AUTHORS: David Baldock and Melanie Muro (IEEP), Emil Fraas and Simone Højte (Concito)
The EU agri-food sector requires urgent transformation. However, current CAP funding is insufficient for the needed transitions. A Just Transition Fund for Agriculture has been proposed to provide targeted financial support for farmers adopting sustainable practices, investing in infrastructure, and acquiring new skills. Key considerations for its design include funding sources, eligibility, duration, and integration with existing mechanisms.
The EU’s agri-food sector faces unprecedented challenges – from climate change to market uncertainties – requiring urgent transformation. However, existing funding mechanisms, particularly the Common Agricultural Policy (CAP), are not directed strongly at the transition required.
Highlighting financing as one of the primary barriers to achieving a sustainable agricultural transition the Strategic Dialogue for the future of EU Agriculture has called for the establishment of a complementary and temporary Just Transition Fund to accelerate the sustainability transition of the agricultural sector. As the European Commission’s “Vision for Agriculture and Food” takes shape, policymakers must act decisively to incorporate transition funding into the next Multiannual Financial Framework (MFF) and CAP. Whether through a new instrument or reform of existing funds, a just transition fund mechanism is necessary for a fair and strategic agricultural transition.
This short analysis makes the case for dedicated just transition funding for EU agriculture and explores the design elements crucial to establishing an effective and equitable funding mechanism.
A transition funding mechanism would bring several advantages:
- Accelerates sustainability goals by funding climate-smart agriculture, biodiversity restoration, and emissions reductions.
- Ensures fairness, preventing vulnerable farmers and rural communities from being left behind.
- Encourages private investment, leveraging public funds to unlock additional financial resources.
To be successful, the fund, or funding mechanisms, must:
- Balance environmental, social, and economic objectives.
- Support a mix of grants, loans, and guarantees.
- Secure substantial EU funding while mobilising private capital.
- Define clear eligibility criteria for farmers and food system actors.
- Establish robust monitoring and accountability frameworks.
- Integrate with CAP and other EU policies to maximize impact.
Photo by Raphael Rychetsky on Unsplash
