Title page 1

Contents 6

1. INTRODUCTION 13

1.1. THE EU AGRARIAN SYSTEM IS AT A CROSSROADS 13

1.2. OBJECTIVES OF THE STUDY 14

1.2.1. DRIVERS TO BE CONSIDERED 14

1.2.2. MAIN CHALLENGES TO BE CONSIDERED 15

1.2.3. ADAPTATIONS OF THE AGRICULTURAL SECTOR TO BE CONSIDERED 15

2. METHODOLOGICAL CHAPTER 15

2.1. OVERALL APPROACH 15

2.2. METHODOLOGICAL TOOLS TO COLLECT AND ANALYSE DATA 16

2.3. METHODOLOGY FOR THE CASE STUDIES 17

2.3.1. SELECTION OF CASE STUDIES 17

2.3.2. CASE STUDIES PROCESS 18

3. INTRODUCTORY CHAPTER: KEY TRENDS DRIVING CHANGES IN THE EU AGRICULTURAL SECTOR 19

3.1. CLIMATE CHANGE 19

3.1.1. MULTIPLE CONSEQUENCES OF UNCERTAIN MAGNITUDE 19

3.1.2. CLIMATE CHANGE IMPACTS ON EU AGRICULTURE 20

3.2. DEMOGRAPHIC CHANGE 21

3.2.1. AGRICULTURAL DEMOGRAPHICS 21

3.2.2. DECLINE OF ACTIVE (WORKER) POPULATION IN RURAL AREAS 21

3.3. REGULATORY FRAMEWORK 23

3.4. CHANGES IN DEMAND 25

3.5. TECHNOLOGICAL CHANGE AND KNOWLEDGE DEVELOPMENT 25

4. FINDINGS ON STUDY QUESTIONS 26

4.1. SQ 1 - WHAT ARE THE MAIN CHALLENGES DRIVING CHANGES IN FARMING PRACTICES AND SYSTEMS IN THE NEXT 5 TO 10 YEARS,... 26

4.1.1. OBJECTIVE AND APPROACH 26

4.1.2. AGRICULTURAL SECTOR FACES STRUCTURAL AND CONTEXTUAL CHALLENGES 26

4.1.3. EMERGING REGIONAL AND SECTORAL TRENDS IN CHALLENGES 32

4.1.4. KEY FINDINGS 37

4.2. SQ 2 - WHAT ARE THE POSSIBLE ADAPTATIONS THAT ARE OR COULD BE TAKEN BY SECTOR/MS - REGION? WHAT IS OR WOULD BE A POSSIBLE... 37

4.2.1. OBJECTIVE AND APPROACH 37

4.2.2. OVERVIEW OF ADAPTATIONS IMPLEMENTED BY MEMBER STATES/REGION MENTIONED BY STAKEHOLDERS IN THE CASE STUDIES 38

4.2.3. A DIVERSITY OF APPROACHES DEPENDING ON SECTOR-SPECIFIC CONSTRAINTS AND REQUIREMENTS 40

4.2.4. OPPORTUNITIES STEMMING FROM ADAPTATION STRATEGIES 44

4.2.5. KEY ACTIONS AND DYNAMICS TO PRIORITISE TO ENHANCE REGIONAL/SECTORAL ADAPTATION 45

4.2.6. KEY FINDINGS 48

4.3. SQ 3 - WHAT INFLUENCES FARMERS IN THE DECISION-MAKING PROCESS TO ADAPT (OR NOT TO ADAPT) THE WAY THEY FARM? 48

4.3.1. OBJECTIVES AND APPROACH 48

4.3.2. FARMERS' INTERNAL DRIVERS: THE CORE OF FARM-LEVEL DECISION-MAKING 49

4.3.3. EXTERNAL FACTORS ARE LEVERS OR OBSTACLES THAT INFLUENCE FARMERS 58

4.3.4. KEY FINDINGS 62

4.4. SQ 4 - WHAT ARE THE TRANSITION COSTS AT FARM LEVEL AND FOR THE MAIN STAKEHOLDERS IN THE UPSTREAM AND DOWNSTREAM... 63

