Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) No 3508/92 establishing an integrated administrative and control system for certain Community aid schemes ("integrated system")
Date: 1996-04-29
Institutions: European Commission
Subjects: EU aid, aid system, aid to agriculture, animal production, area of holding

iPi 

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  29.04.1996 
COM(96)  174  final 

96/0122  (CNS) 

COMMISSION REPORT 

on the  application  in the Member  States of the Integrated  Administrative 
and Control  System for  certain Community  aid schemes 

Proposal  for a 
COUNCIL REGULATION (EC) 

amending Regulation  (EEC) No  3508/92  establishing  an integrated  administrative 
and control  system for  certain  Community  aid schemes  ("integrated  system") 

(presented by the  Commission) 

COMMISSION REPORT 

on 

the application  in the Member States of the Integrated Administration  and 
Control System for certain Community aid schemes 

d 

1 

2 

3 

4 

5 

6 

7 

8 

Introduction 

Scale of  expenditure verified 

Basic  components  of  Integrated  System 
3.1 
3.2 
3.3 
3.4 
3.5 
3.6 
3.7 

System  for  identifying  land 
System  for identifying  livestock 
Applications  for  aid in respect  of  land 
Applications  for  aid in respect  of  livestock 
Administrative  structures 
Computerized  crosschecks 
Summary  of  statistics  of checks 

Part-financing 

Scope  of Integrated  System  and future  outlook 

Situation  at 31  December  1995 

Remarks in connection  with  clearance  of  accounts 

Conclusions 

Annex: 

Summary  of  situation  in Member  States 

3 

4 

5 
5 
6 
7 
8 
9 
9 
10 

11 

12 

13 

15 

15 

INTRODUCTION 

The  reform  of  the  common  agricultural  policy  (CAP)  adopted  in  June  1992 
represents  a  watershed  in  agricultural  support  measures,  involving  a  shift  from 
price  support  to  compensatory  aid  paid  directly  to  producers. 

This aid is related to the land cultivated  and the number of livestock reared by the 
farmer.  It entails measures to control production, such as set-aside and support  for 
extensification  of  stockfarming. 

The  methods  for  administering  and  monitoring  the  aid  must  be  adapted 
accordingly,  in  line  with  two  main  concerns: 

- 

- 

facilitating  the  task  of  farmers  who  wish  to  take  advantage  of  the  aid 
offered, 

administering  the huge number of applications with the greatest  speed and 
security. 

Experience gained  in the past  in the administration  and monitoring  of this type of 
aid  showed  that  unless  a  totally  new  approach  was  adopted,  the  difficulties  of 
application  would  have  been  considerable  for  both  farmers  and  the  departments 
in charge of administration  and controls. It was also unthinkable to administer and 
verify  each scheme separately. Accordingly  it was decided that a single processing 
system  would  cover  all  aid  applied  for  by  each  agricultural  holding. 

In view of the large number of applicants, special means were adopted to optimize 
controls.  In  order  to  deal  with  this  large  number  of  applications  and  make 
payments  to  the  farmers  in  time,  exhaustive  on-site  checks  could  not  be 
contemplated  and  provision  was  accordingly  made  for  a  maximum  number  of 
checks  to  be  carried  out  at  the  administrative  verification  stage. 

Sight  needed  not  to  be  lost  of  the  practical  consequences  for  the  farmers 
themselves  of  the  adoption  of  new  aid  schemes.  To  that  end,  the  administrative 
procedures  were  simplified  as  far  as  possible  while  a  uniform  framework  was 
introduced  for  the  application  of  several  types  of  aid. 

On that basis, the Integrated  Administration and Control System for  compensatory 
aid provided  for under the reform  of the CAP ("Integrated  System") was adopted, 
utilizing  in particular  modern techniques  like data-processing  and remote sensing, 
and perhaps one day  soon the  electronic  identification  of animals. The  Integrated 
System  provides  for  a single  area  aid  application,  to  be  submitted  by  the  farmer 
each  year.  This  is  the  key  component  for  the  administration  and  monitoring  of 
area-related  aid  schemes.  The  Integrated  System  also  entails  the  setting-up  of 
computerized databases enabling crosschecks to be conducted on holdings, as well 
as parcels  and  livestock.  To  conduct  this type  of  check,  provision  was  made  for 
a  system  for  identifying  and  registering  agricultural  parcels  and  livestock. 

Regulation (EEC) No 3508/92, which introduces the Integrated System,  provides 
for Community  part-financing  of  expenditure  incurred  on its establishment.  The 
Integrated  System  became  applicable  from  1  February  1993  as  regards  aid 
applications  and  integrated  controls  thereof,  and  as  regards  the  system  for 
identifying  and registering cattle. The Member States had until  1  January  1996 to 
introduce the other components of the system. For the new Member States which 
acceded to the  Community  in  1995, the transitional  period expires on  1 January 
1997. 

Coming at the close of the transitional  period for the former Member States, this 
report has three objectives: 

to review the introduction  of the Integrated  System, 

to draw initial  conclusions  regarding  its introduction, 

to  propose  solutions  to  the  problems  encountered  and  to  outline  the 
possible  uses  of this  instrument  for other measures,  existing  or planned, 
under the common  agricultural  policy. 

SCALE  OF  EXPENDITURE  VERIFIED 

In  the  wake  of  the  reform  of  the  CAP,  the  breakdown  of  EAGGF  Guarantee 
Section expenditure has been substantially modified. Payments under the schemes 
subject  to  the  Integrated  System  in  respect  of  aid  applications  submitted  by 
farmers  in  1993  and  subsequent  years  are covered  from  the  1994  budget  year. 
Such payments have increased sharply. 

Total  EAGGF  Guarantee  Section expenditure  amounted to ECU 33  410  million 
in  1994,  ECU  34  500  million  in  1995  and  ECU  41  258  million  in  the  1996 
budget.  Expenditure on direct aid under the Integrated System schemes amounts 
to ECU  14  150  million  in  1994,  ECU  17 760  million in  1995  and ECU  19  170 
million in the  1996 budget. 

This  expenditure  therefore  represents  42% (1),  51% (1)  and  46%  (1)  of  total 
EAGGF Guarantee Section expenditure for the 1994,  1995 and 1996 budget years. 

(1) 

expenditure executed  for  1994  and  1995, budget estimates for  1996. 

BASIC  COMPONENTS  OF  INTEGRATED  SYSTEM 

3.1 

System  for  identifying  land 

The  requirement  for  a  system  to  identify  areas  can  be  explained  by  the 
need  to  define  a  system  of  communication  between  the  farmer  and  the 
administration  to  allow  areas  declared  to  be  located  so  they  can  be 
monitored  over  time,  so  computerized  crosschecks  can  be  organized  and 
on-the-spot  checks  conducted. 

Member  States  do  not  apply  the  same  system  of  identification.  The 
systems for identifying  agricultural  land applied by the Member States may 
be  distinguished  by  reference  to  two  main  criteria: 

• 

• 

Some  systems  are  based  on  references  (maps  and  numbering) 
existing  beforehand,  like  the  land  register  in  Spain,  Italy,  France, 
Germany, Luxembourg and Austria, and the Ordnance Survey maps 
which  cover  most  of  the  United  Kingdom. 

Other systems have been created from  scratch to meet requirements 
laid  down  by  regulation.  This  is  the  case  in  Ireland,  Greece, 
Portugal,  the  Netherlands,  Belgium,  Denmark,  Scotland  (fodder 
areas)  and  probably  Finland  (1)  and  Sweden(l). 

Some  systems  identify  agricultural  parcels,  as  in  Germany  (11 
Lander), Belgium, Italy,  Spain, France (simplified  system), Ireland 
(arable  land),  Luxembourg  and  the  United  Kingdom.  Others 
identify  blocks  (or  îlots) comprising  land declared,  as in  Germany 
(5  Lander),  Austria,  Denmark,  France  (general  system),  Finland, 
Sweden, Portugal, Greece, Ireland (fodder  areas), Scotland  (fodder 
areas)  and  the  Netherlands.  In  the  latter  case,  two  major  variants 
exist  alongside  each  other,  whereby  the  block  is  created  by  the 
farmer  (AT,  DE,  FR,  IE  and  FI)  or  defined  by  the  authorities  on 
the basis of maps or aerial photographs (DK, EL, NL, PT and SE). 

As a result  there  are  various  situations  differing  in  terms  of: 

• 

• 

Cost  and  time  required  for  introduction:  where  it  is  feasible,  the 
land-registry  approach  whether  or  not  involving  blocks  is  the 
quickest  to  introduce  and,  on the  face  of  it,  least  costly; 

Ease  of  use  for  declarants:  the  approach  by  blocks  makes 
declaration  easier  in  so  far  as  the  references  are  fewer  in  number 
and  more  stable  over  time; 

(1) 

which  only  adhered  to  in  1995. 

