ISSN 1831-0834
EUROPEAN  
COURT OF AUDITORS
2013
EN
Special Report No 10
COMMON AGRICULTURAL POLICY: IS THE 
SPECIFIC SUPPORT PROVIDED UNDER 
ARTICLE 68  OF COUNCIL REGULATION 
(EC) NO  73/2009 WELL DESIGNED AND 
IMPLEMENTED?

COMMON AGRICULTURAL POLICY:  
IS THE SPECIFIC SUPPORT PROVIDED 
UNDER ARTICLE 68 OF COUNCIL 
REGULATION (EC) NO  73/2009 WELL 
DESIGNED AND IMPLEMENTED?Special Report No 10  2013
(pursuant to Article 287(4), second subparagraph, TFEU)
EUROPEAN COURT OF AUDITORS
EUROPEAN COURT OF AUDITORS
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LUXEMBOURG
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E-mail: eca-info@eca.europa.eu
Internet: http://eca.europa.eu
Special Report  No 10  2013
A great deal of additional information on the European Union is available on the Internet.
It can be accessed through the Europa server ( http://europa.eu ).
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Luxembourg: Publications Office of the European Union, 2013
ISBN 978-92-9241-382-8
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Reproduction is authorised provided the source is acknowledged.
Printed in Luxembourg
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?3
CONTENTS
Paragraph
 GLOSSARY
I–VII  EXECUTIVE SUMMARY
1–6  INTRODUCTION
7–12 AUDIT SCOPE AND APPROACH
13–76  OBSERVATIONS
13–28   WEAKNESSES IN THE IMPLEMENTATION FRAMEWORK OF THE SPECIFIC SUPPORT UNDER ARTICLE 68 AFFECT 
ITS ALIGNMENT WITH THE GENERAL PRINCIPLES OF THE CAP 
14–19   SPECIFIC SUPPORT UNDER ARTICLE 68 IS A  PARTIAL DEROGATION FROM THE GLOBAL DECOUPLED 
ORIENTATION OF THE DIRECT PAYMENT SCHEME
20–26  CONSIDERABLE ROOM FOR MANŒUVRE BY THE MEMBER STATES, WHILE THE COMMISSION HAS LIMITED 
CONTROL
27–28  THE FUTURE OF CAP SPECIFIC SUPPORT MEASURES AFTER 2013: RISKS OF LACK OF ALIGNMENT WITH THE CAP 
PERSIST
29–53   INSUFFICIENT EVIDENCE TO DEMONSTRATE THAT MEASURES INTRODUCED UNDER ARTICLE 68 ARE 
NECESSARY OR RELEVANT
31–35  INSUFFICIENT EVIDENCE OF NEED IN A  NUMBER OF CASES
36–49  INSUFFICIENT EVIDENCE THAT THE MEASURES ARE WELL TAILORED
50–53   INSUFFICIENT TOOLS TO ASSESS THE EFFECTIVENESS OF THE MEASURES
54–76  INAPPROPRIATE OR INSUFFICIENT CONTROLS OF THE IMPLEMENTED MEASURES AT MEMBER STATE LEVEL
55–63   WEAKNESSES IN THE ADMINISTRATIVE CONTROL AND MANAGEMENT SYSTEMS
64–69   WEAKNESSES IN THE ON-THE-SPOT CHECKS
70–76   HEAVY MANAGEMENT AND CONTROL BURDEN
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?4
77–81  CONCLUSIONS AND RECOMMENDATIONS
 ANNEX I  —  ENVELOPE ALLOCATED TO ARTICLE 68  FOR  2010–13, BY MEMBER STATE AND 
ACTIVITY (WITHOUT EX. ARTICLE 69 MEASURES)
 ANNEX II  — SUMMARY OF THE MEASURES SELECTED IN THE MEMBER STATES VISITED
REPLY OF THE COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?5
Administrative controls/on‑the‑spot checks : Title III of Commission Regulation (EC) No 1122/20091 estab -
lishes the general principles for controls that apply to all direct aid measures. In particular, all aid applications 
are to be subject to administrative controls, supplemented by on-the -spot checks based on sampling. From 
Article 29 of the regulation: ‘For each measure under the specific support for which administrative controls are 
technically possible, all applications should be checked.’
AEM/MAET : Agri- environment measure/Agri- environment measure in a specified geographical area (France).
CAP : Common agricultural policy.
Coupled/decoupled direct aid : Until 2003, farming support under Pillar I was largely granted in the form of 
direct payments linked to the production of specific agricultural products (‘coupled’ direct aid). Payments of 
this sort mainly came as ‘area’ aid by hectare, aid by crop type or ‘livestock’ aid per eligible animal. After the 
CAP reform in 2003, most Pillar I aid measures were ‘decoupled’ , meaning that they are no longer dependent 
on the output of the beneficiary.
Deadweight : Deadweight occurs where a measure is used to support beneficiaries who would have made 
the same choice in the absence of aid. In such cases, the payment of aid produces no impact. By definition, 
therefore, the share of expenditure which generates deadweight is ineffective, because it does not contribute 
to the objectives set.
Integrated Administration and Control System (IACS) : IACS is defined in Chapter 4 of Title II of Council 
Regulation (EC) No 73/20092 and further developed by Regulation (EC) No 1122/2009. It comprises a compu-  
terised database of farms and aid applications, an identification system for parcels of agricultural land (LPIS) 
and an animal identification and registration system (AIRS), and provides for a series of administrative controls 
and on-the -spot checks.
Pillar I/Pillar II : The Agenda 2000 reform established two main pillars for the CAP . Pillar I (European Agricul -
tural Guarantee Fund — EAGF) provides for market measures and income support in the form of direct pay -
ments. Pillar II (European Agricultural Fund for Rural Development — EAFRD) co -finances rural development 
measures in areas such as agri- environment, the promotion of food quality, higher technical standards and 
animal welfare.
Single Payment Scheme (SPS) : The SPS is the system of decoupled aid under Pillar I which has applied since 
the 2003 CAP reform in Member States which joined the European Union before 2004. A simplified transitional 
version, known as the Single Area Payment Scheme (SAPS) applies in the newer Member States.
1 Commission Regulation (EC) No 1122/2009 of 30 November 2009 laying down detailed rules for the implementation of Council 
Regulation (EC) No 73/2009 as regards cross- compliance, modulation and the integrated administration and control system, under 
the direct support schemes for farmers provided for that regulation, as well as for the implementation of Council Regulation (EC) 
No 1234/2007 as regards cross- compliance under the support scheme provided for the wine sector (OJ L 316, 2.12.2009, p. 65).
2 Council Regulation (EC) No 73/2009 of 19 January 2009 establishing common rules for direct support schemes for farmers under 
the common agricultural policy and establishing certain support schemes for farmers, amending Regulations (EC) No 1290/2005, (EC) 
No 247/2006, (EC) No 378/2007 and repealing Regulation (EC) No 1782/2003 (OJ L 30, 31.1.2009, p. 16). GLOSSARY
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?6
EXECUTIVE SUMMARY
I.
When the Single Payment Scheme (SPS) was intro -
duced in 2003, Member States were allowed to retain 
up to 10 % of their national ceilings for ‘specific types 
of farming which are important for the protection or 
enhancement of the environment or for improving 
the quality and marketing of agricultural products’ . 
This specific support was later extended by Article 68 
of Regulation (EC) No 73/2009, which increased the 
number of objectives for which aid could be granted.
II.
Twenty -four Member States have decided to make use 
of Article 68, through a patchwork of 113 extremely 
varied measures. The total budget for the 2010–13 
period is 6,4 billion euros. Although the measures are 
each subject to their own individual rules, most of 
them are based on classic mechanisms for coupled 
direct payments3.
III.
The audit focused on the design of the specific sup -
port provided for in Article 68 and the way this was 
implemented in 2010 and 2011 (management and con -
trol arrangements) and in particular whether specific 
support satisfactorily proves to be consistent, relevant 
and properly controlled. The audit was conducted at 
the Commission’s services and in four Member States 
representing approximately 70 % of the budgetary 
allocation for the relevant measures.
3 Please refer to the Glossary  for explanations about coupled/decoupled 
direct aid and the Single Payment Scheme.
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
IV.
The SPS was based on the principles of decoupling 
direct payments from production and simplifying the 
payment regime (‘single payment’). As a derogation, 
Article 68 allows Member States to maintain direct 
coupled payments ‘in clearly defined cases’ . However, 
the Court found that the Commission had little control 
over the justification for such cases and that Member 
States had a large degree of discretion in introducing 
direct coupled payments. As a result, the implemen -
tation of Article 68 provisions was not always fully 
aligned with the general principles of decoupling and 
simplification now governing the common agricultural 
policy.
V.
The Court also found that there is insufficient evidence 
in the Member States that the measures introduced 
under Article 68 are necessary or relevant and this in 
terms of the need for them, the effectiveness of their 
design and the levels of aid made available. Insufficient 
objectives and indicators will hinder the future assess -
ment of the measures.
VI.
Lastly, the Court pointed out weaknesses in the admin -
istrative and control systems set up to ensure that 
existing measures were correctly implemented. Such 
weaknesses were sometimes noted despite manage -
ment and control burdens that are already heavy but 
might need to increase further still if they are to meet 
the requirements of the regulations.VII.
In the context of the introduction of the ‘post-2013’  
CAP , the Commission proposal now under discussion 
would allow specific support to be maintained in the 
form of coupled payments, but without sufficiently 
defining precise limits. In this regard, the Court has 
the following main recommendations:
(a) Specific support for certain agricultural activities 
should be based on a strict understanding of the 
provisions of Article 68 and the granting of such 
coupled support should be adequately justified to 
the Commission and checked by it.
 — To be able to assume its ultimate responsibility 
under the system of shared management, the 
Commission should play a more active role in 
establishing the criteria governing the imple -
mentation of the measures.
 — Member States should be required to dem -
onstrate that each specific support measure 
which they intend to introduce is necessary 
(in terms of the need for and added value of an 
approach based on derogations), relevant (in 
terms of implementation arrangements, award 
criteria and aid levels), and that it satisfies the 
criteria of sound financial management.
(b) Account being taken of the variety of possible 
measures an appropriate system of monitoring 
should be established to facilitate subsequent 
evaluation.
(c) Once measures have been introduced, the  
Member States should establish suitable  
and comprehensive management and con -
trol systems to ensure that all the require -
ments of the regulation can be satisfied.  
In order to avoid generating disproportionate 
costs on the limited scale of a specific support 
measure, the requirement for controls should al -
ready be taken into account during the measure’s 
design phase (simplicity of implementation, ‘con -
trollability’ of criteria, etc.) or, possibly, even in the 
decision on whether or not to introduce a given 
measure.EXECUTIVE SUMMARY
8
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?1. When the Single Payment Scheme (decoupling of direct support to 
farmers from production)4 was introduced in 2003, Member States were 
allowed to continue to apply certain production-linked support meas -
ures for farmers. Following Article 69 of Regulation (EC) No 1782/2003)5, 
Member States were entitled to earmark up to 10 % of their national ceil -
ings for ‘specific types of farming which are important for the protection 
or enhancement of the environment or for improving the quality and 
marketing of agricultural products’ .
2. This specific support was later extended by Article 68 of Regulation 
No 73/2009 (period 2010–13). Article 68 increased the number of objec -
tives or activities for which aid could be granted (See Table 1) .
3. Detailed rules for implementing the support provided for in Article 68 
are notably laid down in Commission Regulation (EC) No 1120/20096 
(Articles 37 to 49) and Regulation (EC) No 1122/2009 (Articles 29 and 46). 
The management and control systems for the various kinds of support 
granted under Article 68 are broadly based on the Integrated Adminis -
tration and Control System (IACS).4 See Glossary .
5 Council Regulation 
(EC) No 1782/2003 of 
29 September 2003 
establishing common 
rules for direct support 
schemes under the common 
agricultural policy and 
establishing certain support 
schemes for farmers and 
amending Regulations 
(EEC) No 2019/93, (EC) 
No 1452/2001, (EC) 
No 1453/2001, (EC) 
No 1454/2001, (EC) 1868/94, 
(EC) No 1251/1999, (EC) 
No 1254/1999, (EC) 
No 1673/2000, (EEC) 
No 2358/71 and (EC) 
No 2529/2001 (OJ L 270, 
21.10.2003, p. 1).
