Monday, May 26, 2008

Romania says EU farm aid problem over

BUCHAREST (Reuters) – Romania has resolved problems about distributing European Union direct payments to farmers on time, easing concerns in Brussels of funds being misspent, the head of the agency handling EU money said yesterday.

Romania, the second biggest Eastern member of the EU after Poland, was told by Brussels to improve its farm payments system but escaped subsidy cuts after the Commission decided it met the bloc’s standards.

But Brussels asked Bucharest to tighten fraud controls as million of euros of aid are paid to Romanian farmers between end-March and mid-June 2008.

Dan Gherghelas told Reuters in an interview that his agency has addressed flaws triggered by wrong land statements and drastically cut the acreage eligible to receive aid.

One-third of farmers who applied for subsidies declared larger-than-real crop areas, Gherghelas said. “We have excluded 1 million hectares of farmland from financing, consisting of overlapping land and non-eligible plots... 12,000 farmers will not receive any money,” he said.

The official, who blamed mostly poorly drafted land databases and lack of information among farmers, said controls revealed that 445,000 aid claims out of 1.24 million requests were wrong. “These figures have stirred concern in Brussels,” he added.

Under its Common Agricultural Policy, the EU has earmarked 440 million euros for Romania in 2007, or 50.5 euros per hectare. For 2008, farmers could receive 528 million euros’ worth of direct payments, or 60.6 euros per hectare. Payments will increase to 141 euros by 2013.

Gherghelas said direct aid payments for 2007, the country’s first year of membership, speeded up earlier this month. “No money will be returned to Brussels. The whole sum will be absorbed... We hope to have 900,000 farmers paid by the end of this month and finish distributing the sum by the middle of next month, before a June 30 deadline.”

Romania has also started to gather farmers’ requests for funds earmarked for 2008, a process that will end on June 9, the official said.

Like other ex-communist countries that joined the EU in 2004, Romania is expected to receive a smaller number of applications compared to the previous year, partly due to land consolidation.

One in five Romanians now has a small farm of an average 2 hectares following land restitution after communist-era collectivization was scrapped in 1989. One-third of the active population lives on subsistence farming.

“We’ve received only around 1 million aid requests so far... People may have not submitted requests for non-eligible land anymore... We can also assist the merging of plots to create bigger farming exploitations.”

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