COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 10.02.1997 
COM(97) 39 final 
REPORT FROM THE COMMISSION TO THE COUNCIL 
on co-financing of remote sensing checks in connection 
with agricultural subsidies 
required under Article 6 of Regulation (EC) No 165/94 

COMMISSION REPORT TO THE COUNCIL 
on co-financing of remote sensing checks in connection 
with agricultural subsidies 
required under Article 6 of Regulation (EC) No 165/94 
1. Introduction 
1.1 CAP reform 
In 1992, Regulation No 1765/921 "reformed" the common agricultural policy (CAP). The reform covers the main 
arable crops and certain fodder areas and imposes compulsory set-aside of part of the arable crop area. Direct area-
based subsidies are paid to farmers, amounting to around ECU 16.2 billion in 1996. 
1.2 IACS 
Council Regulation No 3508/922 and Commission Regulation No 3887/923 set up an "integrated administration 
and control system" (IACS) for Community subsidies granted under the reform arrangements. This system 
requires farmers in all Member States to submit a standardised annual declaration and involves a computerised 
database, identification of land parcels declared and animals and integrated control procedures. 
The rules provide for two forms of control: 
• "administrative" i.e. based on the IACS files and databases. These checks, made on all applications, are 
outside the scope of this report. 
• physical checks, covcri ng a sample of at least 5% of applications selected using criteria set in the rules. 
1.3 Remote sensing 
This is specifically provided for as a physical checking option (Regulation No 3508/92 Article 8 (4)) at Member 
States' discretion. The alternative is "traditional" checking by inspection on the spot. All Member States except 
Luxembourg and Austria decided to use remote sensing in 1996. 
Remote sensing is in fact a type of on-the-spot checking involving scrutiny of information on the actual use of 
agricultural parcels during the crop year. This information is however gathered by aircraft or satellite instead of 
being obtained by visiting the parcels. 
1.4 Development of remote sensing for CAP control purposes 
The European Commission's Joint Research Centre (IRC) at Ispra in Italy developed the basic techniques used in 
the Remote Sensing controls, in its MARS Project (Monitoring Agriculture by Remote Sensing) approved by the 
Council in 1988. The aim at this time was to use satellite imagery to produce European agricultural statistics. 
Council Regulation (EEC) No 1765/92 of 30 June 1992 establishing a support system for producers of 
certain arable crops (OJ L 181, 1.7.92, p. 12) 
Council Regulation (EEC) No 3508/92 of 27 November 1992 establishing an integrated 
administration and control system for certain Community aid schemes (OJ L 355, 5.12.92, p.l) 
Commission Regulation (EEC) No 3887/92 of 23 December 1992 laying down detailed rules for 
applying the integrated administration and control system for certain Community aid schemes (OJ 
L 391, 31.12.92, p. 36) 
o^ 
In 1990 the EAGGF used satellite imagery experimentally to compile a regional inventory for durum wheat in 
southern Italy and central Greece. This was a purely statistical exercise, i.e. there was no checking of individual 
farmers or their plots. 
In 1991, i.e., before implementation of reform, the EAGGF with JRC help began test checks on individual plots 
declared. In that year declarations covering durum wheat, five year set-aside, vine grubbing and cotton were 
checked in Greece, Spain, France and Italy. 
In 1992, ten Member States used the system for checks on two newly introduced measures: temporary land set-
aside4 and temporary aid for oilseeds5. 
Remote sensing was thus ready for use when CAP reform was implemented in 1993. This both facilitated adoption 
of the reform (until then the main experience of subsidising on an area basis was with durum wheat, where serious 
problems had come to light in 1990) and warranted specific mention of the technique in the regulatory provisions. 
1.5 Co-financing 
Since 1970 Regulation No 729/706 has left the cost of control work to be met by Member States. Remote sensing is 
however a fairly new and complex technique bound to raise expenditure when first used. Accordingly in a waiver 
from the general rule Commission Regulations Nos 2069/917 and 615/928 (application rules for temporary land 
set-aside and for oilseed aid) introduced Community financing of remote sensing checks. Regulation No 3887/92 
continued this. 
Since 1994 it has been the Council itself by a specific Regulation, No 165/949, that has authorised co-financing for 
five years of jointly organised control programmes. Commission Regulation (EC) No 601/9410 sets the detailed 
rules. 
Before 1994 100% of costs were met from the EU budget. From 1994 to 1998 the rate is 50%.A separate 
appropriation (no co-financing involved) covers centralised image purchasing by the Directorate-General for 
Agriculture (see below). The EU budget does not co-finance the administrative costs of the programmes. These 
remain subject to the general rule. 
