Agricultural subsidies are distributed in accordance with the Common Agricultural Policy (CAP) which is characterised in the press as having a seemingly high cost.

During the early years of the EU’s existence the CAP did represent a significant proportion of budget expenditure, over two-thirds on occasions. Now the CAP costs about EUR 55 billion per year. This represents 40 % of the total EU budget, less than 0.5 % of GDP in the EU. Not only is the share of the CAP in EU GDP declining, but this share is also declining much faster than EU public expenditure.

The CAP’s cost should also be seen in context. Unlike for other sectors, such as education, defence, transport, health care or social security, whose cost is borne by national governments, the Member States have agreed that decisions about the EU's agricultural policy be taken at community level, and that an appropriate budget be put in place to do this.

The annual £3.0 billion cost of agricultural subsidies in the UK can also compared to Government expenditure where it represents just 0.5% of the total:

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