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    This is how agricultural subsidies are swindled in the EU

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    The Brussels Commission and EU member states still need to do more to counter farm subsidy fraud. This is the conclusion of a report presented by the EU Court of Auditors in Luxembourg on Monday. According to the audit report, not enough is being done in Brussels to specifically tackle the practice of “illegal land grabbing”.

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    With “illegal land grabs”, fraudsters acquire land only for appearances in order to be able to subsequently collect EU funds. The report refers to an investigation by the European anti-fraud agency (OLAF) from 2017.

    Million scam in 2017 in Italy

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    At that time, Olaf and an Italian police force, which reports to the Ministry of Finance in Rome, discovered that a number of people had been included in the national treasury database, posing as farmers. According to Olaf, the damage to EU taxpayers was around 32 million euros at the time.

    In the case in question, the funding applications submitted to the EU were based, among other things, on incorrect lease agreements because the tenants had either died or did not know anything about the lease. In another case in France, applications for plots in mountainous areas were made for years, even though agriculture was not possible there: water supply, enclosures and feeding facilities were missing. At the time, the EU’s anti-fraud agency found that aid payments were being made for herds that didn’t even exist.

    Great risk of fraud in mountain farming

    The EU must “ensure that EU funds actually reach the legitimate recipients,” said Nikolaos Milionis, member of the Court of Auditors, who led the audit. According to the information provided by the Court of Auditors, the fraudulent practices involved in the “illegal seizure of land” range from forgery of documents to political influence and bribery. Anti-fraud agency Olaf believes these scams often involve public or private land where ownership is unclear. There is also a risk of fraud in mountain agriculture, because it is more difficult to check whether the required grazing is actually taking place.

    The agricultural budget makes up the largest item in the multi-year EU budget. Between 2016 and 2020, reported fraud cases accounted for 0.09 percent of total agricultural budget payments, according to anti-fraud agency Olaf. With a multi-year budget volume of 262 billion euros, around 227 million euros ended up with recipients who had swindled the grants. However, according to EU auditor Milionis, the actual volume of fraud is probably larger. In particular, Milionis accused the Directorate-General responsible for agriculture in Brussels of not having sufficiently dealt with the practice of “illegal land grabbing”.

    The EU Court of Auditors is counting on the audit report helping the EU Commission and the Member States to expand the fight against fraud as part of the new common agricultural policy. This EU agricultural reform will take effect next year. The reform introduces new requirements for farmers who want to receive support from Brussels. Among other things, more space is to be made available in order to improve biodiversity and the preservation of habitats.

    Economic ties in small businesses

    With the EU agricultural reform, small and medium-sized farms in particular are to be given more support. However, the auditors from Luxembourg warn that before EU funds are paid out, it must be ensured that small and medium-sized farms really operate independently. Fraud always comes into play when such companies hide ties to larger companies.

    For example, a Lithuanian cooperative received investment support for ongoing operations and marketing amounting to 200,000 euros. However, as the Court of Auditors found, the cooperative belonged to a large multinational company and was therefore not eligible for funding.

    Source: Tagesspiegel

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