This article undertakes a legal analysis of the capping mechanism – the proposed mandatory upper limit on area-based income support for farmers – as a new element of the proposed DABIS (degressive area-based income support) instrument within the framework of the reform of the Common Agricultural Policy for the period 2028–2034.

The aim of the article is to assess the compliance of the proposed mechanism with the principles of European Union (EU) law, in particular the principle of proportionality (Article 5(4) TFEU) and the prohibition of discrimination (Article 40(2) TFEU). The article analyses the case law of the Court of Justice of the European Union concerning the artificial conditions clause. The results of the analysis indicate that in principle, capping is consistent with the Treaty objective of ensuring a fair standard of living for the agricultural community; however, its effectiveness depends on the quality of secondary legislation preventing the artificial division of entities. Furthermore, it is pointed out that capping largely favours small and medium-sized farms which are eligible for aid from EU funds.