The Common Agricultural Policy's integrated administration and control system (ICAS), which is responsible for regulating payments, continues to cause headaches for the directorate-general for agriculture.
Problems with high error rates identified in previous years in Portugal and Bulgaria are still unresolved. Portugal promised to put in place an action plan to fix the problems by 2010. But an audit mission in March 2011 found only a small part of the necessary work had been completed. The Portuguese government has since adopted a reinforced action plan.
The Bulgarian government completed its action plan in time, but the Commission has not yet received sufficient assurance that the handling of the 2012 claims will work properly.
The department also found a unacceptably high error rate for the rural development (pillar 2) funds in the CAP, with errors probably involving around €278 million of
payments, at a rate of 2.36%. 2011 control statistics show a deterioration of the situation in rural development as compared to 2010.
The department identified deficiencies in the supervision and control of certified organic products – the subject of a critical report from the EU's auditors that was published this week (26 June). The market for organic produce is growing, and total public spending for organic farming support had reached more
than €690 million by the end of 2010. But there are insufficient controls on this funding and weaknesses in EU supervision of the member states' control systems, the report warns.
Procedures are being streamlined and improved to fix this problem, with increased audits of member states. The Commission is also evaluating the regulatory framework for organic farming.