All Member States using remote sensing have asked for co-financing. Before 1994 Italy and the regional 
administration of Andalucia made aerial photography checks that did not form part of the programme and were 
not therefore co-financed. 
10 Council Regulation (EEC) No 1703/91 of 13 June 1991 introducing a temporary set-aside scheme for 
arable land for the 1991/92 marketing year and laying down special measures for that marketing year 
under the set-aside scheme provided for in Regulation (EEC) No 797/85 (OJ L 162,26.6.1991, p. 1) 
Council Regulation (EEC) No 3766/91 of 12 December 1991 establishing a support system for 
producers of soya beans and rape and sunflower seed (OJ L 356, 24.12.91, p. 17) 
Council Regulation (EEC) No 729/70 of 21 April 1970 on the financing of the common agricultural 
policy (OJ L 94, 28.4.70, p. 13) 
Commission Regulation (EEC) No 2069/91 of 11 July 1991 laying down detailed rules for application 
of the temporary set-aside scheme for arable land for the 1991/92 marketing year (OJ L 191, 
16.7.1991, p. 19) 
Commission Regulation (EEC) No 615/92 of 10 March 1992 laying down detailed rules for a support 
system for producers of soya beans and rape and sunflower seed (OJ L 67, 12.3.92, p. 11) 
Council Regulation (EC) No 165/94 of 24 January 1994 on co-financing by the Community of remote 
sensing checks and amending Regulation (EEC) No 3508/92 (OJ L 24, 29.1.94, p. 6) 
Commission Regulation (EC) No 601/94 of 17 March 1994 laying down detailed rules for application 
of Council Regulation (EC) No 165/94 as regards co-financing by the Community of remote sensing 
checks on agricultural areas (OJ L 76, 18.3.1994, p. 20) 
3 
2. Technical description 
2.1 General organisation 
Farmers are required to submit their annual subsidy applications in prescribed form and by dates set in line with 
Regulation 3508/92, in general between the end of March and 15 May depending on Member States. Remote 
sensing allows correct declarations to be picked out so that inspection on the spot can be directed to the others and 
to problem parcels and its amount and cost reduced accordingly. 
What actually happens is that satellite images obtained at several dates in the crop year or aerial photos (depending 
on local conditions) are "photo-interpreted" to allow comparison of the actual situation as revealed by the images 
with the parcel areas and contents declared by farmers. This work is very specialised and most Member States 
contract it out. 
The contractor is involved only in the actual photo-interpretation work. Handling of files upstream and 
downstream of this is by the national administration. The farmer normally has no contact with the contractor and 
so no third party enters into his relations with the administration. Calculation of penalties and financial 
adjustments applying to farmers is never entrusted to the contractor. 
Table 1 shows the main stages and their times. The times may differ from one Member States and sometimes from 
one region to another. 
Table 1 - Main stages 
————— 
Task Period 
Choice of control zones, assessment of image requirements September-November 
Call for tenders, selection of contractors, signature of contracts December-March 
Selection and administrative processing of applications lodged in April-June 
chosen zones; transfer of files to contractors 
Assembly of topographical or IAS documents needed and boundary March-June 
numbering of parcels declared 
Acquisition of set of images (by Commission) and/or aerial photos November, March, May, June 
by contractors), processing, geometrical correction etc. (August) 
Photo-interpretation of parcels to be checked on images or photos May-August 
Categorisation and return of files and results June-August 
Inspection on the spot of problem parcels July-October 
Contractor's report to Administration and discussions of results October-November 
2.2 Tender specifications 
The Commission organises every year with the Member States a general invitation to tender covering the whole 
Union. A jointly drawn up specification describes the services required. The invitation and the specification are 
published in October or November (in 1996: 22 November). 
2.3 Selection of contractors 
From 1990 to 1992 contracts were concluded directly by the Commission. Since 1993 each Member State selects 
one or more contractors in agreement with the Commission and then signs a contract under national law. The 
contract confers entitlement to co-financing. 
2.4 Satellite images 
The satellites providing usable images for control purposes are SPOT 1, 2 and 3 giving pixel11 dimensions of 10 
metres (black and white) and 20 m (colours) and LANDSAT TM 5 (30 m pixel). The new 1RS 1C satellite will 
give a 5.8 m b!ack and white pixel in 1997. The black and white and colour images from the various satellites are 
The pixel is the smallest visible component of the image. 
