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System for Fund Management in the European Union

DG AGRI

EAFRD,EAGF and IPAd

Launched in 1962, the EU’s common agricultural policy (CAP) is a common policy for all EU countries. The CAP budget is divided between two funds (often referred to as the “two pillars” of the CAP): the EAGF supporting income and agricultural markets and the EAFRD dedicated to support for rural areas.

While the Commission bears overall responsibility for the financial management of the CAP, it normally does not make payments to beneficiaries. Most of the CAP budget is implemented under so-called “shared management” between the Commission and EU countries, with the remainder falling under “direct management”.

The new CAP, which starts in 2023, aims to foster a sustainable and competitive agricultural sector that can support the livelihoods of farmers and provide healthy and sustainable food for society, as well as vibrant rural areas.

The policy focuses on nine specific objectives, linked to common EU goals for social, environmental, and economic sustainability in agriculture and rural areas.

Each EU country will design a national CAP strategic plan, combining funding for income support, rural development, and market measures. When designing their strategic plans, EU countries will contribute to the nine specific objectives through a toolbox of broad policy measures provided by the Commission, which can be shaped around national needs and capabilities.