The need to validate the units created by the farmer  by comparison 
with  official  sources,  on-the-spot  inspections  and  recent  aerial 
photographs; 

Effectiveness  of computerized  crosschecks based on the size of the 
reference units, their stability, the updating intervals, the proportion 
of  ineligible  land,  and  the  number  of  farmers  using  the  same 
identifier. 

3.2 

System  for  identifying  livestock 

The  fundamental  purpose  in  verifying  aid  applications  is to  ascertain  the 
actual  existence  of  the  declared  livestock  as  identified  by  an  individual 
number,  and  to  check  compliance  with  the  various  eligibility  criteria.  To 
achieve  those  objectives,  a  single  livestock  identification  and  registration 
system  was  needed.  This  was  defined  and  introduced  by  Directive 
92/102/EEC  of  27  November  1992,  which  mainly  covers  the  veterinary 
health  surveillance  of  livestock.  Care  has  therefore  been  taken  to  avoid 
superimposing  two  systems. 

to  register  all 

That  Directive  stipulates  that  all  animals  must  be  identified  by  an 
individual  number  shortly  after  birth or introduction  into the  Community. 
Marking  must  involve  the  use  of  eartags  which  cannot  be  tampered  with 
without  sign  and  are  approved  by  the  Member  State.  The  producer  is 
individual 
required 
identification  numbers  and  enter  details  of  animals  arriving  at  or  leaving 
the farm  with the corresponding  dates. It does not make explicit  provision 
for registering  livestock in a central database but, in view of the obligation 
to  administer  the  issuing  of  numbers  and  to  monitor  the  health  of  large 
herds, all the Member  States have developed or are developing a database. 
The  Commission  feels  that  the  need  for  such  a  database  should  be  taken 
into account when that Directive is reviewed as planned  in the near  future. 

livestock  he  keeps  under 

the 

The  livestock  must  be  marked  using  large-format  plastic  rings which  are 
easy to read; metal  rings, which are not very  legible, have gradually  been 
phased  out,  except  in the  United  Kingdom,  where the possibility  of  using 
either  plastic  or  metal  has been maintained.  The marking  is affixed  by  an 
approved  identifier  in  Belgium,  Greece,  France,  Ireland  and  Portugal. 

Some Member  States  do  not  yet have  a database  for  identifying  livestock 
but  are  currently  developing  a  central  computerized  system;  pending 
completion  of  this  work,  conduct  administrative  checks  using  hard-copy 
documents  (AT,  EL,  ES,  IE,  IT  and  SE). 

Depending  on  the  type  of  information  recorded  and  updated  in  the 
database,  three  levels  of  efficiency  may  be  distinguished: 

- 

Databases containing the numbers issued (as in DE (currently being 
developed)  and  UK), 

- 

- 

Databases  identical  to  the  above  but  also  containing  additional 
information  on the  animals  identified,  such  as sex, breed  and  date 
of  birth  (DK,  LU  and  PT), 

Databases  in  which  all  movements  of  livestock  are  recorded  and 
which thus enable compulsory retention periods, in particular, to be 
verified  (BE,  FR,  NL  and  FI (now  being  prepared)). 

This third type of computerized database provides the ideal solution but is 
also  the  most  costly;  Luxembourg  and  Ireland  are  developing  a  project 
along  these  lines.  The  Commission  advises  the  Member  States  as  a 
minimum  to  adopt  the  second  approach,  which  affords  adequate  control 
capacity.  Naturally,  the  details  used  for  checks  must  be  selected  on  the 
basis  of  the  characteristics  of  production  in  the  Member  States.  In 
Denmark,  for  example,  animals  generally  remain  on  the  holding  of  birth 
until slaughter, whereas  in Ireland  the animal often  passes through  several 
holdings  or  dealers  before  slaughter.  Methods  of  verification  must 
obviously  take  account  of  such  special  local  factors. 

3.3 

Area  aid  applications 

The  Commission  has  not  imposed  a  single  type  of  form  for  the  whole 
Community.  Area  aid  applications  comprise  four  main  sections,  namely 
administrative  data  (name,  bank  account,  etc.),  references  to  parcels 
(number  and  official  area),  areas  cultivated  (per  parcel,  group)  and  any 
annexes  (diagrams,  copies  of  maps  and  plans, etc.). 

The form  and complexity  of forms  and explanatory notes are the result of 
choices made by  the  Member  States  and  depend  largely  on the  system  of 
parcel  identification  selected  and  any  combination  with  Community  aid 
under  other  national  aid  schemes  (e.g.  environmental  aid). The  form  may 
even vary within a Member  State by region (DE and UK) or scheme (FR). 

In  1995,  in  order  to  make  declarations  lighter  work  and  to  reduce  the 
percentage of mistakes, most Member  States sent farmers preprinted  forms 
containing administrative data and parcel references. In Belgium and Italy, 
in  digital  form  via  professional 
most  declarations  were  received 
associations. 

requests 

reasoned 

for 
Each  year  many  Member  States  present 
postponements  of  the  time  limit  for  submitting  declarations,  set  by 
regulation  at  31  March  (8  requests  in  1994,  12 in  1995  and  13 in  1996). 
The arguments put forward  generally concern local cropping calendars, the 
anticipated  rate  of  alterations  to  cropping  schedules,  work  plans  and 
procedures  for  the year  concerned.  The  Commission  considers  that  in  the 
future  the  Member  States  should  be  given  responsibility  for  taking  this 
decision on the basis of the effectiveness  of control procedures  introduced 
(see  point  7 and  Annex  II  to  proposal  for  Regulation),  subject,  naturally, 
to  verification  under  clearance  of  accounts  procedures. 

3.4 

Applications  for  aid  in  respect  of  livestock 

Unlike  practice  in the  case  of  area  aid,  it  was not  possible  to  introduce  a 
single application  covering  all  aid  granted  in respect  of  livestock  (special 
premium  for  male bovine  animals,  suckler-cow  premium,  sheep and  goat 
premiums, compensatory  allowances  for  natural  handicaps).  As  structures 
and  cycles  vary  from  one  type  of  production  to  another,  it  seemed 
necessary  and  logical  to  take  account  of  this  fact  by  allowing  for  some 
flexibility  and variation  in the dates set for the submission of  applications 
and  in  the  retention  periods  during  which  the  animals  are  to  be  kept. 
Nevertheless,  the  Commission  encourages  the  Member  States  to  group 
them  as much  as possible.  Application  forms  for  the  various types  of  aid 
are generally  set out  in a similar  way to make them  easier to compile  and 
process. 

Whatever  the  premium  concerned,  aid  applications  comprise  all  requisite 
information  to  be  provided  compulsorily,  namely  the  administrative 
identification  of  the  farmer,  data  on  the  holding  (maximum  individual 
entitlement,  milk  quota,  reference  of  application  for  area aid),  particulars 
relating  to  the  animals  covered  by  the  aid  application  (number,  species, 
place of retention and  identification  numbers of cattle), an undertaking  by 
the producer to observe the compulsory  retention period and a declaration 
to the effect  that he is aware of the conditions governing the grant. All this 
information  is  generally  included  in  a  form  of  up  to  four  pages,  which 
poses  no practical  difficulties  for  declarants. 

Compulsory  annexes,  comprising  farm  registers  (DE  and  EL)  and  a 
document accompanying  or identifying  the animals (BE, FR, IE and UK), 
are  appended  in  certain  Member  States.  It  is not  general  practice  for  the 
accompanying  document  to  be  presented  at  the  same  time  since  the 
Regulation  covering  the  sector  allows  the  Member  States  under  certain 
conditions  to  use  a  comprehensive  list  of  livestock  instead  of  individual 
documents.  However,  where  they  exist,  accompanying  documents  are  to 
be presented to the authorities when the aid application is submitted.  Some 
Member  States keep  such  documents  at the  department  concerned  during 
the retention  period  (BE,  FR,  IE and  UK). The Commission  recommends 
this practice, which provides one of the best safeguards for complying with 
the  compulsory  retention  period,  in  cases  where  the  animal  cannot  move 
without an accompanying  document  under the veterinary  rules  applicable. 

