The most recent reforms of EU agriculture policy have largely cut the link between farm support and production. This has also led to a wider range of agri-environment and rural development policy tools available across the EU.
The CAP therefore can no longer be regarded as the major driver of agricultural intensification. Nevertheless a significant future challenge is to secure enough funding of rural development and agri-environment policy measures at Member State level. Support from the CAP also needs to be better targeted at environmentally sensitive farming systems, such as high nature value farmland. This is a particular concern for areas in the new and Mediterranean Member States ( EEA, 2007).
EU farms are likely to continue specialising and growing in a bid to maintain income levels. Regardless of current and future reforms of the CAP, this growth will challenge Member States to achieve the objectives of EU environmental legislation for water and nature protection, and in particular the sustainable use of pesticides. The growing worldwide demand for food and energy production, will likely lead to further environmental pressures from farming.
Negative agricultural impacts are well documented, however, it is important to recognise that agriculture also provides environmental benefits by maintaining landscapes and habitats. The policy challenge therefore is to minimize the impacts and to support the benefits from farming.
Climate change will have a significant effect on agricultural production throughout the world and farmers will need to respond to this challenge by adjusting production patterns. Agriculture, however, can contribute to counteracting climate change via the production of bio-energy. Here it is important to favour the most environmentally beneficial practices, such as using short rotation coppice for heating purposes or biogas production from a diverse crop rotation. Currently the most dominant biofuel in Europe is oilseed rape, which is used for biodiesel production and is a very intensive crop. Therefore, bioenergy policies need to take agri-environmental concerns into account.