15 Coupled national support schemes
under the CAP
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| European Court of Auditors Special Report No. 10 concerning the Common Agricultural Policy: is the specific support provided under Article 68 of Council Regulation (EC) No. 73/2009 well designed and implemented?
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| Legal base | —
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| Deposited in Parliament | 2 December 2013
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | EM of 10 December 2013
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| Previous Committee Report | None
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| Discussion in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
15.1 The reform of the Common Agricultural Policy (CAP) in
2003 began the process of 'decoupling' (i.e. breaking the link
between the €40 billion or so of direct payments paid to
EU farmers each year and agricultural production). Specifically,
a number of schemes under which farmers were paid per head of
livestock or area of crops were abolished, and replaced by the
Single Payment Scheme, based on land area.
15.2 However, an exemption enabled a limited
degree of funding from Member States' direct payment budgets for
nationally designed schemes involving coupled support, and, following
the CAP 'Health Check' in 2008/09, this provision was revised
and extended by virtue of Article 68 of Council Regulation (EC)
No. 73/2009. This enables such support to be granted (a) for specific
types of farming which are important for the protection of the
environment, improving the quality of agricultural products, improving
their marketing, enhancing animal welfare, activities entailing
additional agri-environment benefits; (b) for addressing specific
disadvantages affecting livestock farmers in economically vulnerable
or environmentally sensitive areas; (c) in areas subject to restructuring
and/or development programmes to ensure against land abandonment
and/or to address specific disadvantages; (d) for contributions
to premiums for insurance against losses caused by adverse weather
or diseases; or (e) for contributions to mutual funds addressing
losses caused by animal or plant disease or environmental incidents.
The current document
15.3 The total budget for 2010-13 is €6.4
billion, and this Special Report by the European Court of Auditors
(ECA) examines whether the support was well designed and implemented.
It notes that, in that period, 24 Member States had introduced
measures under Article 68, roughly two-thirds of which represented
coupled support (with the remaining expenditure covering measures
involving agri-environment, abandoned farmland and insurance).
It selected 13 measures in France, Italy, Spain and Greece, which
between them accounted for expenditure of €2.7 billion, with
each measure being considered in terms of scheme design, including
underlying justification; analysis of management and control systems;
and inspections to check compliance.
15.4 The Court notes that, although Article 68
enables Member States to maintain coupled support only in clearly
defined cases, they had a large degree of discretion in practice,
and it concludes that, as a result, the measures have not always
been aligned with the principle of decoupling and simplification,
tending in many cases simply to continue the previous coupled
aid. It also comments that the Commission had few powers to monitor
or control the schemes adopted; that Member States had supplied
little evidence that the measures introduced were necessary or
relevant; that the effectiveness of scheme design and levels
of aid were questionable; and that there were weaknesses in the
administrative controls.
15.5 The Court also notes that, under the further
CAP reform agreement earlier this year, many of the existing Article
68 measures will continue to be permitted under the new voluntary
coupled support provisions, and that consequently they could well
be maintained. It makes three basic recommendations:
- that the granting of coupled
support should be justified to the Commission and checked by it;
- that a system of monitoring should be introduced,
with indicators established at the outset to provide for subsequent
evaluation; and
- that Member States need to establish suitable
and comprehensive management and control systems.
15.6 The Commission's response is included in
the report, and in essence says that it has fulfilled its responsibilities
under the Article 68 provisions, and that any weaknesses are down
to Member State decisions and actions.
The Government's view
15.7 In his Explanatory Memorandum of 10 December
2013, the Parliamentary Under-Secretary for Farming, Food and
the Marine Environment (George Eustice) points out that, by their
very nature, coupled payments distort the market as they encourage
a level of supply which outstrips demand, and so depress prices
for all EU producers. In addition, they require additional layers
of bureaucracy, whilst the resulting overproduction can also lead
to negative environmental and development impacts. He says that
it has, therefore, been the policy of successive UK Governments
to oppose the use of coupled payments, and that none of the Article
68 options have been taken up in England, Northern Ireland or
Wales (though Scotland has since 2005 operated a limited coupled
support scheme for the beef sector, which currently operates under
the Article 68 provisions).
15.8 The Minister adds that the UK argued during
the negotiations on the current Article 68 measures that the provisions
did not provide for adequate control or monitoring, and that consequently,
the Court's findings do not come as a surprise. However, he finds
it disappointing that the report was not available in time to
influence the recent CAP reform negotiations, particularly those
on the voluntary coupled support arrangements which will replace
Article 68 measures under the new CAP in 2015. He says it is also
disappointing that the Commission has neither accepted any responsibility
for inadequacies in the existing detailed rules, nor undertaken
to try and address these in the delegated and implementing acts
needed to implement the CAP reform agreement on voluntary coupled
support. The UK will therefore continue to press the Commission
on this issue in order to help avoid perpetuating the weaknesses
identified by the Court.
Conclusion
15.9 Although (with the exception of the Scottish
Beef scheme) the UK has chosen not to make use of the provisions
of Article 68 of Council Regulation (EC) No. 73/2009, the extent
to which a measure of coupled support should be maintained under
the Common Agricultural Policy has been a bone of some contention.
We are therefore drawing to the attention of the House this report
by the European Court of Auditors, which makes a number of pertinent
observations on the way in which the Article has been operated
to date by other Member States, and the extent to which this situation
will continue after the latest round of reforms come into effect.
We also endorse the Government's comment that it would have been
preferable had the Court's findings been made available in time
to influence the relevant CAP reform negotiations in Brussels.
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