6 Commission Regulation 
(EC) No 1120/2009 of 
29 October 2009 laying 
down detailed rules for the 
implementation of the single 
payment scheme provided 
for in Title III of Council 
Regulation (EC) No 73/2009 
establishing common rules 
for direct support schemes 
for farmers under the 
common agricultural policy 
and establishing certain 
support schemes for farmers 
(OJ L 316, 2.12.2009, p. 1).INTRODUCTION
TABLE 1
OBJECTIVES OR ACTIVITIES ELIGIBLE FOR ARTICLE  68 SPECIFIC SUPPORT
Protection or enhancement of the environment 68(1)(a)(i)
Quality of agricultural products 68(1)(a)(ii)
Marketing of agricultural products 68(1)(a)(iii)
Animal welfare 68(1)(a)(iv)
Agri-environment benefits 68(1)(a)(v)
Address specific disadvantages in vulnerable or sensitive areas or affecting vulnerable 
types of farming68(1)(b)
Prevent farmland from being abandoned 68(1)(c)
Crop, animal and plant insurance 68(1)(d)
Mutual funds for diseases and environmental incidents 68(1)(e)
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?9
4. Twenty-four Member States have decided to make use of Article 68 
through a patchwork of 113 measures that differ widely, both in kind 
and in budget.
5. For the 2010–13 period, a total envelope of 6,4 billion euros was al -
located from the EU budget to Article 68 (see Annex I ). The following 
diagrams show the distribution of funding by Member State ( Diagram 1 ) 
and by type of measure ( Diagram 2 ).
6. Form of support (coupled/decoupled) used for the various measures 
set up under Article 68(1) as classified in the EU budget is presented in 
Table 2 .
TABLE 2
FORM OF SUPPORT (COUPLED/DECOUPLED) USED FOR THE VARIOUS MEASURES SET UP 
UNDER ARTICLE  68(1)
Coupled direct  
aidDecoupled direct 
aid
Protection or enhancement of the environment (68(1)(a)(i)) √
Quality of agricultural products (68(1)(a)(ii)) √
Marketing of agricultural products (68(1)(a)(iii)) √
Animal welfare (68(1)(a)(iv)) √
Agri-environment benefits (68(1)(a)(v)) √
Specific disadvantages and vulnerable farming types (68(1)(b)) √
Preventing farmland being abandoned (68(1)(c)) √
Crop, animal and plant insurance (68(1)(d)) √
Mutual funds (68(1)(e)) (insurance) √
10
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?DIAGRAM 1
DISTRIBUTION OF BUDGETED FUNDS FOR THE PERIOD 2010–13 BY MEMBER STATE
Others
20 %
France
29 %
Italy
20 % Spain
12 %Hungar y
7 %Greece
7 %Poland
5 %
Source : Budgetary forecasts communicated by the European Commission.
DIAGRAM 2
DISTRIBUTION OF BUDGETED FUNDS FOR THE PERIOD 2010–13 BY TYPE OF MEASURE
Speciﬁc
disadv antages
68(1)(b)
40 %
Agri-environmen t
68(1)(a)(v)
19 %Qualit y
68(1)(a)(ii)
17 %Insur ance
68(1)( d)
11 %Environmen t
68(1)(a)(i)
5 %Others
8 %
Source : Budgetary forecasts communicated by the European Commission.
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
AUDIT SCOPE AND APPROACH
7. The audit focused on the introduction of the support provided for in  
Article 68 and the way it was implemented in 2010 and 2011 (manage -
ment and control arrangements). In order to address the main audit 
question of whether the support provided was well designed and imple -
mented, the audit addressed the following three sub -questions:
(a) Is the implementation framework of specific support measures 
conceived in such a way as to ensure consistency with the general 
orientation of Pillar I of the CAP?
(b) Is there sufficient evidence that the measures introduced under 
Article 68 are necessary and relevant?
(c) Are these measures implemented in conjunction with a satisfactory 
control system?
8. The audit was conducted at the Commission’ s services and in Greece, 
Spain (Aragón, Galicia, Castilla la Mancha), France and Italy (Emilia Ro -
magna, Lazio), Member States representing 68 % of the budgetary al -
location for the 2010–13 period and 73 % of the expenditure budgeted 
for the first 2 years.
9. Work focused on a selection of 13 measures (see brief descriptions in 
Annex II ):
 ο Aid for durum wheat (Greece — 68(1)(a)(ii))
 ο Aid for sheep/goats in less favoured areas (Greece — 68(1)(b))
 ο New single payment entitlements in less favoured or mountain areas 
(Greece — 68(1)(c))
 ο Aid for crop rotation in unirrigated areas (Spain — 68(1)(a)(v))
 ο Aid for the dairy sector in less favoured areas (Spain — 68(1)(b))
 ο Aid for sheepmeat/goatmeat (Spain — 68(1)(b))
 ο Additional aid for protein crops (France — 68(1)(a)(i))
 ο Aid for maintaining organic farming (France — 68(1)(a)(v))
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?7 Including an analysis of 
the assessments which were 
available concerning the 
implementation, previously, 
of Article 69 of Regulation 
(EC) No 1782/2003 or other 
equivalent measures.
8 An insurance company in 
France and Consorzi di Difesa 
in Italy (type of producers’ 
organisations acting as 
middlemen).
9 Some of the beneficiaries 
selected for 2010 had 
not renewed their aid 
applications in 2011; in 
addition, some beneficiary 
files for 2011 were not yet 
available at the time of the 
audit. ο Aid for sheep/goats (France — 68(1)(b))
 ο Crop insurance (France — 68(1)(d))
 ο Crop rotation (Italy — 68(1)(a)(v))
 ο Improving the quality of agricultural products in the bovine sector (Italy — 
68(1)(a)(ii))
 ο Insurance (Italy — 68(1)(d))
10.  These 13 measures had been allocated 2 686 million euros for the 2010–
13 period, representing just over 40 % of the total budget for Article 68 
(50 % in the first 2 years).
11.  The audit approach consisted of an evaluation of the work done to pre -
pare the regulations in force7 and, for the selected measures:
(a) a review of the measures’ design (e.g. needs, eligibility criteria and 
aid rates) and of the documentation available in support of the 
choices made;
(b) an analysis of management and control systems;
(c) compliance tests, on a documentary basis, on a random sample 
of around 10 beneficiary files per measure; most of the beneficiar -
ies concerned had already been visited for on-the -spot checks by 
national authorities;
(d) on-the -spot visits for a subsample of the files mentioned above 
and, where necessary, to any other party considered relevant to 
the measure8.
12.  Altogether, the auditors examined documentary records for 141 files 
(applications, checks and payments for 2010 and 2011)9 and made 29 
on-the -spot visits.
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Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
10 Only the risk management 
measures (subparagraphs 
(d) and (e)) were innovative 
compared with the forms of 
support already available.
11 All agri- environment 
measures are available 
under Pillar II for far larger 
amounts (Measure 214, for 
which 22,2 billion euros 
was allocated for 2007–13). 
For more on this subject, 
see the Court’s Special 
Report No 7/2011 ‘Is 
agri- environment support 
well designed and managed?’ 
(http.//eca.europa.eu ). In 
particular, aids to organic 
farming in France under 
Article 68 are identical to 
those which already existed 
under rural development 
measure 214.
12 See the Court’s Special 
Report No 11/2012 ‘Suckler 
cow and ewe and goat 
direct aid under partial 
implementation of SPS 
arrangements’ ( http.//eca.
europa.eu ).
13 For example, Spain had 
opted to decouple the 
existing ewe and goat 
premiums; however, it 
immediately reintroduced 
a comparable measure to 
provide aid for sheepmeat/
goatmeat under Article 68.
14 For example, French 
aid for protein crops 
introduced under Article 68 
is titled ‘additional’ because 
it was superimposed in 
2010 and 2011 on an 
equivalent existing measure 
maintained until 2011.OBSERVATIONS
WEAKNESSES IN THE IMPLEMENTATION 
FRAMEWORK OF THE SPECIFIC SUPPORT UNDER 
ARTICLE 68 AFFECT ITS ALIGNMENT WITH THE 
GENERAL PRINCIPLES OF THE CAP
13.  The CAP reform, introduced in 2003, was based on the principles of de -
coupling direct payments from production and simplifying the payment 
regime. As an exception, Article 68 allows Member States to maintain 
specific support ‘in clearly defined cases’ . The audit assessed whether 
such derogations were aligned with the general principles of decoupling 
and simplification now governing the common agricultural policy.
SPECIFIC SUPPORT UNDER ARTICLE 68 IS A  PARTIAL DEROGATION 
FROM THE GLOBAL DECOUPLED ORIENTATION OF THE DIRECT 
PAYMENT SCHEME
14.  Most of the measures10 that could be introduced under Article 68 
are comparable to (or, in some cases, exactly identical to) other pre -
vious schemes11. To a large extent, therefore, Article 68 of Regula -
tion (EC) No 73/2009 (and its forerunner Article 69 of Regulation (EC) 
No 1782/2003) is essentially the legal basis needed to ensure continu-  
ation of existing measures, in particular in the form of coupled aid  
already long available.
15.  Thus, the coupled livestock measures which were audited are compar-  
able to the direct aid measures for animals, such as premiums for suckler 
cows and ewes and goats12, which they have complemented or sup -
plemented13. Most of the area aid measures which were introduced are 
essentially a continuation of aid measures already available under Rural 
Development or of previously existing coupled aid schemes14, which the 
Council had already decided to decouple.
16.  However, decoupling was the key theme of the 2003 CAP reform, and 
this orientation was confirmed by the 2008 Health Check15.
15 From the second recital to Regulation (EC) No 73/2009: ‘In particular, the decoupling of direct support should be extended and the functioning of 
the single payment scheme should be simplified.’ The intention was that Member States which had initially opted to maintain a certain percentage of 
production support under the SPS would withdraw it before 2013. Moreover, specific support schemes that were still coupled were gradually removed 
and incorporated into the SPS (with the notable exception of the suckler cow and ewe/goat premiums, which Member States may retain as coupled 
schemes).
14
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?16 Recital 35 to Regulation 
(EC) No 73/2009, which 
continues: ‘Member States 
should be allowed to use […] 
for granting specific support 
in clearly defined cases. [...] 
With a view to respecting the 
Community’s international 
obligations, the resources 
that could be used for any 
coupled support should be 
limited to an appropriate 
level’ .
17 Agrosynergie, Assessment 
of the effects on markets of 
partial decoupling , October 
2010 ( http://ec.europa.eu/
agriculture/eval/reports/
decoupling/short_sum_
en.pdf ): 
‘[…] in most cases, the 
implementation conditions 
distorted the nature of 
Article 69, which has been 
seen in the Member States as 
a form of partial decoupling 
in response to the 
introduction of decoupling.’17.  What Article 68 (and, before that, Article 69, its ‘forerunner’) foresees is 
therefore a number of derogations to the objective of extending and 
simplifying decoupling. By maintaining or even creating forms of cou -
pled support, it departs from the general orientation of Pillar I. For this 
reason, the regulation states that derogations should apply restrictively 
‘in clearly defined cases’16. Consequently, the purpose of this article is 
not to maintain some form of partial coupling or to introduce ‘recou -
pling’ , but merely to provide tailored solutions to a handful of specific 
problems.
18.  In 2010, an evaluation of the market impact of partial decoupling already 
concluded that Article 69 of Regulation (EC) No 1782/2003 had been 
misused in order to maintain a form of partial coupling17. Since then, this 
risk has increased due to a high number of possible measures offered 
by Article 68 of Regulation (EC) No 73/2009, which takes the options for 
specific support further than the above Article 69 did.
19.  Therefore, whether or not the specific supports are consistent with the 
Council’s general orientation for Pillar I is now depending on the inter -
pretation given to the concept of ‘clearly defined cases’ in which specific 
support is to be granted, and on the way it is verified.
CONSIDERABLE ROOM FOR MANŒUVRE BY THE MEMBER STATES, 
WHILE THE COMMISSION HAS LIMITED CONTROL
20.  The regulations on specific support do not provide sufficient framework 
to ensure that this support would only be provided ‘in clearly defined 
cases’ . Indeed, the regulations allow Member States to act, when design -
ing their measures, with considerable room for manœuvre.
21.  Approval by the Commission is only formally required for agri- environ -
ment measures under paragraph 1(a)(v). For all other types of measure, 
the Commission can take no legally binding action, and the Member 
States’ only obligation is to notify the Commission of the decisions they 
take.
15
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?22.  Furthermore, the regulations set very few constraints with regard to 
the measures that may be introduced. And the few rules that do exist 
apply to just one category of measures, but it is not always clear why 
they should not apply to others. Therefore, as there is not always a clear 
distinction between the different types of measures, Member States can, 
depending on the stated objective, sidestep the few existing rules by 
using one classification in preference to another. (see Box 1 ).