Applications  are  generally  submitted  to  the  local  offices  (at  provincial, 
nomos  or  departmental  level),  which  undertake  an  initial  administrative 
check  of  applications 
in  addition  to  registering  them  and  provide 
information  and  advice  to  producers  (along  similar  lines  in  all  Member 
States).  Submission  periods  vary  according  to  the  type  of  premium 
concerned: 

special  premium  for  male  bovine  animals:  continuous  submission 
(AT,  BE,  DK,  DE,  ES,  FR,  SE  and  UK);  two  or  three  periods 
lasting one or two months (EL, FI, IE, IT, LU, NL and PT). In the 
case  of  DK,  DE  and  SE,  the  special  premium  for  male  bovine 
animals is granted after  slaughter on presentation of  slaughterhouse 
certificates,  which  are  subject  to  special  checks; 

suckler-cow  premium:  one  or  two  periods  lasting  one  or  two 
months; 

sheep premium and compensatory  allowance for natural handicaps: 
generally  a  single  period;  all  applications  are  often  submitted 
together  on the  same  form. 

3.5 

Administrative  structures 

The cross-sector nature  of the Integrated  System has induced  the  Member 
States  to  adjust  their  administrative  structures.  New  units  have  been 
established  (e.g.  in  BE,  FR  and  PT),  major  restructuring  has  taken  place 
(e.g.  in NL  and  IE)  and  in  general  staff  has  been  increased. 

Three  main  types  of  organization  have  been  adopted,  involving: 

• 

• 

• 

centralized  payments,  checking  and  submission  of  applications 
(DK,  IE,  IT,  LU  and  PT); 

binding  national  rules,  with  regional  application  subject 
to 
verification  by  a central  body  (AT,  BE, EL,  FR,  FI, NL  and  SE); 

national  interpretation  of regulatory constraints, with responsibility 
for  implementation  at  regional  level  (DE,  ES  and  UK). 

3.6 

Computerized  crosschecks 

In  addition  to  straight  crosschecks  on  each  aid  application  submitted  to 
ensure  that  aid  is  only  paid  once  on  each  parcel  and  animal,  one  of  the 
basic  functions  of  administrative  checks  is  to  conduct  systematic 
crosschecking  with  identification/registration  files  covering  agricultural 
parcels  and  livestock.  Given  the  large  number  of  applications  for 
processing  in  a  relatively  short  time,  such  verification  can  only  be  fully 
effective  if  it  is  computerized. 

In  accordance  with  the  regulatory  obligation  to  verify  the  grounds  for 
payment  of  area  aid,  the  Commission  has required  the  Member  States  to 
introduce  efficient  computerized  crosschecks  so that  any  anomaly  can  be 
detected  systematically  and as quickly  as possible. In addition to detecting 
the  splitting-up  of  holdings  through  registers  of  farmers,  efforts  have 
focused  on  the  validation  of  parcel  references  via  official  sources  (land 
registry).  Checks  to  ensure  that  references  exist,  to  compare  areas 
cultivated  with  official  figures  and  to  detect  duplicate  declarations  have 
been  developed  in  particular. 

In  the  stockfarming  sector,  crosschecks  of  basic  data  on  animal 
identification  and aid applications mean that one or more criteria governing 
eligibility  for  the  premium  can  be  verified  from  the  administrative  stage, 
using  recorded  data  like  the  identification  number,  date  of  birth,  sex, 
breed,  holder  and  retention  period. 

3.7 

Summary  of  statistics  of  checks 

The  Commission  has  prepared  questionnaires  on  checks  conducted  and 
results  obtained.  Although  all  Member  States  have  not  forwarded  all  the 
data requested, certain conclusions can nevertheless be drawn, on the basis 
of replies forwarded, concerning the practical introduction of the Integrated 
System  and  checks  conducted. 

Late  submission  of  aid  applications  entails  a  1% reduction  per  day  in the 
amounts  covered  by  the  application.  Where  the  overrun  in  the  deadline 
exceeds 20 days, the  application  is inadmissible  and  no  aid  is payable.  In 
1993 and  1994, the percentage of late applications was generally  low. The 
Community  average  for  area  aid  applications  submitted  over  20 days  late 
was  0.1%. The  figure  for  aid  applications  relating  to  livestock  is  slightly 
higher  at  0.2%.  Although  the  number  of  applications  submitted  late  but 
within  20  days  of  the  deadline  was  higher,  the  Community  average  was 
below  1%.  It  may  be  concluded  that  although  they  wait  until  the  last 
minute  to  submit  their  aid  applications,  the  overwhelming  majority  of 
farmers  do  comply  with  the  time  limit. 

Obviously,  in  some  Member  States,  the  first  year  of  application  of  the 
system  did pose some  problems.  For example, a large number  of  area aid 
applications were not completed  properly  and had to be corrected  in  1993 
(e.g.  for  mistakes  in  identifying  parcels,  calculating  the  rate  of  set-aside, 
etc.).  In  the  stockfarming  sector,  where  the  detailed  rules  of  application 
governing  aid  schemes  have  undergone  less  change,  the  number  of 
applications  containing  anomalies  was  smaller. 

A  significant  improvement  was  observed  in  1994,  the  second  year  of 
application.  The  provision  of  preprinted  declarations  readily  available  to 
farmers  and  the  possibility,  in  certain  Member  States,  of  submitting 
applications  in computerized  form  through  producer  organizations  should 
bring  a further  improvement  in the  future. 

10 

inspections, 

regards  on-the-spot 

As 
the  minimum  percentage  of 
applications  subject  to  checks  is  set  at  5%  for  area  aid  and  10%  for 
livestock.  The  Community  average  for  checks  actually  conducted  is 
slightly  over  7%  for  areas.  Although  the  figure  for  livestock  aid 
applications  seems  fairly  high  (17%  in  1993),  some  Member  States  (in 
particular France and Portugal) have conducted the minimum number only 
(10%).  The  percentage  of  applications  for  area  aid  verified  by  remote 
sensing  has  risen.  In  1993, 31% of  checks  covering  area  aid  applications 
were  conducted  by  this  method.  The figure  rose to 40% in  19941. 

The  percentage  of  area  aid  applications  where  amounts  applied  for  were 
reduced  in  1994  as  a  consequence  of  on-the-spot  checks  amounted  to 
2.2%; in 0.7% of applications, the amounts were reduced without  penalties 
being  applied;  penalties  were  applied  in  1%  of  cases  and  0.5%  were 
rejected  out  of  hand.  In  1993,  penalties  were  applied  or  aid  applications 
were  rejected  in  0.8%  of  cases  relating  to  areas  against  1%  of  cases 
relating to livestock.  The penalties laid  down  under the Integrated  System 
have  acted  as  a  deterrent  and  in  general  the  rate  of  compliance  has  been 
acceptable. 

PART-FINANCING 

Article  10 of Regulation  (EEC) No 3508/92 introduces Community  part-financing 
of expenditure  covering  the implementation  of the  Integrated  Administration  and 
Control  System  as  regards  temporary  staff  resources  and  data-processing  and 
technical  equipment.  Initially  set  at  three  years  from  1992,  the  duration  of  the 
part-financing  arrangements was extended to the end of  1995 in view of the work 
still to be completed  and the transitional  period  laid  down  for  the introduction  of 
the  system. 

On  account  of  the  late  publication  of  the  Regulation,  the  Member  States  could 
only draw the Community financial  contribution from  1993, although five Member 
States (DK, DE, FR, NL  and UK) did take advantage of the possibility  offered  to 
include  expenditure  relating  to  1992 in  their  financing  applications  for  1993. 

Of the ECU  50 million  available  in the  1993 budget,  Member  States'  expenditure 
amounted  to ECU  44  million,  a rate  of  utilization  of 88%. 

In  1994, Member  States'  expenditure  accounted  for  around  76%  of  the  ECU  50 
million  of  Community  appropriations  available. 

A special  report  on controls by  remote  sensing  will be presented  during  1996 in accordance  with 
Article  6  of  Regulation  (EC)  No  165/94. 

11 

their  allocations  under  Regulation 

Under-utilization of appropriations stems from the fact that certain Member  States 
(EEC)  No  3508/92. 
do  not  use 
(BE,DK,EL,ES,IT,Lu,PT,UK)  Some  expenditure  incurred  by  others  has  been 
rejected as ineligible (unconnected with the introduction of the Integrated System). 
A  few  Member  States'  requirements  substantially  exceed  the  appropriations 
allocated  to them; however,  given  the delays in setting  up the Integrated  System, 
they  were not able to qualify  for  part-financing  during the period  when  provision 
existed.  (DE,FR,IE,NL) 

As regards  1995, although the final expenditure will only be known in May  1996, 
the trend  can  be worked  out  on the  basis of the Member  States'  forecasts,  which 
point  to  an  overall  rate  of  utilization  of  around  92% of  the  ECU  43  360  million 
available  (including  expenditure  in the  three  new  Member  States). 

