FINNISH EXPERIENCES ON THE FIRST YEAR OF IMPLEMENTATION OF THE

NEW CAP

29.1.2016Kari Valonen

SCA spokesperson Ministry of Agriculture

03.05.2023 1

TOPICS• Finnish starting point for implementing the CAP

reform• Most important cases identified for simplification

– permanent grasslands– cross compliance– VCS-penalties– constant re-measurement of areas– payment delays

• Ideas for the future

03.05.2023 2

CAP IMPLEMENTATION

• Finland overall quite satisfied with the CAP reform– move towards regional model (as already in FI)– balancing of direct payments between MS– stronger voluntary coupled payments– specific circumstances taken into account quite well (eg. in

greening)

• New CAP more targeted and having new aims– more complicated implementation

03.05.2023 3

CAP IMPLEMENTATION

• FI tried to create as simple as possible model for implementation in order to keep administrative burden in check– no voluntary elements, except VCS (very much needed in FI

conditions)– limited list of EFA´s (set-aside, nitrogen fixing crops, short

rotation coppice, landscape features under cross compliance)

– no equivalence in greening or regional/collective EFA´s– use of IT based systems whenever possible– even simpler regional model (from 3 regions to 2)

03.05.2023 4

CAP IMPLEMENTATION• Still everyone surprised of the level of increase of

administrative burden• We very much welcome the simplification efforts

undertaken by the Commission– more needs to be done!– good initiatives on penalties currently under discussion –

extend them to VCS and RD measures (animals and area payments under IACS)

– also basic acts could be opened at some stage – complication arises from there

03.05.2023 5

FI EXPERIENCES• FI started to gather information about implementation

bottlenecks and difficulties already in late summer 2015

• Parallel national ongoing process on simplification – national laws, regulations, requirements simplified

• Input from the Paying Agency, Food Safety Authority and advisory services as well as from stakeholders

• Letter to the Commission 22.1.2016

03.05.2023 6

PERMANENT GRASSLANDS• ECJ Judgement C-47/13 – new interpretation, which

was not foreseen during the negotiations• FI agrees with the aim of maintaining permanent

grasslands, however– due to the new interpretation ca 48 000 ha of grassland area

was ploughed up in 2015, which otherwise would have been maintained as grass

– farmers are afraid of the status change to permanent grassland due to possible restrictions as well as decrease of the value of land in sales and rent markets

– ploughing will continue in the future years– exception at least for those who have changed their

production line?03.05.2023 7

CROSS COMPLIANCE• We have received lot of feedback from the farmers

on the bureaucracy of cross compliance rules• They feel that sanctions relating to cross compliance

are not proportionate• Early warning system is applied in FI (minor non-

compliances can be corrected).• But still even quite small non-compliances cause sanctions

of 1-5 % both for all direct payments and for all animal and animal-based payments under rural development.

03.05.2023 8

CROSS COMPLIANCE• What should be changed?

– Only the most important, relevant and clear SMRs should be maintained

– A non-compliance of the animal linked requirement should cause sanction only for animal-related voluntary coupled support and animal-related rural development support in those Member States where these aids are applied.

– Area linked requirement should cause sanction only for area payments.

03.05.2023 9

VOLUNTARY COUPLED SUPPORT FOR ANIMALS

• FI uses information from existing animal database as the basis for calculating the aid. The payment is based on the days the animal is on the farm (fair treatment). Issues identified:– incorrect / late entries to the database cause penalties– claimless system increases sanctions – all mistakes are

found– current eligibility rules at the EU level are not based on days,

but on whole animals

03.05.2023 10

VCS: Entries to database of animals and penalties

03.05.2023 11

A farm with 50 dairy cows in AB-region (Southern Finland).

Nine of them has been bought in the beginning of the year (1 January). The purchase has been entered to the database one day late, i.e. on the 8th day (instead of 7th day). These 9 animals are ineligible.

Because the difference is over 20% the farm will loose the payment from all animals (9/41 = 21% )and 50 x 530€ = 26 500€ is lost

No payment at all for 50 animals because of 1 day mistake concerning 9 animals!

VCS: ELIGIBILITY DAYS Example:• A farm with 39 bulls. There are 35 accepted animals, but four bulls that

have accumulated a total of 400 eligible days (= 1.1 animals) are rejected in the control procedures. Rejection as four whole animals.

• The eligible days accumulated by these bulls are not taken into consideration when calculating the number of accepted animals on the basis of eligible days. – There are 35 accepted animals = a total of 12 775 eligible days (12775/365).

The difference between animals accepted and rejected in calculating the penalty is 11 % (4/35 x 100%). The aid paid on the basis of the number of animals accepted is reduced by 22% (11% x 2, because the difference is over 10 %).

– If the penalty would be calculated based on livestock units, the aid would be reduced only by 3%

– In the so-called support area AB in Finland, i.e. southern Finland, the amount of support lost in 2015 would be 3 850 € under the current rules (but only 535 € if based on days)

03.05.2023 12

VCS: ELIGIBILITY DAYS

Why such need for severe sanctions?

• We understand that the penalty system has to include deterrent element and be dissuasive, i.e. be a little bit stricter in cases where the farm is controlled based on risk or random sampling, where there is possibility that the farm is not controlled every year.

• In claimless system all applicants are automatically controlled!

• Discussion whether we should return to the old system for applying aid per animal.

• Allow more flexibility to the rules to take into account different payment models.

03.05.2023 13

Constant re-measurement of areas and update of LPIS

• In the Finnish conditions agricultural parcels are small and often irregular in size.

• Even small changes in measurement points or different technology used can cause alteration of the measured area.– need to update information on 150 000 parcels yearly and

change payments for farmers also retroactively– huge cost for administration and headache for the farmers –

relatively minor benefit for the Funds• Increase the updating tolerance from 2 % to 3 % margin• Increase the limit for no reductions from 0,1 ha to 0,5

ha03.05.2023 14

03.05.2023 15

CHANGES TO PAYMENT TIMETABLE

• Added complexities and burdens of the new CAP have been challenging for the controllers and the creation of new IT systems

• Due to our climatic conditions the controls get started quite late– no possibility to pay advances for Direct Payments– as from 2018 advances for Rural Development possible only

as from 16.10

03.05.2023 16

03.05.2023 17

July Aug Sep Oct Nov Dec Jan Feb March April May JuneClaim year Next year

0

100

200

300

400

500

600

700

Changes in payment times of supports between claim years 2014 and 2015

CY 2014 CY 2015

M€

*Includes exceptional increase of advances (up to 85 %) of RD supports (R (EU) 2015/1748)

*

IDEAS FOR THE FUTURE

• Local conditions and traditional practices should be taken into account especially in permanent grassland rules.

• Reward simple and reliable systems and the use of IT and not make them too costly for the farmers.

• Reconsider the concept of an error. Concentrate on the big issues and real fraud, which cause risks to the funds and not on small mistakes. Increase tolerance.

• Common discussion needed between the Commission/Council/EP/Court of Auditors

03.05.2023 18

THANK YOU FOR YOUR ATTENTION!

03.05.2023 19