23.  Despite this, the Commission has examined the measures notified to 
it with a view to ensuring that each Member State supplies a certain 
amount of standardised information. In the course of that work, there 
have been frequent exchanges which have at times resulted in amend -
ments to the measures initially proposed.
BOX 1
AN EXAMPLE OF UNCLEAR DISTINCTION BETWEEN THE DIFFERENT TYPES OF MEASURES 
AND HOW MEMBER STATES CAN USE IT TO SIDESTEP THE FEW EXISTING RULES
No clear distinction exists between measures to be set up under paragraph 1(a)(i) (environment) and 
paragraph 1(a)(v) (agri- environment). For example, the French aid for protein crops was set up under 
paragraph 1(a)(i), whereas in Spain and Italy fairly similar measures supporting crop rotation18 were introduced 
under paragraph 1(a)(v) with fairly similar objectives. See also example in paragraph 26.
Such choices had a direct impact on the applicable rules:
 —‘environmental’ measures are conditional on ‘non-negligible and measurable [...] benefits’19 (criterion which 
does not apply to ‘agri- environmental’ measures);
 —whereas ‘agri- environmental’ supports have to be pre approved by the Commission and must be limited to 
‘the coverage of the additional costs actually incurred and income foregone in order to fulfil the objective’  
(restrictions which do not apply to the other categories, including ‘environmental’ support).
18 As explained in Annex II , the Spanish measure referred to does not actually include any crop -rotation conditions but takes the form of 
area aid that is conditional above all on certain percentages of oilseed and protein crops.
19 Although in the case mentioned, the fulfilment of this condition was not demonstrated.
16
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?24.  Nonetheless, the Commission lacks the legal mandate for a broader role, 
and the examination and exchanges are not always acted upon. The 
degree of detail given in the decisions which the Commission receives 
from Member States varies widely and in certain cases, the in- country 
audit revealed significant clauses that were not in the description sent 
to the Commission. Finally, the audit provided clear illustration of the 
limits to the Commission’s powers of control over the choice and design 
by Member States of the measures.
25.  Thus, in the course of the examination of (other than agri- environment) 
measures reported by some Member States20, questions raised by the 
Commission went unanswered. As it did not have the necessary powers, 
the Commission was compelled to close those cases without having 
been able to decide whether the measure in question was legal. The files 
were marked with the following conclusion: ‘the process of assessing 
the notification […] shall be closed […] the compliance of the measure 
notified shall be considered as not fully nor clearly demonstrated’ .
26.  In another Member State21, a measure was reformulated to be introduced 
under paragraph 1(a)(i) after the Commission had refused to approve it 
as an agri- environment measure (paragraph 1(a)(v)).
THE FUTURE OF CAP SPECIFIC SUPPORT MEASURES AFTER 2013: 
RISKS OF LACK OF ALIGNMENT WITH THE CAP PERSIST
27.  In the context of its proposal relating to the CAP 2014–20, the Commis -
sion has proposed22 maintaining the possibility of specific support in 
the form of coupled payments, a proposal on which the Court issued an 
opinion in April 201223. Taking into account amendments currently under 
discussion24, this proposal would lead to the following main changes:
(a) the list in Article 68 of products concerned would be extended;
(b) the available budget would be fixed at 8 % of the ceiling, with 
a possibility, by derogation, of up to 13 %;20 Ireland and Portugal.
21 Denmark.
22 COM(2011) 625 final of 
12 October 2011, Articles 38 
to 41.
23 Opinion No 1/2012 
on certain proposals for 
regulations relating to the 
common agricultural policy 
for the period 2014–20 
(http://eca.europa.eu ).
24 B7-0079/2013, Proposal 
for a European Parliament 
decision on the opening 
of, and mandate for, 
interinstitutional negotiations 
on the proposal for 
a regulation of the European 
Parliament and of the 
Council establishing rules for 
direct payments to farmers 
under support schemes 
within the framework of the 
common agricultural policy 
(COM(2011) 625 — C7-
0336/2011 — COM(2012) 
552 — C7-0311/2012 
2011/0280(COD) — 
2013/2528(RSP)).  
(http://www.europarl.
europa.eu/sides/getDoc.
do?pubRef=-//EP//
NONSGML+MOTION+B7-
2013-
0079+0+DOC+PDF+V0//EN )
17
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?(c) coupled support would be granted:
(i) ‘to sectors or to regions of a Member State where specific types of 
farming or specific agricultural sectors undergo certain difficulties and 
are particularly important for economic and/or social and/or environ -
mental reasons’ ; and
(ii) ‘to the extent necessary to create an incentive to maintain current 
levels of production in the regions concerned’ .
28.  As the list of products and the budget ceiling available for specific sup -
port would increase and the conditions for support depend on the inter -
pretation given in future to the very vague concepts used (‘difficulties’ , 
‘particularly important for economic and/or social and/or environmental 
reasons’), most coupled aid measures currently in place could well be 
maintained.
INSUFFICIENT EVIDENCE TO DEMONSTRATE THAT 
MEASURES INTRODUCED UNDER ARTICLE  68 ARE 
NECESSARY OR RELEVANT
29.  The Court audited whether, given the limited requirements to which 
Member States are subjected, enough evidence and tools exist to dem -
onstrate that measures introduced under Article 68 are necessary or well 
tailored.
30.  The Court checked whether evidence of needs and of the relevance of 
the aids’ form and level were provided ex ante  and whether proper moni -
toring systems would allow the measures’ effectiveness to be confirmed 
ex post .
18
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?INSUFFICIENT EVIDENCE OF NEED IN A  NUMBER OF CASES
31.  The audit revealed that in a number of cases there was no evidence25 for 
a need for specific support besides qualitative arguments of a general 
nature. It also revealed that the examined documents were not sufficient 
to justify key aspects of the measures26. Moreover, it was impossible to 
document the reasons for budget allocation decisions, either among the 
various measures implemented or in relation to other needs for which 
specific support has not been granted.
32.  For example, in one Member State (Greece) no documentation was avail -
able to specifically justify any of the measures.
33.  In another case (Spain) surface aid was justified by ‘the need to combat 
a recent trend towards cereal monocultures’; however, the documents 
obtained were not enough to demonstrate any such trend in the areas 
targeted by the measure. Neither of the two Member States which tar -
geted specific areas with their agri- environment measures had statistics 
to demonstrate the relevance of the choices made.
34.  In France, reductions in livestock numbers, which the measure aims to 
combat, were only substantiated in the case of suckler ewes (no reduc -
tion in milk ewes and no statistics supplied for goats); the aid measure 
adopted, however, is applicable to the whole sheep/goat sector.
35.  As far as the measure to maintain organic farming is concerned (France), 
the Court found that statistics or studies were not available to substan-  
tiate the risk of a  ‘return to conventional agriculture’ by organic farmers. 
Thus the need for support to maintain organic farming was not properly 
justified.25 3 measures out of 13.
26 6 measures out 10; see 
examples in the following 
paragraphs.
19
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?INSUFFICIENT EVIDENCE THAT THE MEASURES ARE WELL TAILORED
INSUFFICIENT EVIDENCE THAT COUPLED PAYMENTS ARE APPROPRIATE
36.  Specific support is largely granted in the form of coupled payments27, 
although there is no conclusive evidence that coupled aid is the most 
appropriate means of achieving the objectives being pursued. For at 
least some of the objectives pursued (eg. improvements to quality, mar -
keting of agricultural products, animal welfare, etc.), other forms of aid 
than coupled payments, such as investment co -financing or promotion 
of quality produce, that are more in line with the CAP’s objectives are 
also available and should have been considered when designing these 
measures.
37.  Thus, the lack of conclusive evidence that coupled payments are the 
most appropriate form of support has been already raised on several 
occasions in connection with coupled livestock aid28. Furthermore, this 
risk of coupled payments being unsuited to the competitiveness objec -
tive was raised in the 2010 evaluation of the market impact of partial 
decoupling in connection with Article 69 support.
38.  Moreover, the detailed criteria of the measures implemented are not 
always directly justified by the stated objectives or needs. And, although 
Article 68 allows aid to be targeted, most of the supports in place are 
not discriminate or targeted enough.
39.  For example, measures under paragraph 1(a)(i) and (v) are implemented 
on the basis of environmental objectives. Their relevance thus depends 
on whether a causal link is clearly established between the subsidised ac -
tivities and these environmental objectives. Nevertheless, for the meas -
ures which were audited, this causal link was an underlying hypothesis 
for which there was no specific evidence29.27 According to the general 
budget breakdown, coupled 
payments under Article 
68 account for 66 % of all 
expenditure (73 % of the 
measures implemented in 
2010). Some measures under 
paragraph 1(a)(v) also make 
use of coupled payments, 
while paragraph 1(e) 
measures could equally be 
considered decoupled.
28 ‘[...] the question arises 
of whether it is appropriate 
to use [...] an instrument of 
the first pillar of the CAP , to 
pursue an objective which is 
more closely related to rural 
development. [...] in line with 
the principles underlying the 
reform of the CAP , it would 
be appropriate to incorporate 
this remaining coupled aid 
into the single payment 
scheme and to confine the 
role of supporting local 
agricultural economies 
to the instruments of the 
second pillar.’ (Agrosynergie, 
Assessment of the effects on 
markets of partial decoupling ). 
‘The Court did not find 
conclusive evidence to 
demonstrate that the audited 
schemes [direct aid for 
suckler cows and for sheep 
and goats] are in general 
a more effective tool than 
decoupled aid, allied with 
other EU and nationally 
funded measures, to maintain 
production and thus 
sustain economic activity in 
regions with few economic 
alternatives and generate 
environmental benefits.’ 
(Special Report No 11/2012).
29 Special Report No 7/2011 develops this point further: ‘specific quantified evidence was used only in a minority of cases to design and manage 
agri- environment sub -measures. [...] For 24 % of the contracts reviewed, Member States reported that the causal relationship between the farming 
practices and the anticipated environmental benefits were not demonstrated.’ ‘[...] management decisions [...] did not focus payments at specific 
environmental problems.’ .
20
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?30 See the Court’s Special 
Report No 4/2003 concerning 
rural development: support 
for less-favoured areas 
(OJ C 151, 27.6.2003): ‘the 
Commission has insufficient 
evidence to show that the 
classification of less-favoured 
areas is valid […].This may 
lead to a classification that 
is no longer justified, [...] 
and thus to an unjustified 
allocation of aid.’ The 
Commission subsequently 
drew up a proposal for the 
period 2014–20 (COM(2009) 
161 final of 21 April 2009), but 
this is still under discussion.
31 Of all the measures which 
were audited, the only 
exception was the French 
supplement for new fodder 
legume producing areas; 
however, this represented 
a total annual budget of only 
1 million euros.
32 ‘The support referred to 
in paragraph 1(b) (...) may 
only be granted to the 
extent necessary to create an 
incentive to maintain current 
levels of production.’
33 For example, ‘improving 
the quality of agricultural 
products’ (Article 68(1)(a)(ii)) 
and ‘improving the marketing 
of agricultural products’ 
(Article 68(1)(a)(iii)).40.  The Greek aid measures for less-favoured areas (sheep/goats and new 
single payment entitlements) were designed on the basis of an old def-  
inition of Less Favoured Areas covering around 80 % of the country’s 
usable agricultural land. Apart from the fact that this lack of targeting 
serves to dilute the available funds, some areas considered to be less 
favoured in the past may no longer be so today30.
41.  Lastly, the aid was granted without any criteria for changing or improv -
ing previous practices31. For the measures audited, a large proportion of 
beneficiaries therefore benefit from a deadweight effect in the form of 
aid that, at best, maintains an existing practice. Whilst this arrangement 
is consistent with the terms set for ‘maintenance of production’ in respect 
of measures introduced under Article 68(1)(b)32, for those measures that 
targeted improvement it is inherently inefficient and insufficient for the 
purpose of changing the existing situation33.
42.  For the crop -rotation measure (Italy, Spain), although the national au -
thorities targeted specific regions or areas, the aid is available to all 
farmers in these areas, regardless of what they were doing before. As an 
illustration, one Italian beneficiary visited during the audit claimed that 
he did not change his crop rotation practices.
43.  In Greece, the stated objective of aid for durum wheat is to improve qual -
ity. To that end, it imposes certain conditions in that respect (certified 
seed, AGRO 2 production method), but there is no stipulation that the 
crop grown or the production method must have changed compared 
with previous practice.
44.  In France, the Article 68 subsidy replaced an equivalent national insur -
ance measure, almost doubling the subsidy rate. The data reveal that the 
very steep increase in the level of aid from 2010 only had little impact, 
with no more than a slight rise in both the percentage of land insured 
and the number of contracts. Essentially, therefore, the near -doubling of 
aid produced deadweight in the form of contracts that already existed 
and land that was already insured.