In total, as an initial  investment  Community part-financing  on the introduction  of 
this  entirely  new  system  of  controls  represents  significantly  less  than  1%  of 
expenditure  on  the  relevant  aid  schemes  for  a  single  year.  When  set  against  the 
proportionately  very  small  cost  of  the  initial  investment  and  the  very  lengthy 
period  over which the system  is expected  to function,  the greater  effectiveness  of 
controls  achieved  through  part-financing  is clearly  fully  worthwhile. 

SCOPE  OF  INTEGRATED  SYSTEM  AND  FUTURE  OUTLOOK 

Product groups covered as from  the inception of the Integrated  System  comprised 
arable  crops  (cereals,  oilseeds,  protein  plants  and  set-aside),  beef/veal  (special 
premium,  suckler-cow  premium),  sheepmeat  (ewe  premium),  compensatory 
allowance  for  less-favoured  areas  (solely  as  regards  payments  in  respect  of 
livestock). 

The  Integrated  System  has  applied  to  the  ewe  premium  scheme  and  the 
compensatory  allowance  from  1 January  1994 only. 

Since  then,  its  scope  has  widened,  in  particular  as  a  result  of  the  inclusion  of 
linseed  under  the arrangements  for  arable  crops. The reform  of the  arrangements 
covering  rice  makes  provision  for  that  product  group  to  be  covered  by  the 
Integrated  System  too. 

In addition to the abovementioned  arrangements, which provide for aid per hectare 
paid directly to the farmers, other  schemes exist which are indirectly  linked to the 
land  cultivated.  Although  the  Integrated  System  should  not  cover  them  in  toto, 
provision should be made for  some components of the System to apply. Under the 
reform  of  the  arrangements  covering  dried  fodder,  for  example,  agricultural 
parcels  are  to  be  identified  using  the  method  applying  in  the  Integrated  System, 
so that  crosschecks  with  other  utilizations  can  be conducted.  The  same  approach 
is  followed  for  cotton. 

The Member  States can also extend  the systems they  introduce  to other  schemes. 
By  way  of  an  example,  some  States  have  decided  to  include  agri-environmental 
measures. 

12 

The  progressive  introduction  of  the  agricultural  parcel  identification  system  will 
afford  further  possibilities of introducing aid schemes linked to area. A system  for 
identifying  and  registering  parcels  permits  uniform  monitoring  of  measures 
applying  to  land  management.  In  the  future,  consideration  could  be  given  at 
Community  level to extending  the Integrated  System to cover  agri-environmental 
and  afforestation  measures  (Council  Regulation  (EEC)  No  2078/92  and  No 
2080/92), compensatory allowances for land, and other product groups like hemp. 
The  same  working  methods  will  need  to  be  followed  with  regard  to the  register 
of  olive  cultivation  and the  vineyard  register. 

SITUATION  AT  31  DECEMBER  1995 

Area  aid 

As  at  31 December  1995  all  Member  States  have  taken  the  requisite  steps  to 
introduce the Integrated  System, though they have not all made the same progress. 

Member  States  fall  into  three  groups: 

Member  States  where  work  of  limited  scale  remains  to  be  done  or  some 
improvements  made,  although  if  they  are  not  implemented  immediately 
this will not call into question the acceptability of the system in place (DE, 
DK,  ES, IT  and NL); 

• 

• 

Member States where programmes for identifying  parcels (BE, IE and UK) 
or  defining  databases  (FR,  LU  and  AT)  have  been  undertaken  and  a  few 
more  months  are needed  for  their  completion; 

Member  States  (EL,  PT,  FI  and  SE) where work  still  to be completed  on 
parcel  identification  is  such  that  completion  during  1996  cannot  be 
confirmed. 

Aid  in respect  of  livestock 

Implementing  legislation  for  Directive  92/102/EEC  has  been  adopted  in  all 
Member  States except Ireland  and Italy, where infringement  procedures are under 
way.  However,  a  single  identification!  system  operates  effectively  in  Ireland. 
Implementing  legislation  for  the  Directive  (and  rules  of  application)  is  being 
adopted  in the  new  Member  States. 

Farm  registers  have  been  introduced  for  beef  and  veal.  However,  shortcomings 
have  been  observed  in  Spain  and  Italy,  where  records  are  frequently  incomplete 
since they simply repeat the particulars given in aid applications. The introduction 
of official  farm registers has not been fully  completed in Greece and Portugal. For 
sheepmeat,  registers  will  generally  be  in use  in the  first  half  of  1996 only. 

13 

Two Member States have completed introduction of the Integrated System, namely 
Belgium and the Netherlands. Four Member  States have a system which, although 
satisfactory,  could  be  improved 
in  certain  aspects.  These  are  Denmark 
(crosschecks  and  registers),  France,  Ireland  and  Luxembourg  (data-processing 
system  for  crosschecks). 

Four Member  States'  (and the three new Member  States')  systems are  incomplete 
and  on  significant  points are  still  in the  developmental  phase: 

- 

- 

- 

Germany  is introducing  a central database in order to conduct  crosschecks 
nationally; the database will  permit  checks covering  livestock  movements 
between  Lander; 

Portugal  and  Greece  are  introducing  computerized  crosschecks  with  the 
livestock  identification  database;  Greece  also  needs  to  complete  marking 
and  registering  of  livestock; 

the  United  Kingdom  needs  to  improve  security  in  its  system  for  issuing 
identification  numbers. 

Two  Member  States'  systems  show  shortcomings  and/or  are  lagging  behind: 

- 

- 

Spain  has  established  a  detailed  organization  plan  but  its  practical 
introduction  as  regards  both  livestock  identification/registration  and 
crosschecks  is in the  early  stages  only; 

Italy has not  adopted  implementing  legislation  for  Directive  92/102/EEC, 
and  as  a  result  there  are  shortcomings  in  livestock  identification  and 
registration  and possibilities  of verification  are consequently  very  limited. 

Overall,  work  still  remains  to  be  done  and  the  corresponding  programmes  are 
under  way  in  many  Member  States,  in  particular  to  step  up  the  effectiveness  of 
crosschecks. 

REMARKS  IN  CONNECTION  WITH  CLEARANCE  OF  ACCOUNTS 

The  introduction  of  the  Integrated  System  has  gone  hand-in-hand  with  active 
coordination and advisory work by the Directorate-General for Agriculture. During 
the transitional  period  covering  the  introduction  of the  Integrated  System  for  the 
1 January  1996 deadline, controls  under  the clearance  of accounts  were  intended 
to be especially deterrent. Furthermore, even where a system devised by a Member 
State was appraised  favourably  by the Commission, the way it actually  functioned 
needed  to  be  checked  to  see there  were  no  failings. 

As checks were conducted almost concurrently with the introduction of the system 
by  the  Member  State,  the  main  objective  was  to  detect  any  shortcomings  and 
identify  the  risks  inherent  in the  way  it operated  so the Member  State could  take 
the  necessary  measures  to  remedy  problems  noted. 

14 

Many  positive  and  negative  remarks  regarding  the  first  and  second  years  of 
application  were  made to the Member  States, which were all  concerned,  albeit  to 
various  degrees.  In  cases  where  a  particular  Member  State  did  not  comply  with 
the  regulations  or  control  provisions  applicable  on  the  entry  into  force  of  the 
system  or did  not take the transitional  measures agreed with  the Commission,  the 
latter will  draw the financial  consequences resulting from  the failings  observed in 
the  clearance  of  accounts. 

CONCLUSIONS 

The adoption  of the CAP reform  in general  and the introduction  of the  Integrated 
System  in  particular  have  compelled  the  Member  States  to  reorganize  their 
administration  and  controls.  This  necessary  adaptation  has  entailed  a  substantial 
effort  on their part.  The setting-up  of the agricultural  parcel  identification  system 
livestock  together  with  the  introduction  of 
and  the  system  for  identifying 
computerized  databases  has  called  for  considerable  work  and  significant 
investments. 

This  work  was  monitored  very  closely  by  the  Commission  departments.  In  each 
Member State, discussions and on-the-spot inspections concerning the introduction 
of  the  Integrated  System  took  place  at  least  once  every  six  months.  In  addition, 
within the EAGGF Committee, ten meetings lasting one or two days were devoted 
entirely  to  discussions  on  the  introduction  of  the  Integrated  System.  On  two 
occasions during those meetings, on-the-spot inspections of systems introduced by 
the Member  States  were  organized  (Italy  and  Belgium). 

