Fertiliser crisis: Brussels proposes a special €500 million package for the CAP reserve

Brussels – The European Commission has tabled an extraordinary amendment to the EU budget to bolster the agricultural reserve of the Common Agricultural Policy (CAP), allocating €300 million in additional funds to provide “targeted and exceptional support to farmers affected by the war in the Middle East and rising fertiliser prices,” writes the European executive in a statement. The Berlaymont Building is now assessing the amount of resources still available in the crisis reserve for the current year, which could be just over 200 million, bringing the total “war chest” of aid to over 500 million euros. The strategic boost was announced on 19 May as part of the fertiliser plan and will be formally announced as part of a package of targeted amendments to the CAP, which must be approved by the European Parliament and the Member States.

This emergency measure forms part of the broader macroeconomic framework of the EU’s draft annual budget for 2027, totalling €200 billion, the last to be funded by the current Multiannual Financial Framework. European financial planning is inevitably affected by the crises of recent years, including the pandemic, the energy shock, and inflation resulting from global geopolitical tensions and ongoing conflicts, factors that have destabilised markets and made the continent’s economic growth volatile.

Although the EU 2027 budget shows a sharp increase in investment in security and defence, the protection of natural resources and agricultural stability remains a fundamental pillar of the Union, which has nevertheless proposed to allocate over €57 billion to environmental protection and primary sector policies for the coming year.

As part of the new measures presented, Brussels intends to launch a temporary liquidity scheme to enable Member States to reprogramme their CAP strategic plans and partially offset the additional fertiliser costs resulting from the crisis. The new flexibility measures will also cover advance payments and introduce incentives for the use of digestate in response to a specific request from Italy.

The Minister for Agriculture, Food Sovereignty and Forestry, Francesco Lollobrigida, has spoken out in support of the matter, stating:

“The Commission’s response demonstrates that Italy’s efforts in Brussels continue to be effective. We had called for a solution to the high cost of fertilisers triggered by the ongoing conflict in the Middle East. This funding can be seen as an initial, concrete response to the emergency. However, as Italy, we have called for and will continue to call for the suspension of CBAM and the ETS, regulations which, especially in this period of uncertainty, have no reason to exist. The European Commission must abandon ideological positions and be more pragmatic; duties cannot be imposed on factors of production that are essential to farmers.”