserving permanent grassland, maintaining biodiversity, and dedicating 5% of their arable land to ecologically beneficial areas (Ecological Focus Areas). In EU nations, the ratio of permanent grassland to agricultural land is decided by national or regional authorities, with a 5% leeway (Doukas, 2014).

Several studies have suggested that cross-compliance is an effective tool for promoting environmental and agricultural sustainability (Bennett et al., 2006; Juntti, 2012; Meyer et al., 2014; Ragazou et al., 2022). However, some scholars have argued that cross-compliance alone may not be sufficient to meet the environmental goals of the CAP and that it should be combined with other policy instruments, such as agri-environmental measures and payments for ecosystem services (Matthews, 2013; Meyer et al., 2014). Additionally, recent research has shown that the effectiveness of the CAP’s green direct payment scheme may vary depending on the farm characteristics and the local context (Hristov et al., 2020), suggesting the need for more targeted and flexible policies (Doukas et al., 2023).

Therefore, policymakers and researchers need to continue examining the effectiveness of the CAP’s environmental policies and identifying ways to improve them. The integration of agri-environmental measures, payments for ecosystem services, and the use of targeted policies based on farm and local context could be promising strategies to promote environmental sustainability while supporting agricultural production (Doukas & Petides, 2021).

In the EU, regulations are in place to protect designated sections of permanent grassland, which cannot be transformed or cultivated by farmers. However, certain farmers, such as those enrolled in the small farmer’s program, are exempt from the greening regulations, and organic farmers are immediately rewarded for their environmentally friendly practices. Failure to comply with greening regulations can result in reduced direct payments. The green direct payment system is crucial in promoting good environmental practices and mitigating the impact of climate change on agriculture. The cross-compliance regime, although relatively lenient, provides a framework for regulation and control mechanisms. The agricultural industry worldwide faces increasing pressure from a growing population, urbanization, resource depletion, and climate change. In the EU, climate change effects, including extreme weather events, rising temperatures, and changing rainfall patterns, are adversely affecting agricultural production and environments, particularly in the southern and southeast regions. European agriculture is at risk of river flooding, droughts, coastal flooding, and other severe impacts due to climate change. While some regions may benefit from certain climatic changes, most will experience negative effects, exacerbating existing environmental issues.

Studies have shown that climate change is likely to increase the occurrence of extreme weather events, such as droughts and floods, with potentially serious effects on agricultural production (Doukas, 2019). The risks posed by climate change are particularly severe in the EU’s southern and southeast regions, where agriculture is expected to be most negatively impacted (ibid). Furthermore, these effects on agriculture will likely exacerbate existing environmental issues, such as resource depletion, and lead to increased vulnerability in various areas (ibid). Therefore, implementing measures to mitigate the impact of climate change, such as the green direct payment system, is crucial in promoting sustainable agricultural practices and preserving the environment.

In addition, research has highlighted the importance of establishing precise and quantifiable standards for the cross-compliance regime, given its relatively lax framework and flaws in control mechanisms (Doukas, 2014). Moreover, farmers who disregard greening regulations are penalized through reduced direct payments, indicating the importance of complying with these regulations (ibid). Finally, the exemptions for certain farmers, such as those enrolled in the small farmer’s program and organic farmers, should be carefully considered for administrative and proportionality reasons (Rydén, 2007).

Overall, protecting the environment and mitigating the impact of climate change are essential in maintaining sustainable agricultural production in the EU and globally. The implementation of regulations, such as the green direct payment system and the cross-compliance regime, is crucial in promoting good environmental practices and ensuring compliance with environmental standards.

To address the challenges facing agriculture from climate change and natural resource depletion, it is essential to implement sustainable production techniques and promote climate change and natural resource management. The CAP aims to achieve this goal since it acknowledges that farmers in Europe are the major environmental managers, spending money and producing in rural parts of Europe. The new CAP framework for 2021–2027 aims to promote a competitive and sustainable agricultural sector, supporting farmers’ livelihoods and providing nutritious food to society while fostering vibrant rural communities (European Commission, n.d.). The European Green Deal, with a focus on agriculture and rural areas, is a crucial tool in achieving the Farm to Fork and biodiversity objectives (Fig. 2).

