The Performance‐based Farm Payment – a Proposal for a Paradigm Shift in the <scp>CAP</scp>

Summary This paper proposes an agricultural policy model that underpins the CAP with a credible performance paradigm and at the same time reduces its complexity. The ‘Performance‐based Farm Payment’ links farm payments to a farm’s achievement of the goals of the European Green Deal. The central element of the model is a matrix converting a given set of voluntary environmental measures into contributions to each of the Green Deal goals. Payments are made only when a farmer meets at least one of the Green Deal goals (threshold principle). The Performance‐based Farm Payment is designed to replace all area‐related payments of the current CAP. The practical application of the model is illustrated using a sample calculation. Besides being less complex, the Performance‐based Farm Payment enables farmers to integrate the environmental sector into their operations, thus creating an additional source of income. It can also serve as an environmental benchmarking tool for farms called for in the strategic dialogue at EU level.