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Costs of Control Exercise

Carfi Salvatore

37th Conference of Directors of EU Paying AgenciesRiga

7 May 2015

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Learning Network: new working group costs of control

Exercise– Inventory before the implementation of the new

CAP (2013)– ‘Rough’ expectations for the year 2015– Greening – Simplification– Follow up

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Results

• Responses from participants 23 MS• But… not all questions filled in• Rough indications, first impression, first step• No statistical valid exercise

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Some statistics

Number of reference parcels (2015 compared to 2013) -10%

Percentage greening parcels 2015 (compared to all parcels) 35%

Average number of reference parcels in 2015 1,760,000

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2015 and beyond• Do you expect an increase in the costs of control? yes: 18 out of

23 respondents• Biggest categories of increase being expected in:

– OTSC, crosschecks, travelling, CWRS– Administrative controls– Greening controls– EFA Layer– LPIS requirements– IT– Wages– Operational Costs– Delegated body Costs– Direct payments in general

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Comparison 2015 to 2013

Market Measures

• Administrative & other controls– FTE: -4% – Number of controls: -7%

• OTSC– FTE: +14%– Number of controls: +16%Remark: rough estimates, based on partly filled in questionnaires

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Comparison 2015 to 2013

Direct Payments• Administrative & other controls– FTE: +25% – Number of controls: +31%

• OTSC– FTE: +22%– Number of controls: +31%Remark: rough estimates, based on partly filled in questionnaires

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Comparison 2015 to 2013

Rural Development Programme

• Administrative & other controls– FTE: +11% – Number of controls: +16%

• OTSC– FTE: +45%– Number of controls: +16%Remark: rough estimates, based on partly filled in questionnaires

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Some examples impact greening

Average yearly costs of maintenance EFA layer per parcel: 4,25 €7,5 million € per MS: 210 milion euro (extrapolated to all 28 MS : 210 million € )

Average yearly costs photo interpretation per parcel: 4 €7,1 million € per MS(extrapolated to all 28 MS: 210 million €)

Remark: rough estimates, based on partly filled in questionnaires

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Greening out of pocket

Main costs (average investments per MS in €):– Farmer register 700.000– LPIS: 1.345.000– OTSC: 2.990.000– Application process: 965.000– Integrated system: 2.000.000– Entitlement register: 1.710.000– Calculation of payment authorisation: 165.000– Maintenance of software: 875.000

Remark: rough estimates, based on partly filled in questionnaires

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Greening out of pocket Averages per MS (€)

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Applicati

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Integrated sy

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Entitlement r

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Main

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of software

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1000000

2000000

3000000

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Simplification proposals and impact

21% decrease in expected costs of control if:• Lowering % OTSC, avoid 100% (market measures)• Lowering control rate in general, including greening and

small farmers• Combine samples Direct Payments and RDP• Simplify procedures crop diversification, EFA’s,

certification schemes• No double controls, 1 farm visit• Wider use remote sensing• Reduction administrative controls

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Main conclusions

The bad news:• Most PA’s expect an increase in the costs of control in 2015 and

beyond (18 Yes, 2 No)• Expected raise of the yearly number of controls and FTE involved of

11-45% for Direct Payments and RDP (compared to 2013)• Main triggers: greening, LPIS, wages, controls, especially OTSC• Apparently small control elements (e.g. EFA layer maintenanc and

photo interpretation) are costing hundreds millions of euro’sThe good news:• Potential simplification proposals: 21% reduction in costs (control

procedures, greening procedures)• In the interest of farmer, PA’s and EC

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Follow up

• First step in Riga• Second half 2015: – completion missing data of this excercise– further exploration main cost drivers,

• First half 2016: simplification proposals costs of control

• Looking forward to co-operate with EC

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