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EU auditors slam Commission’s CAP reform plan for falling short of ambitions and objectives

“Next CAP should be greener, rigorously performance-based and more accountable”

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The Commission’s proclaimed ambition to increase the CAP’s environmental and climate ambitions is not reflected in its reform proposals, which also fail to provide sufficient justification for the different policy instruments, the European Court of Auditors (ECA) has found.

The ECA has published a scorching opinion on the European Commission's legislative proposals for the post-2020 Common Agricultural Policy (CAP) released in June this year.

The institution found that the EU executive’s plans do not reflects its call to increase the policy’s environmental and climate ambitions, even though the auditors recognise that the reform includes some tools to address these objectives.

In particular, the ECA calls the estimated 40% (budgetary) contribution of the CAP to these targets “unrealistic” given that the main policy instruments are set to remain largely the same.

João Figueiredo, the auditor responsible for the opinion, said during the presentation of the report in Brussels today (November 7) that the envisaged agri-environmental schemes of enhanced conditionality, eco-schemes and other measures are “not so different that they can justify this new number”.

“This figure is not supported by accurate calculations,” another ECA member added. “The contribution of the current policy was estimated at 19%, which we already found unrealistic.”

The ECA also denounces that the climate and environmental objectives are “neither clearly defined nor translated into quantified targets”, making it unclear how the Commission will assess the impact of the policy measures in this area.

Insufficient justification for policy instruments

The auditors further note that direct payments to farmers will continue to take up the largest share of the policy’s budget, even though “this instrument is not appropriate for addressing many environmental concerns, nor is it the most efficient way of supporting viable income”.

In its legislative proposals, the Commission justifies the area-based subsidies as a necessary form of income support, based on statistics showing that the average income from farming is below the average wage for the economy as a whole.

However, the auditors consider that these data are insufficient to “support the claim that farm households, taken as a whole, need significant support to achieve a fair standard of living”.

Specifically, they point out that the figures do not take into account farmers’ income sources outside of agriculture and highlight that member states are not required to compile reliable and comparable statistics on farm incomes.

“It also does not show that direct payments solve the income problems,” said one of the auditors.

Meanwhile, the evaluators state that the introduction of capping is a “possible solution” to address the “problem” of the subsidies’ concentration on larger farm holdings.

However, they echo previous criticisms expressed about the possibility to deduct salary costs – including costs from unpaid labour – from the payments before the application of the cap, arguing that this would significantly limit the impact of the measure.

Apart from direct payments, the report also outlines that no “robust economic evidence” has been provided for the maintenance of the other traditional CAP instruments of market intervention and Rural Development measures.

Increased subsidiarity welcomed, concerns on accountability

In general, the auditors welcome the “shift from an emphasis on compliance towards a focus on performance”.

“The idea to increase subsidiarity, as reflected in the CAP Strategic Plans, is also a good solution because the previous one-size-fits-all approach did not work,” said Figueiredo.

However, the ECA also identified a number of issues regarding the proposed changes to put the policy into practice.

It considers that the CAP proposal does not contain the necessary elements of an “effective performance system” given the lack of “clear links” between the policy’s instruments, objectives, targets and results.

In terms of accountability, the auditors fear that the proposal will lead to fewer and less effective checks and audits.

In particular, they highlight that “under the proposal, the Commission would receive neither control statistics from paying agencies, nor assurance on payments to individual farmers from certification bodies”, making it “harder to apply a single audit approach”.

“Based on misunderstanding”

In reaction, a spokesperson of the Commission declared that the institution’s officials will shortly analyse the report in full detail, but the EU executive already firmly dismissed some of the findings.

“I can already say at this stage that the Commission rejects a number of conclusions set out in the  opinion as they are based on a misunderstanding or misinterpretation of the proposals,” she said.

“The Commission will provide the Court with a detailed response,” she added.

The ECA members responsible for the report have met with representatives from the Commission’s Agriculture Directorate this morning to elaborate on the evaluation and exchange views on its conclusions.

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