Regulation (EU) 2025/2649 of the European Parliament and of the Council of 19 December 2025 amending Regulation (EU) 2021/2115 as regards the conditionality system, types of intervention in the form of direct payment, types of intervention in certain sectors and rural development and annual performance reports and Regulation (EU) 2021/2116 as regards suspensions of payments, annual performance clearance and controls and penalties

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 43(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee (1),

Acting in accordance with the ordinary legislative procedure (2),

Whereas:

(1) In its communications of 29 January 2025 entitled ‘A Competitiveness compass for the EU’ and of 11 February 2025 entitled ‘A simpler and faster Europe: Communication on implementation and simplification’, the Commission emphasised the need to enhance competitiveness, foster innovation, and support growth across the Union, for which simplification and reducing administrative burden are critical enabling factors. It is, therefore, necessary to address costly regulatory burdens, complexities of Union law and its implementation, including excessive reporting obligations, while paying attention to the specific needs of small and medium entities.

(2) The Commission in its communication of 19 February 2025 on a vision for agriculture and food stresses that, to drive innovation and sustainability in agricultural practices, farmers should be entrepreneurs and providers who do not carry unnecessary bureaucratic or regulatory burdens. That perspective and the sector’s diversity call for tailored approaches rather than ‘one-size-fits-all’ solutions, alongside reality checks for the Union law, and simplifications, considering also the benefits brought by digital technologies, such as technologies enabling automated reporting. A better balance between requirements and incentives is needed to guide the sustainability transition of farming and to foster innovation. The special needs of small farms, which underpin the vitality of rural communities by protecting nature and livelihoods, call for more fitted and straightforward support under the Common Agricultural Policy (CAP), minimising administrative burden. Small farms are often at a disadvantage in accessing and utilising funding, which hinders their ability to invest, innovate and pursue development opportunities.

(3) Regulation (EU) 2021/2115 of the European Parliament and of the Council (3) establishes rules on support for strategic plans to be drawn up by Member States under the CAP (CAP Strategic Plans) and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD). Regulation (EU) 2021/2116 of the European Parliament and of the Council (4) establishes rules on the CAP financing, management and monitoring. In 2024, Regulation (EU) 2024/1468 of the European Parliament and of the Council (5) was adopted with the aim to better adjust the Union CAP support framework to on-farm realities, improve administration of the CAP Strategic Plans by Member States and reduce the burden related to checks. Also, the Commission adopted Delegated Regulation (EU) 2024/1235 (6) amending Commission Delegated Regulation (EU) 2022/126 (7), providing in particular for the possibility for Member States to adjust the reference ratio for Good Agricultural and Environmental Condition (GAEC) standard 1 based on structural changes in farming systems and for derogations from the obligation to impose reconversion obligations on farmers and other beneficiaries.

(4) Feedback and experience from the two years of implementation of the CAP Strategic Plans under the current CAP Union legal framework indicate that further, limited adjustments of that legal framework are needed in order to address the identified bottlenecks and complexities. Those include the fact that specific circumstances, practices and needs of certain groups of farmers, such as organic farmers, young farmers, women farmers, mountain-area farmers, small-scale farmers and livestock farmers, are not yet sufficiently taken into account in the CAP Union legal framework, which does not permit Member States to adjust the various instruments to the specific circumstances, practices and needs of those farmers. Also, certain simplification opportunities within the CAP, such as the use of lump-sums or simplified cost options, are underutilised due to complexities in their implementation and management. That can lead to overlapping or ambiguous requirements for farmers, complicate farmers’ access to support, and hinder business development opportunities for farmers, such as for young farmers and new farmers. There are also certain rigidities in the rules impacting how Member States manage and amend their CAP Strategic Plans and fulfil their reporting obligations. Finally, the burden of on-farm-visits and checks on both farmers and administrative bodies still needs to be alleviated, in particular by introducing more efficient methodologies for Integrated Administration and Control System (IACS) quality assessments and conditionality controls. Overcoming those bottlenecks, complexities and rigidities would help Member States use the CAP Strategic Plans to maximise opportunities for the benefit of farmers and other beneficiaries of the CAP, reduce administrative burden and complexity, and make better use of scarce resources. In order to maximise the effect of the direct payments granted under the support system established by the CAP legal framework, in particular as regards the fair income and living standards of the farmers, it is important that national measures outside CAP are designed in such a way as to not affect the direct payments negatively.

