amending Regulation (EU) 2021/2115 as regards the conditionality system, types of intervention in the form of direct payment, types of intervention in certain sectors and rural development and annual performance reports and Regulation (EU) 2021/2116 as regards data and interoperability governance, suspensions of payments annual performance clearance and controls and penalties
European Commission
Brussels, 14 May‥2025
COM(2025) 236 final
2025/0236(COD)
EXPLANATORY MEMORANDUM
1. Context of the proposal
• Reasons for and objectives of the proposal
General context of the proposal
President von der Leyen’s political guidelines for the 2024‑2029 Commission set out a plan for sustainable prosperity. The plan emphasises the need to boost competitiveness to unlock opportunities, drive innovation and support growth in the European Union (EU).
Mario Draghi’s report ‘The future of European Competitiveness’ points to costly regulatory burdens, especially for SMEs, caused by excessive reporting obligations, investment gaps and unfavourable conditions for private investment. The report advocates coordinated efforts, whether through smaller cumulative steps, bold EU‑level actions, or increased subsidiarity, to reduce these burdens.
The Commission’s competitiveness compass outlines five horizontal enablers spanning all policies and sectors, including systematic simplification of procedures for accessing EU funds, faster and lighter processes, and closer links with digitalisation for better data management.
The ‘Simpler and faster Europe’ communication proposes a new way of working between EU institutions, Member States and stakeholders to simplify EU rules, reduce regulatory burdens and improve rule‑making and implementation. The communication targets a reduction of the administrative burden arising from EU rules by at least 25 % for all companies and 35 % for SMEs by the end of 2029.
The European Preparedness Union Strategy (26 March‥2025) highlighted the need for preparedness against major critical events such as armed conflicts, hybrid threats and infrastructure sabotage (e.g., water supplies). The Commission recalls that the concept of force majeure (Communication on force majeure and exceptional circumstances in Regulation (EU) 2021/2116 of 30 May․2024) may cover situations not expressly mentioned in Article 3, such as armed conflict or sabotage, provided conditions are met. This may exempt affected farmers from legal consequences of non‑compliance.
The ‘Vision for Agriculture and Food’ stresses that farmers should be entrepreneurs, not burdened by unnecessary bureaucracy, and calls for tailored approaches rather than a ‘one‑size‑fits‑all’ model, including automated reporting to reduce administrative burden.
The CAP (2023‑2027) supports farmers through national CAP Strategic Plans (CAP Plans) that address economic, environmental and social challenges while maintaining subsidiarity and performance focus. Since 2023, 28 CAP Plans have been implemented, providing income support, environmental schemes, investment assistance, innovation, sector‑specific support and rural development.
Specific context and objectives
The first year of CAP Plan implementation coincided with the Russian war of aggression against Ukraine, which, together with natural disasters and climatic events, significantly impacted EU farmers. Following widespread farmer protests in early 2024 and EU Council discussions, the Commission proposed targeted adjustments to the CAP legal framework to better align with on‑farm realities, improve administration and reduce control burdens.
EU Agricultural Ministers met on 27 January‥2025 and called for further simplification, identifying the need to improve competitiveness, lower burdens for farmers and public administrations, and allocate resources more effectively.
The proposal aims to:
- Simplify on‑farm requirements and adjust the conditionality framework (e.g., payments per livestock and beehives, flexible implementation of GAEC 1, 2 and 4).
- Streamline support for smaller farms by increasing lump‑sum limits and encouraging simplified payments.
- Boost competitiveness through simplified financial instruments and extended support for the fruit and vegetable sector.
- Give Member States greater flexibility in managing CAP Strategic Plans (e.g., removing annual performance clearance, simplifying IACS quality assessment, flexible amendment procedures).
2. Legal basis, subsidiarity and proportionality
- Legal basis – Article 43(2) TFEU.
- Subsidiarity – The competence for EU agriculture policy is shared; amendments must be made at EU level to reduce administrative burden.
- Proportionality – Amendments are limited to what is strictly necessary to achieve the objectives and reduce burdens.
3. Results of ex‑post evaluations, stakeholder consultations and impact assessments
- Ex‑post evaluations – Not applicable.
- Stakeholder consultations – Over 500 individual suggestions from national administrations, Parliament COMAGRI Committee, and farmers’ representatives; 400 suggestions from Member States after the 27 January‥2025 AGRIFISH Council debate; additional inputs from CAP Network, civil dialogue groups and surveys of 27 000 farmers.