4-
interchangeable. For each control zone 4 or 5 images are acquired during the year so that the full vegetation cycle 
is covered. 
Experience has shown that centralised purchasing of images by the Commission opens up possibilities inaccessible 
to individual Member States and avoids disorderly competition for satellite programming. Co-ordination is all the 
more necessary where control responsibilities are regionalised. In addition substantial price reductions are 
obtained The EAGGF therefore purchases the images, lends them to the contractors (retaining ownership) and 
stores them at the JRC at Ispra at die end of the contract 
The number of satellites available and centralised management by the EAGGF means that the optical images 
needed are available for most of Europe. Even in cases of serious cloud cover (greatest risk in Northern Europe) 
radar images taken by the European satellites ERS 1 and 2 (not requiring sunlight and unaffected by cloud cover) 
can replace the missing optical images with still very acceptable results. 
These images allow applications for the year in question to be verified and also in certain cases their eligibility as 
determined by a reference period set in the rules. For instance, archived images found through suppliers' 
catalogues have been used to check that land declared as "arable" was not on 31.12.1991 under permanent pasture, 
permanent crops or trees or used for non-agricultural purposes (Article 9 of Regulation 1765/92). Such a check is 
possible only if images free of cloud cover exist for the required period. 
2.5 Aerial photographs 
Particularly when parcels are small, aerial photos are sometimes used alone or with combination with satellite 
images. Their pixel is generally 1 or 2 m. Organisation of aerial photography is generally more flexible and 
decentralised than satellite programming and it has not been considered useful that the Commission take 
responsibility for photo acquisition. Satellites giving 1 m pixel images are due to operate from 1999 and will be 
able to replace aerial photos. 
Aerial photos generally cost more than satellite images for an equal area. It is often difficult to organise successive 
coverings of a zone, one reason being that photography takes longer. Most of the time one view only is acquired 
and some crops, e.g., those already harvested or not yet sown, cannot be checked. This means more site visits to 
check actual land utilisation, though generally areas do not have to be measured. 
2.6 Acceptance/rejection of applications 
As with any other control procedure a conclusion must be reached on the eligibility of the application checked. In 
our case this falls into three distinct stages. 
• Area and percentage tolerances are applied that have been set in line with the technique used and the national 
context In all cases the rules make Member States responsible for setting these tolerances. 
• For each application it is then calculated whether the "crop group"12 found by the photo-interpreter 
corresponds to that declared. Up to 1995 applications were classed as accepted, rejected or uncertain. Since 
1996 two separate gradings are made: accepted/rejected and complete/incomplete. "Incomplete" means that a 
significant part of the area could not be checked since it was outside the image/photo area, under cloud etc. An 
application marked as accepted but incomplete is considered as unverified while an application can be rejected 
even if the check was incomplete. 
• It is only after contact with the farmer that the national administration accepts, corrects, applies a penalty to or 
rejects die application under Article 9 of Regulation No 3887/92 depending on the discrepancy found. 
3. Achievements 
3.1 Development of techniques 
Working methods have evolved with time, on the basis of the Commission's experience, suggestions from the 
Member States and technical progress. For example: 
12 A crop group is a set of crops (or land uses) with the same subsidy rate (cereals, oilseeds, set-aside, 
durum wheat, fodder crops etc.) 
• Adjusted rules (consolidation of control responsibilities, remote sensing explicitly scheduled) were introduced 
only from 1992 and 1993. 
• In 1993 radar images were used for the first time. 
• From 1994 use of aerial photography (alone or combined with satellite images) was made available as an 
option. 
• From 1994 checking in two stages (autumn-sown and spring-sown crops) was recommended. 
• From 1995 synergy with IACS has been sought. For example, digital orthophotos or digital files of parcel 
boundaries are exchanged between the two activities. Control can be gradually extended (as an option) to other 
sectors: compensatory aid for less favoured areas, agri-environmental measures, vineyard and olive trees 
registers etc. 
• To improve database quality the Commission has encouraged ortho-rectification of aerial photos, and this has 
become general from 1996. Precision of area measurement is improved and these photos can also be used for 
IACS purposes (or come from IACS as in Ireland and Portugal). 
• From 1996 technical tolerances can be applied to the parcel instead of the crop group, so bringing decisional 
criteria closer to those applicable in traditional checks. 
3.2 Volume of work 
Table 2 shows the Member States' steady growth of interest as reflected in number of zones selected and volume of 
applications checked. 