21
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?INSUFFICIENT JUSTIFICATION FOR THE CHOSEN AID RATES
45.  The regulation only requires a partial justification of the chosen aid 
rates in the case of agri- environment measures, for which a ceiling is 
set34. In addition to the difficulty, highlighted by the audit, of setting 
this limit reliably, the risk of the aid being set too low to be effective is 
not adressed35. For other measures, the regulation does not impose any 
specific obligation to justify the chosen rates.
46.  However, setting aid at an appropriate level (neither too high nor too 
low) is a key stage in sound financial management.
47.  In most cases36 no documentation was available to permit an understand -
ing of the choices made or an evaluation of their likely effectiveness. 
On the contrary, the levels of aid were not the result of a study, even 
a cursory one, which would make it possible to justify their relevance. 
Rather, they were often arrived at by a simple distribution of the budget 
allocation (itself the result of political negotiations) among the likely 
beneficiaries.
48.  For example, two of the three sheep/goat measures (Greece and France) 
under review did not document rates at all. Depending on the Mem -
ber State, the rates ranged from 3 euros to 24 euros per animal, yet no 
information was found to rationally explain the difference in order of 
magnitude or the likely difference in impact.
49.  For one crop -rotation measure (Italy) which was one of the cases found 
where a needs analysis had been made to determine the necessary 
rate of aid, the level ultimately chosen was lower than the one initially 
estimated.34 ‘[…] only for the coverage 
of the additional costs 
actually incurred and income 
foregone in order to fulfil the 
objective concerned’ (Article 
68(2)(a)(i)).
35 See also Special Report 
No 7/2011: ‘considerable 
problems were identified 
concerning the aid amounts, 
ranging from shortcomings 
in their calculation to a lack 
of differentiation according 
to regional or local site 
conditions’ .
36 8 measures out of 11; for 
insurance measures, the level 
of aid has been fixed to the 
maximum percentage (65 %) 
allowed by the regulation.
22
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?37 Article 27(3) of 
Council Regulation (EC, 
Euratom) No 1605/2002 of 
25 June 2002 on the Financial 
Regulation applicable to 
the general budget of the 
European Communities 
(OJ L 248, 16.9.2002, p. 1).
38 Where these 
agri- environment measures 
are concerned, Special Report 
No 7/2011 concluded ‘that 
the objectives determined 
by the Member States are 
numerous and not specific 
enough for assessing 
whether or not they 
have been achieved. […] 
Nevertheless, considerable 
problems existed as regards 
the relevance and reliability 
of management information. 
In particular, very little 
information was available on 
the environmental benefits of 
agri- environment payments.’  
With regard to coupled 
livestock aid, Special Report 
No 11/2012 concluded: 
‘there are weaknesses in 
the monitoring of key 
performance indicators and 
in assessing the ultimate 
social and environmental 
impacts of the schemes by 
the Commission and Member 
States […].’ .INSUFFICIENT TOOLS TO ASSESS THE EFFECTIVENESS OF THE 
MEASURES
50.  The Financial Regulation37 provides that specific, measurable, achievable, 
relevant and timed (SMART) objectives shall be set for all sectors of ac -
tivity covered by the budget and that achievement of those objectives 
shall be monitored by performance indicators for each activity. And ac -
cording to generally accepted sound financial management standards, 
these performance indicators should be relevant, accepted, credible, 
easy and robust (RACER).
51.  Given that Article 68 is just a budgetary framework designed to meet 
various needs and a range of objectives, SMART objectives and RACER 
performance indicators cannot be feasibly set at the level of Article 68 
taking into account the scale and diversity of the different measures.
52.  The Court found that the lack of proper systematic monitoring (setting 
SMART objectives and monitoring RACER indicators) would hinder the 
possibilities for evaluating the performance of most of the measures 
under review at a variety of levels (see Box 2 )38.
53.  In that context, the Court notes that DG Agriculture and Rural Develop -
ment’s multiannual plan provides for an evaluation of Article 68 meas -
ures in 2016/2017. However, as explained above, such an evaluation will 
be relevant only if based on a proper monitoring framework using SMART 
objectives and RACER performance indicators.
23
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?BOX 2
EXAMPLES OF WEAKNESSES IN TERMS OF OBJECTIVES AND INDICATORS
Examples of non‑SMART objectives
 — Durum wheat aid : ‘This action aims to improve the quality of durum wheat and thus safeguard the produc -
tion of high- quality flour for pasta production […].’
 — Sheep/goat aid : ‘To support the role of sheepmeat and goatmeat as regards stemming the decline in rural 
populations, territorial structuring and maintaining biodiversity.’
 — Crop rotation : ‘To increase levels of organic substances in the soil, because the repeated deep tilling typical 
of monoculture causes the mineralisation of organic substances […], reducing soil fertility and causing large 
amounts of CO2 to be released into the atmosphere […] Reducing soil erosion […] Maintaining biodiversity.’
Examples of no or inadequate indicators
 — Organic farming maintenance aid : In the decision it notified to the Commission, France reported that 
the indicator used for this measure was the number of hectares under cultivation for organic production. 
However, even if the relevance of such an indicator is accepted within the wider framework of the French 
plan ‘Organic Farming in 2012’ , it is not specific enough in relation to the actual objectives of this measure 
(risk of returning to conventional agriculture), which is merely a small part of the plan.
 — New single payment entitlements in less‑favoured or mountain areas : No indicator was provided for 
assessing the impact of this measure.
 — Protein crop aid/Crop‑rotation aid : The only element available for these measures is the number of hec -
tares for which aid is being claimed and/or paid out. This element increases in proportion with expenditure, 
yet without providing any information on the actual impact of the measures as far as the stated final objec -
tives are concerned (e.g. input requirements, soil fertility/erosion).
24
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?39 Paragraph 3.15 of the 
Annual Report concerning 
the financial year 2011  
(OJ C 344, 12.11.2012).
40 Cereals, oilseeds and 
protein crops.INAPPROPRIATE OR INSUFFICIENT CONTROLS OF 
THE IMPLEMENTED MEASURES AT MEMBER STATE 
LEVEL
54.  Within the general legal framework set by Regulation No 73/2009 and 
Regulation (EC) No 1120/2009, a set of specific eligibility criteria has 
been established by each Member State for each measure. The Integra-  
ted Administration and Control System (IACS, developed in Regulation 
(EC) No 1122/2009) provides standards of controls to ensure compliance 
with both general and specific rules, notably via administrative controls 
and on-the -spot checks. Thus, effective control of Article 68 support pre -
supposes that IACS is operating effectively (see paragraph 3). However, 
since IACS is already subject to regular checks by the Court39, the audit 
was not geared towards providing an opinion on it and only the aspects 
specific to Article 68 measures are developed below.
WEAKNESSES IN THE ADMINISTRATIVE CONTROL AND MANAGEMENT 
SYSTEMS
55.  The Court’s audit revealed various weaknesses in the administrative con -
trol and management systems:
56.  In France and Italy, the national authorities were not able to document 
the existence of procedures to avert the risk of duplicate financing with 
some other schemes. Moreover, weaknesses in the audit trails made it 
impossible for certain automatic administrative checks to be re -verified. 
Finally, the documents made available in some of the files examined did 
not provide sufficient support for the payments made or explanation for 
anomalies found, such as abnormal payment dates.
57.  Although fodder legume aid (France) is reserved for new areas previously 
planted with COP40, no provision is made for any administrative controls 
on compliance with this condition and, even in the case of on-the -spot 
checks, document inspections were not systematically carried out. How -
ever, the errors found in this respect, together with the aid application 
form’s lack of clarity, point to a high rate of undetected errors for this 
sub-measure.
25
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?41 In specific cases where 
the basis for calculating aid 
differs from the terms of 
the beneficiary’s contract 
with the insurer, this system 
may prove to be less 
effective. However, even in 
this particular scenario the 
residual risk was found to be 
very small.58.  One of the aids for sheep (France) is conditional on compliance with 
a productivity ratio, yet no administrative checks are performed on this 
condition, which is therefore only verified during on-the -spot checks. In 
one case of aid for goats, support had been granted 2 years running on 
the basis of a supporting document which showed that the beneficiary 
did not meet the required conditions.
59.  In one of the Spanish regions, a misinterpretation of the dairy sector aid 
meant that the beneficiaries had been refused payment for a number of 
eligible animals. At the same time, an error in the configuration of the 
management system resulted in the additional land area component of 
aid being paid on the basis of a criterion at odds with the terms of the 
national measure, although the overall financial impact was limited.
60.  Furthermore, the audit of the sample of selected beneficiaries high -
lighted errors in the database that was used to calculate aid to the cattle 
sector (Italy).
61.  In the specific case of measures to provide insurance support, the 
French control system relies heavily on the insurers’ data and checks. 
This approach, which is justified by the insurers’ direct financial inter -
est in checking the contractual data that provides the basis for the aid 
calculation41, allows a mainly automated form of centralised control. In 
particular, it has made it possible to reduce the number of on-the -spot 
checks significantly.
62.  By contrast, no equivalent system relying on insurers’ data has been 
introduced in Italy. In addition to an increased administrative workload, 
the audit highlighted several dysfunctions, such as the subsidising of 
premiums corresponding to insured values set by the beneficiary with 
no reference to actual past production or any form of justification. More-  
over, because aid was paid before the beneficiary had paid the insurance 
premium, there were recoveries.
26
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?42 By contrast, another 
Member State visited got 
around this requirement 
by making no provision 
for a compulsory retention 
period when devising its 
animal measures, thus 
rendering the obligation to 
conduct all or some of its 
checks during that period of 
the year inapplicable.63.  The existing arrangements to provide insurance support in France are 
not sufficient to monitor insurers’ margins and, therefore, to monitor 
the financial implications of aid for the final beneficiary (a crucial part 
of evaluating the likely longer -term impact). When the insurance group 
that provides around 80 % of subsidised contracts increased its rates 
in 2010, it absorbed for itself a significant portion of the permissible 
subsidy under Article 68 support.
WEAKNESSES IN THE ON‑THE‑SPOT CHECKS
64.  On-the -spot checks carried out by national authorities suffer from vari -
ous weaknesses as the Court’ s audit revealed:
65.  In Greece, in 2010 the national authorities only carried out half of the 
on-the -spot checks for the sheep/goat measure that are required by 
the regulation. Moreover, some three quarters of these checks were 
non- compliant, since they had not been conducted during the com -
pulsory animal retention period42.
66.  In Italy, the minimum rate of on-the -spot checks was not achieved in 
the case of the insurance measure (chiefly because of the total lack of 
checks in one of the regions under review). Even when the stipulated 
checks were carried out, they were confined to producer associations 
acting as intermediaries and there was no verification of insurers or final 
beneficiaries. Moreover, the statistics supplied for the dairy sector to 
show compliance with this obligation include veterinary inspections, 
yet the checks carried out during these inspections were neither clearly 
defined nor reviewed. Lastly, the information needed to verify the mini -
mum number of on-the -spot checks could not be obtained for the crop 
rotation measure.
67.  In two Member States (Spain and Italy), it was found that the dates of 
some on-the -spot checks on area aid had come too late to allow some 
of the key verifications required for the crop rotation measure to be 
completed. In one of the two cases, it was also found that some checks 
were being conducted on the basis of old satellite images when more 
recent images were available.
27
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?43 Where livestock measures 
in particular are concerned, 
the many audits carried 
out by DG Agriculture 
and Rural Development ‘s 
clearance -of-accounts units 
have brought conclusions 
that, in substance, are 
reasonably similar to the 
Court’s in the following 
respects: (a) the number and 
timetable of on-the -spot 
checks (Greece, Italy, 
Lithuania, Romania, United 
Kingdom); (b) insufficient 
on-the -spot checks of 
documentation (Bulgaria, 
Greece, Spain, Poland); 
(c) poor recording of the 
specific verifications made 
in the course of on-the -spot 
checks (Bulgaria, Spain, 
Lithuania); (d) shortcomings 
in the updating of animal 
databases (Greece, Italy, 
Lithuania, Poland, Romania).  
Despite the amount of 
work already done by the 
Commission, it was found 
that more systematic use of 
the data at its disposal could 
have drawn attention to other 
deficiencies in the Member 
States’ control systems.
