EU Auditors: Commission has not Properly Supervised the “Decoupling Process” for EU Farm Support

10 Jul 2014 --- A report published by the European Court of Auditors (ECA) reveals that the Commission did not adequately supervise Member States for the calculation of payment entitlements to EU farm support under the Single Payment Scheme in the period 2010-2012. The distribution of the available support by the Member States was not always consistent with EU principles and policy objectives and the payment entitlements were sometimes incorrectly calculated."

“The Single Payment Scheme (SPS), introduced in 2005, replaced most of the former direct payments linked with agricultural production. The review of the 2003 CAP reform in 2008, known as the ‘health check’, extended the SPS to agricultural sectors where the scheme so far had not or only partly been introduced. Member States had a considerable margin of discretion in allocating and calculating the payment entitlements; however, the Commission retains the final responsibility for the payments of EU support for farmers. The Court found that the Commission did not adopt clear implementing rules and has not adequately supervised Member States when they distributed among their farmers the available support of around € 4.2 billion during the 2010-2012 period. As a consequence, the criteria which Member States defined did sometimes not respect EU principles, notably those of equal treatment of farmers, proportionality and sound financial management, and payment entitlements of farmers were sometimes incorrectly calculated.” stated Mr Augustyn Kubik, the ECA Member responsible for the report, “This may also have an important impact on the new payment schemes for farmers as from 2015.”

The decoupling of direct support for farmers from production and the introduction of the SPS were essential elements in the process of reforming the CAP in 2003. The main objective of the SPS was to shift policy orientation from market support to decoupled income support to farmers, thus enhancing farmers’ market orientation and achieving a greater decentralisation. The SPS has so far been introduced in 18 Member States and accounts for 54 % of the entire EU budget for agriculture and rural development. Support under the SPS is independent (“decoupled”) from actual agricultural production but farmers must have payment entitlements and eligible land in order to receive SPS aid. The SPS remains in force until the end of 2014. As from 2015, it will be replaced by a new basic payment scheme which will also be based on payment entitlements. Under certain conditions Member States may transfer the current value of payment entitlements into the new system. Thus the calculation of SPS payment entitlements may have an effect on future payments to farmers until 2021.