How EU subsidies are wasted on environmentally harmful activities
 
Although the Common Agricultural Policy has decoupled agricultural payments from production in 2003, EU member states may still choose to maintain a limited link between subsidy and production, where Denmark chooses to do so for sheep and beef cattle. Two-thirds of Danish agriculture is managed by farms with a high intensive use of fertilizers, manure and pesticides, and high production of pigs and cows. Pollution from farming is a challenge to the water supply. According to the Danish Ministry of the Environment, several aquifers in Denmark suffer from groundwater pollution, especially from nitrate and pesticides, and over recent decades many waterworks have been closed, forced to drill deeper or forced to buy their water from neighbouring water supplies.

Denmark, like 65% of Europe, relies on groundwater as a source of drinking water. In 2010, EUR 956.1 million from the EU budget was spent as income support to Danish farmers and a further EUR 1,006.5 million was spent on agriculture markets (i.e. interventions on productions), while only EUR 61.5 million was spent on Rural Development schemes. Income support for farmers is a single payment on the basis of cultivated area with no link to the delivery of public goods, such as clean water and air and biodiversity. EU agricultural subsidies have been mainly targeting intensive farming in Denmark and very little actually go towards targeted schemes, such as agri-environment.