44 The audit concluded that 
‘the regulation does not 
specify how the Commission 
sees verifiability and 
controllability articulated 
and no guidelines have been 
issued. We understand that 
it was a deliberate choice (...) 
to leave as much discretion 
as possible to the Member 
States. Nonetheless (...) in the 
absence of clear guidance 
effective control may not 
be ensured. In addition it 
may be difficult to assess 
(...) whether controls are 
operated as intended. We 
therefore invite (...) to explore 
possibilities to better ensure 
controllability and verifiability 
of the proposed Article 68 
measures, for instance by 
adapting the terms of the 
current or future post-2013 
legislation or by issuing 
additional guidelines.’ .68.  Weaknesses were found (Greece and Spain) with regard to the document 
inspections carried out during on-the -spot checks on animal aid and the 
reductions to apply in cases where important supporting documents 
were missing 43.
69.  Finally, it was noted (in France) that when an on-the -spot check identi -
fies a structural problem which makes it likely that the beneficiary would 
have been ineligible over previous years there is no procedure for ex -
tending the scope of the check and attempting to identify and recover 
the full amount unduly paid.
HEAVY MANAGEMENT AND CONTROL BURDEN
70.  The introduction of specific measures entails a specific burden in terms 
of management (setting up ad hoc systems) and control (notably, num -
ber of controls, how they have to be organised and what verifications 
should be carried out), which has to be taken into account from the 
beginning.
71.  In 2011, the Commission’s internal audit had found that Article 68 pre -
sented inherent risks and that there was a need to verify upfront that 
measures implemented would be controllable44.
72.  Problems such as those identified in the case of the sub -measure for 
new fodder legumes (paragraph 57) and dairy sector aid (paragraph 59), 
illustrate the risks involved in improperly setting up an ad hoc system 
for measures that are allocated a small budget (especially  when they are 
intended to be provisional). By contrast, for the durum wheat aid meas -
ure (Greece), systematic administrative checks had been introduced45 
which, although seen as more efficient, entail a heavy workload both 
for the national administration and for the beneficiaries.
45 Automatic capping of aid in accordance with a seed ratio per hectare, with systematic control of seed invoices and labels for all the 
65 000+ applicants.
28
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?46 As beneficiaries can 
apply under more than one 
measure, the total number 
of beneficiaries is not 
immediately available.73.  Quantitatively speaking, maintaining coupled support necessitates 
a great many on-the -spot checks, which are extremely expensive for 
the Member States — even if the cost is seldom assessed. Article 68 is 
responsible for over 1,43 million aid applications in all Member States46. 
Even though the regulatory requirements were not met in certain cases, 
around 110 000 on-the -spot checks were carried out in respect of these 
measures in 2011.
74.  Although some controls would still be necessary if there were no specific 
support (SPS verifications, veterinary checks, etc.), a large part of today’s 
workload is directly linked to the scheme.
75.  Qualitatively speaking, the finding that some area checks were poorly 
timetabled with regard to the verifications required by coupled support 
(paragraph 67) illustrates, on the one hand that specific supports gen -
erate constraints compared to single payments, and on the other hand 
that these constraints are not always given due consideration.
76.  Moreover, the various control weaknesses found, for example regard -
ing inadequate documentary verification in the course of livestock aid 
on-the -spot checks, demonstrate that, to be effective, many such checks 
would currently need to be improved at an additional cost or burden 
(see Box 3 ).
BOX 3
COMPARING THE LEVEL OF AID WITH THE ASSOCIATED COSTS: GREEK AID FOR SHEEP/
GOATS
The basic aid amount is just 3 euros per animal. Beneficiaries of this measure receive an average of around 
550 euros.
With nearly 2 600 on-the -spot checks carried out in 2010, Greece fell far short of its obligations under the 
regulation in this respect (4 800 checks required). See paragraph 65.
Shortcomings were discovered with regard to the inspection of documents in the course of these checks. In 
particular, it was found that certain documents simply did not exist although, in theory, they had to be verified 
for the checks to be valid. The beneficiary justified the absence of proof of the animals’ deaths by means of vet -
erinary certificates on the basis of costs which was considered by him out of all proportion to the aid received.
29
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
CONCLUSIONS AND RECOMMENDATIONS
77.  The Court’ s audit revealed that the design and implementation of the 
support measures under Article 68 are affected by various shortcomings 
which should be addressed in the context of the new CAP .
78.  The Single Payment Scheme (SPS), introduced in 2003, was based on the 
principles of decoupling direct payments from production and simplify -
ing the payment regime (‘single payment’). As a derogation, Article 68 
allows for Member States to maintain direct coupled payments ‘in clearly 
defined cases’ . However, the Court’s audit disclosed that the Commission 
had little control over the justification for such cases and that Member 
States had a large degree of discretion in introducing direct coupled 
payments. As a result, the implementation of Article 68 provisions was 
not always fully aligned with the general principles of decoupling and 
simplification now governing the common agricultural policy (see para -
graphs 14 to 26).
79.  The Court also found that there is insufficient evidence in the Member 
States that the measures introduced under Article 68 are necessary or 
relevant and this in terms of the need for them, the effectiveness of their 
design and the levels of aid made available (see paragraphs 31 to 49). 
Insufficient objectives and indicators will hinder the future assessment 
of the measures (see paragraphs 50 to 53).
80.  Lastly, the Court pointed out weaknesses in the administrative and con -
trol systems that had been set up to ensure that existing measures were 
correctly implemented. This was equally true of the systems of manage -
ment, administrative controls and on-the -spot checks (see paragraphs 55 
to 69). Such weaknesses were sometime noted despite management 
and control burdens that are already heavy but might need to increase 
further still if they are to meet the requirements of the regulations (see 
paragraphs 70 to 76).
30
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?47 See also Court Opinion 
No 1/2012.
Specific support for certain agricultural activities should be based on 
a strict understanding of the provisions of Article 68 and the granting 
of such coupled support should be adequately justified to the Com -
mission and checked by it.
(a) To be able to assume its ultimate responsibility under the system 
of shared management, the Commission should play a more ac -
tive role in establishing the criteria governing the implementa -
tion of the measures.
(b) Member States should be required to demonstrate that each spe -
cific support measure which they intend to introduce is necessary 
(in terms of the need for and added value of an approach based 
on derogations), relevant (in terms of implementation arrange -
ments, award criteria and aid levels), and that it satisfies the cri -
teria of sound financial management.RECOMMENDATION 1
Account being taken of the variety of possible measures, an appropriate 
system of monitoring (through the definition of relevant indicators that 
can be gauged against an established starting point and sufficiently 
specific objectives) should be established to facilitate subsequent 
evaluation.RECOMMENDATION 281.  In the context of the introduction of the ‘post-2013’ CAP , the Commis -
sion proposal now under discussion would allow specific support to be 
maintained in the form of coupled payments, but without sufficiently 
defining precise limits (see paragraphs 27 to 28)47. In this regard, the 
Court has the following main recommendations:
31
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Once measures have been introduced, the Member States should es -
tablish suitable and comprehensive management and control systems 
to ensure that all the requirements of the regulation can be satisfied.
In order to avoid generating disproportionate costs on the limited scale 
of a specific support measure, the requirement for monitoring and con -
trol should already be taken into account during the measure’s design 
phase (simplicity of implementation, ‘controllability’ of criteria, etc.) 
and even at the time of the decision on whether or not to introduce 
a given measure.RECOMMENDATION 3
This Report was adopted by Chamber I, headed by Mr Ioannis SARMAS, Member of 
the Court of Auditors, in Luxembourg at its meeting of 25 September  2013.
For the Court of Auditors
Vítor Manuel da SILVA CALDEIRA
President

32
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
ANNEX I
ENVELOPE ALLOCATED TO ARTICLE  68 FOR  2010–13, BY MEMBER STATE 
AND ACTIVITY (WITHOUT EX. ARTICLE 69 MEASURES)
Protection or 
enhancement 
of the 
environment 
68(1)(a)(i)Quality 
68(1)(a)(ii)Marketing 
68(1)(a)(iii)Animal 
welfare 
68(1)(a)(iv)Agri-
environment 
benefits 
68(1)(a)(v)Specific 
disadvantages 
affecting 
vulnerable 
types of 
farming  
68(1)(b)Preventing 
farmland 
from being 
abandoned 
68(1)(c)Insurance 
68(1)(d)Mutual funds 
68(1)(e)TOTAL
France 176 50 424 790 350 84 1 874 29 %
Italy 601 396 280 1 277 20 %
Spa in 126 270 402 798 12 %
Gre ece 152 160 120 432 7 %
Hun gary 185 218 15 417 7 %
Poland 82 58 155 295 5 %
Finland 27 3 167 196 3 %
Por tugal 8 35 53 37 133 2 %
Rom ania 14 118 133 2 %
Cze ch Republic 4 19 104 127 2 %
Net herlands 27 55 8 32 122 2 %
Den mark 18 65 26 109 2 %
Ireland 4 96 100 2 %
Bulgaria 15 73 88 1 %
Uni ted Kingdom 60 60 1 %
Aus tria 52 52 1 %
Slovenia 29 20 50 1 %
Slovakia 45 45 1 %
Lithuania 36 36 1 %
Belgium 4 8 18 30 0 %
Latvia 1 20 21 0 %
Swe den 6 1 7 0 %
Estonia 5 5 0 %
Ger many 4 4 0 %
TOTAL 344 1 085 1 55 1 216 2 589 358 677 84 6 409 100 %(million euros)
Source : DG Agriculture and Rural Development.
Note : The figures may not add up to the totals due to rounding.
33
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?SUMMARY OF THE MEASURES SELECTED IN THE MEMBER STATES VISITED
GREECE
Aid for durum wheat (introduced under Article 68(1)(a)(ii))
General description : Per hectare area aid for the production of durum wheat meeting certain qual -
ity requirements.
Main conditions for eligibility
 ο Use of certain certified varieties of durum wheat seed.
 ο Use of a minimum quantity of seed per ha (80 kg/ha in 2010, 100 kg/ha in 2011).
 ο Not in receipt of funding from the equivalent rural development measure (132).
Aid rates (euro per hectare)
Indicative 
estimate1 Actual
2010
90 euro/ha69 euro/ha
2011 80 euro/ha
1 The measure was introduced on the basis of an indicative estimate calculated according to the available budget and participation 
forecasts. As the budget is a fixed maximum amount, the rate actually paid can vary with actual participation.
Aid for sheep/goats in less‑favoured areas (Article 68(1)(b))
General description : Coupled aid for sheep and goats granted for flocks located in or migrating to 
less-favoured or mountain areas. In addition to the basic aid, a supplement is provided for ‘native 
breed’ animals and a higher rate is paid for transhumant flocks.ANNEX II
34
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Main conditions for eligibility
 ο Ewes and she -goats over 1 year old on 31 December.
 ο Compulsory retention period from 15 May to 31 December.
 ο Hold at least 50 eligible females (sheep or goats).
 ο Basic aid: be located in a less-favoured or mountain area.
 ο ‘Native breed’ supplement: female animals belonging to a specific breed native to Greece and appearing 
in a stud register (the ‘native breed’ supplement cannot be combined with transhumance aid).
 ο Transhumance aid: transhumance of more than 90 % of the animals for at least 90 days from an area which 
is not less-favoured to a less-favoured area.
Aid rates  (euro per eligible animal)
Basic aid 3 euro/eligible female
Native breed supplement 2 euro/eligible female
Transhumance aid 4 euro/eligible female
In practice, approximately 95 % of payments consist of basic aid.
New single payment entitlements in less‑favoured or mountain areas (Article 68(1)(c))
General description : Allocation of up to 4 additional single payment entitlements (SPEs) for farms 
in less-favoured or mountain areas covered by the 2007–13 Rural Development Programme.
Main conditions for eligibility
 ο Located in an area classified as less-favoured or mountainous.
 ο Hold at least 1 ha of eligible land without associated SPEs.
 ο  In practice, given the restricted budget, aid was granted to a limited number of applicants, based on a points 
system giving priority to new and/or smaller farms.
Aid rate : New single payment entitlements are paid at a rate of 300 euro/ha.ANNEX II
35
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?SPAIN
Aid for crop rotation in unirrigated areas (Article 68(1)(a)(v))
General description : This is a per -hectare area aid which is made available for declared land (up 
to 100 ha) that includes certain percentages of arable crops as alternatives to cereals and set -aside. 
Contrary to its title, the measure does not directly impose crop -rotation conditions.
Main conditions for eligibility
 ο Beneficiary must have been listed in 2007 as a grower of arable crops with withdrawal or set -aside rights.
 ο Plots of arable crops must be located in an unirrigated area, classified as yielding less than 2 t/ha.
