CAP Cuts and Unfair Trade Deals Risk European Agriculture, Says Fanelli

Breaking: European Farmers Rally Over CAP Cuts and Trade Deals

Across Europe, farmers are staging protests as negotiations over the Common Agricultural Policy and trade agreements with Brazil and Uruguay face sharp criticism. Advocates warn that reducing CAP resources would weaken European farming, threaten rural communities, and compromise food security.

In Basilicata and other farming regions, leaders say the market should not be exposed to productions that do not meet Europe’s environmental, health, and social standards. A regional agricultural spokesperson described the situation as unsustainable and urged a firm European stance in support of farmers.

Francesco Fanelli, a prominent voice for the farming sector, argued that cutting CAP resources would erode the backbone of European agriculture. He warned that unbalanced trade deals could spur unfair competition against producers who adhere to the rules.

“We cannot speak of sustainability only when it suits us-and then overlook imports from systems far removed from our models,” Fanelli stated. “Europe must protect fieldwork, ensure adequate resources, defend made in Italy, and build reciprocal agreements rather then serve a few.”

“There is no need for downward mediation,” he added. “Europe must choose: stand with farmers or drift away from its rural territories.”

Key Facts at a Glance

Issue	Europe’s Position	Concerns	Potential Impact
CAP funding	Debate over resource levels	Risk of weakening rural areas	jobs, local food security may be affected
Trade deals	Negotiations with Brazil and Uruguay	standards divergence	Unfair competition risks
Standards	Higher EU environmental/health rules	Imports may fall short	Perceived double standards
Regional protection	Defense of Made in Italy and local agriculture	Need for real reciprocity	Stronger rural resilience

experts say this debate reflects a broader question about balancing openness with responsible production.The coming months will test how Europe reconciles farm incomes with environmental commitments and fair competition on the world stage.

Reader questions: Do you think Europe should tighten import standards even if it slows access to global markets? How can trade agreements better safeguard farmers while promoting innovation?

Share your thoughts in the comments below.

Impact of CAP Cuts and Trade Deals on European Agricultural Sectors

.## CAP Budget Reductions: Key Figures and Timeline

• 2023‑2027 CAP envelope: €408 billion, a 5 % decrease from the 2014‑2020 period.
• 2025 mid‑term review: European Commission proposes an additional 2 % cut, pushing the total reduction to ≈ €8 billion.
• funding allocation shift: Direct payments fall by 3 %, while eco‑scheme budgets rise by 1 % to meet green Deal targets.

These figures are at the core of Giovanni Fanelli, EU Commissioner for Agriculture, warning that “the combined effect of lower subsidies and unfair external trade terms could destabilise the entire European farming sector.”

---

Unfair Trade Deals: What’s Changing?

Trade Deal	Main Provisions	Controversial Element
EU‑Mercosur (2024‑2025)	Tariff‑free access for beef,sugar,and soy	European livestock producers face a 30 % price dip on exported beef.
EU‑United States (2025) – “Transatlantic Agriculture Partnership”	Reduced tariffs on pork and dairy imports	U.S. subsidies make their pork 20 % cheaper than EU‑produced pork.
EU‑UK “Northern Ireland Protocol” adjustments	Zero‑tariff flow for grains	British grain exporters receive direct EU subsidies, creating a price parity with EU grain.

Fanelli emphasizes that these agreements bypass the safeguard mechanisms built into the Common Agricultural Policy, leaving EU farmers exposed to market distortions.

---

Risk Scenarios for European Agriculture

1. Revenue Compression

• Direct payment cuts reduce farm income by €1,200‑€2,500 per hectare (source: Eurostat 2024 farm income study).
• Simultaneously, imported commodities gain a 10‑15 % price advantage, squeezing margins.

2. Land‑Use Pressure

• lower subsidies push marginal farmers to intensify production on limited land, raising sustainability concerns.
• Eco‑scheme funding is insufficient to offset the loss of agri‑environmental measures.

3. Supply‑Chain vulnerability

• Dependence on imported feed (e.g., soy from Brazil) increases after Mercosur tariffs are removed, exposing the sector to commodity price volatility and geopolitical risks.

4. Rural Depopulation

• Forecasts from the European Rural Development Observatory (ERDO, 2025) show a 3 % acceleration in farm exit rates in regions heavily reliant on CAP payments.

---

Case Study: Italian Wheat Producers under Dual Pressure

• Background: Italy’s Po Valley wheat growers traditionally rely on a €200 per‑hectare direct aid.
• CAP Cut Impact: The 2025 reduction slashes this aid by €40, lowering net returns to €1,200 per ha.
• Trade Deal Effect: mercosur wheat imports, now duty‑free, enter the market at €150 per tonne cheaper than EU wheat.

Result:

• Average farm profitability fell 12 % in the 2024‑2025 season.
• Five local cooperatives switched to short‑term contracts with South American exporters to mitigate cash flow, raising concerns about seed sovereignty.

The Italian Ministry of Agriculture cited Fanelli’s warning in a parliamentary hearing, urging the EU to re‑introduce safeguard clauses for staple crops.

---

Practical Tips for Farmers Facing Funding Gaps

1. Diversify Income streams

• Adopt agri‑tourism (farm stays, workshops) – potential extra revenue of €5,000‑€8,000 per year.
• Explore value‑added processing (e.g., organic flour, specialty cheese).

2. Leverage Remaining Eco‑Scheme funding

• apply for “Organic Transition” grants (up to €3,500 per ha).
• Participate in “Carbon Farming” pilots – receive payments for carbon sequestration verified by EU‑approved registries.

3. Form Cooperative Buying Groups

• Bulk‑purchase inputs (fertiliser, seed) to secure 5‑10 % discount.
• Jointly negotiate forward contracts for output to lock in prices before market swings.

4. Utilise EU Digital Tools

• Register on CAP‑Connect for real‑time subsidy tracking.
• Use the Farm Data Hub to model climate‑resilient cropping patterns and identify optimal subsidy allocations.

---

Policy Recommendations Highlighted by Fanelli

• Re‑establish “Market Protection Clauses” in all future trade agreements to allow temporary tariffs if import volumes jeopardise domestic stability.
• Introduce a “Transition Fund” of at least €2 billion to support farms shifting from conventional to sustainable practices during the CAP cut period.
• Mandate Transparency: Publish quarterly impact assessments of trade deals on agricultural sectors, enabling rapid legislative response.
• Strengthen the “public Goods” Component of CAP by allocating ≥ 30 % of the remaining budget to biodiversity, soil health, and water management.

Fanelli argues that without these safeguards, the EU risks losing its food‑security edge and undermining rural economies.

---

Potential Benefits of Maintaining Robust CAP Funding

• Stabilised Farm Income: Direct payments act as a safety net, preventing price‑shock induced bankruptcies.
• Enhanced Competitiveness: Adequate subsidies enable investment in precision agriculture, reducing production costs by up to 15 %.
• Environmental Gains: Funding tied to eco‑conditions promotes carbon sequestration and biodiversity corridors, aligning with the European Green Deal.
• Social Cohesion: Sustained rural livelihoods curb urban migration,preserving cultural heritage and regional food traditions.

These advantages underscore why stakeholders echo Fanelli’s call for balanced budgetary decisions that consider both economic viability and long‑term sustainability.