Past Experience Towards Delivering CAP2014 Objectives
Directors of Paying Agencies ConferenceDublin
2013
Dr Al Grogan
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OverviewAdapting to the changing structure of the CAP2014 The introduction of a new green payment giving rise to a further
payment scheme A refined and simplified Cross Compliance ? The ever present issue of the eligibility of land Directing payment to active farmers carrying out agricultural
activities Managing the flattening of payments All within an environment of continuing to achieve
The CAP2014 objectives
But Will it be in the same control / audit environment we are now so familiar with Are there possible improvements to help meet the objectives
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Meeting the Challenges while ensuring no risk to the FUND
Challenges
EnvironmentalGHG emissions, Soil depletion, Water/air quality, Habitats and
biodiversity
EconomicFood security, Price variability, Economic
crisis
Territorial IssuesVitality of rural areas,
Diversity of EU agriculture
Policy objectives
Sustainable management of natural resources and climate
action
Overall Simplificatio
n
Balanced territorial development
Viable food production
Reform To Achieve
Improvedsustainability
Enhancedcompetitiveness
With Greatereffectiveness
?
4
CAP2014An increased number of elements to manage and
control Basic Payment (eligibility) Green payment
EFA Crops numbers Permanent Pasture
Small farmers scheme Young Farmers Scheme Possibility for coupled support schemes Cross Compliance
A simplified set of 13 SMRs and GAEC standards Implementation of a more comprehensive FAS
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Adapting to the Evolving Structure of CAP2014
Were there any failures in implementing the legal requirements of CAP2005 ?
Some deficiencies leading to national reductions
Could these have been avoided?Are there any improvements in
structures that could help with CAP2014
Will review from an Inspection Service Perspective
What have we learned from a control perspective in implementing CAP2005 ?
CommunicationIs there a need for better Communication at
every level?Thereby to achieve a better exchange of
experience and understanding in administering the CAP with a view to improving implementation and most importantly avoiding financial reductions
Are we successful in that aspiration
The ultimate objective …. Audit Clearance
Concern is to reflect the legislation in all controls
Are there failures at audit … yes … but why
Are there ways we can minimise future reductions in implementing CAP2014
Paying Agency ResponsibilitiesInclude :Interpret the legislation correctlyDevelop appropriate controls based on this Check the admissibility of all claimsDocument everythingReport as requiredCheck that all the scheme eligibility
requirements are satisfiedIs cross compliance and greening in order
Can we use our shared experience better
Previous Directors reports highlighted:The need for early feed back from auditsThe opportunity to openly share
experiencesThe need for clear and unambiguous
understanding of the requirementsHave we taken this advice on board
and did it help?
Some Irish experience on controls since 2005
Concentrate only on : Land eligibility and
Cross Compliance
Ireland opted for full decoupling in 2005 so a major administrative change in a short period was required
Intensive effort was required to fully understand the implementation requirements particularly with cross compliance
Expensive systems developed to manage and monitor
Yet audit issues arose
Irish experience on controls since 2005
The Preventative Audit ExperienceIreland volunteered for a preventative audit in
mid 2005 on requestExpectation
Review progress to that point in design and implementation
Advise on deficiencies and where difficulties were being encountered
Clarify questions raisedBut
Sanctioned for certain failures foundIs there a message here?
Who has the ultimate knowledge and expertise
Primary legislation now to be agreed by the troikaImplementing/delegated acts then drawn upThese articles not always easy to interpret if past
experience applies and current drafting is an indicationBack in the Member State how well are the
requirements then understood …. Room for interpretation…MS must implement as appropriate
How often do we need to get a legal interpretation of the requirement
Auditors then independently determine the requirements and……….…..
Take the cross compliance sanctioning process
Deemed to be simple… apply 3% and review to 1% or 5% where negligent or an intent 20% and review
Also should be proportionate in respect of the breach
Minor breaches need not be sanctioned but what is minor
And then the difficulties we all appear to have with the concept of ‘INTENT’ and which continues to cause issues in the current negotiations
The audit Process While the audit is a critical phase there
is the availability of the conciliation process should issues be disputed
So some scope to disagree with the Audit interpretation / findings
But can the need for this be minimised?
