January 28, 2013
Cutting down the range of non-agricultural entities which are currently able to claim EU farm income subsidies is one of the important positive changes in the operation of the European Union’s agriculture policy now being recommended by the European Parliament’s agriculture committee ( Com-Agri). The committee voted in favour of this and more than 30 other recommendations at the end of last week. If accepted by Parliament and Council, this proposal alone could save the EU taxpayer hundreds of millions of euros.
There is a downside to the recommendation however: that the definition on non-eligible applicants should be left to national governments. This could make the measure much less effective. A recent Court of Auditors report on the application of the SAPs farm income scheme in the NMS12 showed a massive disparity between the area of land entitled to subsidies and the very much larger areas approved by member governments. In Poland the overpayment in 2010 covered no less than 4.2 million hectares – 18.245 million hectares against 14.137 million ha approved by the Commission. There was similar proportionate over-payment on non-designated areas in Hungary, Romania and Bulgaria.
Com-Agri is right to stress that “entities such as transport companies, airports, real estate companies, companies managing sport grounds, campsite operators and mining companies or other non-agricultural enterprises… shall not, a priori, be regarded as active farmers nor shall they be the beneficiaries of any direct payments. Unfortunately the get-out clause that entities on the ‘negative’ list’ could only be allowed to draw EU payments if they can prove to governments that farming forms a “significant part” of their overall business, could allow much of the abuse to continue. The member state record on this issue is not good.
The Court of Auditors pointed out that much of the money paid out under the SAPS scheme has been wasted not only by blatant fraud, but by “inappropriate official allocation”. It recorded that millions of euros in ‘farm income payments’ were paid out to such non-agricultural entities as hunting grounds, airfields, military training grounds, ski runs, fishing grounds and public parks.
The most outrageous rip-off the EU farm budget was detected in Romania. The Court found that in 2010 more than 1,000 Romanian municipalities and local authorities had received €23.5 million in SAPS aid paid on some 340,000 hectares of public land without trace of any farming activity. This land has no agricultural function. At the same time, many genuine farmers in Romania are still excluded from SAPS payments. In Bulgaria and Hungary the Court found similar cases. The Court found that in Poland, in 2010, 1,345 hunting associations had legally received SAPS aid worth €2.54 million in relation to 19,000 ha of so-called ‘agricultural’ land. Similarly, in Hungary, 337 hunting associations received more than €1 million in SAPS aid on 7,000 hectares. <28/01/2013>