A report by the European Court of Auditors has concluded that there is “no adequate data” to demonstrate that supporting European farmers’ incomes is making an effective contribution to the goals of the Common Agricultural Policy (CAP).

The Court said the European Commission’s system of assessment is not well-enough designed and has significant limitations, which mean it is impossible to measure the impact of the billions being spent on direct payments. Between 2014 and 2020, about €270 billion – almost £220bn, or a third of the total EU budget – will go directly or indirectly towards supporting farmers’ incomes. This is intended to contribute to supporting EU food production and helping farmers maintain fair living standards.

Under new CAP rules, the Commission has to assess the impact of farm subsidies in relation to their stated objectives. The auditors examined the design of the Commission’s performance measurement system for farmers’ incomes. The tools the Commission intends to use to gather statistics and assess the effectiveness of its policy are economic accounts for agriculture (EAAs) and the farm accountancy data network (FADN).

However, the Court of Auditors said the EU executive’s plans are flawed; EAAs “are not sufficiently informative” on farm incomes and the value of agriculture, the FADN is missing data on “a significant number of recipients of EU payments” and auditors identified “weaknesses” in management from Member States and the Commission itself.

Announcing the findings on Thursday, report author Rasa Budbergytė said, “These key indicators, on which the Commission has to base its assessments, are not sufficiently reliable and are not linked clearly enough to CAP measures. As they stand, they are of no use in showing whether the subsidies have achieved their desired effect and reduced the income gap between farmers and others.”

Many of the reforms introduced as part of the new CAP, including the greening element, were introduced in order to legitimise CAP payments in the eyes of European citizens; the agricultural policy makes up by far the biggest single chunk of European spending, and legislators came under pressure from citizens’ groups and member state ministers who highlighted environmental concerns, pushes for greater transparency and austerity programmes current in many European states during the reform process.  

Although the Commission’s mechanism came in for criticism on Thursday, a steady trickle of studies from influential UK institutions have looked at direct payments and called current EU policy into question. Late in the CAP reform process in 2013, researchers from the University of East Anglia (who contributed to the government’s controversial National Ecosystem Assessment two years previously) warned that EU farming policy represents poor value for society and the environment, and in 2015 Cambridge researchers said “perverse” subsidy payments are delivering little benefit for the public or the environment.

Late last month, 100 NGOs active across Europe wrote to the Commission, demanding the Commission president Jean-Claude Junker carry out a “fitness check” of EU farming policy. The groups expressed concerns that environmental elements of the policy have been watered down, and that the policy is failing to meet the expectations of European citizens.

On Thursday, auditors said no representative data is available on the disposable income of farm households, and there is no reliable system for comparing agricultural incomes with those in other sectors in order to justify support for farmers. They also said, even when data is available, member states have not always ensure that it is of appropriate quality. They also said vague objectives for some CAP measures and the absence of a baseline make it difficult to assess whether they will achieve their objectives.

The auditors visited six Member States which, between them, account for more than half the gross value added of European agriculture and whose farmers receive more than half the EU budget for agriculture, primarily in the form of direct payments: Germany, Spain, France, the Netherlands, Poland and Romania.

Following the publication of their report, the auditors recommended that the Commission:

• develop a more comprehensive framework for providing information on disposable income and for comparing farmers’ incomes with incomes in other sectors of the economy;
• further develop the main farm income measurement tools so their potential can be better achieved;
• ensure that the analysis of farmers’ incomes is based on indicators, taking account of the current situation of agriculture, and on sufficient and consistent data for all CAP beneficiaries. This could be done by developing synergies between existing administrative data or by developing other suitable statistical tools;
• enhance the present quality assurance arrangements for the farm income statistics established by the Member States.

From the outset of the next programming period, the Commission should:

• define appropriate operational objectives and baselines against which the performance of the CAP measures can be compared;
• complement its current framework of performance indicators for evaluations with other relevant and good-quality data in order to measure the results achieved;
• and assess the effectiveness and efficiency of the measures designed to support farmers’ incomes.