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The challenges facing Luxembourg agriculture

After a boom in the concentration of farms and an increase in productivity in the 20th century, the agricultural sector is currently facing a host of new challenges that are as important as they are urgent.

Agricultural methods and practices must adapt to environmental requirements and climate change in order to guarantee sustainable production in line with the many strategies and management plans drawn up to protect natural resources, biodiversity and the climate.

In tense and volatile economic markets, producers must remain alert to international and European competition, as well as to changes in consumer expectations and habits. Being a small country, Luxembourg is as much affected by globalisation as its neighbouring countries.

Economic and climatic crises regularly disrupt markets and require producers to take appropriate action.

Innovation and knowledge transfer are tools that are growing rapidly and that farmers can use to respond to these changes. The agricultural profession is undergoing a remarkable evolution in order to meet all these challenges.

The Ministry's missions and remit

The Ministry of Agriculture, Food and Viticulture is competent in the following matters:

  • Agricultural and viticultural policy;
  • Food policy;
  • Rural development policy (LEADER, village development);
  • consumer protection.

The Ministry of Agriculture, Food and Viticulture continually strives to improve its response to societal expectations and to consolidate agriculture as an integral part of our economy. Agriculture and food policy aims to ensure the viability of agricultural production and includes the entire food chain, all the way through to the consumer.

The national agricultural policy reflects the Common Agricultural Policy and the United Nations' sustainable development objectives, and takes account of the various national and European strategies for climate, the environment, water and biodiversity. It promotes modern, multifunctional and above all sustainable agriculture, and is characterised by the complementary nature of competitiveness and the protection of natural resources and animal welfare.

The common agricultural policy

The Common Agricultural Policy (CAP) was reformed in 2022, placing greater emphasis on policy performance and generating impact on the ground. Public spending on European policy is more targeted than ever and geared towards concrete achievements.

The objectives have become more ambitious, and the overall focus has been extended to aim for a responsible and sustainable agriculture that is ready to tackle the many challenges it faces. Above all, environmental ambitions have been strengthened. The European strategy from farm to fork adds further concrete targets for the period beyond 2030.

The common agricultural policy is transposed at national level by a National Strategic Plan (NSP) which aims to ensure sustainable development in the agricultural sector, by implementing the economic, environmental and social objectives of the CAP. One of the main priorities is to guarantee fairer incomes for agricultural producers and to strengthen the competitiveness of agricultural and agri-food businesses. Emphasis is also placed on the renewal of generations on farms, in particular by supporting the installation of young farmers. Finally, the Luxembourg plan aims to develop organic farming, reduce the use of pesticides, greenhouse gas (GHG) and ammonia emissions, and promote carbon sequestration.

It is worth pointing out that agricultural policy places particular emphasis on rural development and the LEADER initiative, complemented at national level by a village development strategy.

Fairer and greener direct payments

The NSP provides direct support to farmers in order to guarantee a viable income and strengthen the resilience and competitiveness of the sector as a whole, while ensuring sustainable development. Luxembourg has also established a flat-rate payment for young farmers. Through coupled aid, Luxembourg has decided to set aside specific support for the beef sector and the fruit and vegetable sector.

One of the major new features of the CAP is the introduction of ecological schemes under the first pillar, designed to reward practices that protect the climate and the environment.

All of the various aid schemes are subject to compliance with a set of minimum standards and basic environmental conditions, reinforced and supplemented since the current period by social conditionality and accompanied by a catalogue of penalties in the event of non-compliance. The payment of aid is therefore linked to observance of a whole range of minimum conditions, thus ensuring sustainable production under good social conditions.

Promoting the key priorities of Luxembourg's rural development

The actions under the second pillar of rural development address the challenges facing Luxembourg in terms of competitiveness and modernisation of the agricultural sector, climate change, reduction of greenhouse gases, protection of the environment, biodiversity, and animal welfare. The multiannual framework of these interventions is in line with the annual approach of the ecological support schemes.

There is a wide range of measures that complement those of the first pillar. The targets set for the agricultural sector in terms of reducing emissions (greenhouse gases and ammonia) have led the Ministry to propose specific incentives aimed at voluntarily reducing the cattle herd and reducing inputs in order to achieve the reduction goals.

As the challenges are numerous and ambitious, the Ministry is supporting a number of knowledge transfer tools aimed at farmers, with agricultural advice at the forefront, to implement new farming practices that take account of environmental objectives while aiming for productivity. Innovation will also be promoted in order to develop new techniques and production methods.