The  initial  situation  varied  substantially  from  one  Member  State  to  another 
depending  on the scale of data  immediately  available.  Some Member  States were 
able  to  base  their  parcel  identification  systems  on  existing  land-registry  data  or 
reliable,  updated  topographical  maps  while  others  had  to  set  up  a  system 
practically  from  scratch.  Technically  speaking,  the  introduction  of  the  livestock 
identification  system  presents fewer  difficulties.  However,  problems, which  arose 
in several Member States, involving coordination between departments responsible 
for  verifying  aid  and veterinarians  delayed  the introduction  of this component  of 
the  Integrated  System. 

In view  of the diversity  and  scale  of the technical  and administrative  problems to 
be solved,  it must be observed  that the Member  States all  experienced  difficulties 
in  meeting the deadline  for  the  introduction  of the Integrated  System  as a whole. 
At  the  present  stage  and  in  order  to  avoid  financial  corrections  based  on 
Regulation  (EEC) n" 729/70, one additional  year should  suffice  to complete work 
to bring the system  fully  into operation.  For this reason, it  is proposed  to delay 
by  one  year  the  date  of  definitive  implementation.  A  draft  Regulation 
proposing  an  amendment  to Regulation  (EEC)  No  3508/92  along  these  lines 
is  attached  to  this  report. 

In the light  of that  proposal  putting back  the final  date  for  implementation  of the 
Integrated  System,  the  Commission  feels  that  one  further  extension  of  one  year 
is  needed  for  the  part-financing  arrangements  provided  for  in  Article  10(2)  of 
Regulation  (EEC)  No  3508/92. 

15 

The  draft  Regulation  also  proposes  an  amendment  to  the  provisions  on  the  date 
of  submission  of  area aid  applications to allow the Member  States to set the date 
without  requesting  the  Commission's  authorization.  Such  an  amendment  to  the 
Regulation  will  simplify  administrative  procedures.  In  addition,  the  Commission 
has always found  it difficult  to take a decision  on dates to be set each year on  the 
basis of past experience, given the way  systems change from  one year to the next. 
By setting the deadline for the submission  of aid applications  themselves, the 
Member  States  will  assume  the  responsibility  of  seeing  to  the  proper 
administrative and financial  management of aid and the execution of controls 
within  the  time  limits  laid  down. 

Furthermore,  the  draft  Regulation  contains  no  proposal  to  extend  the  scope 
of  the  Integrated  System.  Such  amendments  will  be  adopted  under  the 
relevant  regulations  covering  the  product  groups  concerned. 

At  this  stage,  observations  during  on-the-spot  inspections  and  via  expert  groups 
show  that  the  Integrated  System  has  proved  to  be  an  excellent  instrument  for 
gathering  information  on the situation  in the field and conducting  controls. Many 
of  its  components  are  already  operational  and  the  others  will  come  into  force 
within  one  year.  Foreseeably,  various  functions  such  as  parcel/livestock 
identification  and  the aid  application  database will  allow  other  types  of  aid  to be 
covered  from  the technical  and  administration  viewpoints  in the near future.  This 
will  assist  the  Member  States,  in  so  far  as  they  will  reap  the  benefit  of  their 
investments  on  the  introduction  of  the  System  and  their  tasks  will  be  facilitated. 
The  Commission  should  support  the  trend  towards  wider  utilization  of  the 
Integrated  System,  which  must  ultimately  reduce  the  cost  of  processing  and 
monitoring  aid,  improve  management  and  provide  a better  service  to the  farmer, 
thanks  to  greater  clarity,  speed  and  security  in  processing  applications. 

16 

Integrated Administration  and Control  System 

Annex 

Report  to  the Council 

Situation  in the Member States. 

Land 

Parcel identification  system: Development  of parcel administration  software  still in 

The  parcel  identification  system 

progress 

will use: the  agricultural  parcel 

Data  base: Will  be centralized  under  Oracle;  development  in progress 

identified  on the  individualized 

Cross-checks:  Wll  be  carried  out  at  the  level  of  farm  parcels,  effective  once 

orthophoto  plan  produced  for  each 

system  set  up 

farmer 

Completion  of work:  validation 

after  1996  declaration.  First 

large-scale  operation  in  1996. 

Livestock 

Overall,  the  system  is  satisfactory 

Identification:  Directive*  transposed  for  bovine  animals,  in  progress  for  ovine 

and  operational 

animals.  Double  marking  (within  thirty  days  by the  farmer,  within  six  months  by the 

identifying  agent). 

Completion  of work: 

Register:  Farm  register  made  up  of  identification  files  to  be  accompanied  by  a 

system  complete 

summary. 

Data  base:  Central 

identification 

register,  computerized  and 

linked 

to  the 

"premiums"  data  base. 

Cross-checks:  effective  because  of  computerized  linking  of the  two data  bases. 

17 

Danmark 

Land 

The  parcel  identification  system 

Parcel  identification  system:  being  developed;  blocks  will  contain  5 to  10 

will  use:  crop  blocks  defined  by 

agricultural  parcels. 

the  authorities,  marked  on 

Data  base:  Although  the  system  was  improved  in  1995,  there  is still  a very  large 

individualized  maps  for  the 

number  of  anomalies. 

farmers. 

Cross-checks:  at  present  checks  are  not  effective,  but  should  be  improved  by the 

Completion  of work:  expected 

new  parcel  identification  system 

end  of  1995 

Livestock 

Identification:  Directive  transposed  (bovine  animals),  very  clear  marking  using 

plastic  rings. 

Satisfactory  overall,  registers  to 

Register:  different  types  of farm  register,  official  register  to  be defined. 

be  improved 

Data  bases:  Register  of  marking  rings  issued,  central  base  for  the  computerized 

administration  of  applications. 

Completion  of work: 

Cross-checks:  effective,  but  not  systematic  between  the  2 data  bases. 

validation  in  1996 

Deutschland 

Land 

The  parcel  identification  system 

Parcel  identification  system:  system  complete  (except  Saxony  Anhalt,  where 

will  use:  in the  case  of  11/16 

development  in  progress). 

Lander:  the  agricultural  parcel  with 

Data  base:  Organized  by  Land,  but  data  not  always  exchanged.  Regional  data 

direct  reference  to  the  land 

bases,  even  at  Kreis  level  (Hessen)  in  1995 

register;  in the  case  of  5/16:  the 

Cross-checks:  validation  using  computerized  land  register  partly  in place  (e.g. 

Feldstuck  (block) 

BW, NW,  SH, HE...) 

Livestock 

Completion  of work:  With  a few 

exceptions,  in  place  for  the  end  of 

1995. 

Identification:  Directive  transposed  (bovine,  ovine  and  caprine  animals),  single 

identification  system  in  place  from  October  1995  (plastic  tags  attached  by the 

farmer). 

System  development  in  progress 

Register:  single  farm  register  for  veterinary  purposes  and  for  premiums. 

Data  bases:  regional  identification  registers  not  interconnected,  creation  of  central 

Completion  of work: 

data  base  in  Munich  . 

during  1996 

Cross-checks:  will  be  carried  out  by  Bavaria  for  all  the  Lander,  first  tests  in 

November  1995. 

Land 

The  parcel  identification  system 

Parcel  identification  system:  Phase  1 invitation  to  tender  (creation  of digital 

will  use: crop  blocks  defined  by 

orthophotos)  cancelled  (and  reissued  1-Sep-95).  Phase  2 announced  1-Oct-95. 

the  authorities,  marked  on 

Data  base:  Centralized,  and  in  1995  enabled  150  000  declaration  papers  to  be 

orthophoto  plans. 

pre-printed  - but  divided  into  52 dBASE files  (by  Prefecture) 

Completion  of work:  the 

Cross-checks:  not  currently  being  made  on  parcel  data. 

cancellation  of  Phase  1 delayed 

Livestock 

Identification:  Directive  transposed  (bovine,  ovine  and  caprine  animals),  marking 

completion  by  a further  year  - no 

chance  of  completion  before  the 

end  of  1996. 

by veterinarians  (plastic  rings)  in progress  for  bovine  animals,  from  January  1996 

System  still  being  developed, 

for  ovine  animals. 

making  progress  thanks  to the 

Register:  detailed  farm  registers  under  veterinary  supervision,  copy  in local 

support  of  the  veterinary  service.  ' 

veterinary  office. 

Data  bases:  development  of  2 data  bases  (identification  and  applications)  with 

Completion  of work: 

computer  link. 

computerized  system  to  be 

Cross-checks:  document-based  checks  pending  completion  of  computerized 

completed  during  1996 

system,  cross-checks  using  copies  of the  abovementioned  farm  registers 

endorsed  by  veterinary  officials. 