4.4.1. OBJECTIVE AND APPROACH 63

4.4.2. DETAILED METHODOLOGY FOR THE FARM LEVEL ANALYSIS 64

4.4.3. COSTS AND BENEFITS OF EFFICIENCY ADAPTATION MEASURES AT FARM LEVEL 65

4.4.4. COSTS AND BENEFITS OF SUBSTITUTION ADAPTATION MEASURES AT FARM LEVEL 69

4.4.5. COSTS AND BENEFITS OF REDESIGN ADAPTATION MEASURES AT FARM LEVEL 73

4.4.6. SUMMARY OF TRANSITION COSTS AND BENEFITS AT FARM LEVEL 75

4.4.7. TRANSITION COSTS AND BENEFITS FOR OTHER STAKEHOLDERS IN THE VALUE CHAINS 77

4.4.8. KEY FINDINGS 80

4.5. SQ 5 - ARE THE EUROPEAN CURRENT POLICY TOOLS ADAPTED TO THESE TRANSITION NEEDS? 81

4.5.1. OBJECTIVE AND APPROACH 81

4.5.2. RELEVANCE OF THE CAP IN ADDRESSING THE CHALLENGES STUDIED AND MEETING THE RELATED NEEDS OF THE AGRICULTURAL SECTOR 81

4.5.3. CAP SUPPORT TO THE AGRICULTURAL SECTOR IN ITS TRANSITION AND ADAPTATION TO CHALLENGES: DEGREE OF INCENTIVE AND... 90

4.5.4. CONSISTENCY BETWEEN INSTRUMENTS PROPOSED IN THE CSP AND INITIATIVES UNDERTAKEN BY MEMBER STATES OUTSIDE THE CSP... 93

4.5.5. POSSIBILITIES OF IMPROVING OR ROUNDING OUT CURRENT POLICY TOOLS 96

4.5.6. KEY FINDINGS 97

4.6. SQ 6 - WHAT ARE THE OPPORTUNITIES AND BOTTLENECKS THAT COULD HINDER THE IMPLEMENTATION OF REGIONAL TRANSITION STRATEGIES? 97

4.6.1. OBJECTIVE AND APPROACH 97

4.6.2. REGIONAL STRATEGIES PRESENT NUMEROUS OPPORTUNITIES TO DRIVE THE TRANSFORMATION OF AGRICULTURAL SYSTEMS 98

4.6.3. STRUCTURAL AND CONJUNCTURAL BARRIERS LIMITING THE SCOPE OF REGIONAL STRATEGIES 100

4.6.4. HOW CAN THE EU PROMOTE THE IMPLEMENTATION OF REGIONAL ADAPTATION STRATEGIES? 105

4.6.5. KEY FINDINGS 108

5. CONCLUSIONS 109

6. RECOMMENDATIONS FOR IMPROVING AND ENHANCING CURRENT POLICY INSTRUMENTS 110

BIBLIOGRAPHY 113

ANNEX I - SELECTION OF FADN INDICATORS FOR THE ANALYSIS 117

Table 1. Sources of data and SQ concerned 16

Table 2. Main external data sources used for the study 17

Table 3. Overview of the case studies 18

Table 4. Trends in the change of regulatory frameworks with expected increased requirements on farms 24

Table 5. Classification of structural challenges per sector, sorted by order of priority from the case studies analysis 35

Table 6. Overview of the sectoral plans developed to face challenges 42

Table 7. Adaptations for which analysis of FADN data was possible 64

Table 8. Cost and benefits of efficiency adaptation measures 65

Table 9. Evolution of FADN indicators for increased irrigation compared to the control group, 2013-2021 67