Fig. 2
An infographic diagram of challenges and prospective approaches for sustainable agriculture. It has a Venn diagram with outward arrows denoting challenges. 3 circles indicate society, environment, and economy. Strategies and policies, common objectives, and approaches are shaded in different colors.

Challenges and prospective approaches for achieving sustainable agriculture within the framework of the European Green Deal. (Source: Boix-Fayos & de Vente, 2023)

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The new CAP requires measurable environmental and climatic requirements to be met to receive direct payments (Volkov & Melnikienė, 2017). This involves implementing agricultural practices such as the rotation of crops rather than diversification, safeguarding wetlands to maintain soils rich in carbon, and managing water resources in a sustainable manner. Each Member State must develop programs or incentives for farmers to encourage sound agricultural practices. The new CAP also includes an increased transfer of resources from pillar 1 to pillar 2 for environmental and climatic policies, reflecting a 15% financial upgradation of environmental issues (Bielik et al., 2022; Doukas et al., 2022).

Environmental Conditionality in the CAP: A Path toward Sustainable Agriculture

Historical institutionalism and rational choice institutionalism are two research methods used to explain the actions of Member State governments and their impact on the EU institutions. Leading scholars in the field of historical institutionalism, such as Pierson (1996) and Bulmer (2009), have emphasized the importance of examining political and policy-related activities in the context of multilevel government. Bulmer introduced the concept of a “governance regime” to analyze various subsystem policies within the EU.

On the other hand, rational choice institutionalism is based on the theory of rational behavior in economics and is primarily used to describe the goals of Member State governments in the EU integration process. As per this theory, governments willingly engage in and transfer power to the European Union because they believe it offers them several advantages. These benefits may include reduced transaction expenses, more effective policy formulation, improved efficiency, and increased adherence to regulation (Moravcsik, 1993).

However, it is worth noting that while rational choice institutionalism provides a useful framework for analyzing the EU integration process, it has also been criticized for oversimplifying the complex interactions between actors and institutions in the EU (Schneider & Ershova, 2018). Moreover, recent developments such as the Brexit referendum and the rise of populist movements in Europe have challenged the assumptions underlying rational choice institutionalism and highlighted the importance of examining the role of emotions, identity, and culture in EU politics (Manners, 2018).

The implementation of the CAP has varying costs and benefits for different Member States, resulting in competing goals and expectations among actors involved in its development. These entities may comprise various stakeholders, such as government officials with specific agendas, committee bureaucrats, interest groups representing various industries, and advocacy groups advocating for agricultural issues, among others (Doukas & Maravegias, 2021; Maravegias, 1991). By utilizing decisions regarding CAP reform as a bargaining tool, those in charge of agricultural policy have historically prioritized the concerns of farmers within their countries and those of their major trading partners. However, these decisions have often disregarded the opinions of consumer groups, especially in regard to environmental issues (Swinnen, 2001).

During the late 1990s, there was a notable transformation in the history of the CAP. This shift was triggered by several incidents. Examples of such incidents include the emergence of bovine spongiform encephalopathy, the detection of dioxin contamination in Belgian food products, and the spread of foot and mouth disease. These events brought about a heightened level of awareness among consumers, prompting them to demand greater attention to food safety and quality issues. This change in consumer demand also brought to light apprehensions regarding the influence of the CAP on animal welfare and the environment, leading to a push for the adoption of policies that address these issues. As a result, the Green Party leaders attempted to attend meetings of the appropriate ministers in countries such as Germany and Italy, which aided in the review and redefinition of the CAP (Swinnen, 2001).

The priority placed on food safety and quality has significantly risen among EU residents, largely due to the demand from consumer groups. Consequently, these issues have become a central focus of the CAP’s agenda. These concerns have been on the rise, especially after the aforementioned situations, and continue to be a significant focus of the CAP. While the CAP’s position on these issues may vary, its political response has been to address them in policy reform efforts (Swinnen, 2001).

Recent studies have emphasized the importance of aligning CAP policies with the EU’s climate and biodiversity targets (Dupraz & Guyomard, 2019; Pe’er et al., 2020) and have highlighted the need to integrate environmental and climate objectives into the CAP to ensure its contribution to the EU’s Green Deal objectives (Cuadros-Casanova et al., 2023; Pe’er et al., 2019). Scholarly research has emphasized the necessity of aligning the CAP with the Sustainable Development Goals established by the United Nations. Specifically, Goal 2, which aims to terminate hunger, attain food security, enhance nutrition, and foster sustainable agriculture, is of critical significance (Matthews, 2020; Swaminathan & Kesavan, 2018).

