Systemic misuse of EU agri grants in Central-Eastern Europe, report finds

Agricultural subsidies continue to be misused across countries in Central and Eastern Europe, despite numerous attempts by the European Commission to remediate the issue, according to a new report commissioned by the Greens/EFA political group.

The report, released on Thursday (25 February), investigates the use of EU agricultural funds in five Central and Eastern European (CEE) member states: Bulgaria, the Czech Republic, Hungary, Slovakia and Romania.

It offers insights from each country and concludes that the implementation of these funds is a “highly problematic” issue across all countries.

The report comes on the back of several high-profile investigations into the misuse of EU agricultural subsidies in CEE countries over the past few years, which have pointed to issues ranging from conflicts of interest and nepotism to corruption and fraud.

It also falls on the three-year anniversary of the murder of the Slovak investigative journalist Ján Kuciak and his fiancée Martina Kušnírová in late February 2018, who died amid an investigation into the fraudulent use of agricultural subsidies.

The report points out that, as well as hindering the EU’s efforts to achieve its goals on a number of important issues, such as protecting biodiversity and fighting climate change, this misuse of funding also undermines confidence in the EU and the EU’s fight for the rule of law.

NYT reporting shines a spotlight on CAP delivery model

An investigative report published in the Sunday edition of the New York Times (3 November) highlighted once again the distorting effects of farm aid provided under the EU Common Agricultural Policy (CAP), which are however intrinsic to its delivery model.

The Commission declined to comment on the report at this time. The EURACTIV network also tried to contact the agricultural ministries of the five countries involved but received only one response from the Czech Republic.

“We consider the subsidy system in the Czech Republic to be transparent. We will not give any more comments on the study,” a representative from the Czech agricultural ministry said.

Back in 2019, in the aftermath of a New York Times investigation into the EU farmings subsidies programme, the Commission passed the buck to member states, saying that when it comes to land ownership, it is “first and foremost for relevant authorities from member states to act and to put the necessary system in place to prevent and avoid frauds”.

At the time, the Commission proposed the creation of a “European public prosecutor” who they said would be “up and running very shortly. Last September, the College of the European Public Prosecutor’s Office (EPPO) was sworn before the Court of Justice of the European Union in Luxembourg.

The EPPO is the first independent European prosecution service, in charge of investigating, prosecuting and bringing to justice offences affecting the EU’s financial interests.

The European Parliament has proposed a definition for active or genuine farmers in charge of accessing funding, but this debate is still ongoing.

“We have spent years debating the definition of a genuine farmer and still many armchair farmers slip through the cracks,” Irish MEP Chris MacManus told EURACTIV in a recent interview.

“Anyone who read the 2019 New York Times article, which exposed how politicians such as Victor Orban cheat the system to siphon millions of euros of CAP funds to associates, can tell you corruption is causing huge reputational damage to the CAP,” he warned.

EU's family farming model at risk of dying out, warns MEP

Family farming as we know it is under threat and this may be the last generation of EU family farmers, according to Sinn Féin MEP Chris MacManus, who raised concerns over land concentration and called for a larger safety net for small farms. 

Political ties needed to get ahead

The report found that there are “systemic advantages” for big farms whose managers generally have “close ties to the ruling parties” in their countries.

“The reports clearly show that there can be found strong links between politics and the biggest beneficiaries of the subsidies in all five member states,” the report reads, adding that it seems that without close linkages to politics in some cases equal access to land is “almost impossible”.

It also highlights that EU agricultural funds have become an “attractive business opportunity for different type fraudsters with little interest in farming itself.”

Most recently, a European Commission auditing review confirmed that Czech Prime Minister Andrej Babiš breached domestic and EU conflict of interest legislation after it found that he continues to control the agricultural company Agrofert.

Larger farms privileged

The report also concluded that there is a “clear inequality” between the funding allocations for the big and small farmers, concluding that many countries do not use fully the existing instruments provided by the Common Agricultural Policy (CAP) to support small-scale farmers.

Evidence from the report also indicates that there are cases where larger farms are being treated in a preferential manner with regard to the implementation of subsidies.

As reported by EURACTIV Slovakia, the country has recently announced plans to introduce a redistributive payment to shift a portion of EU farm subsidies from large farms to small ones. However, the move received backlash from the Slovak Agriculture and Food Chamber (SPPK) – the country’s largest agricultural association – and sparked protests in the country.

Commenting on the report, Green MEP Viola von Cramon, member of the budgetary control committee, said the evidence shows that EU agricultural funds are “fuelling fraud, corruption and the rise of rich businessmen”.

“Despite numerous investigations, scandals and protests, the Commission seems to be turning a blind eye to the rampant misuse of EU funds”.

“The CAP is not working, it’s providing the wrong incentives for how land is used, which damages the environment and harms local communities,” she stressed.

[Edited by Gerardo Fortuna/Zoran Radosavljevic]

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