Cross Compliance Criticised by Court of Auditors

The European Court of Auditors (ECA) has identified a number of systematic failures in the way in which cross compliance has been implemented since its introduction in 2005. In a highly critical Special Report - entitled “Is cross compliance an effective policy?” – it is concluded that cross compliance '...is a vital element of the CAP' but that '... as currently managed by the Commission and implemented by the Member States [it] is not yet effective...'.

The timing of the report’s publication on 9 December is notable given that political agreement on the CAP Health Check, which included amendments to cross compliance, was finalised in the previous month. The report was adopted by the ECA at a meeting on 6 November, nearly two weeks before political agreement on the Commission’s Health Check proposals was reached on 20 November, a point highlight by Birdlife International. The environmental NGO, which is very supportive of the report’s conclusions, is disappointed that ‘the Health Check has been decided without taking into consideration the Court Report’.

... the Commission do acknowledge that ‘the effectiveness of cross compliance could be further improved’.

Cross compliance was introduced in 2005 as a means of ensuring that farmers in receipt of direct CAP payments and some rural development measures comply with minimum baseline standards in relation to the environment, food safety, animal and plant health, and animal welfare. Farmers who are found to have breached cross compliance standards risk a deduction to the payments they receive (in principle up to 100%, but in practice much lower). Currently, cross compliance applies to around €40 billion of EU budget expenditure per year, distributed amongst some five million farmers. The ECA report notes that in 2005, the earliest year for which figures are available, cross compliance sanctions resulted in the deduction of around €10 million of direct aid payments.

The Commission, in its replies to the ECA report is, perhaps unsurprisingly, quite defensive of their record in implementing cross compliance. However, the Commission do acknowledge that ‘the effectiveness of cross compliance could be further improved’.

Main cross compliance failures identified by the ECA

The European Court of Auditors identify a number of issues which have, in its view, resulted in the failure of cross compliance as an effective policy mechanism at EU and Member State level. The main criticisms made by the ECA can be summarised as follows:

  • The scope and objectives of cross compliance are poorly defined and certain issues, such as irrigation and air pollution, have been excluded from the GAEC legislative framework without justification (in the view of the ECA);
  • The legal framework for cross compliance is too complex and should be simplified (but standards not watered down), particularly for some Statutory Management Requirements (SMRs). As a result more guidance is needed from the Commission to ensure that standards are both verifiable and meaningful at farm level. In addition, some Member States were judged to have only partially implemented cross compliance.
  • The distinction between cross compliance and agri-environment measures is not always clear. In some Member States, farmers receive payments for practices which should be included within the cross compliance baseline (e.g. for retaining terraces and undertaking crop rotations in Portugal);
  • The control and sanction systems set up by Member States are weak. As a result it is difficult to judge the degree of compliance at farm level, and when breaches are detected, the subsequent reductions to farmers’ direct payments are typically low;
  • Monitoring and reporting data provided by Member States were thought to be unreliable in some cases, and this issue had not been effectively addressed by the Commission.

Despite these criticisms, it should be noted that the ECA report is based on audit checks undertaken in just seven of the 27 EU Member States: Finland, France, Greece, the Netherlands, Poland, Portugal and Slovenia. As a result, it is not clear to what extent the criticisms apply more broadly.

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PUBLICATION DATE

23 Dec 2008

AUTHOR

IEEP

FURTHER INFORMATION

The Institute for European Environmental Policy coordinates CAP2020. It is an independent not for profit institute which undertakes research in a number of policy areas including agriculture and rural development.