The CAP and European Agricultural Funds


Basic objectives of the CAP
Photo of an agricultural machine

The agricultural sector contributes to the generation of wealth and employment, and to compliance with environmental, social and international commitments.

The general public benefits from the work of farmers and producers. Therefore, added value is created in rural areas and in the agro-food industry.

The CAP has clear reasons for its existence:

  • To guarantee viable food production
  • To manage natural resources sustainably and adopt measures to combat climate change, according to the targets set in the Europe 2020 Strategy.
  • To achieve balanced territorial development, oriented towards the diversification of agricultural activity and the viability of rural areas.

Therefore, CAP funding is necessary to achieve both the strategic and operative targets: increased competitiveness, improved sustainability and greater efficiency.

The expenditure category (heading 2) of the EU budget, "sustainable growth: natural resources", includes CAP expenditure, which is financed by two funding mechanisms:

  • the European Agricultural Guarantee Fund (EAGF) and
  • the European Agricultural Fund for Rural Development (EAFRD)

(See more common elements and differences between EAGF and EAFRD)

The EAGF is jointly managed by the Member States and the European Union and funds the following costs:

a) measures to regulate or support agricultural markets,

b) direct payments to farmers within the framework of the CAP,

c) information and promotion of agricultural products in the domestic market of the European Union and third countries.

+See Execution of the EAGGF, EAGF and EAFRD budget by financial year and Member State. Expenditure maps of EAGGF, EAGF and EAFRD by Member State and financial year.

The EAFRD, jointly managed by the Member States and the EU, also finances the rural development programmes.

Within the financial framework for 2014-2020, the expenditure ceiling for heading 2 (‘Sustainable growth: natural resources’) is set at €373.18 billion. This means that approximately 29% of the EU budget is dedicated to market measures and direct payments, and approximately 9% to rural development. (

All together, CAP financing ranges from €46 to €57 billion every year, a relatively modest amount which is decreasing in comparison with the EU GDP (0.54% of the EU GDP at the start of the nineties; 0.43% in 2004, and 0.32% in 2015).

See Reg. (EU/EURATOM) 1311/2013 of the Council

See Reg. (EU) 1306/2013 of the European Parliament and Council

+See Delegated Reg. (EU) 907/2014 of the Commission

+See Implementing Reg. (EU) 908/2014 of the Commission

See Reg. (EU) 2017/2393 of the European Parliament and Council

Modification date: 11/12/2018