Study raises doubts over subsidies checks

Date:17/07/03

By David Cronin

NO EVIDENCE can be found to support assertions by the European Commission that it carries out management checks on the payment of export subsidies for farm produce, according to a new study.

Prepared by the EU's Court of Auditors, the study criticizes the €3.4-billion-per-year system of paying export refunds to European agricultural traders to enable them sell their products on the world markets.

It says there are no guidelines on rate-setting procedures used by the Commission for export subsidies to the beef and milk sectors.

"The Commission states that it carries out management checks," the Luxembourg-based auditors add, after perusing files held by the EU executive. "There is, however, no systematic written evidence of such."

The auditors also query the whole basis of aid to the sugar sector in the Union. Officially, all sugar produced in excess of the EU's agreed quota for the crop cannot be exported with the aid of subsidies. Yet surplus production has corresponded to the amount exported with the help of EU subsidies in recent years, the auditors found.

"This calls into question the substantial level of the aid granted to the export of quota sugar, bearing in mind that export refunds should only be granted to the extent necessary to enable the product to be exported," state the auditors.

In a reply to the Court's report, the Commission said rules it agreed on improving the management of export refunds in July last year are designed to address many of the concerns raised by the auditors.

A report by the European Court of Auditors has questioned the European Commission's system for managing export subsidies to the beef and milk sector. The report also criticises the whole basis of aid to the sugar sector.