13 RURAL DEVELOPMENT: COMMUNITY SUPPORT
FOR LESS FAVOURED AREAS
(24667)
Special
Report No. 4/2003
| European Court of Auditors' Special Report No. 4/2003 (pursuant to Article
248(4), second paragraph, EC) concerning rural development: support for
less-favoured areas together with the Commission's replies.
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| Legal base | —
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| Deposited in Parliament |
27 June 2003 |
| Department | Environment, Food and Rural Affairs
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| Basis of consideration |
EM of 5 July 2003 |
| Previous Committee Report |
None |
| To be discussed in Council
| No date set |
| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
13.1 Support for rural development constitutes the second
pillar of the Common Agricultural Policy (CAP), and, in 1999,
it underwent a significant reform in which the nine Regulations
governing it were grouped together in a single measure (Council
Regulation No. 1257/1999).[40]
This lays down the support framework and established 22 aid measures,
one of which concerns the support given to farmers in the less
favoured areas (LFAs).[41]
Such support, which dates back to 1975, is funded by the Guarantee
Section of the European Agricultural Guarantee and Guidance Fund
(EAGGF) by means of 89 rural development plans covering the period
2000-2006, which have been developed by the Member States and
approved by the Commission. The Court of Auditors has examined
these arrangements to establish whether the scheme is managed
by the Commission in a way that ensures legal and regular implementation,
whether it is appropriately monitored, whether relevant knowledge
is available on its impact, and whether timely action has been
taken to correct any deficiencies.
The current document
13.2 By way of background, the Court notes that 56% of
the agricultural area in use within the Community is classified
as "less favoured", and that it benefits some 3.9 million
holdings, at an annual cost of around €2
billion in 2001 (equivalent to €500
per holding). Around one half of this is borne by the EAGGF,
representing just under 19% of the overall budget authorised by
the Berlin European Council for rural development for the period
2000-2006. The Court also notes that the percentage of land classified
as less favoured rose from 36% in 1975 to its present level, due
in part to the successive enlargements during this period, involving
a number of countries with a much higher proportion of such areas.
It further notes that the proportion of land classified as less
favoured within some Member States has varied considerably over
time, and currently ranges from 1% in Denmark to more than 98%
in Luxembourg (and about 45% in the UK).
13.3 The Court's main findings are:
- that the Commission has insufficient
evidence that the classification of LFAs is valid;
- that Member States use a wide range of indicators
to determine whether or not an area is less favoured, particularly
where land is in danger of abandonment, which may lead to differences
in the treatment of beneficiaries;
- that the Commission does not have enough sound
information on the impact of the measure, particularly on whether
the level of compensation is justified, which may lead to over-compensation;
- that, although the notion of "good agricultural
practice" is now an important eligibility criterion, compliance
with it is difficult to verify without clear definitions and consistent
application, particularly as the checks carried out are not as
effective as they should be;
- that the monitoring of the scheme is poor, due
to lack of relevant data, with the information supplied by Member
States being late or incomplete;
- that, although the beneficiaries believe that
the aid has enabled them to continue farming in an area which
they might otherwise have had to leave, no definite conclusion
can be drawn in the absence of an overall evaluation.
The report concludes that various aspects of the
scheme should be reviewed so as to enable it to make a more effective,
efficient and economic contribution to rural development.
13.4 The report is accompanied by the Commission's
reply. In general, this welcomes the report, and says that it
will be taken into account in the development of the LFA measure
as part of rural development policy. In particular, the Commission
says that it will consider whether the present system of LFA classification
should be changed for the next rural development programming period
after 2006.
The Government's view
13.5 In his Explanatory Memorandum of 5
July 2003, the Minister of State (Rural Affairs and Local Environmental
Quality) at the Department for Environment, Food and Rural Affairs
(Mr Alun Michael) simply notes the report's main findings and
the Commission's reactions. He adds that, since the report does
not propose any specific actions, the Government does not intend
to launch any formal consultation on it, and that no timetable
has been proposed for its consideration by the Council.
Conclusion
13.6 Since help to the less favoured
areas is one aspect of the CAP by which the UK has set some store
since its introduction in 1975, we think it right in clearing
this document to draw the Court's observations to the attention
of the House.
40 OJ No. L.160, 26.6.99, p.80. Back
41
There are three categories of LFA - mountain areas, other areas
with poor productivity and in danger of abandonment, and areas
affected by specific handicaps in which farming needs to be continued. Back
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