Audit ScenariosSome scenarios to consider
Found not in full compliance with the literal wordingThe process adopted could be as effective if not
better than the legal interpretationBut found to be in breach legallyShould there be the possible to accommodate if
no greater risk to fundProportionality when applying sanctions
The scope for minor with no sanctionThe expectation on sanction level or
distributionExpectations from findings in other member
states
Some scenarios to considerWhen there is scope for ambiguity in the
interpretationGive benefit of doubt and clarify the
legislationProvide guidance as soon as possible
When the implementation legislation is amended to reflect MS wishes, recognised weaknesses or to improve the process thenGive retrospective benefit if in conformity
with new procedure
Audit Scenarios
Cross ComplianceScope Interpretation difficultiesMember States should withdraw direct aid in
whole or in part on the basis of criteria which are proportionate, objective and graduated. The percentage of reduction shall be graduated according to the severity, extent, permanence and repetition
Maintain organic matter through appropriate practice
Maintain soil structure through appropriate measures
The eligibility status of land has and continues to raise issues
The association between GAEC, active farming, abandonment and eligibility are closely interlinked
Is the basis of payment system so critical to get rightIssues for eligibility
Area … CoverActively farmed and GAEC status
So controller interpretation critical
Eligible Land
What issues can arise Marginal low production landWhat is GAEC on such land… rock … rush …
heather …. wetlandsGAEC workshop experience
Full range of interpretation from fully ineligible to fully eligible
So who is right…..Who has the correct interpretation ….why
Eligible Land
Eligible LandWhat issues can arise
Productive high grade landDistinction between a GAEC breach and
fully ineligibleSome interpretation variation
Unharvested forage land, wide field margin raised as possibly ineligible
So who has it right….why
Grassland (CAP2014)"permanent grassland" means land used to grow grasses or
other herbaceous forage naturally (self-seeded) or through cultivation (sown) and that has not been included in the crop rotation of the holding for five years or longer;
it may include other species which can be grazed provided that the grasses and other herbaceous forage remain predominant;.
Member States may decide to include land which can be grazed and which forms part of established local practices where grasses and other herbaceous forage are traditionally not predominant in grazing areas;
Agricultural Activity "agricultural activity" means …… maintaining the
agricultural area in a state which makes it suitable for grazing or cultivation
without any particular preparatory action going beyond traditional agricultural methods and machineries,
carrying out a minimum activity to be established by Member States on agricultural areas naturally kept in a state suitable for grazing or cultivation
Eligible Land …CAP2014Land never declared in the past.
The new concept of a reduction coefficient to transform new areas into eligible hectares,
A challenge but will it create major audit issues?
EFA Land.The concept of equivalence proposed to meet the EFA
requirement, How might this be agreed as much scope for variationThe extra measurement requirements
Benefits of Commission workshopsGives the view of the various DGsFacilitates making contactsCompiled guidance notes useful
Helpful Tools
Helpful ToolsBenefits of JRC workshops (GAEC and
FAS)Less formal environmentGenerally more time to build contactsGreater contributions by MS particularly in making
presentationsPractical demonstrations of conforming practicesComplements Commission meetingsAttended by a range of playersDo we need similar workshops for some
SMRs
Preventative audits could be adapted to improve implementation in the early stages…a simple visit perhaps
Clarification guidance to all MS where difficulties identified anywhere
Consideration given to common training on requirements
Forum for more rapid clarification of issues that ariseMore commission workshops in early stages of
implementationOnline forum to raise and have issues answered
quickly
Recommendations
Common forum to publish findings which could help other MS to improve their implementation
Option for simple arbitration on ‘risk to the fund’ when failure is a technical/legal failure with limited actual implications or risk to the fund
An annual audit Conference/Training event sharing the ongoing audit findings in all MS
Early clarification / assurance to avoid multiple year reductions applying
Recommendations
2014 … A Challenge to all!
Thanks
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