However, as a result of previous reforms, strategic objectives such as agriculture have become more complex due to various types of conditionalities. Since strategic weight is typically measured by the share of funding, this has become increasingly difficult, and the single-fund model under discussion would make such measurement nearly impossible. 

For Finnish agriculture and forestry, the Multiannual Financial Framework (MFF) and the associated legislation provide the foundation for the sector's competitiveness. We need an EU agricultural policy that supports production across the entire Union, including areas with natural constraints. Since Finland's accession to the EU, we have made significant use of both the direct payments under the first pillar of the CAP and the funds allocated to rural development. This model has enabled national co-financing, particularly for environmental and climate measures and for coupled support in sectors requiring specific incentives, such as beef production. 

The vision for agriculture and food presented by Commissioner Hansen raises expectations that will require strong financial backing in the MFF to be fulfilled. We fully support the Commissioner's vision for the future. However, it must be clear that this vision will remain merely a political promise unless it is supported by the EU as a whole. 

Agriculture and cohesion policy have always played a major role in the EU. Structural changes to the financial framework have made it difficult to compare different programming periods. In the 1990s, agriculture and regional development accounted for around 80% of EU spending. Today, agriculture accounts for only 23–25% of the budget. 

President von der Leyen’s political guidelines, as well as Commissioner Hansen’s vision for agriculture, repeatedly emphasise the need to improve the quality of life and livelihoods for farmers and rural regions in Europe. It is also stressed that farmers must earn a fair and adequate income from the market. We support the idea that there should be a balanced approach between the EU budget and the incentives, investments, and regulations of the Common Agricultural Policy (CAP), and that farmers should be rewarded for working in alignment with nature-related goals. 

A fundamental change in the agricultural environment is the situation in Ukraine. While support packages are needed in the short term, long-term funding will also be necessary for reconstruction, regardless of whether Ukraine becomes an EU member or remains a candidate country. In addition to Ukraine and Moldova, many other countries in the Western Balkans have long been in the EU accession pipeline. Previous enlargement processes have relied heavily on agricultural and cohesion policy instruments, which will continue to be essential in the future. Unlike past reforms, future enlargements will require more funding than what is currently allocated under existing CAP policies. 

The EU’s financial landscape changed significantly after 2020. In addition to the traditional MFF (€1,085.3 billion for 2021–2027), co-financed by Member States, a €750 billion investment and reform programme—NextGenerationEU—was introduced, funded through EU-level borrowing. The impact of this borrowing on future fiscal capacity is now becoming evident. The current MFF must allocate around 20% of its resources to servicing these loans. Lending can remain a tool in EU financing, but policymakers must seriously consider the Union’s repayment capacity. 

Following the COVID recovery package and in response to the U.S. Inflation Reduction Act (IRA), the Commission and various Member States have increased national industrial subsidies within their means. A competitiveness fund is clearly needed to prevent wealthier Member States from distorting the internal market with disproportionate aid packages. We believe that a European Competitiveness Fund and a European Defence Fund, as envisioned by President von der Leyen, are necessary. 

For agriculture and forestry, it is vital that the competitiveness of the bioeconomy and the role of food security as part of overall security are duly considered. Ensuring the security of the EU's eastern border is also essential to maintaining the competitiveness of regional industries and strengthening European security. 

President von der Leyen’s guidelines call for a significant strengthening of the EU budget's revenue side to ensure adequate and sustainable financing in line with policy objectives. This necessitates the development of new revenue sources, as annual revenues must, by principle, fully cover annual expenditures. The revenue side of the EU budget is currently almost entirely (98%) composed of the Union’s own resources, with around 70% derived from GNI-based national contributions. For 2021–2027, the contribution rate is 1.113% of GNI. 

A major issue with the new financing models is the inefficiency of alternative collection methods compared to the GNI-based model. Moreover, introducing new models is not worthwhile unless they alter the distribution of EU funding among Member States. 

MTK Key Messages: 

• Agricultural policy is a key EU priority. It must aim to strengthen competitiveness, revitalise the economic viability of rural populations, and support sustainable production even in disadvantaged regions. COPA-COGECA has advocated for maintaining agriculture’s relative share in the growing budget, adjusting for inflation, while reflecting agriculture’s priority status in the EU work programme. 

• EU funding for agriculture and rural development will continue to be based on the two-pillar model. Pillar II (rural development) has proven effective in Finland. 

• Farmers and forest owners need incentives for climate and environmental action and for additional requirements imposed by new legislation, such as animal welfare. 

• Rural businesses need a stable, long-term operational environment. A 5+5-year financial framework would offer more balance and be better suited for major investments. 

• MTK supports the proposal for additional measures under the EU’s Eastern Border Instrument. 

• New financial instruments should only be developed if they are cost-efficient in terms of collection and also lead to meaningful changes in Member States' financial priorities. 

• In light of emerging challenges, the EU needs an expanding base of contributions from Member States.  

Juha Ruippo

Director, trade policy and international relations

+358 20 413 2341

+358 40 55 33 232