The Impact of the New Farm Aids on the Land Plot Identification System (LPIS)

Starting from the definition of the Physical Block (PB) as an area of land of specific identification, with stable boundaries, and used for agricultural purposes by one or several farmers, which comprises one or several farm plots, it has been noticed that in recent years, the new financial packages provided under the National Rural Development Programme for 2007-2013 (NPRD) can have a dramatic impact on the LPIS.

Risk factors used in hazard analyses preceding the inspections on contracted plots have been enhanced. There has been a tendency among farmers to increase their declared areas in order to obtain larger sums under the new financial packages. This calls for a reconsideration of plot/PB boundaries. National budget-supported costs associated with such an action would be justified if such subsidies were conditional. One’s mere commitment to maintain a pasture in Good Agricultural and Environmental Conditions (GAEC) as well as a farming activity for a period of five years is not relevant unless the money from such subsidies is conditional on purchasing maintenance equipment or livestock. Thus the farmer would have an incentive to stabilise the boundaries of his plots – without the  pressure of sanctions – which are encroached upon by non-agricultural areas, every year.

Other risk factors involve not only some people’s failure to realise that it is important to present the new financial packages to farmers, but also their refusal to register the applications of those who wish such financial assistance. The main reason for this, contrary to the rural development-oriented CAP, is the wish to avoid problems when reporting observations on the PBs, and to justify non-compliance errors arising from inspections, which trigger penalties that affect the farmers.

Misunderstandings persist in the disbursement mechanism of farm aids. Once the farmer files his/her statement and the observation reports on the PBs are made, an immediate on-site visit should be made in order to determine the geographical coordinates of the areas. Only if the initial PB has increased or decreased or a new one has emerged should one perform an inspection on the use of the new financial packages. One will thus avoid the confusion between a PB update, its actual inspection, its measurement and reference against the national system, inspections by classic measurements, GAEC inspections, LFA inspections, and AM (agro-environmental) inspections (M211, M212, and M214 in the NRDP).

To give a specific example: a farmer files a PB that does not exist in the LPIS, where he declares that he has land. If his application is part of the inspection sample, inspectors will control only the plots covered by the subsidy application and not what he applies for in separate forms, which is associated with the PB. Such confusions are responsible for having generated area exclusions, as the farmer is inspected before one defines his/her precise pasture areas for which s/he has requested additional funding. Under the AC (administrative control), LPIS errors can be solved ahead of time. It is well-known that such errors trigger a chain reaction of further errors, which cause a dramatic drop in the farmer’s aid, as they regard GAEC, AM, LFA etc., non-compliance.

As to the European payments towards local councils, they should be discontinued. Based on regulatory bills, the local authority can monitor the compliance of farmer statements versus the reality in the field. One cannot subsidize a Member State (MS) through various EU funds and disburse yet another payment through the local councils, from the same budgets. That qualifies for double payment. A government institution that manages European funds will sanction the state – represented by its local councils, called “farmers” – for non-compliance with the GAEC etc. Thus the EU funds are disbursed to each MS for institutional reforms, only to be followed by penalties for the latter’s failure to observe its own rules.

The above considerations would strengthen the MS control over the LPIS and thus help facilitate payments to actual farmers, as well as trigger genuine rural development at the European level.