(5) Article 4(3), point (c), of Regulation (EU) 2021/2115 establishes that, when an agricultural area is used as a grassland and has not been included in the crop rotation of the holding for five years or more, it is to be considered as permanent grassland. However, some farming systems entail crop rotation on arable land where the grasses or other herbaceous forage are not included in the crop rotation for periods longer than five years, but where those areas are ploughed up to remain arable land. As a consequence, farmers in the Member States where such farming systems are applied face difficulties in managing their agronomic rotations and in remaining viable while meeting the requirements for the implementation of GAEC standard 1. In addition, the use of longer crop rotations with grasslands may bring significant benefits in terms of biodiversity and ecosystem services, while allowing farmers greater flexibility in their agronomic management. Therefore, in order to promote such flexible and sustainable agronomic practices for the management of grasslands, it should be possible for Member States to extend the period determining the classification of an area as permanent grassland from five to seven years. Therefore, Article 4(3), point (c), of Regulation (EU) 2021/2115 should be amended accordingly.

(6) However, the automatic conversion of arable land into permanent grassland after a fixed period can create unnecessary regulatory pressure for farmers wishing to keep their land classified as arable land. Therefore, in order to provide greater flexibility, it should be possible for Member States to decide that land classified as arable land on 1 January 2026 remains arable land, even where the period of five or seven years has expired. In such a case, farmers should be given the possibility to opt out from the decision taken by the Member State and to continue applying the rule of conversion of their arable land into permanent grassland after the expiry of the five or seven year period. To ensure consistency and legal certainty, Member States implementing such flexibility should also ensure that their decision does not affect ongoing multiannual environmental commitments undertaken under Article 70 of Regulation (EU) 2021/2115, and that beneficiaries are given the possibility to amend or withdraw accordingly the application referred to in Article 69(1) of Regulation (EU) 2021/2116 in the year following the Member States’ decision.

(7) In order to minimise the risk of negative impacts on the single market and international trade of the new crisis payments to farmers following natural disasters, adverse climatic events or catastrophic events in accordance with Article 78a of Regulation (EU) 2021/2115, the interventions under which that Union support is to be granted should be designed by the Member States in such a way that they qualify under the criteria of Annex 2 to the WTO Agreement on Agriculture.

(8) Article 11 of Regulation (EU) 2021/2115 provides for a mechanism for implementation of the memorandum of understanding on oilseeds, including provisions on increases of planned outputs and reduction coefficients to avoid exceeding the maximum support area for the whole Union. That provision needs to be amended to take into account amendments of Article 119 of that Regulation, introduced by this Regulation.

(9) The system of conditionality comprising statutory management requirements (SMR) and GAEC standards aims to contribute to the development of sustainable agriculture through an increased awareness, on the part of beneficiaries, of the need to comply with those basic standards and requirements. It also aims to increase the consistency of the CAP with the environment, public health, plant health and animal welfare objectives pursued by Union law. However, considering that the agricultural area managed by small farmers who benefit from payments under the interventions referred to in Article 28 of Regulation (EU) 2021/2115 is limited, applying the system of conditionality to such small farmers, who manage majority of farms in the Union, yields insufficient benefits compared to significant costs, and imposes an important administrative burden on those farmers and national administrations. To reduce such costs and ease the related administrative burden, it is appropriate to exempt small farmers from the application of the system of conditionality.

(10) The GAEC standards referred to in Article 13 of Regulation (EU) 2021/2115 are part of the conditionality system referred to in Article 12 of that Regulation. They contribute to the mitigation of, and adaptation to, climate change, and to the protection of the environment, including water, soil and biodiversity of ecosystems. The general principles on which organic production pursuant to Article 5 of Regulation (EU) 2018/848 of the European Parliament and of the Council (8) is based include the preservation of natural landscape elements, such as natural heritage sites, and the responsible use of energy and natural resources, such as water, soil, organic matter and air.

(11) GAEC standard 1, listed in Annex III to Regulation (EU) 2021/2115, aims to maintain permanent grassland to preserve carbon stock. Points 1.7.3 and 1.9.1.1 of Annex II to Regulation (EU) 2018/848 emphasise the importance of maximising the use of grazing and pasture, which prevents the conversion of permanent grassland into other land uses, and in line with the main objective of GAEC standard 1 preserves carbon stock in permanent grasslands. GAEC standards 3, 5 and 6, listed in Annex III to Regulation (EU) 2021/2115, aim to maintain soil organic matter, limit erosion, and protect soils during sensitive periods, respectively. Those objectives are already achieved through the tillage and cultivation practices applied in organic plant production, in particular those referred to in point 1.9 of Annex II to Regulation (EU) 2018/848. GAEC standard 4, listed in Annex III to Regulation (EU) 2021/2115, aims to protect water against pollution. Similarly, points 1.5, 1.7, 1.9 and 1.10 of Annex II to Regulation (EU) 2018/848 aim to reduce the risk of water pollution by limiting the use of veterinary medicinal products, restricting the use of fertilisers and pesticides, and restricting stocking density. Experience has shown that organic farming has a positive impact as regards nutrient leaching and run-off, making it less likely that an organic farmer would compromise the quality of water, thereby achieving the main objective of GAEC standard 4. Therefore, given the principles and rules laid down in Regulation (EU) 2018/848 and existing practices under the organic farming systems, farmers certified in accordance with Regulation (EU) 2018/848 should be deemed to comply with GAEC standards 1, 3, 4, 5, 6 and, as is already the case, 7 in relation to their organic production units and in-conversion production units, as defined in Regulation (EU) 2018/848. In order to reduce the administrative burden on the competent authorities of the Member States while striving to apply that possibility of the presumption of compliance with certain GAEC standards in the most appropriate way, it should be possible for Member States to decide that such presumption of compliance only applies where the entire holding of the farmer certified in accordance with Regulation (EU) 2018/848 consists of organic production units or of in-conversion production units as defined in Regulation (EU) 2018/848, or of both such production units.

