Common Agricultural Policy (CAP)
The declared objectives of the CAP are as follows:
to increase agricultural productivity through technological progress, optimising factors of production, especially labour;
to ensure a fair standard of living for the agricultural community;
to stabilise markets;
to assure the availability of supplies; and
to ensure supplies reach consumers at a reasonable price.
	UK agriculture was allocated a budget of around €4.0 billion each year through the CAP under the EU’s Multi-Annual Financial Framework (MFF). The UK Government made an annual contribution to the MFF until 2020 under the terms of the Withdrawal Agreement. The CAP is comprised of two pillars. Pillar 1 includes Direct Payments, accounting for about 81% of the budget (€3.201bn in the UK in 2020) and also funds the Common Market Organisation Regulation (CMO). These payments were €0.043bn for the UK in 2019. Pillar 2 supports environmental outcomes, farming productivity, socio-economic outcomes and rural growth, accounting for the remaining 19% of the budget (€0.756bn in the UK in 2020). There are three Direct Payment schemes in England: the basic payment scheme, greening, and the young farmer payment. The three schemes combine to give each farmer applying a single Direct Payment for the scheme year, which runs from 1 January to 31 December.
	Basic payment scheme is an area-based annual payment, made to farmers. Basic payment scheme accounts for almost 70% of the Direct Payments budget.
	The CMO and market measures are also part of Pillar 1. These include private storage aid, intervention purchasing and other market measures that are product-specific.
	Pillar 2 measures are delivered through multi-annual Rural Development Programmes in England and in each of the Devolved Administrations. The current programme period runs from 2014 to 2020. Most of the Pillar 2 expenditure is on environmental schemes which bring public benefit and would not always be considered by the market, for example environmental land management through agri-environment and forestry schemes.