The European Commission has defended its handling of fraud under the Common Agricultural Policy (CAP), particularly the issue of ‘land grabbing’, following a report by the European Court of Auditors (ECA), which oversees spending by the EU.

The ECA released an audit report yesterday (Monday, July 4) which found that more needed to be done to combat fraud in agricultural spending.

One of the main fraud risks outlined by the ECA was land grabbing.

According to the ECA, land grabbing may involve fraudulent practices, such as the falsification of documents; coercion; use of political influence or insider information; manipulation of procedures; or payment of bribes.

The ECA acknowledged that there is no precise legal definition of land grabbing, nor is there an accepted view on how to define the term.

In the context of CAP, the term is normally understood to refer to the concentration of agricultural land and CAP payments in the hands of large companies or investors. The ECA’s audit focused on forms of land grabbing where illegal methods were used to acquire the land.

The EU anti-fraud body, known as OLAF (an acronym based on the French version of its name) has found that publicly owned land, and private land where ownership is unclear, are the most susceptible to illegal land grabbing.

According to the ECA, fraudsters may also seek to acquire land – legally or illegally – for the sole purpose of receiving direct payments without performing agricultural activities.

The overall conclusions of the ECA report state that while the commission has responded to incidents of fraud in CAP spending, it has not been sufficiently proactive in addressing the impact of the risk of illegal land grabbing on CAP payments.

The report recommended that the commission reviews how national paying agencies implement the guidance on checking that land is at the applicants’ lawful disposal. Furthermore, the commission was asked to issue advice on how member states should address the risk of land grabbing.

EU Commission’s response

The commission has since released a document responding to the ECA’s audit report, in which it took the position that land grabbing does not represent a problem inherent to the abuse of weaknesses in CAP legislation.

The commission instead argued that the problem is linked to “possible deficiencies” of legal systems, supervision and protection of individual rights within member states, and must therefore be addressed by them.

The response also drew a distinction between, on the one hand, illicitly obtaining land and subsequently fulfilling payment eligibility criteria, and, on the other hand, only pretending to fulfil conditions through forged or falsified documents.

The latter situation, the commission said, “could be an issue that the paying agency’s anti-fraud measures might detect”.

Notwithstanding that, the commission said it accepts the ECA’s recommendation relating to land grabbing, and that it will monitor how paying agencies are implementing ‘land at disposal’ requirements.

However, the commission insisted that it “already disseminates best practice” to member states in all elements of the CAP.