(12) To improve consistency of requirements for farmers and simplify the setting of the GAEC standards by the Member States, Article 13(1) of Regulation (EU) 2021/2115 should be amended to clarify that Member States may set out the GAEC standards in their CAP Strategic Plans consistently with mandatory national requirements, provided that such national requirements comply with the GAEC standards listed in Annex III to that Regulation. It should, in particular, be clarified that GAEC standards set out in the CAP Strategic Plans do not need to go beyond existing mandatory national requirements, provided that those national requirements comply with GAEC standards listed in Annex III to Regulation (EU) 2021/2115, in particular with the main objectives of those GAEC standards.

(13) Article 13(2a) of Regulation (EU) 2021/2115 should be amended to enable Member States, when implementing the GAEC standards, to provide for temporary derogations from the requirements of minimum standards also in the case of plant diseases or pest infestations, which prevent farmers from complying with those requirements in a given year.

(14) GAEC standard 9 imposes a ban on converting or ploughing permanent grasslands designated as environmentally sensitive in Natura 2000 sites. Experience has, however, shown that there could be exceptional situations where such environmentally sensitive permanent grassland is damaged, for instance by invasive species, and appropriate measures to address such situations, including exceptions to the ban on ploughing of the areas concerned in order to restore such permanent grassland, could be necessary to ensure that the GAEC standard 9 requirements contribute to the protection of habitats and species. In line with the simplification objective, Member States could in particular make use of their existing control systems in Natura 2000 sites on the basis of a risk analysis. Furthermore, Member States could use mandatory requirements established in the Natura 2000 management plans, provided that those requirements comply with GAEC standard 9 listed in Annex III to Regulation (EU) 2021/2115.

(15) Article 19 of Regulation (EU) 2021/2115 allows Member States to retain up to 3 % of the direct payments to be paid to a farmer to support the farmers’ contribution to a risk management tool. A Member State deciding to make use of that option has to apply it to all beneficiaries of direct payments in a given year. Experience shows that only very few Member States make use of that option. Discussions with the Member States have shown that the lack of risk management tools, whether set up by Member States or available through private insurance, available for all farmers receiving direct payments, is an obstacle to the implementation of that Article. In order to increase the uptake and use of that option, it is necessary to amend that Article 19 so that its implementation is more flexible and to adapt it to the existing risk management tools in Member States. As a result of that amendment, Member States deciding to use the option to retain up to 3 % of the direct payments to be paid to a farmer as farmers’ contribution to risk management tools should be able to decide whether it applies to all farmers receiving direct payments in a given year, or whether it applies to the farmers for whom a risk management tool exists in a given year, on the condition that their decision corresponds to the risk management tools in place.

(16) The simplified payment scheme designed by Member States for small farmers under Article 28 of Regulation (EU) 2021/2115 reduces the complexity of the application process for income support, both for small farmers and for administrations. In order to enhance its attractiveness and encourage a larger number of small farmers to benefit from that scheme, the maximum amount that can be received under that scheme should be increased. In order to foster the participation of small farmers who benefit from the payments referred to in that Article in the eco-schemes referred to in Article 31 of that Regulation, Member States should have the possibility to exclude payments received by those farmers under the eco-schemes from the maximum amount of payment referred to in Article 28 of that Regulation.

(17) Where a Member State decides pursuant to Article 28, second paragraph, of Regulation (EU) 2021/2115 that the payment to small farmers referred to in Article 28, first paragraph of that Regulation, is not to replace support for eco-schemes established in accordance with Article 31 of that Regulation, the eco-schemes should continue to comply with all requirements laid down in Article 31(5) of that Regulation. That principle should also be respected as regards interventions under Article 70 of that Regulation in respect of farmers receiving payments referred to in Article 28 of that Regulation. In order to ensure compliance with the general principle that payments are only provided for commitments going beyond the conditionality requirements, and to safeguard the ambition of the interventions, which form part of the environmental and climate architecture of the CAP, farmers receiving payments referred to in Article 28 of that Regulation should only receive payments under eco-schemes referred to in Article 31 of that Regulation or payments under interventions referred to in Article 70 of that Regulation if they comply with the conditions laid down in Article 31(5), first subparagraph, point (a), of that Regulation or the conditions laid down in Article 70(3), first subparagraph, point (a), of that Regulation.