European agricultural subsidies are still largely based on the amount of farmland, a system that primarily benefits livestock farming, even though today’s challenges call for a different approach. Valerie Vossen and Hannah van Bilsen of Economic Bureau Amsterdam make this case in an opinion article published in Het Financieele Dagblad.

The Common Agricultural Policy (CAP), which accounts for around one-third of the European Union’s long-term budget, allocates most subsidies based on the number of hectares of agricultural land. As a result, production systems that require large areas of land, such as livestock farming, receive the greatest support. This increasingly conflicts with the EU’s ambitions on climate, biodiversity and the transition to a more sustainable food system.

As the European Commission prepares the reform of the CAP for the period after 2027, now is the time to modernize the allocation criteria. As an alternative, Valerie and Hannah propose a hybrid system, in which subsidies also depend on the societal value of agricultural production. One possible metric is the amount of edible protein produced per hectare. Products that generate more edible protein from the same amount of agricultural land would receive a higher payment per hectare. This would align financial incentives more closely with the European Union’s sustainability objectives while encouraging more efficient use of agricultural land.

The full article is available on the website of Het Financieel Dagblad (Dutch only).