Auditors deal setback to EU agricultural reform

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The European Court of Auditors today (17 April) dealt a blow to the European Commission’s overhaul of agricultural policies, saying in an opinion that the proposals are “too complex” and expose the EU to possible abuse in its direct payments scheme.

The Luxembourg-based audit body is to be present its opinion on the Common Agricultural Policy (CAP) to the European Parliament’s budget committee on 24 April.

The opinion, although not legally binding, is almost certain to shape the debate raging over the EU executive’s CAP proposals that were unveiled in November.

Agriculture Commissioner Dacian Ciolo? has called the proposals “both simple and efficient” and in line with the EU’s focus on environmental sustainability.

But the auditors say the proposals for 2014-2020 fall short of simplifying CAP rules for member states and farmers, saying the “legislative framework of this policy remains too complex.”

“In spite of the claim that it focuses on results, the policy remains fundamentally focused on spending and controlling expenditure and therefore oriented more towards compliance than performance,” the auditors said in a statement.

The opinion also says the “greening” obligations proposed under the direct payments scheme to farmers “are not adequately laid down”.

The Auditors' opinion is almost certain to influence the debate on the EU’s most expensive programme. “It’s essentially a way we add value to the discussion,” said Aidas Palubinskas, a press officer for the court.

A spokesperson said the Commission had no immediate response. "The Court's opinion has been published only today," the Commission told EURACTIV in an e-mail response. "We will now carefully analyse it, in particular any suggestions aimed at further simplifying the Common Agricultural Policy."

Fuel for the CAP debate

The 63-page opinion appears to offer ammunition to all sides that have questioned aspects of the CAP proposals, including concerns that greening measures – such as removing some land from active cultivation – would impose new administrative burdens on farmers.

The document is also likely to sharpen the debate over whether there is too much or too little oversight.

A recent University of Nottingham study criticised farm support programmes in Europe and the United States for not providing enough administrative oversight, while the organisation representing European farmers and farm cooperatives – Copa-Cogeca – says the Commission’s greening proposals would introduce new layers of burdensome reporting.

Pekka Pesonen, secretary-general of Copa-Cogeca, recently told EURACTIV that new greening requirement would entail “high-level administrative burden, meaning the farmers will have reporting responsibilities, and most probably the cost of production will go up.”

The auditors’ opinion also says that the CAP proposals:

  • Fail to outline ways that members states can offset the expected 15% increase in management costs under the CAP reforms;
  • Fall short of easing the complexity of measures on how rural development funds are spent, noting there are six layers of rules;
  • Questions whether the Commission draft goes far enough in defining 'active farmers’, saying “the risk persists that, in the future, payments will continue to be made even when beneficiaries do not exercise any activity on their land.”

The opinion also says the Commission appears to undermine its own effort to encourage young people to become farmers. A proposed entitlement programme that is to being in 2014 by requires that recipient had already received CAP payments as early as 2011, the opinion says.

Launched in 1962, the Common Agricultural Policy (CAP) is a system of EU agricultural subsidies and programmes that marks the biggest single budget outlay for the EU.

The parliament's current discussions on the future CAP are a precursor to jockeying over the farm-support programme. If approved as proposed, the 7-year, €435.6-billion programme would account for nearly 40% of EU's spending. Of that, €317.2 billion would fund direct payments to farmers under Pillar 1 of the CAP.

The Commission’s proposals to expand green space one hotly contested issue, with farm organisations and their advocates in Parliament claiming this would create more bureaucracy. Others contend that reducing cultivatable land at a time of high food prices and rising global demand does not make sense.

About 70% of CAP spending goes to direct payments for farmers, 20% of the budget is spent on rural development measures, and the remainder is handed out as export subsidies to food companies. France, Germany, Spain, Italy and Britain are the biggest beneficiaries.

  • 24 April: M. Michel Cretin, member of the European Court of Auditors, is expected to present the court's opinion to the European Parliament's budget committee.

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