Table 2. Volume of remote sensing co-financed 
MS and number of 
contracts 1996 
Belgium (1) 
Denmark (2) 
Germany (2) 
Greece (2) 
Spain (2) 
Finland (1) 
France (2) 
Ireland (1) 
Italy (1) 
Netherlands (1) 
Portugal (2) 
Sweden (1) 
United Kingdom (3 ) 
TOTAL 1996 Number of zones selected 
Satellite 
0 
4 
13 
6 
12 
4 
9 
2 
21 
4 
5 
4 
6 
90 Aerial 
photos alone 
3 
0 
0 
0 
8 
0 
3 
0 
18 
0 
8 
0 
0 Number of applications checked in 1996 
Satellite 
alone 
0 
3,052 
1,514 
3,602 
15,367 
0 
4,112 
0 
0 
3,110 
3,543 
0 Aerial 
photos alone 
2,007 
0 
0 
0 
921 
0 
1,466 
0 
37,851 
0 
7,001 
0 
2,249 | 0 
40 j 36,549 | 49,246 Satellite + 
photos 
0 
0 
1,391 
700 
1,660 
4,177 
0 
2,045 
20,500 
0 
0 
2,621 
0 
33,094 Total 
2,007 
3,052 
2,905 
4,302 
17,948 
4,177 
5,578 
2,045 
58,35! 
3,110 
10,544 
2,62! 1 
2,249 j 
118,889 j 
Farmers make aiound 3.06 million applications every year, at least 5% of which must be physically checked In 
19% Italy checked 8.4% of its applications. If this overshoot is discounted for calculation of the average remote 
sensing covers 63% of the minimum 5%. 
< 
3.3 Image purchases 
Table 3 gives the numbers of images bought by the Commission for the control zones indicated in Table 2. 
Table 3. Image purchases 1994 to 1996 
1996 
1995 
1994 SPOT 
390 
340 
232 LandsatTM 
127 
155 
90 ERS (radar) 
33 
6 
7 Total 
550 
501 
379 
3.4 Application checks: General results 
Check results from 1993 to 19% are summarised below. "Uncertains" and "incompletes" are not totally 
comparable. The totals shown do not correspond to those for applications checked (see Table 2) since in certain 
cases figures for actual application numbers are not available. 
Table 4. Control results 1993 to 1996 
1996 (part) Accepted 
complete 
41,492 % 
72.57% Rejected, 
complete or 
incomplete 
13,766 % 
24.08% Accepted 
incomplete 
1,914 % 
3.35% TOTAL 
57,172 
1995 
1994 
1993 Accepted 
35,737 
24,969 
21,462 % 
57.64% 
58.31% 
65.38% Rejected 
18,557 
11,956 
7,658 % 
29.93% 
27.92% 
23.33% Uncertain 
7,706 
5,896 
3,709 % 
12.43% 
13.77% 
11.30% TOTAL 
62,000 
42,821 
32,829 
4. Further considerations 
4.1 Analysis of results 
In 19% the results were: 73% accepted, 23% rejected/complete, 1% rejected/incomplete and 3% accepted/inco 
mplete. Acceptance and rejection percentages vary widely between Member States, much more owing to the 
quality of declarations and of the parcel system available to farmers than to locally varying fraud rates. In 1996 
accepted applications ranged from 60% to 93% by Member State, in 1995 from 45% to %%. 
When a farm visit is decided on following a remote sensing exercise the inspector has the parcel and crop group 
findings accounting for rejection and can target his work accordingly. The number of parcels involved per 
application is generally fairly small and inspection time can therefore be cut down, particularly when as in certain 
cases rejection has turned solely on the use of the parcel and it does not need to be measured. His work is also 
facilitated by the documentation (map and image extracts) received from the contractor for the problem parcels, 
particularly if the reference mapping for the area is old. 
4.2 Quality control 
In complement to the contractor's own quality assurance required in every case, a double check on the quahty of 
contractor's work is also made. The Commission (JRC at Ispra in collaboration with DG VI) checks, to the benefit 
of and with the agreement of the Member States, a sample of the data received from contractors to ensure that the 
work was carried out correctly. Member States also make on-the-spot checks of a sample of applications accepted, 
along with those rejected, to check that the decisional criteria were correctly applied and assess what irregularities 
are passed over by remote sensing. This approach has no equivalent in traditional control. The aim is adjustment 
and integration of the different physical control methods so that they are complementary rather than in 
competition. 
> 
In 1995 the JRC made a first test on the data from three contractors. In 19% a IRC subcontractor and the JRC 
between them tested 11 contractors out of 18. These tests were financed by the JRC budget The test results will be 
available at the end of 1996 or beginning of 1997 depending on when the data to be tested was transmitted to 
Ispra. 