19 

Land 

The  parcel  identification  system 

Parcel  identification  system:  system  complete;  however,  land  register  quality 

will use:  the  agricultural  parcel 

varies  according  to  region. 

with  direct  reference  to  the  land 

Data  base:  centralized,  including  parcel  data 

register 

Cross-checks:  carried  out  regionally  and  centrally,  with  occasional  regional 

Completion  of work:  system 

differences 

Livestock 

complete,  in operation  during 

1995. 

Identification:  Directive  transposed  for  bovine  animals,  marking  inadequate  in 

certain  regions. 

Register:  farm  register  limited  to  animals  for which  a premium  application  is 

Development  of  a  coherent 

made. 

system  in collaboration  with  the 

Data  bases:  local  identification  registers,  not  interconnected,  central  data  base  for 

regions. 

applications. 

Cross-checks:  effective  where  using  the  application  data  base,  inadequate  with 

Completion  of work: 

regard  to  identification  files. 

during  1996 

20 

Land 

The  parcel  identification  system 

Parcel  identification  system:  reference-based  system  being  developed  (planned 

will  use:  the  block  or the 

for  first  quarter  of  1996).  Mixed  system  (simplified  scheme:land  register  parcel; 

agricultural  parcel,  references  to 

general  scheme:the  block). 

the  land  register. 

Data  base:  award  of  Pacage  contract  planned  before  the  end  of  1995;  no use 

Completion  of work:  during  1996 

planned  for  1996  declarations. 

Cross-checks:  at  present  principally  manual;  validation  of  land  register  in 

progress;  first  cross-checks  of  parcel  references  in  1996 

Livestock 

Identification:  Directive  transposed  (bovine,  ovine  and  caprine  animals),  double 

marking  of  bovine  animals  (by the  farmer  at  birth,  by the  identifying  agent  within 

System  providing  guarantees,  to 

four  months). 

be  supplemented  by  data  cross 

Register:  farm  register  in  place  for  bovine  animals,  not  yet  systematically  for 

checking  at  national  level 

ovine  animals. 

Data  bases:  2 computerized  data  bases  (identification  and  applications)  in each 

Completion  of work: 

Département. 

first  quarter  of  1996 

Cross-checks:  linkage  of the  two  data  bases  per  Département  currently  being 

systematized,  cross-checking  of data  at  national  level  planned  from  the  first 

quarter  of  1996. 

21 

Ireland 

Land 

The  parcel  identification  system 

Parcel 

identification  system:  development 

in  progress,  aerial  photography 

will  use:  Forage  (90% of 

completed  for  the  whole  country.  Structural  reorganization  still  in progress. 

declarations)  - blocks  defined  by 

Data  base:  Centralized  under  Supra,  Oracle:  on-line  access  possible  from  County 

the  farmer;  cereals  - borders  of 

offices;  development  still  in progress  - but this year  100% of declarations  were pre 

the  agricultural  parcels;  both  on 

printed.  A few  flaws  with  unambiguous  farm  identification. 

the  1995  orthophoto  plans. 

Cross-checks:  Cannot  be  carried  out  until  the  parcel  identification  system  is  in 

Completion  of work:  last 

place. 

Livestock 

validations  after  1996 

declarations. 

Identification:  Directive  not  transposed,  infringement  procedure,  marking  using 

rings  with  poor  legibility. 

System  improvement  planned  for 

Register,  new  farm  registers  complying  with  requirements. 

1996  (computerized  livestock 

Data  bases:  development 

project 

for  a  new  centralized 

computerized 

registration) 

identification/registration  system,  central  data  base  for  applications. 

Cross-checks:  carried  out  regionally  and  centrally. 

Completion  of work: 1996 

Italia 

Land 

The  parcel  identification  system 

Parcel  identification  system:  operational;  reference  system  clearer  every  year. 

will  use: direct  reference  to  the 

Data base:  Centralized,  Oracle; but decentralized  data  input  presents  some quality 

land  register 

problems. 

Completion  of work:  system 

Cross-checks:  detailed,  but  no  very  satisfactory  way  of  solving  the  problems 

complete. 

identified  has  yet  been  found. 

Livestock 

Identification:  Directive  not 

transposed, 

infringement  procedure,  marking 

inconsistent  or  non-existent. 

Register:  farm  registers  often  incomplete. 

Very  unsatisfactory,  undertaking 

by the  Ministry  of  Health  to 

Data  bases:  central  identification  register  which  only  covers  animals  for  which 

regularize  situation  before 

premium  applications  are  made,  central  data  base  for  applications. 

summer  1995 

Cross-checks:  central,  but  incomplete  identification  data  base. 

Completion  of work:  1996 

22 

Luxembourg 

Land 

The  parcel  identification  system 

Parcel  identification  system:  reference  system  operational;  land  register  data  will  use:  direct  reference  to  the 

base  available. 

land  register. 

Data  base:  SIGC  studies  in  1995;  62% of  declarations  pre-printed  in  1995. 

Completion  of  work:in  principle 

Cross-checks:  carried  out  after  payments  in  1995. 

planned  for  mid-1996. 

Livestock 

Identification:  Directive  transposed  (bovine,  ovine  and  caprine  animals),marking 

clear  and  generally  applied,  within  six  months  or before  moving  the  animal. 

Register:  farm  registers  well  designed  and  well  kept. 

Improvement  of the  computerized 

Data  bases:  central  identification  register  managed  by veterinarians,  central  data 

system  for  the  end  of  1995 

base  for  applications. 

Completion  of  work:validation  in 

Cross-checks:  carried  out  centrally. 

1996 

Nederland 

Land 

The  parcel  identification  system 

Parcel  identification  system:  development 

in  progress,  with  the  topographical 

will  use:  topographical  blocks, 

department  in  charge  of  implementing  and  administering  the  project.  Project  test 

defined  by the  authorities, 

with  2 000  declarants  facilitated  planning  for  1996. 

Completion  of  work:  planned  for 

Data  base:  centralized  since  Jan.  1995;  system  being  developed. 

the  end  of  1995. 

Cross-checks: 

limited  at  present  -  improvements  expected  in  1996  when  the 

parcel  identification  system  is  in place. 

Livestock 

Identification:  Directive  transposed  (bovine  and ovine  animals),  very  clear  double 

marking  by the  producers. 

System  satisfactory  overall. 

Register:  farm  registers  using  identification  records. 

Data  bases:  central  identification/registration  system  with  automatic  safeguards, 

Completion  of  work: 

central  data  base  for  applications. 

system  complete 

Cross-checks:  carried  out  using  the  central  data  bases. 

23 

Portugal 

Land 

The  parcel  identification  system 

Parcel  identification  system:  Award  of  contracts  (creation  of parcel  identification 

will use:  crop  blocks  and 

system)  planned  in  Nov.  1995;  work  schedule  extended  to end of  1996. 

agricultural  parcels  defined  by  the 

Data  base:  Centralized  - but  redevelopment  expected  for  1997  (SINGA) 

authorities,  marked  on  orthophoto 

Cross-checks:  detailed,  but  inefficient  because  of  the  current  weakness  of  the 

plans. 

parcel  identification  system 

Livestock 

Completion  of work:  1.1.97 

proposed  by  the  INGA. 

Identification:  Directive  transposed  (bovine,  ovine and caprine  animals),  metal tags 

replaced  this  year  by  plastic  tags,  tattooing  for  ovine  animals. 

Register:  farm  registers  in  place,  definition  of  an official  register  underway. 

System  improvement  in  progress. 

Data bases:  local or regional  identification  files,  project  for the creation  of a central 

file,  central  data  base  for  applications. 

Completion  of work: 

Cross-checks:  to  be  improved  using  an  animal  identification  file. 

during  1996 

United 

Land 

The  parcel  identification  system 

M  Kingdom 

Parcel  identification  system:  England  and Wales  have finally  adopted  a strategy; 

will  use:  England  and Wales: 

Scotland  carrying  out  production  tests  in  1995;  in  Northern  Ireland  strategy  and 

topographical  maps  checked  by 

progress  are  satisfactory  overall. 

the  authorities;  Scotland:  blocks 

Data  base:  England  and  Scotland  -  centralized,  development  in progress,  end  of 

validated  with  Ordnance  Survey 

work  1995;  Wales  -  still  three  separate  data  bases  with  manual  data  exchange; 

digital  data;  Northern  Ireland: 

Northern  Ireland  generally  operational  end  of  1995. 

individual  plans  of farms,  updated 

Cross-checks:  Need  to  validate  declaration  data  (especially  in England)  - except 

by the  authorities. 

for  Northern  Ireland,  where  validation  should  be  completed  for  end  1995. 

Completion  of work:  England 

and Wales:  1996;  Scotland  and 

Northern  Ireland:  1.1.1996. 