The CAP, established in 1962 and lasting until 1992, saw little opposition from pressure groups representing farmers’ professional associations. However, in the following years, the European agricultural model’s negative environmental impacts strengthened consumer and environmental movements. These movements subsequently gained power within EU institutions, due to food scandals and escalating environmental effects (Doukas, 2018).

Although politically justified, the economic philosophy behind cross-compliance, which involves adding new conditions to existing income support, remains unclear. The question arises whether this is a valuable policy tool. Several studies have indicated that direct payments were assigned based on agricultural policy objectives, rather than environmental objectives. As a result, farmers who heavily rely on direct payments may not necessarily align with those who cause significant harm to the environment (Doukas, 2018).

It is crucial to consider the decision-making process regarding the distribution of direct payment savings, particularly from farmers’ noncompliance (Sadłowski et al., 2022). Member States could only withhold 25% of funds obtained through the implementation of cross-compliance (see Article 100 of the Regulation (EU) No 1306/2013), and therefore there was little incentive for states to establish a reliable control system. This lack of follow-through by the Member States indicates a discrepancy between political rhetoric and reality. Consequently, new “players” such as consumer and environmental movements gained importance in the reform process, as well as the gradual decline of producer pressure organizations resulting from the decline in the rural population, both in terms of absolute numbers and as a share of the overall workforce in the EU (Brady et al., 2017; Maravegias & Doukas, 2011).

It is worth noting that, historically, CAP’s system perpetuates socio-economic disparities, particularly in rural areas, by favoring large farms and consolidating land ownership (Milczarek-Andrzejewska et al., 2018). This concentration of land ownership contributes to the displacement of small farmers and the exclusion of marginalized groups, perpetuating social injustice. The counterargument to this criticism is that direct payments are as concentrated as agricultural land, as 20% of the largest farms in the EU hold 82% of agricultural land and production (Matthews, 2020). The level of support is also determined by the specific products cultivated in specific areas. The products of the northern regions of the EU (e.g., grains, dairy) traditionally receive a higher support than those of the southern regions (e.g., wine, fruit, and vegetables), explaining the significant variation in the amount of financial aid received by each region of the EU (Shucksmith et al., 2005). On the other hand, the southern Member States with a large agricultural sector are primarily “poorer,” and their farmers are small and less efficient; even if they produce products with low protection, the funding of the CAP is an essential proportion of their total income (Doukas & Maravegias, 2021). However, this fact does not compensate for an injustice that contradicts some of the policy’s primary goals. Moreover, studies show that CAP has failed to deliver on its environmental objectives, despite a budget allocation for environmental purposes (Dupraz & Guyomard, 2019), indicating a need for reform to ensure sustainable agricultural practices.

The Green Payment Scheme represents a critical juncture in the evolution of the CAP in terms of both its design and implementation. With the introduction of this scheme, the compliance of producers with environmental regulations became quantifiable, and clear criteria were established for the allocation of direct payments. Furthermore, the most recent version of the CAP, covering the period from 2021 to 2027, places a greater emphasis on the targeted allocation of resources in order to align with the European Union’s climate goals. This change is prompted by the recognition of the severe and widespread impacts of climate change on agriculture, which affects the entire food production chain. The new framework of the CAP aims to address these issues by implementing measures that specifically target climate action and sustainability in agriculture.

As demonstrated by the above examples, the focus on developing green architecture within the CAP is clear, aiming to create a robust yet adaptable framework for “greening” the policy. The CAP has been under scrutiny for a considerable period due to the detrimental effect it has on the environment. The increase in agricultural production intensity and the depletion of natural resources are among the factors causing this concern. Under the new CAP, rational decision-making is paramount within a structured framework of shared commitments and goals. The policy’s diminished budget places considerable emphasis on conditionality, underscoring its significance. At the same time, the policy aims to raise awareness of and address environmental and climate change-related issues through specific funding mechanisms. Achieving these goals requires the integration of both CAP pillars, as well as cooperation with other related policies while providing flexibility based on national priorities (Doukas & Maravegias, 2021).