 ο  Grow at least 20 % of non- cereal crops (oilseed crops, protein crops and legumes listed in the national 
legislation) and comply with a 10–25 % set -aside rate, depending on the area involved.
 ο Supplement 1: a minimum of 25 % of non- cereal crops to be grown.
 ο Supplement 2: a minimum of 25 % of legumes to be grown.
Aid rates  (euro per hectare)
Basic aid 60 euro/ha
Supplement 1 20 euro/ha
Supplement 2 20 euro/ha
Aid for the dairy sector in less‑favoured areas (Article 68(1)(b))
General description : Coupled direct aid for dairy cows in less-favoured areas. Payment is capped at 
100 animals per farm. Additional support is granted to farmers with a minimum area of forage land.ANNEX II
36
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Main conditions for eligibility
 ο Farm with milk quotas and making sales, located in an area classified as mountainous, depopulated or with 
specific limitations.
 ο Dairy cows more than 24 months old, correctly identified and owned on 30 April (no compulsory reten -
tion period).
 ο Additional land area component: minimum of 0,4 ha of forage area per eligible cow.
Aid rates  (euro per eligible animal)
Indicative 
amountsActual amounts
2010 2011
Basic aid — mountains and areas with 
specific limitationsFirst 40 
Next 60 60
4859,15
47,3259,41
47,52
Basic aid — depopulated areasFirst 40 
Next 60 49
4048,57
38,5647,85
38,28
Additional land area componentFirst 40 
Next 60 55
4438,88
27,2238,55
26,98
Aid for sheepmeat/goatmeat (Article 68(1)(b))
General description : Coupled aid for ewes or she -goats granted to meat producers participating 
in group actions (e.g. infrastructure, marketing, training).
Main conditions for eligibility
 ο Non‑dairy  ewes and she -goats over 1 year old (or which have already given birth) owned on 1 January 
(no compulsory retention period).
 ο Belong to a producer grouping which meets certain criteria (e.g. infrastructure, marketing, training), repre -
sents at least 5 000 breeding animals and is committed to retaining 90 % of this flock for 3 years.ANNEX II
37
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Aid rates (euro per eligible animal)
Indicative 
estimateActual
2010
4,30 euro5,03 euros
2011 4,58 euros
FRANCE
Additional aid for protein crops (Article 68(1)(a)(i))
General description : Aid per hectare to encourage farming involving a large proportion of protein 
crops, which are considered to provide significant environmental advantages. Another form of aid 
was later introduced for new areas of fodder legume crops which were not shown in the planning 
documents initially sent to the Commission.
Main conditions for eligibility
 ο Eligible production/varieties: protein crops (peas, field beans, sweet lupins) and fodder legumes (lucerne, 
clover, sainfoin).
 ο Growing conditions: sow before 31 May; maintain crops in a normal state of growth and care, the protein 
crops to be harvested after the stage of lactic ripeness.
 ο Specific criteria for fodder legumes: plant on a plot sown the previous year with cereals, oilseeds and protein 
crops; no aid received under a MAET.ANNEX II
38
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Aid rates (euro per hectare)
Protein crops Legume crops
Estimated Actual Estimated Actual
2010 150 euro/ha 100 euro/ha - 13,5 euro/ha
2011 125 euro/ha 140 euro/ha - 16 euro/ha
2012 100 euro/ha n/a - n/a
Aid for protein crops is described as ‘additional’ because, in 2010 and 2011, the rates shown above 
were paid in addition to an amount of 56  euro/ha under an existing coupled measure which was 
not withdrawn until 2012.
The ‘forage legume crops’ sub -measure only represents 1 million euros of the 40 million euros budget-  
ed for the protein crops measure in 2010 and 2011.
Aid for maintaining organic farming (Article 68(1)(a)(v))
General description : Area aid to support organic farmers by compensating them for the extra costs 
and shortfalls not adequately covered by market prices.
Since the 2011 crop year, a second measure, ‘Conversion to organic farming’ ( not selected as part 
of the audit ), has been available. This is also a type of area aid, with higher rates for land being 
converted.ANNEX II
39
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Main conditions for eligibility
 ο Meet the organic farming specifications for each plot of land for which aid is requested (it is not necessary 
for all plots to be used for organic farming).
 ο No aid received under an AEM.
Aid rates  (euro per hectare)
Market gardening and arboriculture 590 euro/ha
Vegetables, vines and perfumed, aromatic and medicinal plants 150 euro/ha
Annual crops (cereals, etc.) 100 euro/ha
Grasslands and chestnut groves 80 euro/ha
Heathland, summer pastures and runs 25 euro/ha (from 2011)
Aid for sheep/goats (Article 68(1)(b))
General description : Coupled aid for ewes or she -goats (meat or milk). In addition to the basic aid, 
a supplement is available for sheep on the basis of marketing criteria and for goats based on health 
criteria.
Main conditions for eligibility
 ο Ewes and she -goats over 1 year old (or which have already given birth) at the end of the compulsory re -
tention period (may be replaced, under certain conditions, by female lambs/kids during their compulsory 
retention period, up to a maximum of 20 % of the total flock declared).
 ο Compulsory retention period of 100 days from 1 February.
 ο Minimum of 50 eligible ewes or 25 eligible she -goats (in the case of goats, aid is capped at 400 animals).
 ο For sheep, have complied with the minimum productivity ratio (number of lambs born/ewes present) in 
year n-1.
 ο Supplement for sheep: breeders who are members of a commercial producers’ organisation or have signed 
marketing contracts.
 ο Supplement for goats: breeders who have signed up to the guide to good health practices or the mutual 
code.ANNEX II
40
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Aid rates  (euro per eligible animal)
Indicative 
estimateActual 2010 Actual 2011
Sheep
basic aid
supplement21,00
-20,58
3,0020,76
3,00
Goats
basic aid
supplement13,00
-8,93
3,008,75
3,00
Crop insurance (Article 68(1)(d))
General description : Financial contribution to the payment of crop insurance premiums to cover 
economic losses caused by adverse climatic events.
Main conditions for eligibility
 ο The measure is limited to crop insurance premiums (plants).
 ο The main conditions are laid down in Article 70 of Regulation (EC) No 73/2009 and Article 47 of Regulation 
(EC) No 1120/2009.
Aid rate : 65 % of the eligible part of the premium, which is the maximum permitted under EU 
legislation.ANNEX II
41
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?ITALY
Crop rotation (Art 68(1)(a)(v))
General description : Area aid granted to farmers who practise crop rotation every 2 years on the 
same plot, alternating between cereals and protein or oleaginous soil-improving crops.
Eligibility criteria
 ο Eligible regions: Abruzzo, Basilicata, Calabria, Campania, Lazio, Marche, Molise, Puglia, Sardinia, Sicily, Tuscany 
and Umbria.
 ο Eligible varieties: legumes and cereals as defined in national law.
 ο To be eligible, areas must measure at least 500 m2.
 ο The biennial crop rotation must respect the following cycles:
Crop rotation
first 2-year periodCrop rotation
second 2-year period
Eligible  
Year 1 Year 2 Year 3 Year 4
cereal legumes cereal legumes Yes
cereal legumes legumes cereal Yes
legumes cereal legumes cereal Yes
legumes cereal cereal legumes No
Aid rates  (euro per hectare )
Maximum 
ratesActual ratesHectares
claimedEligible
hectares
2010 100 euro/ha 100 euro/ha 902 490 888 877
2011 100 euro/ha 92 euro/ha1n/a n/a
1 Rate still provisional at the start of 2012, set on the basis of an expected 
increase in the number of applicants.ANNEX II
42
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Improving the quality of agricultural products in the bovine sector (Article 68(1)(a)(ii))
General description : Direct aid per head granted for the calves of beef or dual-purpose (meat and 
milk) suckler cows. The measure comprises an additional slaughter premium for cattle reared in ac -
cordance with quality labelling protocols or on farms participating in a recognised PDO (protected 
designations of origin) or PGI (protected geographical indication) labelling scheme.
Eligibility criteria:
 ο The calves must either have been born out of suckler cows belonging to specific breeds that appear in the 
stud register or suckler cows of specific dual-purpose breeds that are used only for meat and recorded in 
the national register of breeds.
 ο To obtain the slaughter premium, farmers must have reared the animals in accordance with an approved 
voluntary code or be participants in a quality meat -labelling scheme approved by MIPAAF1. Slaughtered ani -
mals must be between 12 and 24 months old and have been reared by the beneficiary for at least 7 months.
Aid rates  (euro per eligible animal)
Budget 
(thousand 
euro)Maximum 
indicative 
rate  
(euro/head)Final rate  
(euro/head)
Calves of 
suckler cowsPrimiparous1 beef cattle appearing in the stud register
24 000200 172,30
Multiparous beef cattle appearing in the stud register 150 129,23
Mixed breeds appearing in the register 60 55,93
Beef calvesCompliant with voluntary labelling specifications
27 25050 42,63
Certified PDO/PGI under Council Regulation (EC) No 510/20062 90 76,73
1 Primiparous cows have given birth once; multiparous cows have given birth at least twice.
2 Council Regulation (EC) No 510/2006 of 20 March 2006 on the protection of geographical indications and designations of origin for 
agricultural products and foodstuffs (OJ L 93, 31.3.2006, p. 12).
1 Ministry of Agriculture, Food and Forestry Policies.ANNEX II
43
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Insurance (Article 68(1)(d))
General description : Subsidies for crop insurance premiums paid to cover climate risks (hail, high 
winds, heavy rain, etc.) or animal or plant diseases in the event of losses exceeding 30 % of annual 
production.
Eligibility criteria
 ο Insurance policies lasting no more than 1 calendar year and taken out with an authorised insurance com -
pany (this is usually done through producers’ associations (Consorzi di Difesa)).
 ο Insure all the production of a specific product on one or more parcels in the same municipality.
 ο The insured value of each product may not exceed the reference prices published every year in the Min -
istry’s national insurance plan.
 ο Support is calculated as the lower of the insurance premiums paid and the notional insurance cost cal -
culated by ISMEA2 on the basis of losses recorded in the same municipalities in the previous 5 or 6 years.
Aid rate : 65 % of the eligible part of the premium, which is the maximum permitted under the EU 
regulation.
Until 2010, a national measure had provided equivalent aid at a subsidy rate of 80 %.
2 ISMEA (Istituto di Servizi per il Mercato Agricolo Alimentare  — Services Institute for the Farming and Food Market) is a public entity 
responsible for statistics, studies and analyses in the agricultural sector.ANNEX II
44
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?EXECUTIVE SUMMARY
I.
Although Article 68 increased the number of objectives 
for which aid could be granted within a maximum limit 
of 10 %, it also introduced a stricter limitation for coupled 
aids (maximum 3.5 % of the national ceilings of the MS). 
IV.
The Commission considers that the implementation of 
the specific support scheme which includes a possibility 
of granting coupled payments does not call into question 
the general orientation of the direct payments scheme 
towards decoupling as this possibility is limited (3.5 % of 
the national ceiling) and is compatible with WTO rules.
V.
The legislator considered it to be the exclusive responsibil -
ity of the Member States to identify types of farming or 
agricultural sectors to be supported by measures under 
Article 68. They were thought to be best placed to identify 
regions or sectors with difficulties on their territory and 
to fix priorities among various needs for targeted support.
The Commission’s proposal for post-2013 PAC includes the 
establishment of a common monitoring and evaluation 
framework in cooperation with the Member States with 
a view to measuring the performance of the common agri -
cultural policy, including first and second pillar measures.
VI.
As acknowledged by the Court in its footnote 44, the Com -
mission had already identified several weaknesses in the 
framework of the clearance of accounts procedure. Some 
of the weaknesses concern a very limited number of ben -
eficiaries and do not point to general systemic weaknesses. REPLY OF THE 
COMMISSION
45
REPLY OF THE  
COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?
VII.
The Commission’s ‘post-2013’ CAP proposal as regards 
voluntary coupled support is subject to a number of 
limits: a list of eligible sectors and productions, defined 
quantitative limits, limited percentage of the Member 
State's national ceiling for direct payments, Commission’s 
approval above a certain level of such percentage, cond-  
itions for granting the support (still to be specified by del -
egated acts).
VII. (a)
In the post-2013 CAP , the Member States will have to 
inform the Commission on the regions targeted, the 
selected types of farming or sectors and the level of sup -
port to be granted. In doing so, they will describe the rea -
sons why the coupled support is envisaged and what the 
expected effects are.
Where the decision taken by the Member State triggers 
the derogation from the basic percentage of the national 
ceiling, a detailed description of the particular situation in 
the region targeted and of the particular characteristics 
of the types of farming or specific sectors which justify 
the increased level of support will be required. Where the 
Member State’s decision is subject to approval, specific 
constraints such as the lack of alternatives or the need to 
provide stable supply to local processing industry shall be 
demonstrated.