Livestock  . 

Identification:  Directive  transposed  for  bovine  animals,  marking  within  thirty  days 

Checks  on the  use  of  tags  issued 

by  the  farmer,  single  identification  number,  various  types  of  approved  marking. 

and  links  between  data  bases  to 

Register:  in  place,  but  no  uniform  model. 

be improved. 

Data  bases:  data  base  of tags  issued,  regional  data  bases  for  applications. 

Completion  of  work: 

Cross-checks:  cross-checks  with  identification  file  to  be improved. 

during  1996 

New  Member  States  - Deadline  1997 

24 

Osterreich 

Land 

The  parcel  identification  system 

Parcel  identification  system:  Pre-printing  of  100  000  declarations 

(50%)  ; 

will  use:  the  Feldstuck  (block), 

compilation  of  parcels  declared  (+/-  2  million)  on  "master  cards"  in  local  offices 

based  on  the  land  register. 

before  1995  declaration. 

Completion  of  w o rk  planned  for 

Database:  In July  1995 work schedule  insufficiently  detailed  but satisfactory  overall 

!  11  1997 

for  the  first  year. 

Cross-checks:  a list of checks for  1995 was submitted,  but was limited  by the state 

of  development  of  computerized  tools.  No  direct  computerized  link  with  the  land 

register  before  1996  - although  references  are  available  at the  land  registry. 

Livestock 

Identification:  Transposition  of  Directive  in  progress,  various  marking  systems 

]  System  still  to  be developed, 

administered  by  associations,  project  for  single  numbering  system  and  double 

\  identification  data  base  to  be 

marking. 

created. 

Register:  farm  register  in  place,  but  not  yet  generally  kept  effectively. 

Data bases:  local identification  files administered  by veterinarians  and associations; 

Completion  of  work: 

central  data  base  for  applications  being  developed. 

planned  for  1.1.1997 

Cross-checks:  not  yet  operational. 

25 

Suomi/Finland 

Land 

The  parcel  identification  system 

Parcel  identification  system:  Reference  based  on  photocopies,  plans  or 

will  use:  crop  blocks,  possibly 

photographic  plans  with  sequential  numbering  in  1995.  Validation  of data 

validated  against  orthophotos. 

submitted  by  declarants  in digital  format  planned  for  1996.  . 

Completion  of work:  planned 

Data  base:  Centralized,  development  in  progress.  Data  input  at  local  level. 

1.1.1997,  but  no work  schedule  in 

Cross-checks:  A  list  of  checks  for  1995  has  been  submitted  to the  Commission. 

place  at  present. 

Livestock 

Identification:  Directive  transposed,  plastic  tags  attached  by the  farmer 

Register:  in  place 

. 

System  still  to  be developed: 

Data  bases:  computerized  administration  of  identification,  data  base  for 

checks  on  issuing  of  tags  to  be 

applications  being  developed. 

Cross-checks:  still  at  project  stage. 

stepped  up,  cross-checks  to  be 

put  in  place 

Completion  of work: 

planned  for  1.1.1997 

Sverige 

Land 

The  parcel  identification  system 

Parcel  identification  system:  Agricultural  parcel  identified  using  topographical 

will  use:  not  yet  decided. 

plans  (of  varying  quality),  with  numbering  system  linked  to the  "fastighet"  (farm 

Completion  of work:  estimated 

block  in the  land  register).  However,  steps  to  improve  the  system  should  be 

beginning  of  1997,  more  detailed 

discussed  as  soon  as  possible. 

schedule  expected. 

Data  base:  proper  commencement  of  implementation,  but  still  being  developed. 

Cross-checks:  detection  of  parcel  problems,  but  manual  checks  are still  required 

to  resolve  them. 

Livestock 

Identification:  transposition  of  Directive  in  progress,  multiple  identification  and 

System  still  to  be developed. 

marking  systems,  start-up  of  a single  system  in  1995. 

Register:  official  farm  register  in place,  its  design  to  be reviewed. 

Completion  of work: 

Data  bases:  at  planning  stage. 

planned  for  1.1.1997 

Cross-checks:  detailed  project  being  developed. 

26 

PROPOSAL  FOR 

COUNCIL  REGULATION  (EC)  No 

/96 

of 

amending  Regulation  (EEC)  No  3508/92  establishing  an  integrated  administrative 

and  control  system  for  certain  Community  aid  schemes  ("integrated  system") 

THE  COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to the  Treaty  establishing  the European  Community,  and  in  particular  Article 

43  thereof, 

Having  regard  to  the  proposal  from  the  Commission1, 

Having  regard  to  the  opinion  of  the  European  Parliament2, 

Whereas  Article  6(2)  of  Council  Regulation  (EEC) No  3508/92  of  27 November  19923 

provides  that  area  aid  applications  must  be  submitted  during the  first  quarter  of  the  year; 

whereas,  however,  the  Commission  may  allow  a Member  State to  fix  a date  for  the 

submission  of  area  aid  applications  between  1 April  and  the  dates  referred  to  in  Articles  10, 

11 and  12 of  Council  Regulation  (EEC)  No  1765/92  of  30 June  1992  establishing  a  support 
system  for  producers  of  certain  arable  crops4;  whereas,  in  the  light  of  experience,  it  should  be 

possible  for  Member  States  to  set  the  deadline  for  the  submission  of  applications  on  their  own 

responsibility  without  seeking  the  authorization  of the  Commission,  taking  into  account  in 

OJ  No  C  .... 
Opinion  delivered  on 
OJ No L  355, 5.12.1992,  p.  1. Regulation  last amended by Regulation  (EC)  No 3235/94  (OJ No 
L  338, 28.12.1994,  p.  16.). 
OJ No L  181, 1.7.1992, p.  12. Regulation  last amended  by Regulation  (EC)  No  1664/95  (OJ No 
L  158, 8.7.1995,  p.  13). 

27 

particular  the time  required  for  all  relevant  data to  be available  for  the  proper  administrative 

and  financial  management  of  the  aid  and  for  checks  to be carried  out; 

Whereas  Article  13(1)  of  Regulation  (EEC)  No  3508/92  provides  that  all  the  elements  of  the 

integrated  system  are  to  apply  from  1 January  1996 at the  latest;  whereas,  in view  of 

experience  gained,  notably  in  setting  up  alphanumeric  identification  systems  for  agricultural 

parcels  and  data  bases, this  deadline  should  be postponed  for  one  year; 

Whereas,  given  the  considerable  investment  required  to  ensure  that the  integrated  system  is 

established  definitively,  provision  should  be  made  to prolong  by  one year  the period  for 

which the  Community  financial  contribution  may  be  granted, 

HAS  ADOPTED  THIS  REGULATION: 

Article J 

Regulation  (EEC) No  3508/92  is hereby  amended  as  follows: 

1.Article 6(2)  is replaced  by  the  following: 

"2.  Area aid  applications  must  be  submitted  by  a date to be  set by the Member  State  which 

may not be later than the dates referred  to in Articles  10, 11 and  12 of Regulation (EEC)  No 

1765/92. 

In  all  cases,  the  date  shall  be  set  bearing  in  mind,  inter  alia,  the  period  required  for  all 

relevant  data  to  be  available  for  the  proper  administrative  and  financial  management  of  the 

aid  and  for  the  checks  provided  for  in  Article  8 to  be carried  out." 

2.  Article  10(2)  is amended  as  follows: 

(a) 

The  first  subparagraph  is replaced  by the  following: 

28 

"The  Community's  financial  contribution  shall  be granted  for  a period  of  five  years 

from  1992, within  the  limits  of  the  appropriations  allocated  for  this  purpose." 

(b) 

The  third  subparagraph  is replaced  by  the  following: 

"The  total  amount  shall  be  shared  among  the  Member  States  as  follows: 

"for  1995: 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

for  1996: 

2,2 

2,3 

9,2 

8,0 

16,5 

13,3 

4,2 

18,1 

0,6 

2,8 

3,3 

5,3 

2,7 

2,4 

9,1 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

1,8 

1,9 

7,7 

6,7 

13,7 

11,1 

29 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

for  1997: 

Austria 

Finland 

Sweden 

3,5 

15,1 

0,5 

2,3 

9,3 

4,4 

7,6 

6,8 

7,6 

39,3 

32,1 

28,6  " 

3.  Article  13(l)(b)  is replaced  by  the  following: 

"(b)  as regards the  other  elements  referred  to  in  Article  2, at the  latest  from: 

-  1 January  1998 in the  case  of  Austria,  Finland  and  Sweden,  and 

-  1 January  1997  in the  case  of  the  other  Member  States." 

