first special report on the Single Payment Scheme of the common agricultural policy

Currently applied in 17 of the 27 EU Member States, the Single Payment Scheme (SPS) is the major mechanism for providing EU farmers with financial support. It helps farmers to better respond to market demand and to promote agricultural practices protective for the environment. The European Court of Auditors publishes today its first report on this mechanism

The report focuses on the beneficiaries of the policy, the conditions of access to the scheme and the definition of eligible land. It also examined to what extent the scheme contributes to the objectives of supporting farmers’ income and to maintaining agricultural land in good agricultural and environmental condition (GAEC).

The ECA found that the SPS has contributed to the achievement of two of the main objectives of the CAP mentioned above. However, the overall conclusion of the audit is that the implementation of the scheme resulted in a number of questionable features:

* the definition of the beneficiaries of the scheme was formulated, and subsequently applied, in a way that permits persons or entities not engaged in agricultural activity, or only marginally so, to 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 SPS provides ;

* in some member states the installation of new farmers is often hampered by present conditions of access to payments entitlements (which may entail substantial investments)

* the specifications of land eligible for EU aid as well as of eligible agricultural activity are 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;

* Currently some twenty different variants of the SPS are applied across the EU. Under the main variant (the historical model), aid is calculated on the basis of what farmers received in the years 2000-2002. Over time, payments have become divorced from current farming conditions in the different regions.

* The SPS primarily benefits few but large beneficiaries.

Based on its findings and conclusions, the ECA has made a number of recommendations for the Commission to consider, including: directing aid to “active” farmers, defining eligible land and agricultural activity more clearly in order to exclude activities that do not increase agricultural productivity as well as parcels not devoted to agriculture. It further recommends to take into consideration the cost of activities that positively contribute to the preservation or improvement of the environment. Finally, the Court also recommends that the value of the entitlements be based on current farming conditions in the various regions of the EU and that a more balanced distribution of SPS aid between farmers be sought.

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