4.3 Reliability of results 
The reliability of remote sensing can be assessed from the JRC's quahty testing (only preliminary results are 
available) and from the findings of on-the-spot visits sent by the Member State to the contractor and included in 
his report Usable incomplete results are available only for 1995 and 19%. Gathering this information is a very 
tricky matter, since the assessment is in part subjective, there are numerous unclassiflable individual cases and the 
feedback the on-the-spot shecks, sometimes very concise, comes from local officials and can be difficult to 
interpret 
• Irregularities were confirmed in 42% of the 12 294 applications rejected and then checked on the spot in 
1995. In 19% (incomplete figures, 2 545 applications) the figure is 61%. The filter is therefore taking on a 
reasonable degree of efficiency in that it is not producing too many raise alerts on appUcations that should 
have been accepted. 
• It is also necessary to check that the filter stops all irregular appUcations, i.e. that appUcations are not 
accepted that should have been rejected. The checks so far made cannot be termed systematic given the very 
restricted results available: for 4 contractors in 1995 and 3 so far in 19%. Irregularities were found in 71 out 
of 241 applications accepted in 1995 and then checked on the spot. These were mainly restricted to two 
contractors. In 1996 irregularities were found in 24 appUcations out of 198. These figures for a very 
restricted sample of appUcations and contractors appear to indicate poor interpretation of information or 
differing views of what constitutes an irregularity. Nor have these percentages been confirmed so far by the 
JRC's quality control. To clarify matters a minimum volume of verification on the spot of accepted 
appUcations has now been recommended to all Member States. It should also be noted that some 
irregularities, over wheat and rape varieties and fallow maintenance, cannot be detected by remote sensing 
and this may explain certain differences. 
• The contractors sent back 25% of the applications to national administrations for further information or 
correction before they could be dealt with and were then resent 21% (1995-96 averages). Some of these 
appUcations were undoubtedly rejected a second time after photo-interpretation, which does not aUow the 
"corrected" and the "rejected" applications to be added together. Others, after correction of "obvious errors" 
or additional information, undoubtedly became acceptable. The 4% which were not photo-interpreted were 
probably checked on the spot even though not credited to remote sensing. From this angle remote sensing is 
just as or even more effective than traditional control. 
S. Cost of remote sensing 
5.1 Member States 
Tables 5 and 6 show the unit costs, separately for sateUite imaging and aerial photography. They vary widely by 
Member State depending on number of appUcations checked and their size (area) and complexity (number of 
parcels). The 19% figures are provisional except for number of appUcations. Costs have steadily fallen owing to 
improvement of techniques and contractor proficiency, increased volume and recentiy availability of IACS 
databases. There is much less of a steady trend for aerial photography, where the figures for Italy predominate (see 
Table 2). Italy's technical approach and sectoral coverage has varied very markedly from year to year. In 1994 and 
1995 remote sensing checks were basic and foUowed by verification with the farmers, not co-financed. In 19% 
ortho-rectification, generalised at the Commission's request alone added about ECU 29 per application. 
r 
Table 5. Cost trend of remote sensing by satellite, images included, exclusive of VAT 
1996 
(provisional) 
1995 
1994 
1993 No. of 
applications 
69,643 
53,388 
42,269 
34,674 No. of 
parcels 
1,023,771 
797,067 
472,975 
331,567 Area (ha) 
2,929,454 
2,498,218 
1,471,363 
937,055 Total cost 
(ECU) 
11,320,188 
9,720,793 
8,779,903 
8,806,351 ECU/ 
application 
162.55 
182.08 
207.71 
253.98 ECU/ 
parcel 
11.06 
12.20 
18.56 
26.56 ECU/ 
ha 
3.86 
3.89 
5.97 
9.40 
Table 6. Cost trend of remote sensing by aerial photography, exclusive of VAT 
1996 
(provisional) 
1995 
1994 No. of 
applications 
50,146 
46,810 
27,426 No. of 
parcels 
719,236 
553,169 
285,386 Area ( ha) 
769,110 
700,953 
313,864 Total cost 
(ECU) 
7,154,987 
4,427,537 
2,465,382 ECU/ 
application 
142.68 
94.59 
89.89 ECU/ 
parcel 
9.95 
8.00 
8.64 ECU/ 
ha 
9.30 
6.32 
7.85 
These costs include purchase of images and aerial photos and the entire remuneration (Member State's and 
EAGGF contributions) of contractors for their photo-interpretation and appUcation processing work. 
