European Court of Auditors: EU Commission proposals affecting the common agricultural policy may cause uncertainty

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In the European Union’s 2028-2034 budget, i.e. in the next multiannual financial framework (MFF), according to the European Commission’s proposal, the common agricultural policy (CAP) would receive funding from the so-called European Fund, which has a budget of around 865 billion euros, based on national plans. For the first time since the establishment of the CAP in 1962, the EU Commission would not set up a separate agricultural fund, and would also terminate the CAP’s traditional two-pillar support, which is currently aimed at agricultural producers and the agri-food industry on the one hand, and rural development on the other. According to the findings published by the European Court of Auditors on Monday, planning and approval regulations combined with the CAP’s more complex legal structure can cause uncertainty, which can reduce predictability for beneficiaries and delay the disbursement of funds. This – as highlighted – goes against the goal of simplification. According to the auditors, uncertainty can also be caused by the fact that the total amount of CAP financing will only become known after the adoption of national plans affecting the unified fund. For the beneficiaries, this can make it unpredictable at the planning stage how much funding they can expect – they pointed out. It can also be difficult to compare the CAP expenditures of the current long-term EU budget with potential appropriations under the next MFF, they explained. Further uncertainty arises from the fact that it is not clear which interventions concerning the common agricultural policy should be based on results and which should be based on milestones and goals, which – as highlighted – can lead to differences between the individual EU countries. In this regard, the auditors emphasized that accountability and traceability must be ensured even when interventions are based on milestones and target values.

It was particularly emphasized that traceability from invoices to final beneficiaries, such as farmers, is essential.

“Given the extent of the proposed changes and the fact that the EU countries have flexibility when preparing their national plans, it is difficult to realistically estimate the impact that can be expected from the European Commission’s proposals on national spending allocations,” the rapporteurs said, and then emphasized that it is important that the greater flexibility provided to the EU countries cannot jeopardize the common objectives of the CAP, such as a fair income for agricultural producers, environmental protection and climate policy actions or food security. Failure to guarantee these would create unequal conditions of competition for agricultural producers and harm fair competition and the functioning of the internal market, they underlined. It was recalled that, according to the European Commission’s proposal, the European Fund would merge previously separate funds and consolidate the EU financing of various, long-standing policies in one national plan for each country.

CAP payments to Member States may depend on performance on the one hand, and milestones and targets on the other hand

The CAP would receive a minimum budget allocation of 293.7 billion euros for income support for agricultural producers, while other CAP measures, such as the LEADER rural development program supporting local communities, support for the outermost regions, and the EU school program would receive funding from the unallocated amount. The document proposes a rural development goal corresponding to 10 percent of the unallocated amount, at least 48.7 billion euros at current prices. In addition, as part of the planned agreement between the EU and the countries of the South American Common Market (Mercosur), the European Commission has proposed that, in order to meet the needs of agricultural producers and rural communities, the EU countries will also have access to around 45 billion euros from the flexibility amount from 2028.

MTI