Implementation of the new rules from the Paying Agency’s point of view

Jukka PekonniemiDirector of Department

Paying Agency/Agency for Rural Affairs

Implementation of the CAP reform in the Paying Agency

The CAP was implemented but:

• Simplification of support systems was not achieved• Information system reform costs totalled over 13 million EUR• Control became more complicated and additional visits increased

the number of control visits => control costs increased by more than 10%

• The complex rules for the calculation of aid in various support schemes were difficult to specify in the information systems

• Some of the instructions were received late from the Commission (including the Commission's guidance documents on control)

• The time for reforming the information systems was too short

Active Farmer

• Only minor share of the farmers are excluded from the direct payments based on this rule. However, this rule causes confusion for all farmers and causes administrative burden

• Instead of excluding certain beneficiaries from the payment schemes, the areas of airports and the like should be excluded 

• Instead of the negative list, administrative and on-the-spot controls are sufficiently effective to ensure that aid is not paid for the areas of airports, permanent sport grounds etc. non-agricultural land

Greening

• The time limits for maintaining diversification and ecological focus areas should be abolished because they are problematic due to sowing of winter crops

• weighting factors of nitrogen fixing crops, short rotation coppice and catch crop and green cover should be 1" Factors under 1 cause confusions for farmers.

• Exceptions for grasslands could be combined. Grassland, land lying fallow, PG in the same exception, would be calculated on the basis of agricultural land

Permanent grassland

• In Finland, the production of forage is based on grassland cultivation, of which 1/6 is classified as permanent grassland. Grasslands in intensive production should not be included in the permanent grassland area

• Monitoring of permanent grasslands is highly labour intensive for administration and difficult for farmers

• The greening requirements applied to Natura grasslands should not overrule protective regulations. If protection permits ploughing, greening requirements should allow it too

• Direct payments are reduced under the financial discipline mechanism every year• The reductions are refunded to farmers if unallocated

funds remain• This procedure results in unnecessary bureaucracy • The unallocated funds should not be refunded but

transferred to the following year. In the year in question, no reductions would be made under the financial discipline mechanisms• No reductions and refunds• With regard to financial discipline, the farmer would

receive the direct payment approximately one year earlier in comparison with reductions and refunds

Financial discipline

Control

• Clearer instructions are necessary in the updating

requirements of the Land Parcel Identification System for the application of margin, and the application of minor retroactive area-related reductions should be abandoned.

• Penalties for errors in the animal database are excessive and the calculation of sanctions in control should be based on days eligible for support, as proposed by the Ministry

• The reductions in support for greening are excessive in case of minor area-related deficiencies and the time limits for control are too strict

Control

• The rules concerning the reduction of control should be simplified. The sole criterion should be for instance 2% error frequency in the previous year

• The advance payments of direct payments should be payable before controls are completed, i.e. the same procedure should apply as for the support assigned for rural development

Audits & financial corrections

• Audits keep PA busy - 4 audits in 2015: - RD axis 2 - cross-compliance- VCS animal-based aid - area aids

• Unreasonable corrections compared to the mistakes/errors - MS burden of proof– one single observation may lead to a flat-rate

correction, for example selection of parcels is risk-based (not random) and result is generalized to all parcels

• Levels of flat-rate corrections: 2, 3, 5, 7, 10 %• The Commission should conduct so-called steering

inspection visits to the paying agencies in the first years of the systems being applied