In its annual report on EU expenditure, the European Court of Auditors has noted with concern how farm subsidies are being redistributed away from farmers and towards landowners, and has highlighted a range of 'non traditional' recipients of farm subsidies including golf courses, railways and horse riding centres.
As has been the case each year for more than a decade, the Court has refused to approve the EU's expenditure. The press release issued today says that:
the Court again gives an adverse opinion on the legality and regularity of the majority of EU expenditure: primarily the part of agricultural spending not covered by IACS, structural policies, internal policies and a significant proportion of external actions. In these areas there is still a material level of errors found in the payments to final beneficiaries, albeit to different levels.
In the chapter on farm subsidies, the report states that:
"the Single Payment Scheme has led to a substantial increase in the number of hectares in respect of which direct aid is paid and beneficiaries. The Court has also noted among them railway companies (England), horse riding/breeding clubs (Germany and Sweden) and golf/leisure clubs and city councils (Denmark and England). (p. 103)
In addition to highlighting these curious recipients of EU farm aid, the Court found that one unexpected effect of the new Single Farm Payment is
"a significant redistribution effect of EU direct aid away from those actually farming and towards landowners, who will see the value of their entitlements multiplied by four in Denmark and Germany and tenfold in England. In England, the flat rate element of entitlements was worth €28.20 per hectare in 2005, whereas all entitlements will have a face value of some €280 per hectare in 2012." (p. 104)
In the past, landowners would rent out farm land to tenant farmers, and it would be the tenant farmer who would work the land and claim the subsidy. Under the new system in countries adopting the 'area based' system, landowners themselves can qualify for the Single Payment Scheme and are now receiving the payments themselves directly, while continuing to rent out the land to tenant farmers, who are essentially cut out of the system.
The Court's report also finds fault with the implementation of the new style environmental stewardship schemes (also known as agri-environment) under which farmers are paid for reducing pollution from fertilizers and pesticides and improving wildlife habitats:
"The Court’s audit found a high incidence of errors, by both nature and amount for the agri-environmental schemes. Payments under these schemes are dependent on respecting (often complex) conditions, such as observance of good farming practices. The Court found in seven out of eight cases audited that farmers had not met their commitments or that some conditions had not been effectively checked by the authorities."
The report goes on to note with concern the large windfall profits that have been made by many beneficiaries as a result of the many changes in the system of farm subsidies that have been implemented over the past few years. It says that "only Belgium, Denmark, Italy, Luxembourg and Sweden" chose to apply the so-called windfall profits clause that allows governments to claw back such windfall profits. It also notes that "the allocations made under the new farmers and investment schemes created substantial abnormal profits which fall within and outside the scope of the windfall profit clause". It gives a telling example of how people were able to work the system to generate significant windfall profits. It is worth quoting in full:
"A simple transfer of a holding between family members during or after the reference period was sufficient to increase the number and values of entitlements allocated for the holding. In Ireland a farmer who stopped farming in 2002 leased his holding to his son. The father was allocated entitlements worth 38 000 euro on the basis of premia paid in 2000 and 2001. His son was approved as a new farmer and allocated entitlements worth 87 000 euro on the basis of premiums paid in 2002. In 2005 the father transferred his land and his entitlements free of charge to his son who ended up owning entitlements worth 125 000 euro. If the transfer had not occurred the holding would have been allocated entitlements worth 67 800 euro." (p. 105)
Little of this is any surprise to the farmsubsidy.org network, whose members have been finding unexpected recipients of farm subsidies alongside the many royal recipients (Queen Elizabeth, Prince Albert of Monaco, the Duchess of Alba etc) and corporate beneficiaries Arla, Campina, Nestle, Philip Morris, Tate and Lyle etc). Who would have thought that Lufthansa and Gate Gourmet are getting six figure payouts in farm aid every year? This has been hidden from the public for decades, but transparency is finally bringing it all out into the open. In preparing its audit, the Court of Auditors has has access to all the data on farm payments from all member states: far more data than has so far been disclosed to the members of farmsubsidy.org. The data on who gets what has been compiled and made available to the Court of Auditors. It should be made available to all European citizens without delay.
Further information:
Read the Court of Auditors report in full.
View a list of UK golf courses who get farm subsidies.
View a list of UK councils who get farm subsidies.
Hat tip to Bruno Waterfield of the Daily Telegraph for the heads up to the Court's report.
