Farm-level impacts of the CAP post-2020 reform: A scenario-based analysis

We analyze the farm-level economic and environmental impacts of the post-2020 reform of the Common Agricultural Policy (CAP) of the European Union, examining six scenarios constructed around the budget allocated to eco-schemes and the stringency of enhanced conditionality. Results suggest that the CAP post-2020 can improve environmental performance but at a cost for farms. Enhanced conditionality appears to play a greater role than eco-schemes in delivering environmental improvements. The new CAP provides the Member States ample options to choose among different measures. The optimal policy mix will depend on the balancing of income support versus environmental performance that reflects policy priorities.

Automated summary

This study analyzes the economic and environmental impacts of the post-2020 reform of the Common Agricultural Policy (CAP) of the European Union at the farm level. The results suggest that while the new CAP can improve environmental performance, it comes at a cost for farms. Enhanced conditionality appears to be more impactful in delivering environmental improvements compared to eco-schemes. Member States have ample options to choose among different measures, and the optimal policy mix will depend on the balance between income support and environmental performance.