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Agriculture: EC’s Spending Claw-back; Blitz On Rules; Opening To Grain Imports

  • December 28th, 2007
  • Posted by 7thmin

belgium-open-fields-reduced2.jpgThe European Commission has ordered a claw-back of €256.3-million in wrong spending by governments under the Common Agricultural Policy (CAP), and it has announced further changes in compliance rules for allocating money to industry.

It has also recognised world grain shortages by scrapping import duties; noting that Europe has changed from exporter to importer status.


The European Commission has decided (20.12.07) to recover € 256.3-million (A$429.15-million,, 28.12.07) of EU farm money it says has been unduly spent by Member States

It says the money is to be returned to the Community budget because of inadequate control procedures or non-compliance with EU rules on agricultural expenditure; from national governments responsible for paying out and checking expenditure under the Common Agricultural Policy (CAP).

The Agriculture Commissioner, Mariann Fischer Boel, said the EC as the executive body had to check that money was properly spent, and a recent Court of Auditors’ report had shown that the control system had improved markedly over recent years.

The latest decision on recovering funds was the 26th since the current system started in 1995.

This time funds will be recovered from Belgium, Cyprus; Czech Republic, Germany, Denmark, Spain, Finland, France, Great Britain, Greece, Hungary, Ireland, Italy, Malta, Portugal, Sweden and Slovenia.

The main individual corrections are:

• € 183.9-million (A$307.9-million) charged to Spain for shortcomings or lack of checks on crop declarations and yields as well as on monitoring the controls of mills in the olive oil production sector;

• € 16.6-million (A$27.8-million) charged to region of Andalucía in Spain for weaknesses in on-the-spot checks (remote sensing and classical field visits) for area aids;

• € 10.5-million (A$17.5-million) charged to Italy for weaknesses in management and control of the quota system in the tobacco production scheme;

• € 9.7-million (A$16.2-million) charged to Great Britain for late payments mainly in the extensification premium.


In its drive to simplify the CAP the Commission has introduced more changes in the Cross Compliance system where management efficiencies are measured and linked to financial support for producers.

It decided (20.12.07) on implementation of measures recommended in a comprehensive report on changes made to date.

Statement from the Agriculture Commissioner, Mariann Fischer Boel:

“The changes adopted today aim at easing the management of the system where experience gained over the past two years showed up undue difficulties. They do not water down the efficiency of the system. The changes mainly concern harmonising control provisions so that the burden for the farmers and the national administrations is reduced to the minimum necessary. For instance, farmers’ participation in the farm advisory system or relevant certification schemes could be now taken into account in the control system. The calculation of reduction of payments will now also take into account the possible improvement or worsening of the situation in case of repeated infringement.

“The remaining regulatory measures proposed in the report are under the responsibility of the Council and are currently being discussed by the Member States with a view to implementing them as from 2008. They mainly concern the possibility to exempt from reductions the cases of minor infringements or the cases where the amount of reduction is very low. They concern also the implementation of cross compliance in certain new Member States and the clarification of the farmers’ responsibilities …

“The start up problems raised during the first year of its implementation had to be tackled and this is what we have done. I am confident that the remaining decisions will be taken quickly by the Council to allow the whole simplification package to be implemented very soon.

“Cross Compliance means that farmers have to respect a set of standards to avoid reduction of their payments – direct payments and some rural development payments – from the European Union. These standards cover protection of the environment, public, animal and plant health, animal welfare and the maintenance of the land in good agricultural and environmental condition. Cross Compliance has the dual aims of contributing to making farming more sustainable and making the CAP more compatible with the expectations of consumers and taxpayers. Cross Compliance was a major component of the 2003 CAP reforms …

“To achieve its objectives, Cross Compliance includes the possibility to reduce, either fully or partially, the direct payments to the farmer if the standards are not respected. It is made up of two components, the ‘statutory management requirements’ (SMRs) and ‘good agricultural and environmental condition’ (GAEC). The SMRs are made up of 19 laws, while Member States have to define minimum standards for GAEC based on an EU framework. A review of these standards will be made during the CAP Health Check.”


The European Union is to suspend import duties on most cereals, making exceptions just for oats, buckwheat and millet — for the current marketing year, up to 30.6.08.

The decision, by Agriculture Ministers, was proposed last month by the European Commission, which said it was a reaction to the “exceptionally tight situation on both world and EU cereals markets”, and record price levels.

It said levels of border protection for cereals were already “rather low”, though import duties were still applied for certain types of grains regarded as important for the balance of the EU market.

The change is a sudden backing off after a period in which the European Commission reduced “intervention stocks”, i.e. grain bought up by the central authority.

It had begun proposing extensive use of grain crops for production of biofuels, as a way both to help meet tight targets for carbon emissions from fossil fuels, and to pull back over-production.

It said:

“Suspending import duties will facilitate cereals imports from outside the EU and take some of the pressure off European grain markets.

“We have now had two low European harvests in a row and prices are high both at home and on world markets.”

At the start of the present marketing year last July, total stocks (private plus intervention) were 13.2 million tonnes below levels at the same time the previous year.

That was the result of a modest harvest in 2006/07 and significant withdrawals from EU intervention stocks.

In 2007, unfavourable weather conditions reduced the harvest and overall EU production was estimated at 256 million tonnes, a fall of 10 million tonnes or 3.5 percent on the already modest 2006/07 harvest.

Output had been declining at a time when EU stocks were already low.

“As a result, the EU will need more imports in 2007/08 than in 2006/07,” the Commission said.

“Traditionally a net exporter, in 2007/08 the EU has become a net importer. European cereals markets have seen a spectacular upsurge in prices since the start of 2007/08.

“There are tensions on the small-grain cereals and maize markets, as a result of reduced stocks of common wheat and maize, poorer than forecast quality, and the exhaustion of intervention stocks (currently down to 0.5 million tonnes).”

The EU has consolidated its duties for all cereals in line with international agreements, under the GATT (General Agreement of Tariffs and Trade), and later the WTO (World Trade Organisation).


Management of the CAP and recovery of funds.

European Commission, “Commission to recover €256.3 million of CAP expenditure from the Member States, IP/07/1977, Brussels, 20.12.07.

Also, EC MEMO/06/178, and “Managing the agriculture budget wisely” (Factsheet), at:, (28.12.07).

CAP Compliance.

EC, CAP simplification: Commission implements its commitment to improve Cross Compliance system, IP/07/1981, Brussels, 20.12.07.

See also:

Cutting duties on grain.

EC, Agriculture: European Union suspends import duties on most cereals, IP/07/1977, Brussels, 20.12.07