5.2 EAGGF expenditure 
The EAGGF itself purchases the images. Up to 1994 it met 100% of the cost of contracts, since then 50%. Table 7 
summarises these costs. The figures are not precisely comparable with those of tables 5 and 6 since certain 
expenditure was either not presented or not authorised for co-financing (see § 5.3) and some remote sensing 
control work (e.g. vineyard and oUve trees registers) is not included in tables 5 and 6. Some additional work in 
connection with remote sensing was also financed from the same budget: 
• a study on precision of measurement of agricultural parcel boundaries (one contract in 1992) costing 
ECU 31,560; 
• a study on automatic segmentation of parcel boundaries using satelUte images (three contracts in 1992-93) 
costing ECU 101,910; 
• a study on use of radar images in replacement of optical images (one contract in 1993) costing ECU 26,230; 
• development (following an open call for tenders) of software for the use of remote sensing for control 
purposes and testing of this by three experienced contractors (ECU 82,800 in 1993, ECU 372,729 in 1994 
and ECU 223,506 in 1995). The software (CACHOO) is now being used in Denmark, Finland and Portugal, 
and by the JRC for quality testing. 
Table 7. EAGGF expenditure on remote sensing (ECU) 
Year 
1990 (100%) 
1991 (100%) 
1992 (100%) 
1993 (100%) 
1994 (100%) 
1995 (50%) 
1996 (50%, 
provisional) 
Total 1990-96 Images (100%) 
138,718 
73,286 
437,022 
1,059,482 
1,184,134 
1,367,966 
1,408,662 
5,669,270 Application checks 
584,500 
713,931 
4,142,227 
7,577,104 
8,314,638 
7,000,000 
9,653,150 
37,985,549 Other contracts 
0 
0 
31,560 
210,940 
372,729 
223,506 
0 
838,735 Total 
723,218 
787,217 
4,610,809 
8,847,526 
9,871,501 
8,591,472 
11,061,812 
44,493,554 
9 
When Regulatio n 165/94 was adopted the financial statement indicated expenditure of ECU 20 million per year 
up to 1998 (raised to ECU 21.5 million by the 1994 Act of Accession). This amount was arrived at from current 
data: 6 million appUcations, 5% of which to be checked, estimated unit cost ECU 200, remote sensing used for 2/3. 
On present figures this estimate can be revised downwards. With extended use of remote sensing but lower unit 
costs an annual amount of ECU 15 million (including images) now appears reasonable. 
5.3 Distribution key 
The cc-financing rules provided for the available funds to be shared between Member States by a distribution key 
annexed to Regulations 3887/92 and 165/94. The key has only had to be used in 1993 since in other years 
appropriations exceeded Member States' eligible requests. In 1993 Greece did not confirm its co-financing request 
In 1995 Italy's appUcation could be granted at only 48% instead of 50%. The reason was that an additional control 
programme had been organised by Italy with the Commission's agreement but the information needed by the 
Commission to aUow it to commit the extra funds was not provided in due time. 
6. Cost efficiency 
6.1 Commission study 
In 19% the EAGGF undertook with JRC support a cost effectiveness study analysing three data sources: 
contractors' reports on remote sensing (1993 to 1995), the Member States' annual reports on implementation of 
IACS (1993 to 1995) and a questionnaire to Member States for 1995 covering supplementary checks to remote 
sensing and traditional checks. Seven Member States and four German Lander agreed to reply. The Commission 
already had some information on costs for two other Member States. The volume of data available is considerable 
but is sometimes difficult to interpret or compare. 
The first results show for the criteria used widely varying situations from one Member State to another and 
difficulty by some national administrations in calculating the cost of traditional checks and assessing their 
consistency. The Commission does not wish to risk wrongly interpreting some of the answers to the 
questionnaires. Moreover as the situation develops - and in general improves - rapidly as IACS becomes firmly 
implemented, it is often difficult to compare the reports for different years. The Commission accordingly proposes 
to supplement its analysis with the 1996 results and validate and discuss it in the next few months with the 
Member States before drawing final conclusions. 
This additional work should aid the Member States in their choices after 1998 (if cc-financing is discontinued) and 
also help the Commission in defining its position as that date approaches. 
