The future of EU agriculture is under renewed scrutiny as the European Commission’s Joint Research Centre (JRC) unveils Scenar 2040, a forward-looking analysis exploring how different policy choices could reshape Europe’s farming sector.
Building on the EU Agricultural Outlook and national CAP Strategic Plans, the study offers a data-driven examination of how alternative paths under the Common Agricultural Policy (CAP) might affect productivity, trade, employment, and the environment.
Rather than setting policy prescriptions, Scenar 2040 is designed to feed the debate – providing quantitative evidence to guide discussions on how to balance economic, social, and environmental priorities in EU farming by 2040.
Four possible futures for EU agriculture
Using three integrated agro-economic models within the JRC’s modelling platform, the analysis explores four possible futures for EU agriculture: a reference ‘business-as-usual’ baseline, and three alternative policy scenarios — Productivity and Investment, Environment and Climate, and NoCAP.
Each scenario simulates the long-term effects of different CAP funding allocations and policy orientations, revealing the trade-offs and tensions that define modern agricultural policymaking.
Productivity and Investment: Economic gains, environmental costs
In the Productivity and Investment scenario, CAP resources are primarily directed towards boosting competitiveness and innovation.
By 2040, EU agricultural output would rise by 2.7%, driven by efficiency gains and stronger trade performance – improving the EU trade balance by €2.7bn.
Consumers would benefit from slightly lower food prices, while overall employment in the sector would remain stable.
However, these economic wins come with environmental side effects. Greenhouse gas emissions would rise by 0.5%, and nitrogen surplus per hectare would grow by 1.4%, signalling greater pressure on ecosystems.
Environment and Climate: Green gains, economic strains
By contrast, the Environment and Climate scenario prioritises sustainability, redirecting CAP support towards climate and biodiversity-friendly measures.
The environmental dividends are striking: EU agricultural emissions fall by 1.7%, nitrogen pollution drops by 2%, and crop diversity expands. The greener model could also generate up to 90,000 new jobs in rural areas through eco-focused innovation.
Yet the economic trade-offs are significant. Agricultural output would shrink by 4%, imports would rise, and the EU’s trade balance could worsen by €1.8bn. Consumers would face higher food prices, reflecting the cost of greener production.
Emission leakage: A global paradox
The study highlights a critical paradox in EU agriculture policy – the problem of ‘emission leakage.’
While green policies reduce emissions within the EU, lower domestic output could shift production to countries with less carbon-efficient systems, potentially increasing global emissions overall.
Conversely, the productivity-focused approach, despite modestly raising EU emissions, might reduce global agricultural emissions by displacing less sustainable competitors abroad.
This complexity underscores the global interdependence of agricultural systems and the need for coherent international climate strategies.
The NoCAP scenario: A warning for policymakers
To test the resilience of EU farming without policy support, the JRC simulated a ‘NoCAP’ scenario – a purely theoretical exercise, as abolishing the CAP would breach EU treaties.
The results paint a stark picture: farm incomes would fall by 11%, and the smallest farms could lose up to 21%.
EU agricultural output would drop 5%, pushing food prices higher and cutting 250,000 jobs from the agri-food sector.
The social consequences would be severe, especially for vulnerable households facing higher food bills.
Moreover, emission leakage effects could again drive up global agricultural greenhouse gases, as production migrates to less efficient regions.
Balancing competing priorities
The Scenar 2040 study makes one message clear: there is no one-size-fits-all path for the future of EU agriculture. Productivity, environmental sustainability, and food security are intertwined – and often in conflict.
Rather than endorsing a single approach, the JRC calls for a nuanced, evidence-based CAP that balances economic resilience, social cohesion, and ecological responsibility.
As the EU navigates its next agricultural reform cycle, these findings offer a crucial reminder: Europe’s agricultural future depends on striking the right balance between growth and green transition – at home and abroad.
