OECD: EU must use agricultural subsidies much more targeted

The new report from the Organisation for Economic Co-operation and Development (OECD) also notes that the EU has an ambitious Green Deal policy, but that it is not sufficiently taking off.

In the overview 'Policies for the Future of Farming and Food in the European Union,' recommendations are made for the new EU agricultural policy for the period 2023-2027. It is noted that the agri-food sector is at a “critical moment” as it faces climate change, crises such as the Covid-19 pandemic and the war in Ukraine. Moreover, Brussels is aiming to guarantee both food security and ecological sustainability.

The overview of the past ten years shows that agricultural productivity in EU countries has increased more slowly than in other OECD countries elsewhere in the world. The ecological sustainability performance of the agri-food sector “has not improved in line with expectations.” This is not due to insufficient ambition or lack of financial resources, but rather the policies formulated and their actual implementation.

According to the OECD experts, the 27 EU countries must among other things directly link their subsidies from the Common Agricultural Policy to the income level of the farmers. Brussels should also stop subsidies for agricultural activities that conflict with other EU objectives or maintain undesirable situations.

“Recent CAP reforms have changed the way support is provided, but this has only led to incremental progress,” according to the report. Therefore, it is recommended to offer farmers more certainty by expanding the voluntary annual eco-schemes to 'multi-year results-based payments.' A new approach is also needed to deliver environmental services.

The report also points to the lack of available data on farmers' household incomes throughout the EU – only Ireland and the Netherlands currently collect such information. The OECD says that this makes it impossible to compare farmers' incomes with other sectors.