6.2 ViabiUty 
In terms of numbers of applications checked (leaving aside questions of relative efficiency) calculation from the 
gross figures supplied by the Member States shows remote sensing checks (all related costs and VAT included) to 
be cheaper than traditional checks in Denmark, Italy, the Netherlands, one German Land (Saxony), Sweden (1996 
only) and Portugal (overall national estimate). Spain and Greece were close to equality between the two methods in 
1995 and reached it in 1996. Remote sensing is dearer in France, the United Kingdom and several German 
Lander. No information on traditional checks is available for the other Member States. 
The use of remote sensing has been preferentially targeted on appUcations covering a large area (generaUy 1.5 to 6 
times bigger than the IACS average). A calculation in terms of area covered, if possible, would give the advantage 
to remote sensing in most cases but in the absence of data on areas checked by traditional methods the weighting 
would be open to question. 
To the costs shown in Tables 5 and 6 the national administration must add the cost of processing appUcations 
before and after their handling by the contractor, any purchase of additional information (e.g. cadastral maps 
supplied to contractors) and on-the-spot checking of rejected appUcations. Lastly, VAT on contract prices is 
generaUy met by the national administration. This is not a factor for traditional checks. 
The comparative cost (weighted averages) of traditional checks and of checks before and after remote sensing has 
been estimated in the aggregate for 1995 and 1996. Table 8 gives the figures. 
Table 8. Comparison of unit costs per appUcation checked (ECU) 
Administrative preparation of the 
dossiers 
Remote sensing contract excl. VAT 
Images supplied by Commission 
Check on-the-spot 
VAT on remote sensing contract 
Total cost per application 
Average EAGGF contribution Remote sensing 
average 1995 (8 MS) 
24 
173 
24 
34 
29 
284 
86 Remote sensing 
average 1996 (8 MS) 
24 
164 
21 
34 
28 
271 
82 Traditional check 
average 1995 (9 MS) 
31 
0 
0 
198 
0 
229 
0 
For those Member States for which 1995 figures are available Table 8 shows that remote sensing checks were on 
average more expensive, VAT included, but that co-financing offset this. Comparison for the same Member States 
of the 19% remote sensing and 1995 on-the-spot figures œnfirms this. These averages however conceal widely 
differing situations from one Member State to another. In 1995 costs for remote sensing ranged from ECU 160 to 
714 per application and for traditional checks from ECU 132 to 933. The average area per application checked 
ranged from 4 to 201 ha by Member State. 
6.3 Comparative efficiency 
Only Member State statistics arc available for any attempt to analyse comparative efficiency in terms of volume of 
penalties applied or of irregularities detected. Their figures cover checks following remote sensing and traditional 
checks and they are contained in the IACS reports. 
Comparison of their figures without correction would appear to indicate that for three years (1993-95) remote 
sensing has almost always uncovered fewer problem applications than traditional checks (generaUy 2 to 4 times 
fewer depending on Member State). In fact when account is taken of the dossiers sent back to the national 
authorities before remote sensing (see § 4.3) the difference dwindles and the number of irregularities detected 
sometimes turns to the advantage of remote sensing. Moreover in terms of areas on which penalties are applied 
(and not of application numbers) the figures also become more favourable to remote sensing, which checks larger 
areas and verifies each application more fully. Remote sensing tends to leave more smaU irregularities undetected 
but this has a very small impact on the areas on which penalties are appUed. 
It is nonetheless true that risk analysis is less flexible for remote sensing (checks grouped zonaUy, whereas 
traditional checks can be targeted on isolated appUcations) and that the two types of check differ somewhat in 
nature: an inspector on the spot can cover points of detail, check elements beyond the scope of satelUte images (e.g. 
durum wheat and rape varieties, maintenance of fallow etc.), make corrections in the light of information from the 
farmer and count animals. 
6.4 Traditional checks on the spot 
Analysis of cost-effectiveness will necessarily involve comparison with traditional checks. In the IACS reports the 
Commission receives statistics on the checks made and their results but has Utile information on their actual 
content and the measuring methods used and tolerances applied. Traditional checks in fact vary widely in 
character from one country to another and also from one appUcation to another within Member States. 
In practice traditional checks are restricted by logistical constraints (travelhng time, productivity expected of 
inspectors) and by the reasonably acceptable duration to a farmer of a routine visit. The average inspection visit 
duration notified by Member States is about one day. This means that except on smaU farms it is impossible for the 
inspector to visit all parcels and at least walk round them on foot to make a rough check of their area. 
