Auditors Find Criteria for EU Farm Aid Abused

ANALYSIS - European regulations designed to pay assistance to farmers farming in difficult and less favoured areas are being abused by a number of EU states, writes Chris Harris.
calendar icon 27 November 2013
clock icon 5 minute read

A European Court of Auditors Report has found that the criteria to make support payments to farmers are being ignored or stretched to allow potentially illicit payments to farmers.

The report, published this week shows that there is insufficient evidence in the member states that the measures introduced under Article 68 of Regulation 73/2009 are “necessary or relevant”.

When the single payment scheme for farmers was introduced in 2003, EU countries were allowed to earmark 10 per cent of their national Common Agricultural Policy ceilings to pay out specific support as well as paying some production-linked support measures to farmers.

Article 68 increased the number of activities and objectives for which aid could be granted.

Among those criteria the article specifies:

  • Specific types of farming which are important for the protection or enhancement of the environment
  • Improving the quality of agricultural products
  • Improving the marketing of agricultural products
  • Practicing enhanced animal welfare standards
  • Specific agricultural activities entailing additional agri-environmental benefits.

The grant aid can also be given to address specific disadvantages affecting farmers in dairy, beef and veal, sheep and goat meat and rice sectors in economically vulnerable or environmentally sensitive areas.

The criteria could also extend to restructuring and development programmes, some insurance schemes and compensations for animal or plant diseases.

According to the European Commission, a total of 24 countries have made use of Article 68 to grant extra funds to farmers through a patchwork of 113 extremely varied measures.

The total budget for 2010-2013 is € 6.4 billion.

The European Court of Auditors review was conducted in four countries – Greece, Spain, Italy and France - representing approximately 70 per cent of the budgetary allocation for these measures.

These measures had been allocated €2.686 billion for 2010-2013, representing just over 40 per cent of the total budget for Article 68.

The European Commission said: “The audit found that the framework put in place to ensure that this support would only be provided in clearly defined cases is insufficient.

“The Commission has little control over the justification for such cases and Member States had a large degree of discretion in making these payments.”

The Commission added: “For the most part, the Commission can take no legally binding action, and the Member States’ only obligation is to notify the Commission of the decisions they take.

“As a result, the implementation of Article 68 was not always fully aligned with the CAP and there was insufficient evidence that the measures introduced under Article 68 are always necessary or relevant in terms of needs, effectiveness and levels of available aid.”

The auditors specifically focused on a selection of 13 measures: aid for durum wheat (Greece), aid for sheep/goats in less favoured areas (Greece), new single payment entitlements in less favoured or mountain areas (Greece), aid for crop rotation in unirrigated areas (Spain), aid for the dairy sector in less favoured areas (Spain), aid for sheep meat/goat meat (Spain), additional aid for protein crops (France), aid for maintaining organic farming (France), aid for sheep/goats (France), crop insurance (France), crop rotation (Italy), improving the quality of agricultural products in the bovine sector (Italy), and insurance (Italy).

The audit revealed that the implementation of the support measures under Article 68 are affected by various shortcomings, such as weaknesses in the administrative and control systems that had been set up to ensure that existing measures were correctly implemented.

The auditors said that this was equally true of the systems of management, administrative controls and on the spot checks.

The European Commission has now called for specific support for certain agricultural activities to be based on a strict understanding of the provisions of Article 68 and for the granting of support to be adequately justified to the Commission and checked by it.

The auditors also said that the European Commission should play a more active role in establishing the criteria governing the implementation of the measures.

They also recommend that Member States should be required to demonstrate that each specific support measure, which they in¬tend to introduce, is necessary - in terms of the need for and added value of an approach based on derogations – relevant - in terms of implementation arrangements, award criteria and aid levels - and that it satisfies the criteria of sound financial management.

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