- Impact assessment – A full impact assessment was not possible; a staff working document accompanies the proposal, focusing on administrative cost reduction.
4. Budgetary implications
The amendment of Article 52(2) Regulation (EU) 2021/2115 may increase the Union financial assistance for fruit and vegetable sector interventions by 0.5 percentage points. Based on 2024 execution (€1.15 billion), the estimated additional annual expenditure is €5.75 million (≈0.05 % of the total), affecting 2026‑2027.
Amendment of Article 16(1) Regulation (EU) 2021/2116 excludes from the agricultural reserve support for natural disasters, adverse climatic events or catastrophic events. The impact is non‑quantifiable; the provision may reduce reserve spending and could become effective from 16 October‥2025 (financial year 2026).
5. Other elements
- Implementation plans and monitoring – Article 128 of Regulation (EU) 2021/2115 establishes a performance framework, modified by the proposal (new output indicators, new reporting requirement under Article 13a Regulation 2021/2116).
- Detailed explanation of specific provisions – The text lists numerous amendments to both Regulations (EU) 2021/2115 and (EU) 2021/2116, covering definitions, conditionality, direct payments, eco‑schemes, crisis payments, risk management, simplification measures, control systems, financial instruments, and amendment procedures.
6. Specific amendments (highlights)
- Definition of permanent grassland – Extended to seven years where Member States decide.
- Conditionality system – Clarified links with GAEC standards; exemption for small farmers (Article 28).
- Direct payments – Lump‑sum for small farmers increased to €2 500; possibility to combine with eco‑schemes.
- Eco‑schemes – Flexibility to exclude GAEC 2 from baselines; support for organic livestock units and beehives.
- Crisis payments – New complementary crisis payments under direct payments (Article 41a) and rural development (Article 78a).
- Risk management – Increased flexibility in applying Article 19 (3 %).
- Small farm business development – Lump‑sum support up to €50 000.
- Financial instruments – Alignment with Regulation 2021/1060, VAT eligibility, and State Aid ceiling adjustments.
- Annual performance clearance – Abolished; related reporting requirements removed.
- Control and penalty system – Reduced control frequency (one control per year) and exemptions for small farms.
7. Transitional provisions
Amendments to Article 119 Regulation 2021/2115 set out procedures for strategic and non‑strategic amendments of CAP Strategic Plans, including timelines and notification requirements.
8. Entry into force and application
The Regulation enters into force the day after its publication in the Official Journal of the European Union. Article 2 point (5) applies from 16 October‥2025.
Done at Brussels,
For the European Parliament
The President
For the Council
The President
Legislative financial and digital statement
1. Framework of the proposal/initiative
Title: Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2021/2115 … and Regulation (EU) 2021/2116 …
Policy area: Programme cluster 8 – Agriculture & Maritime Policy (Heading 3 of the MFF 2021‑2027 – Natural Resources and Environment)
General objective: Simplify legislation and implementation of CAP Strategic Plans to reduce administrative burden and increase competitiveness.
Specific objectives:
- Recognise diverse farm situations.
- Enable farmers to act as entrepreneurs.
- Improve competitiveness.
- Provide Member States with greater flexibility.
Expected results & impact: Easier access to CAP support, reduced double obligations, fewer on‑farm visits, simplified applications, more flexible land management, better compensation for disaster‑related losses, expanded lump‑sum support for small farms, greater use of standard cost options.
Indicators of performance: New indicators for amended or new interventions; existing indicators continue to measure performance.
Relation to other actions: New initiative building on previous simplification measures, fully compatible with the MFF.
Added EU value: Provides a common, coherent response to cross‑border agricultural challenges, ensuring a level playing field and legal certainty.
2. Management measures
- Monitoring and reporting follow the existing CAP Strategic Plan framework.
- Management and control systems remain those currently used for CAP, with simplifications as described.
- Fraud prevention measures continue as per the existing CAP rules.
3. Estimated financial impact
- Operational appropriations: Additional €5.75 million annually (2026‑2027) for fruit and vegetable sector support.
- Administrative appropriations: None required.
- Human resources: No additional staff needed; existing DG staff will cover implementation.
- Digital investments: No new digital solutions mandated; however, Article 13a (2021/2116) introduces a roadmap for data interoperability.
4. Digital dimensions
- The proposal does not create new digital requirements but reinforces the Digital‑by‑Default principle through the interoperability roadmap (Article 13a).
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