Given the time necessarily absorbed by preliminary contacts, document checks and map consultation at the 
farmhouse, in most Member States, as might realistically be expected, only between 15 and 40% of the parcels are 
actuaUy visited on the occasion of a traditional check. 
li 
In practice unless something arises indicating the need for a thoroughgoing check the inspector making a routine 
visit selects a sample of parcels to be visited. A selection may of course be very weU judged, on the basis of 
anomaUes discerned or intuition, but is none the less influenceable by the farmer or physical constraints (access, 
distance, etc.). 
Traditional checks are in some way or another often restricted by the allocation of resources, whereas remote 
sensing, for which a complete working specification can be given, is as a control both uniform and more objective, 
even if in certain respects less precise. 
Clearly if uniformity and objectivity are considered the prime criteria in efficiency in checking remote sensing will 
be advantageous in most Member States. 
7. Summary 
Remote sensing is now becoming a mature technique. Its feasibility and the grounds for its use are no longer 
questioned. The volume of applications treated by it exceeds that for the corresponding traditional checks. Thirteen 
national administrations have been able to employ a large number of contractors on it without major difficulty. 
Remote sensing has been given special emphasis and co-financed by the Commission, which secs a number of 
substantial advantages: ils dissuasive effect, essential during the critical sclling-up phase of IACS, the availability 
of full documentation for each application checked and the possibility of consulting this in case of subsequent 
dispute, its function as a focal point for reflection on control techniques and finally its more and more evident 
synergy with the most advanced aspects of IACS. 
Member States have also had to put up with certain drawbacks. Its technical Umitations for recognition of certain 
crops, minimum parcel size and cloud cover are well known but there are alternatives: aerial photos and radar 
images. The need to use contractors and group applications by zone makes management more complex and results 
in regionally imbalanccd on-the-spot checking. Lastly, the timetable for checking procedures is tight and delays 
fairly frequent. Some contractors manage however to complete the bulk of their work in three or even two months. 
This encouragement from the Commission to the Member States has given rise to some transfer of their 
responsibilities to the Commission. The situation is now moving towards a return of these to the Member States, 
which have suggested many improvements: use of aerial photographs, two-stage checking, application of parcel 
tolerances, remote sensing training courses, etc. 
On the other side of the coin, this support is a valuable source of documentation and a means of monitoring the 
difficulties encountered and assessing the quality of declarations and national IACS implementation. Co-financing 
has enabled the Commission to introduce a certain transparency with the Member States on checking by remote 
sensing. A means is available of securing quality, rigour and equality of treatment in physical checking. 
This rigour ought also to be imposed on traditional on-the-spot checks, which are carried out in much more 
variable fashion. It would however increase the cost of these and thus tilt the cost-effectiveness balance with remote 
sensing. 
8. Conclusions 
The following are the Commission's provisional conclusions that it proposes to refine in the light of data that will 
shortly be available: final report on the cosl-cffcctivcncss study, analysis of the full results of the 1996 checks and 
possibly 1997 and conclusions and recommendations from the JRC following its quality control. 
1. The Commission proposes to apply Regulation N° 165/94 fully until it expires. It will therefore be asking the 
budget authority for the appropriations needed for co-financing for 1998. 
2. Beyond 1998, if the principle of full Member State responsibility is the only consideration, it is desirable that 
the Commission ceases all co-financing of remote sensing and the Member States, on the basis of their own 
cost-effectiveness analyses, decide what techniques to use. 
UL 
3. For the moment it appears essential that the Commission continue after 1998 to be responsible for provision 
of satelUte images. This will guarantee the present security of supply, maintain the present price advantage 
and avoid disorderly competition between neighbouring control zones. Image supply, which accounts for less 
than 10% of the full cost of checking by remote sensing, and the corresponding support could be a direct 
responsibility of DG VI or the JRC or contracted out to one of the image distributors. 
4. Even without co-financing the Commission could continue its support for Member States wishing to avail 
themselves of it, either as purely technical assistance given by the JRC or as tecruiico-administrative 
assistance given jointly by DG VI and the JRC. Support could also involve continuing external independent 
quaUty control after 1998, under procedures to be decided with participating Member States, if demand is 
sufficient 
5. It would appear advantageous to pursue certain types of co-financing at 50% for Member States which, after 
launching IACS on the basis of an existing land register, wish to improve their IACS arrangements by 
creating a better or more updated one or by Unking up with other declaratory or control arrangements (e.g. 
vineyard or olive trees registers). Such action is warranted by both the importance of high quality declaratory 
and parcel identifiait ion arrangements for the purposes of administrative checks (which have to cover 100% 
of data) and the multiannual (at least five years) nature of such an investment. 
a 

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COM(97) 39 final 
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ISBN 92-78-15499-7 
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