23rd Oct 2016

Bogus UK farmland received EU farm aid

  • Every EU citizen pays €105 per year to the CAP, of which €80 go into direct payments (Photo: caese)

The European Commission on Tuesday (26 February) fined the United Kingdom €111.7 million for failing to detect bogus farmland.

A number of farmers received direct payments from the EU's Common Agricultural Policy (CAP) on land that was not arable.

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Some of the so-called arable "parcels" were instead covered with trees, while buildings carpeted other areas.

The bogus information was handed over to the UK authorities between 2008 and 2010. The authorities are required to cross-check the data but an EU audit found the UK had failed to verify if the CAP funds were properly appropriated.

Unlike other areas of EU spending, member states administer and have complete control over CAP’s direct payment system.

Direct payments account for around €40 billion of the EU’s annual budget and are sourced from the European Agricultural Guarantee Fund (EAGF).

“There are clear rules on how this should be managed and the UK authority didn’t live up to what was required,” Roger Waite, spokesperson for EU agriculture commissioner Dacian Ciolos, told this website.

The EAGF is managed by the commission but it is up to the national or regional paying agencies to hand out the money, verify admissibility of claims and ensure compliance with EU rules.

In the UK, agencies in January 2012 gave farmers up to €200 per hectare in EU direct aid.

Member states pay the farmers up front and then the following month claim the money back from Brussels. Brussels then reimburses the amount a month later.

The commission’s €100 million penalty will be deducted from the UK’s upcoming reimbursement bill.

“If we need to spread it over several months, we do,” said Waite.

Waite said the lax controls by national authorities became more common when in 2005 the direct payment system was changed, following the 2003 reforms.

Funds will also be recovered from 21 other member states for a total of €414 million of CAP expenditure.

The UK tops the list with Italy coming in at a distant second with a €48.2 million fine and Spain at €40.6 million.

The fines are based on a flat-rate penalty of around 1 or 2 percent depending on the seriousness of the charge. Higher penalty rates are given for repeat offenders.

The lack of transparency over payouts is also an issue.

The pro-transparency group found that fewer than one in ten beneficiaries of EU farm subsidies were disclosed in 2012.

Member states are supposed to publish the beneficiaries of CAP on websites but seldom do in practice.

Instead, some publish incorrect data while others like Ireland, France, Italy and the Netherlands have “systems specifically designed to thwart access to the data.”

The group says transparency was delivered a blow when the Court of Justice ruled in 2012 against full disclosure due to privacy issues.

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