Fresh questions over CAP payment plan

THE European Court of Auditors did not spare their criticism this week in their review of the main farm support system operating in Europe, describing the single payment system (SPS) as having several "questionable features".

The scheme is the major mechanism for providing EU farmers with financial support, operating in 17 of the 27 EU member states, and the expenditure going through this channel amounts to approximately €29 billion annually.

But if the Commission takes on board the auditors' concerns there will be a number of changes when they reform the Common Agricultural Policy (CAP). Some of the auditors' suggestions are already under consideration.

Auditors following the money trail raised concerns over the fact that people not engaged in agricultural activity, or only marginally so, could benefit from SPS payment.

The court found cases where "the system encouraged investments by operators who have little interest in farming as an activity but who exploit the guaranteed returns that it provides".

In future, the auditors suggest eligible land and agricultural activity should be clearly defined in order to exclude activities that do not increase agricultural productivity as well as parcels not devoted to agriculture

This issue of active farmers has already been picked up in the CAP reform discussions in the European Parliament and in the Pack report which forms the current Scottish Government stance on reform.

When the SPS was introduced, it was left to member states which system they would use. As a consequence there are currently some 20 different variants of the scheme applied across the EU.

England moved to an area-based system of support while Scotland based payments on an historic basis. The auditors' comment this week on the historic model, based on what farmers received in the years 2000-2, is that these "payments have become divorced from current farming conditions".

In a finding which will resonate with Scottish farmers facing penalties from their single payment, the auditors found that, while the support contributed to supporting farmers' income and to maintaining agricultural land in good agricultural and environmental condition, it listed concerns that the specification of land eligible for aid was too loosely defined.

"As a consequence, farmers may receive payments without having to carry out any maintenance activity and there is no direct link between the level of the SPS aid and the costs incurred in maintaining land in good agricultural and environmental condition," they said.

In future, the auditors suggest eligible land and agricultural activity should be clearly defined in order to exclude activities that do not increase agricultural productivity.