VII. (a) First indent
According to the political compromise (preliminary agree -
ment with the co-legislators) in the context of the post-
2013 CAP reform, the Commission has empowerment to 
define the conditions for granting the aid through dele -
gated acts.The Commission’s objective is to introduce a clear simplifi -
cation in comparison with the current specific support as 
the voluntary coupled support will refer only to one of the 
nine measures existing under Article 68. This means that 
despite the list of sectors eligible being more extended 
than before, the number and the diversity of the objec -
tives of the support are restricted to one category (i.e. the 
economic vulnerability of certain types of farming). The 
Commission considers that this will reduce the risk of over -
lapping and accumulation of support.
VII. (a) Second indent
Under the powers the Commission has been given through 
delegated acts, notably the conditions for granting the 
support will be defined.
As a general rule, the Member States will have to inform 
the Commission on the regions targeted the selected 
types of farming or sectors and the level of support to be 
granted. In doing so, they will describe the reasons why 
the coupled support is envisaged and what the expected 
effects are.
Where the decision taken by the Member State triggers 
the derogation from the basic percentage of the national 
ceiling, a detailed description of the particular situation 
in the region targeted and of the particular characteris -
tics of the types of farming or specific sectors which jus -
tify the increased level of support will be required. Where 
the Member State's decision is subject to approval, spe -
cific needs like the lack of alternatives or the need to pro -
vide stable supply to local processing industry shall be 
demonstrated.
REPLY OF THE  
COMMISSION46
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?VII. (b)
The implementing rules to be adopted by the Commis -
sion will provide for obligations for the Member States to 
periodically inform on the actual uptake of the measures 
implemented. Such obligations are necessary for the Com -
mission in order to comply with its own obligation to regu -
larly report to the WTO since coupled support is concerned 
as derogation from the global decoupled orientation of 
the direct payments schemes. 
Minimum information will be required on the number of 
applications lodged under each kind of support measure 
and on the amounts actually paid as well as the number of 
beneficiaries per region, sector and/or type of farming in 
every Member State.
Such communications will allow the Commission to fol -
low the actual implementation of the scheme for all the 
support measures implemented irrespective of the sector 
concerned as well as the compliance with the budgetary 
ceilings fixed. 
More generally, the political compromise includes the 
establishment of a common monitoring and evaluation 
framework in cooperation with the Member States with 
a view to measuring the performance of the common agri -
cultural policy, including first and second pillar measures.
VII. (c)
Member States are responsible for deciding and designing 
the support measures to be implemented and will have to 
ensure that such measures are verifiable and controllable. 
Therefore, they shall take into account the costs for man -
agement and control resulting from the possible imple -
mentation of coupled support measures and the possible 
need of setting up ad hoc control systems.OBSERVATIONS
15.
Coupled livestock measures are available under  
Article 68(1)(b), which covers a limited list of sectors 
including the beef and veal and the sheep and goat sec -
tors for vulnerable types of farming. The introduction of 
such support is not automatic as the Member States which 
decide to introduce such support have to identify a need 
and target vulnerable types of farming in those sectors. 
In this framework nothing prevents a Member State to 
continue implementing the support measure considered 
appropriate to the objective defined.
Common reply to paragraphs 16 and 17
The possibility offered to Member States to introduce cou -
pled payments does not call into question the general ori -
entation of the 2003 CAP reform towards decoupling, as it 
is limited to a maximum of 3.5 % of their national ceiling 
for direct payments.
18.
The risk of an increased use of the partial decoupling has 
been mitigated as the conditions established for specific 
support under Article 68-72 of Regulation (EC) No 73/2009 
are more restrictive than the ones applicable in the con -
text of previous Article 69, and the agri-environmental 
measures are subject to the Commission’s approval.
47
REPLY OF THE  
COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?19.
The margin of appreciation with regard to the concept of 
‘clearly defined cases’ referred to in Recital 35 of Council 
Regulation (CE) No 73/2009 is restricted by Articles 68, 70, 
71 and 72 of the Regulation as well as in Articles 37 to 49 
of Commission Regulation (CE) No 1120/2009 and in Regu -
lation (EC) No 1122/2009 as regards its verification.
Common reply to paragraphs 20 and 21
The Commission points out that the Member States are 
obliged to notify it of the decision to implement specific 
support measures. On this basis, the Commission fixes the 
yearly applicable budgetary ceiling. Furthermore, apart 
from the specific Commission approval required for the 
agri-environment measures, the Commission carries out an 
assessment of all the measures notified in order to detect 
major possible problems of compatibility with the applica -
ble legal framework.
22.
See reply to Box 1.
Box 1
The Commission considers that the support measures for 
‘environment’ and ‘agri-environment’ are clearly distinct.1 
The ‘agri-environment’ measures are subject to specific 
requirements and a ceiling of 10 % of the MS national 
ceiling; they are also approved by the Commission. Such 
requirements are similar to the ones applicable to equiv -
alent agri-environment measures included in the rural 
development programmes. The ‘environment’ measures 
give the Member States more flexibility, as they are not 
subject to the same requirements while they are subject to 
a more limited ceiling2. 
1 As laid down respectively in Article 68(1)(a)(i) and (v) of Regulation 
(EC) No 73/2009 and Articles 40,44 and Annex IV to Regulation (EC) 
No 1120/2009. 
2 3.5 % of the MS national ceiling, as foreseen in Article 69(4) of Regulation 
(EC) No 73/2009.24.
Eight out of nine kinds of measures are not subject to any 
Commission approval.
Notifications are made in accordance with Annex IV to 
Regulation (EC) No 1120/2009, which means that they do 
not contain all detailed information concerning the meas -
ures. In general, national implementing rules are more 
detailed than the information notified to the Commission. 
This has been noticed during the audits carried out by the 
Commission in the Member States in the context of the 
clearance of accounts.
26.
Denmark initially notified the measure concerned under 
Article 68 (1) (a) (v) of Regulation (EC) No 73/2009 pro -
viding compensation for agri-environmental commit -
ments. However, during the assessment of the measure 
it appeared that the envisaged measure was in fact an 
investment measure aiming at the planting of energy 
crops and not an agri-environmental measure. Conse -
quently, Denmark reformulated the measure so as to make 
it compatible with Article 68 (1) (a) (i).
27. (a)
The Commission’s objective is to introduce a clear simplifi -
cation in comparison with the current specific support as 
the voluntary coupled support will refer only to one of the 
nine measures existing under Article 68. This means that 
despite the list of sectors eligible being more extended 
than before, the number and the diversity of the objec -
tives of the support are restricted to one category (i.e. the 
economic vulnerability of certain types of farming). The 
Commission considers that this will reduce the risk of over -
lapping and accumulation of support. 
REPLY OF THE  
COMMISSION48
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?27. (c) (i)
Subject to the conditions established by the Commis -
sion, it is the exclusive responsibility of the Member States 
to identify types of farming or agricultural sectors that 
undergo certain difficulties which should be supported. 
They are thought to be best placed to identify regions or 
sectors with difficulties on their territory and to fix priori -
ties among various needs for targeted support, taking also 
into account the sector specialisation of the regions. 
27. (c) (ii)
In addition, support shall be granted within defined quan -
titative limits and based on fixed areas and yields or on 
a fixed number of animals. 
28.
The concept of ‘difficulties’ will be specified by means of 
delegated acts. 
Furthermore, the fact that most coupled aid measures cur -
rently in place could be maintained cannot be criticised 
in principle, as long as they are considered appropriate to 
reach a specific objective identified by the Member State.
Common reply to paragraphs 31 and 32
It is up to the Member States to decide where coupled 
or decoupled support is the most appropriate means of 
reaching the objective defined. They shall notify the meas -
ures they intend to implement to the Commission, describ -
ing in particular the need identified on their territory and 
the reasons for granting the support. 
These measures are not subject to the Commission’s 
approval.33.
In Spain there is no official statistical data available related 
specifically to the trend of the surface on cereal, oleagin-  
ous, protein and leguminous crops in the areas where the 
measure is applicable (zones with a cereal yield lower than 
2 tons/ha). Nevertheless, the measure as such, which aims 
at the promotion of alternative crops to cereals, respect -
ing a certain rate of set-aside, represents a benefit for the 
environment as it contributes positively to the sustainable 
management of natural resources (water and soil).
34.
These measures are not subject to the Commission’s 
approval.
35.
As organic farming is less profitable and technically more 
demanding, some operators are returning to conven -
tional agriculture (for instance, in 2005/2006 there was 
a decrease of 1 % in the certified ‘organic surfaces’  — from 
504,536 ha to 499,589 ha — and 0.5 % in 2006/2007 — 
from 499,589 ha to 497,314 ha). The figures may seem low, 
but the risk is very real, especially in view of the trend of 
increasing prices in agricultural products. Meanwhile, both 
measures of conversion to and maintenance of organic 
farming have started been very successful. From 2008, 
there was a real take-off of the maintenance measure. 
In 2008/2009 the certified organic surfaces increased by 
4,7 %, while the organic surfaces in the conversion phase 
increased by 86,2 %. However, this does not imply that the 
risk of abandonment has disappeared.
Common reply to paragraphs 36 and 37 
(including footnote 27)
On the basis of their analysis of the needs for a specific 
support, the Member States select, among the measures 
offered by the scheme, the ones allowing to better address 
the objective set and to grant the appropriate level of sup -
port taking into account the various limits set up by the 
legislation for each type of measure as well as the coupled 
or the decoupled character of the payment (3,5 % or 10 % 
ceiling). It is up to them to consider which type of support 
is more appropriate to addressing the need identified and 
the objective defined.
49
REPLY OF THE  
COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?38.
In a number of cases, in the framework of its assessment of 
the measures, the Commission asked the Member States to 
improve and specify the targeting of the support. 
39.
For measures under Article 68(1)(a)(i) the responsibility of 
identifying the need, fixing the objective and designing 
the measure accordingly belongs to the Member State. For 
measures under Article 68(1)(a)(v), the same responsibility 
of the Member State is subject to a Commission assess -
ment, including on the causal link between support and 
objectives, in view of the approval.
40.
These measures are not subject to the Commission’s 
approval.
41.
Only measures under Article 68(1)(a),(ii),(iii),(iv) and (v) 
specifically refer to an objective of increasing or improv -
ing a particular factor, i.e. ‘changing existing situation’ as 
stated by the Court. The Commission reminds that EU leg -
islation set up the principle that specific support shall not 
compensate for the respect of mandatory requirements. 
More specifically, practices for enhancing animal welfare 
standards shall go beyond the minimum requirements laid 
down in the applicable EU or national legislation. A simi -
lar precondition applies to agri-environment measures. 
For quality, the farmer shall join existing EU or national 
schemes to be selected or defined by the Member States. 
Requirements for marketing are defined by the EU legisla -
tion on information and promotion. The Commission did 
not detect a priori, in the Member States notifications, 
cases where support was granted without any reference 
to a change in the existing situation. For the purpose of 
measuring that change, the Commission required the 
Member States to fix appropriate baselines for the support 
measure to be implemented.42.
In the case of the Italian crop rotation measure, an analysis 
of normal agricultural practice in the regions concerned 
was requested by the Commission prior to the approval 
of the measure. Following this analysis, the initial Italian 
proposal for a triennial crop rotation was changed into 
a biennial one.
The measure proposed by Spain contributes to the main -
tenance of some traditional cultural practices which are 
good for the environment. In the absence of the aid pro -
posed in the agri-environmental measure there is a risk 
of abandonment of those cultural practices. As a conse -
quence farmers would follow the monoculture of cereal 
crops which are less beneficial for the environment.
43.
As regards the lack of a stipulation that the crop grown 
or the production method must have changed compared 
with previous practice, the Commission points out that it 
is not necessarily a shortcoming, but may result from the 
requirements of the quality scheme defined as eligible by 
the Member State. 
Common reply to paragraphs 45 and 46
The fixing of the level of support was left by the legisla -
tor to the Member States, which were thought to be best 
placed to determine the level of support appropriate to 
address the need identified and the objective defined. The 
level of support calculated by the Member State for the 
purpose of the notification is indicative. 
REPLY OF THE  
COMMISSION50
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Common reply to paragraphs 47 and 48
These measures are not subject to the Commission’s 
approval.
49.
In the Italian case, the calculations have been revised fol -
lowing the Commission's assessment. 
The Commission’s decision was taken on the basis of the 
changes notified by Italy to the measure in which the certi -
fied calculations of additional costs and income foregone 
amounted to €101 and €100 respectively for the two Italian 
macro-regions for which the measure had been proposed.
