Institutional Affairs

Commission wants more EU farm aid transparency

25.09.12 @ 17:50

  1. By Nikolaj Nielsen
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BRUSSELS - The European Commission adopted rules on Tuesday (25 September) to increase transparency on farmers who receive billions in EU subsidies every year.

  • The European Commission wants member states to publish the names of EU farm recipients (Photo: freefotouk)

"We not only have to reform the CAP [common agricultural policy] to make it easier to understand but we also need to make it absolutely transparent," EU agriculture commissioner Dacian Ciolos told reporters in Brussels.

The new rules require member states to publish the first and last names of beneficiaries as well as the reasons why they obtain the funds. The aim, says the commission, is to better protect the EU coffer from fraud.

CAP makes up a third of the EU budget, with farmers and agricultural-related programmes receiving some €55 billion each year. The money is supposed to help rural development and guarantee EU food security.

Member states were already required to publish some data online by April every year. But pro-transparency groups like farmsubsidy.org in the past found that many regularly fail to provide comprehensive details on how the money is spent, who receives it, and why.

The NGO in May ranked Luxembourg the least transparent, while others, such as Ireland, France, Italy and the Netherlands have created online databases which are extremely hard to navigate.

Stories of massive fraud abound, with individuals receiving subsidies for farms that do not exist.

Olaf, the EU's anti-fraud office, recovered €691 million in stolen funds from the EU budget in 2011, of which €524.7 million had been siphoned off from structural funds. Around €113.7 million was drawn from customs and another €34 million from EU agricultural subsidies.

Ciolos said the revised rules will compel national authorities to reveal both direct aid to farmers and funding for rural development programmes.

The new rules will not apply to small farmers or small land holdings in order to safeguard personal privacy, however. The exception follows a November 2010 judgement by the European Court of Justice (ECJ) on privacy for natural persons which prompted the commission to suspend the publication of recipients' names.

The commission says the new rules do not infringe the judgement because they are "centred on the need for public control over the use of European agricultural funds."

Bulgaria lets conmen off the hook

For his part, Peter Keller, from the German customs service, on Monday told the European Parliament's organised crime committee that he has been unable to fully bring to justice the perpetrators in a huge EU-fund-fraud case, despite overwhelming evidence.

Investigators in 2008 uncovered a number of German machine manufacturers working with Bulgarian buyers to steal EU funds, Keller said.

The cases involved the so-called "Sapard" programme - an EU initiative worth about €100 million a year which aims to help upgrade agricultural sectors in central and eastern member states.

The scam centred around Bulgarian food processing companies which bought German-made equipment and claimed back EU subsidies from Sapard officials - a decentralised administration which is only audited "ex-post" by the EU.

Sellers and buyers colluded to bump up the list price on machines and Sapard paid out EU cash based on the invoices.

The firms involved then redistributed the overpayments and the EU money via brokers and secret accounts.

Keller said the affair cost the EU €7.8 million, but its exposure prevented the loss of another €68 million.

He secured convictions for the German companies involved, but Bulgarian prosecutors have suspended investigations. "These are people who have been proven to have defrauded others ... It is completely incomprehensible why Bulgaria has not produced any accusation of a legal nature," he said.