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Common Agricultural Policy (CAP)
Practical Law UK Glossary 6-542-1525 (Approx. 3 pages)
Glossary
Common Agricultural Policy (CAP)
The set of legislation and practices adopted by the EU to provide a common unified policy on agriculture.
The CAP is financed by two funds, which form part of the EU's general budget:
- The European Agricultural Guarantee Fund (EAGF) finances budgetary expenditure under CAP pillar 1, including direct payments to farmers and measures to respond to market disturbances, such as private or public storage and export refunds.
- The European Agricultural Fund for Rural Development (EAFRD) finances the Rural Development Programmes (RDPs) of member states under CAP pillar 2.
The 1992 CAP reforms started a shift from supporting agricultural products through guaranteed prices to supporting producers through income support. The scope of the CAP's farming policies have increased to now include environmental and social initiatives, such as:
- Protecting and enhancing biodiversity.
- Managing and protecting water resources.
- Rural development.
Following the departure from the EU, the UK has ceased to participate in the CAP. The Agricultural Act 2020 seeks to enable a smooth transition away from the CAP. It sets out plans to phase out Direct Payments by the end of the agricultural transition period, currently stated as end of 2027, and replace it with a new system of environmental land management (ELM) in England.