Speculators with tenuous farming links exploit EU fund by up to €1m

SPECULATORS are making very attractive guaranteed incomes of up to €1 million a year from the European Union’s farm fund, often without owning as much as a garden, and without doing a day’s work on the land.

An investigation into how €27 billion of EU funds is used found that the vast majority goes to genuine farmers and that it has helped agriculture policy.

Ireland’s member of the court, Eoin O’Shea, said the report did not include any negative mention of Ireland.

But four countries in particular — Britain, Italy, France and Spain — are guilty of allowing the payments to fall into the hands of speculators.

In Italy, one person who paid less than €200,000 for payment entitlements will receive more than €1m in grants.

He leased 45 hectares of poor land more than 400km from where he lives for €7,650 a year and has given the grazing rights to a local farmer for free to keep the grass cut to meet the conditions of the scheme.

The investigation, carried out by the EU’s Court of Auditors, found similar cases in Scotland, where, despite the drop in sheep farming, claims increased for payment for rough agricultural land that would not be suitable for anything else.

The auditors noted that Britain had removed some of the limits that would have cut down on this type of speculative investment.

Qualifying for EU funds is now such a good investment that the court found an increase in new beneficiaries had just very tenuous links to farming.

Genuine farmers were also found to be inventive at maintaining or increasing payments from EU funds.

In Italy and France, some of them transferred tobacco premium rights after mid-2004, and so, continue to receive the high-value payments from their former production of tobacco.

In Britain, farmers began to slaughter all their cattle before a cut off date so they could keep their historical sums to the end of 2013.

A big part of the problem was that different countries interpret the rules in various ways. Even the definition of “active farmers” and what land is suitable to qualify for aid means different things, depending where they are.

Various efforts to change this failed because the rules were voluntary and most member states did not impose them.

The report also found that the bigger farmers benefit more than those with smaller holdings. About 16% of beneficiaries received 75% of the money, while 144 people received more than €1m a year.

A spokesperson for the European Commission said that since no member state made the necessary changes to prevent speculators benefiting unfairly, they would introduce legislation when the fund is reformed over the next few months.