52.
Overall, the fact that there are no RACER indicators does 
not mean that there is no information available that can 
be used for the evaluation of the policy. Moreover, while 
indicators can contribute to the evaluation of a policy, they 
need to be carefully interpreted against the context. In this 
sense, the costs and benefits for a detailed indicator frame -
work need to be carefully assessed, since other approaches 
(e.g. more qualitative techniques or mixed methods) might 
offer better value for money.
Box 2 — Examples of no or inadequate indicators
See Commission’s reply to paragraph 52.
Box 2 — First indent
The objective of this measure is to support farmers prac -
ticing organic farming by the compensation of additional 
costs and loss of earnings, since they are insufficiently 
supported by market prices. However, this measure basi -
cally addresses environmental issues, and for this reason, 
the indicator of ‘number of hectares under cultivation for 
organic production’ is most appropriate.3 
Moreover, this indicator is consistent with the Common 
Indicators for Monitoring and Evaluation of Rural Develop -
ment Programmes 2007–13 CMEF. 
3 There are two kind of indicators in French statistics used in organic 
farming: ‘number of hectares under cultivation for organic production’  
(whose transition period is over), and ‘number of hectares in transition’ .Box 2 — Third indent
Since crop rotation and protein crops are beneficial 
from environmental perspective, the number of hectares 
referred to by the Court is essential data. However, to eval -
uate the impact of the CAP on the environment, additional 
information is needed. This is foreseen in the Monitoring 
and Evaluation system for the post-2013 CAP .
53.
At the time of the evaluation, the Commission will estab -
lish the relevant evaluation questions. Monitoring inform-  
ation is one element on which the evaluator can base his 
analysis; however, there are also other information sources 
and tools such as targeted questionnaires, surveys or sta -
tistical data the evaluator can use to evaluate the impact 
of the policy.
55.
As acknowledged by the Court in its footnote 44, the Com -
mission had already identified several weaknesses in the 
framework of the clearance of accounts procedure. Some 
of the weaknesses concern a very limited number of bene-  
ficiaries and do not point to general systemic weaknesses. 
56.
The Member States shall, pursuant to the legislation, 
ensure that the specific support measures they implement 
are verifiable and controllable. 
In order to address the risk of duplicate financing, the 
Member States shall ensure that a farmer receive support 
for a given operation under only one measure. The Com -
mission considers that the French and Italian authorities 
have in place demarcation criteria for avoiding duplicate 
financing from both Article 68 and Rural Development. For 
instance, more than 10 % of the applications for ‘conver -
sion to organic farming’ were rejected in France in 2011 
because applicants were already beneficiaries of a Rural 
Development measure. 
Several weaknesses have already been identified by the 
Commission and are subject to ongoing audits. Specifi -
cally, in relation to the crop rotation in Italy, the Court’s 
observation will be assessed by the Commission in a forth -
coming audit. 
51
REPLY OF THE  
COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?57.
This weakness has already been identified by the Commis -
sion and is subject to an ongoing audit AA/2011/010/FR.
58.
The absence of administrative checks of the productivity 
ratio in relation to the aid for sheep in France has been 
identified and is followed up by the Commission in the 
framework of the clearance procedure.
59.
The Court’s observations on the dairy sector aid in Spain 
concern a limited number of applicants in one region. 
The configuration error regarding the additional land area 
component of the aid concerned equally a very limited 
number of applicants.
60.
The Member State has already taken corrective actions for 
the identified files. 
62.
The Commission takes note of the dysfunctions identified 
by the Court in Italy in relation to insurance measures. 
These will be followed up during a forthcoming clearance 
of accounts audit on this measure.
63.
These measures are not subject to the Commission’s 
approval.
64.
The Commission considers that the work done in the con -
text of clearance of accounts covers appropriately the risk 
to the Funds posed by the weaknesses identified by the 
Court. 
In this context, the Commission welcomes the Court’s 
remark in footnote 44. 65.
The Court’s observations concerning on-the-spot checks 
for the sheep/goat measure in Greece in 2010 are already 
the subject of an audit by the Commission. Furthermore, 
the Member State has already taken corrective actions for 
the subsequent years.
66.
The Commission takes note of the Court’s findings and will 
assess them during forthcoming clearance of accounts 
audits.
67.
According to the Spanish authorities, the verifications are 
carried out by means of remote sensing (95 %) and by 
classic on-the-spot visits (5 %). Regarding remote sens -
ing, photointerpretations are made four times: in autumn 
of the previous year, in the beginning and at the end of 
spring, and in summer; while these are completed by rapid 
on-the-spot field visits. The measures taken by the Spanish 
authorities seem to reduce the risk for the Fund. However, 
the Commission will take into account the remarks of the 
Court in the framework of its audit activity.
The Court’s remarks for Italy will be assessed during 
a forthcoming clearance of accounts audit.
68.
The Court’s observations on the weaknesses concerning 
document inspections during the on-the-spot checks for 
the sheep/goat measure in Greece are already subject of 
an audit by the Commission. As regards Spain, the Com -
mission will follow-up this observation in the clearance of 
accounts audit.
REPLY OF THE  
COMMISSION52
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?69.
The Commission will follow this observation and take 
appropriate measures.
Common reply to paragraphs 70–75
The Member States take into account the costs for man -
agement and control resulting from the implementation of 
specific support measures and the possible need of setting 
up ad hoc control systems.
76.
See Commission replies to 70–75. 
Box 3 — Third paragraph
An administrative certificate can be issued by the comp-  
etent public authorities without cost for the beneficiaries. 
The possible burden falls on the authorities for issuing the 
certificates in time.
As regards the Court’s observations on the number of on-
the-spot checks carried out and the weaknesses concern -
ing document inspections see Commission replies to para -
graphs 65 and 68.CONCLUSIONS AND RECOMMENDATIONS
77.
The subsidiarity principle will apply to the coupled sup -
port scheme foreseen in the Commission’s proposal. There -
fore, the Member States will have to design and implement 
the support measures according to the objective they will 
have identified. 
78.
The Commission considers that the implementation of 
the specific support scheme which includes a possibility 
of granting coupled payments does not call into question 
the general orientation of the direct payments scheme 
towards decoupling as this possibility is limited (3.5 % of 
the national ceiling) and is compatible with WTO rules.
79.
The legislator considered it to be the exclusive responsibil -
ity of the Member States to identify types of farming or 
agricultural sectors to be supported by measures under 
Article 68. They were thought to be best placed to identify 
regions or sectors with difficulties on their territory and 
to fix priorities among various needs for targeted support.
The Commission’s proposal for post-2013 PAC includes the 
establishment of a common monitoring and evaluation 
framework in cooperation with the Member States with 
a view to measuring the performance of the common agri -
cultural policy, including first and second pillar measures.
80.
As acknowledged by the Court in its footnote 44, the Com -
mission had already identified several weaknesses in the 
framework of the clearance of accounts procedure. Some 
of the weaknesses concern a very limited number of ben -
eficiaries and do not point to general systemic weaknesses. 
53
REPLY OF THE  
COMMISSION
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?81.
The Commission’s ‘post-2013’ CAP proposal as regards 
the voluntary coupled support is subject to a number of 
limits: a list of eligible sectors and productions, defined 
quantitative limits, limited percentage of the Member 
State’s national ceiling for direct payments, Commission’s 
approval above a certain level of such percentage, condi -
tions for granting the support (still to be specified by del -
egated acts). 
Recommendation 1
In the post-2013 CAP , the Member States will have to 
inform the Commission on the regions targeted, the 
selected types of farming or sectors and the level of sup -
port to be granted. In doing so, they will describe the rea -
sons why the coupled support is envisaged and what the 
expected effects are.
Where the decision taken by the Member State triggers 
the derogation from the basic percentage of the national 
ceiling, a detailed description of the particular situation in 
the region targeted and of the particular characteristics 
of the types of farming or specific sectors which justify 
the increased level of support will be required. Where the 
Member State’s decision is subject to approval, specific 
constraints such as the lack of alternatives or the need to 
provide stable supply to local processing industry shall be 
demonstrated.
Recommendation 1 (a)
According to the political compromise (preliminary agree -
ment with the co-legislators) in the context of the post-
2013 CAP reform, the Commission has empowerment to 
define the conditions for granting the aid through dele -
gated acts.
The Commission’s objective is to introduce a clear simplifi -
cation in comparison with the current specific support as 
the voluntary coupled support will refer only to one of the 
nine measures existing under Article 68. This means that 
despite the list of sectors eligible being more extended 
than before, the number and the diversity of the objec -
tives of the support are restricted to one category (i.e. the 
economic vulnerability of certain types of farming). The 
Commission considers that this will reduce the risk of over -
lapping and accumulation of support.Recommendation 1 (b)
Under the powers the Commission has been given through 
delegated acts, notably the conditions for granting the 
support will be defined.
As a general rule, the Member States will have to inform 
the Commission on the regions targeted the selected 
types of farming or sectors and the level of support to be 
granted. In doing so, they will describe the reasons why 
the coupled support is envisaged and what the expected 
effects are.
Where the decision taken by the Member State triggers 
the derogation from the basic percentage of the national 
ceiling, a detailed description of the particular situation 
in the region targeted and of the particular characteris -
tics of the types of farming or specific sectors which jus -
tify the increased level of support will be required. Where 
the Member State’s decision is subject to approval, spe -
cific needs like the lack of alternatives or the need to pro -
vide stable supply to local processing industry shall be 
demonstrated.
Recommendation 2
The implementing rules to be adopted by the Commis -
sion will provide for obligations for the Member States to 
periodically inform on the actual uptake of the measures 
implemented. Such obligations are necessary for the Com -
mission in order to comply with its own obligation to regu -
larly report to the WTO since coupled support is concerned 
as derogation from the global decoupled orientation of 
the direct payments schemes. 
Minimum information will be required on the number of 
applications lodged under each kind of support measure 
and on the amounts actually paid as well as the number of 
beneficiaries per region, sector and/or type of farming in 
every Member State.
REPLY OF THE  
COMMISSION54
Special Report No 10/2013 — Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and implemented?Such communications will allow the Commission to fol -
low the actual implementation of the scheme for all the 
support measures implemented irrespective of the sector 
concerned as well as the compliance with the budgetary 
ceilings fixed. 
More generally, the political compromise includes the 
establishment of a common monitoring and evaluation 
framework in cooperation with the Member States with 
a view to measuring the performance of the common agri -
cultural policy, including first and second pillar measures.
Recommendation 3
Member States are responsible for deciding and designing 
the support measures to be implemented and will have to 
ensure that such measures are verifiable and controllable. 
Therefore, they shall take into account the costs for man -
agement and control resulting from the possible imple -
mentation of coupled support measures and the possible 
need of setting up ad hoc control systems.
European Court of Auditors
Special Report No 10/2013
Common agricultural policy: Is the specific support provided under Article 68 of Council Regulation (EC) No 73/2009 well designed and 
implemented?
Luxembourg: Publications Office of the European Union
2013 — 54 pp. — 21 × 29.7 cm
ISBN 978-92-9241-382-8
doi:10.2865/26972

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QJ-AB-13-010-EN-C
EUROPEAN COURT OF AUDITORSAS A DEROGATION TO THE GENERAL PRINCIPLES OF DECOUPLING AND SIMPLIFYING THE 
PAYMENT REGIME FOR FARMERS, ARTICLE 68 ALLOWS MEMBER STATES TO RETAIN PART 
OF THEIR NATIONAL CEILINGS TO PROVIDE SPECIFIC SUPPORT TO CERTAIN ACTIVITIES, 
NOTABLY THROUGH DIRECT COUPLED PAYMENTS, IN CLEARLY DEFINED CASES.
IN THIS REPORT, THE COURT NOTES THAT THE COMMISSION HAS LITTLE CONTROL OVER 
THE JUSTIFICATION FOR SUCH CASES AND THAT MEMBER STATES HAVE A  LARGE DEGREE 
OF DISCRETION. THERE IS INSUFFICIENT EVIDENCE THAT THE MEASURES INTRODUCED 
UNDER ARTICLE 68 ARE NECESSARY OR RELEVANT IN TERMS OF NEEDS, EFFECTIVENESS 
OF THEIR DESIGN AND THE LEVELS OF AVAILABLE AID. THE COURT ALSO POINTED OUT 
WEAKNESSES IN THE ADMINISTRATIVE AND CONTROL SYSTEMS, SOMETIMES DESPITE 
MANAGEMENT AND CONTROL BURDENS ALREADY HEAVY.