In a significant development, the European Parliament has approved its biggest reform on farm subsidies in decades in a vote that switches cash to smaller farmers and rewards sustainable farming methods.

Earlier its Common Agricultural Policy (CAP), had draw criticism for handing the bulk of subsidies to big landowners and agro-industrial companies; the reform changes that.

“Farming will be fairer and more sustainable,” said Norbert Lins, who chairs the European Parliament’s agriculture committee, calling it the biggest reform since 1992.

The CAP, around a third of the EU’s 2021-2027 budget, will spend $436 billion (387 billion euros) on payments to farmers and support for rural development.

The new CAP rules, applicable from 2023, aims to shift funding from intensive farming practices to practices that protect nature, and reduce 10% of EU greenhouse gases emissions by agriculture.

The reform require 20% of payments to farmers from 2023-2024 be spent on “eco-schemes”, rising to 25% of payments in 2025-2027. While CAP rules do not define what is an eco-scheme, examples however include restoring wetlands, to organic agriculture.

At least 10% of CAP funds will go to smaller farms and all farmers’ payments would be tied to complying with environmental rules.

According to Peter Jahr, an EU lawmaker who helped seal the deal, CAP is far from perfect since some compromises had to be made so that a deal could be reached.

“I’m urging you, please, in the interest of the European farmers, in the interest of the climate, to vote in favour,” said Jahr to the European Parliament.

($1 = 0.8892 euros)

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