The European Court of Auditors (ECA) has identified inherent and fundamental limitations in the basic payment scheme for farmers, part of the EU’s common agricultural policy.
The basic payment scheme for farmers was introduced in 2015 to supplement incomes and support the growth of viable food production in the EU. Currently, the scheme has an annual expenditure of some €18bn and benefits around four million farmers across Europe.
However, while the ECA acknowledges in its report that the scheme has so far been operationally effective, it argues that the basic payment system has had a limited impact on simplification, which was the main purpose of a 2013 reform of the common agricultural policy.
What are the problems with the scheme?
The ECA report argues that one challenge with the scheme is that it focuses on areas and categories of land rather than being allocated based on income, and therefore tends to offer more payouts to larger farms.
Further, some farmers are able to apply for high levels of financial support which they may not need, which can be approved based on past levels of subsidies for which they have qualified. Additionally, the report suggests that a lack of synchronised definitions of terms used in the reform of the common agricultural policy – such as ‘agricultural land’ or ‘agricultural activity’ – means that member states have different approaches. This, it says, can lead to complications in implementation.
What did the ECA say about the report?
João Figueiredo, the member of the European Court of Auditors responsible for the report, warned that while the basic payment scheme for farmers is fundamentally vital to food production in Europe, there are a number of areas which it still fails to address.
He explained: “The basic payment scheme is an important source of income for many farmers, but it has inherent limitations. It does not take account of market conditions, use of agricultural land or the individual circumstances of the holding, and is not based on an analysis of the overall income situation of farmers.”
The current basic payment scheme for farmers will last until 2020. The European Court of Auditors have made a number of recommendations to address the organisation’s concerns with the scheme, and suggested that these factors should be taken into account during preparation of any subsequent schemes.
