The European Union's Common Agricultural Policy (CAP) for the period 2023-2027 represents a fundamental shift in ambition in the field of environmental and climate protection. A comprehensive study prepared for the European Commission by the consortium of PwC, IRWiR PAN and IAMO from April 2026 brings a detailed assessment of how the so-called Green architecture (GA) CAP in practice. The study defines the green architecture as a combination of legislative definitions, mandatory conditionality rules and six main types of interventions. These interventions include eco-schemes, environmental-climate commitments (ENVCLIM), compensatory payments for areas with specific handicaps (ASD), green investments (INVEST), cooperation (COOP) and knowledge exchange or advisory services (KNOW). The main objective of the study is to assess which strategies and tools are most effective in motivating farmers to adopt sustainable practices.

Research scope and methodology used

The evaluation is based on a combination of quantitative and qualitative methods. The research team analyzed all 28 CAP strategic plans from the 27 EU Member States (with Belgium submitting separate programmes for Flanders and Wallonia). A total of 2,479 interventions were examined under the CAP Intervention Catalogue, of which 769 were classified directly as part of the Green Architecture. The empirical basis of the study includes datasets on agricultural practices, data from the Annual Implementation Reports (APRs) and FADN farm accountancy data. The qualitative dimension was provided by 93 structured interviews with managing authorities, paying agencies, farmers and NGOs, as well as 10 in-depth country case studies.

Different environmental bases and the impact of simplification packages

One of the key findings of the study is that Member States have used wide discretion in defining basic concepts such as permanent grassland, landscape features and eligible area. As a result, the environmental basis on which voluntary schemes are based varies significantly between countries. While some countries apply strict rules on ploughing grassland and protecting trees, others have chosen a much more flexible approach.

Rules conditionality – including the Good Agricultural and Environmental Condition (GAEC) standards and the Statutory Management Requirements (SMRs) – form the backbone of the Green Architecture. However, their implementation is uneven across the EU. The situation has also been affected by the simplification packages adopted in 2024 and 2025, which abolished or relaxed several requirements, such as the obligation to set aside 4 % of unproductive areas under GAEC 8, and introduced exemptions for small and organic farms. While these adjustments improved practical feasibility for farmers, they also weakened the credibility of the legislative basis and relegated environmental ambitions to voluntary instruments.

What determines success for farmers: Practicality instead of complexity

The study shows that farmers' willingness to adopt sustainable practices depends less on the theoretical coherence of the overall strategic plan and much more on practical setup of individual interventions. Eco-schemes that follow established agricultural routines – such as cover crops, no-till, extensive grazing, precision agriculture, or buffer strips – achieve the highest participation. Eco-schemes with simple, predictable rules work significantly better than restrictive schemes.

On the contrary, excessive administrative burden and complex monitoring discourage farmers. Interviews showed that requirements for geolocated photos, daily detailed record-keeping, and complicated rules at the level of individual plots significantly reduce interest in participation. Multi-annual commitments under environmental-climate measures (ENVCLIM for 5 to 7 years) bring about deeper behavioral change, but are sensitive to the perception of financial risk and inflexibility, especially on leased land.

Weaknesses: Underfunded education and fiscal contradictions

Advisory services, demonstration farms, farmer education and regional cooperation models (CO-OP a KNOW) are emerging as key prerequisites for a successful transformation. Yet these tools are underfunded or insufficient in many strategic plans. This creates a disparity: while eco-schemes set high expectations, farmers often lack the necessary professional support to meet them.

Another significant obstacle is national fiscal policies. Many Member States continue to subsidise fossil fuels, mineral fertilisers and pesticides through tax breaks or reduced VAT rates. These financial incentives work directly against the objectives of the Green Architecture, weaken the economic attractiveness of green practices and reduce the overall coherence of environmental policy.

Cost-Benefit Analysis: Quantifying Social Value

The cost-benefit analysis (CBA) targeting the area-wide interventions of eco-schemes and ENVCLIM for the period 2023-2027 estimates total public expenditure at approximately EUR 70.1 billion (or EUR 80.7 billion after accounting for administrative and transaction costs). The monetized environmental benefits range from EUR 49.4 billion (pessimistic scenario) to EUR 123.6 billion (optimistic scenario).

In the medium scenario, the benefits (including greenhouse gas reduction, erosion prevention, reduced fertilizer and pesticide consumption, and biodiversity restoration) amount to EUR 68.5 billion, representing a benefit-cost ratio of approximately 0,85. However, a value below 1 does not mean a policy failure. The analysis does not include the benefits from conditionality itself, investments or non-area measures, so the real return to society is likely to be higher. Furthermore, data triangulation from the FADN network confirms that supported farms apply significantly less nitrogen fertiliser compared to non-supported farms.

Future prospects

The study confirms that the Green Architecture represents a significant structural shift in the promotion of environmental objectives in EU agriculture. Member States allocate between a quarter and more than a third of their CAP budgets to its elements. However, moving from blanket coverage to a true systemic transformation requires better synergy between eco-schemes, investments, advisory systems and the removal of conflicting fiscal incentives. JRi&CO2AI

appendix: case studies