Table 10. Evolution of FADN indicators for changed irrigation compared to the control group in the horticulture sector, 2013-2021 68

Table 11. Costs and benefits of substitution adaptation measures 69

Table 12. Evolution of FADN indicators for increased autonomy compared to the control group, 2013-2021 70

Table 13. Evolution of FADN indicators for decreased autonomy compared to the control group, 2013-2021 71

Table 14. Evolution of FADN indicators for increased contractors compared to the control group, 2013-2021 72

Table 15. Evolution of FADN indicators for decreased PPP used compared to the control group, 2013-2021 73

Table 16. Cost and benefits of redesign adaptation measures 74

Table 17. Evolution of FADN indicators for conversion to organic farming compared to the control group, 2014-2021 74

Table 18. Impact of adaptations on costs, profitability and income, all Member States combined 76

Table 19. Typology of adaptations undertaken by other stakeholders in the value chains 77

Table 20. Percentage of EU agri-food enterprises that invested in the last three years (in light orange) and that plan to invest in the next... 79

Table 21. Number of CSPs planning different types of interventions to address the clusters of needs related to climate change adaptation 82

Table 22. Number of CSPs planning different types of interventions to address the clusters of needs related to the environmental transition... 85

Table 23. Number of CSPs planning different types of interventions to address the clusters of needs related to demographic change 88

Table 24. Other sources of funding, mentioned in case studies, that are mobilised outside the CAP to address adaptation/transition needs 93

Table 25. Description of the selected FADN indicators 117

Boxes 10

Box 1. Climate Resilient Agricultural Areas (AARC) 45

Box 2. Living labs 47

Box 3. Adaptations towards more animal welfare-Example from Denmark 50

Box 4. Adaptation to future water scarcity - Example from France 51

Box 5. Adaptations to climate change - Two examples from France 52

Box 6. Adaptation to heat biotic stress - Example from Greece 54

Box 7. Climate change, a threat to economic viability - Example from Greece 56

Box 8. Improving working conditions - example from Poland 57

Box 9. The choice not to adapt towards animal welfare - example from Denmark 57

Box 10. The influence of investment support on the implementation of the practice - Two examples from Spain 60

Box 11. Mismatch between the support offered and the nature of the needs or lack of restrictive criteria for accessing subsidies: insights from... 83

Box 12. Lack of long-term vision anticipating future threats to the sector: insights from the Spanish case study (CS_ES) 84

Box 13. Example of different interventions that help to comply with regulatory changes 86

Box 14. Example of incomplete measures reported by the Greek case study (CS_EL) 86

Box 15. Example from Latvia regarding the lack of comprehensive and strategic vision for the development of new crops to reduce the dependence... 87

Box 16. Specificity of CISYF intervention in Italy to promote investment and retention of young farmers (CS_IT_VEN) 89

Box 17. Insights from the Denmark case study on insufficient financial incentives (CS_DK) 91

Box 18. Insights from the Irish case study on the administrative complexity of accessing CAP support (CS_IE) 92

Box 19. Insights from the Romanian case study on the limited participation in collective action (CS_RO_SOU) 92

Box 20. Insights from the Romanian case study (CS_RO_SOU) emphasizing the lack of cooperation and information limiting the effectiveness... 92

Box 21. Insights from the Romanian case study emphasizing lack of proper education in the agricultural sector (CS_RO_SOU) 93

Box 22. Overview of French initiatives promoting agricultural practices with a high level of environmental ambition 95

Box 23. Insights from the Interreg Europe funding for the Regional Programme Dytiki Ellada in Greece 95

Box 24. Insights from France highlighting the absence of a comprehensive and ambitious strategy to address drought challenges at national level 95

Box 25. The Food Vision Beef and Sheep initiative in Ireland (CS_IE) 102

Box 26. Difficult integration of new technologies: examples from Latvia and Romania 104

Box 27. International regulatory inconsistencies generate frustration and confusion, hindering the willingness to adapt 104