The Green Payment Scheme represents a new system of incentives aimed at promoting environmentally friendly agricultural practices, as well as rewarding farmers who have been meeting certain environmental standards. This is in line with the “public money for public goods” principle, which suggests that public funding for agriculture should be given in exchange for the provision of public goods, such as the protection of the environment and the preservation of biodiversity. The scheme is also designed to encourage farmers to take advantage of new technologies and management practices that reduce the environmental impact of agricultural production.

The new CAP framework for 2021–2027 builds on the previous policy framework, incorporating changes that reflect the EU’s increasing emphasis on environmental sustainability and climate action (Matthews, 2018). In order to achieve this, the CAP encourages a competitive and sustainable agricultural sector supporting farmers’ livelihoods while supplying society with nutritious, sustainable food and vibrant rural communities (Recanati et al., 2019). Sustainable farming practices include precision agriculture, organic farming, agroecology, agroforestry, and more stringent animal welfare standards (Doukas et al., 2022). By shifting the emphasis from compliance to performance, eco-schemes, for instance, should reward farmers for improved environmental and climatic performance, such as managing and storing carbon in the soil and improving fertilizer management to improve water quality and reduce emissions (Arata & Sckokai, 2016; Zafeiriou et al., 2023). The European Commission has recommended that climate action get at least 40% of the total funding for the CAP from 2021 to 2027 (Pe’er et al., 2020). Therefore, the Farm to Fork Strategy (European Commission, 2020) will support European farmers’ efforts to combat climate change, protect the environment, and preserve biodiversity.

The European Green Deal is centered on agriculture and rural areas, and the new CAP aims to be a crucial tool in achieving the Farm to Fork and biodiversity targets. The policy’s implementation relies on the combination of mandatory and voluntary measures, which vary according to the country’s environmental and agricultural needs. The flexibility of the policy enables Member States to tailor their implementation strategies, depending on their individual circumstances, while the conditionality of direct payments serves as an incentive for farmers to meet environmental and climate-related objectives.

The adoption of the new CAP framework and the introduction of the Green Payment Scheme mark a noteworthy transition toward a more sustainable and environmentally aware approach to agriculture in the European Union. By incentivizing environmentally friendly practices and incorporating flexibility and conditionality, the policy establishes a foundation for integrating environmental considerations into the wider agricultural sector. Nonetheless, the effective implementation of this framework and the degree of acceptance and adaptation by Member States and farmers will ultimately determine its success in aligning with evolving policy priorities.

Concluding Notes

Over the last two decades, there has been a greater emphasis on policy change and adaptation to address the impact of economic activity and agricultural output on the environment and climate change. This change has been driven by growing awareness of the issue among consumers and the public, as well as recognition of agriculture’s vulnerability to climate change due to the direct impact of weather on farming activities and its contribution to greenhouse gas emissions.

The new CAP for the programming period 2021–2027 represents a significant shift toward a more sustainable and environmentally friendly approach. The CAP’s new green architecture integrates environmental and climate criteria that are quantifiable. The inclusion of wetland preservation for carbon-rich soils, responsible management of water resources, and crop rotation in lieu of diversification are some of the measures taken to ensure sustainability. In addition, the CAP allocates at least 30% of funding for environmental and climate change activities under the second pillar, amounting to roughly 23 billion euros.

The new CAP reflects a shared commitment to addressing climate change and sustainable development challenges and is an important step toward achieving these goals. It encourages collaboration with other similar policies, incorporates both CAP pillars, and increases flexibility based on national priorities. The new architecture represents a solid yet adaptable framework intended to “green” the CAP and to address the environmental and climate change concerns that have been raised for many years.

Moreover, alongside the green transition, the restoration of chronic injustices in the distribution of funding from the CAP should also be served. That could be achieved if the financial support stops following the unequal distribution of the agricultural area and volume of production between the agricultural holdings in the EU but favors more equitable funding, considering the specific income and development criteria in each region.

In conclusion, the new CAP framework and the Green Payment Scheme represent a significant shift toward a more sustainable and environmentally conscious approach to agriculture in the EU. The policy’s focus on incentivizing environmentally friendly practices, combined with flexibility and conditionality, provides a comprehensive framework for the integration of environmental concerns and considerations into the broader agricultural sector. However, the success of the new framework relies on its effective implementation and the extent to which Member States and farmers embrace the new system of incentives and adapt to the policy’s evolving priorities.