Article  2 

This Regulation  shall enter into force  on the day following  its publication  in the Official Journal 

of the European  Communities. 

Article  1(2)  shall  apply  from  1 January  1996. 

30 

This Regulation  shall  be binding  in its entirety  and directly  applicable  in all Member States. 

Done at Brussels, 

For the Council 

The President 

31 

Item  Bl  - 360  : Monitoring  and  preventative  measures  concerning the  EAGGF  Guarantee 
Section 

1.TITLE OF  OPERATION 

Council  Regulation  (EC)  amending  Regulation  (EEC) No  3508/92 
an 
integrated  administrative  and  control  system  for  certain  Community  aid  schemes 
('integrated  system') 

establishing 

2.BUDGET  HEADING  INVOLVED 

Bl  -  360 

3.LEGAL  BASIS 

Article  43  of  the Treaty  establishing  the  European  Community 

4.DESCRIPTION  OF  OPERATION 

4.1.  To prolong  by one year  the period  of co-financing  of expenditure  incurred  by  Member 
States in implementing the integrated administrative and control system. The system was 
established to enhance the effectiveness  and usefulness of the mechanisms for controlling 
aid schemes linked to area (principally  arable crops and beef, sheepmeat and  goatmeat) 
adopted as part of the reform  of the common agricultural policy. The aim of  Regulation 
(EEC)  No  3508/92,  which  introduces  the  integrated  system,  is  to  set  up  systems  for 
identifying  agricultural parcels and animals together with an electronic data base that can 
be  used  for  cross-checking  aid  applications.  Provision  is  made  for  the  system  to  be 
definitively  in place  from  1 January  1996  (Austria,  Finland,  Sweden:  from  1 January 
1997). 
The  Regulation  provides  for  Community  co-financing  of  expenditure  incurred  by  the 
Member  States  in  introducing  it. 

In  view  of  the  difficulties  that  Member  States  have  had  to  face,  it  is  proposed 
postponing  the  system's  definitive  introduction  by one  year  (to  1 January  1997,  and 1 
January  1998  for  Austria,  Finland  and  Sweden). 

For the  same reason  it is also proposed  prolonging the co-financing  arrangements  for a 
year.  This  operation  represents  a  part  only  of  the  control  measures  in  the  EAGGF 
Guarantee  Section  area  covered  by  item  B1-360. 

4.2.  Period  covered:  one  year. 

5.  CLASSIFICATION  OF  EXPENDITURE  OR  REVENUE 

5.1.  Compulsory  expenditure 
5.2.  Non-differentiated  appropriations 

32 

6  TYPE  OF  EXPENDITURE 

Subsidy  for joint  financing  with other sources  in the public or private sector 
(see point  9.1  for  a detailed  description  of the type of expenditure). 

33 

7. 

FINANCIAL  IMPACT 

"Method of  calculation:  Maximum  authorized  as an  EAGGF  Guarantee  Section  contribution 

7.2. 

Itemized  breakdown  of  cost of  operation  in  ECU  million: 

Commitment  appropriations  in  ECU  million 

(current  prices) 

Budget 
year n 
(1996) 

n+  1 

n + 2 

n + 3 

n + 4 

Co-financing  of 
expenditure  incurred 
by Member  States 

24* 

Total 

24 

Total 

n + 5 
and 
subs. 
years 

24 

24 

T he  breakdown  in  1992 and  1993 by type  of  expenditure  (see 9.1)  was as  follows: 

Data-processing  structures:36%;  Control  structures:24%;  Staff:40% 

7.3.  Schedule  of  commitment/payment  appropriations 

Commitment  appropriations  in ECU  million 

n+  1 

n + 2 

n + 3 

n + 4 

n + 5 
and 
subs. 
years 

Total 

24 

Budget 
year 
n 
(1996) 

24 

18 
6 

Commitment 
appropriations 

Payment 
appropriations 

n 
n+  1 
n + 2 
n + 3 
n + 4 
n + 5 
and  subsequent  years 

Total 

24 

24 

34 

8.  FRAUD PREVENTION MEASURES 

-  Specific  control  measures  planned: 

Verification of eligibility of expenditure incurred by national authorities and of consistency 
between  amounts  claimed  and  accounting  documents;  on-the-spot  inspection  visits  to 
examine supporting  documents and determine the progress of work or the extent to which 
operations  have  been  implemented. 

9.  ELEMENTS  OF  COST-EFFECTIVENESS  ANALYSIS 

9.1. 

Specific  and  quantified  objectives;  target  population: 

-  Specific  objectives:  links  with  general  objective: 

The  types  of  expenditure  covered  by  the  operation  are  the  following: 

Data-processing  structures:  host  computers,  including  installation  costs;  work 
stations, PCs, network  infrastructure  (cables, connectors, etc.); software;  costs of 
digitizing  topographical  maps. 

Control  structures:  printing  and  preparation  of  registers  and  forms;  animal 
identifiction  rings;  devices  for  fitting  them;  land  vehicles  (e.g.  4 x 4)  and 
equipment;  equipment  for  measuring  parcels; costs  of  informing  farmers. 

Staff costs: expenses of temporary  staff recruited for work directly linked with the 
introduction  of  the  system  or  of  officials  specifically  assigned  to  this  work; 
systems  analysts,  engineers,  programmers,  encoders etc. 

The  majority  of  the  technical  and  administrative  difficulties  encountered  by  the 
Member  States  concern  the  introduction  of  systems  for  identifying  parcels  and 
animals. 

The initial situation differed  appreciably between Member States depending on the 
extent  of  the  data  immediately  available:  some  Member  States  were  able  to 
construct  their  parcel  identification  systems on the basis of existing  land  registry 
data  or  reliable  and  up-to-date  topographical  maps  while  others  had  to  establish 
the  system  practically  from  scratch.  Technically  speaking,  the  introduction  of  a 
system for identifying  animals presents fewer difficulties.  However, coordination 
difficulties  between  the  departments  controlling  the  aids  and  veterinarians,  that 
have  come to light  in a number  of  Member  States, have delayed  implementation 
of  this  element  of  the  integrated  system. 

-  Target  population: 

The  beneficiaries  of  the  Community's  financial  contribution  are  national 
authorities  responsible  for  controlling  aid  in the  agricultural  field. 

35 

9.2 

Grounds for the operation: 

-  Need  for  Community  financial  assistance,  particularly  having  regard  to  the 

principle of  subsidiarity: 

The  assistance  is justified  by  the  need  to  safeguard  the  Community's  financial 
interests and to satisfy the requirements of the Member States, for which the work 
involved  in introducing  the integrated  system represents a substantial  additional 
financial  burden. 

-  Choice of  ways and means: 

*  advantages over possible  alternatives (comparative advantages): 

the  Community  financial  aid  constitutes  support  for  their  operation  and  an 
incentive  encouraging  new initiatives. 

*  examination of any similar Community or national operations: 

the  operation  involves  the  implementation  of  an entirely  new  administration 
and control  system.  No  comparison  can  be  made  with  other  Community  or 
nationally  administered operations. 

*  spin-off  and multiplier  effects: 

the  Community  assistance  will  contribute  (for  a  limited  period)  to  the 
implementation of the modern administration and control  systems  introduced 
by  the  integrated  system.  The  expenditure  on  aid  schemes  (arable  crops, 
livestock premiums) covered by the integrated system represents around 50% 
of EAGGF  Guarantee  Section expenditure. 

The total Community co-financing  required as an initial  investment to set up 
this  entirely  new  control  system  represents  considerably  less  than  1% of  the 
expenditure  on  the  aid  schemes  in  question  for  a  single  year.  If  the 
proportionally  very  low  cost  of  the  initial  investment  and  the  fact  that  the 
system  will  be  required  to  operate  for  a  very  long  time  are  taken  into 
consideration, the  co-financing  is seen to  be entirely  cost-effective  given the 
benefits  in terms of more effective  control. 

-  Main  factors  of  uncertainty  which  could  affect  the  specific  results  of  the 

operation: 

The factors of uncertainty include the technical problems faced by the Member 
States  and  their  political  will  together  with  the  budgetary  problems  they 
encounter in complying  with the rules. 

9.3 

Monitoring  and evaluation of the operation: 

-  Performance  indicators: 

36 

From  the  information  provided  by  the Member  States on  checks carried  out  and 
the results achieved, and from  inspection visits by Commission staff,  a number of 
conclusions can be drawn on the practical implementation of the integrated  system 
and  on the  progress  of  controls. 

It  is  clear  that  in  its  first  year  of  implementation  the  system  has  presented 
problems  in  a  few  Member  States.  For  example,  a  large  number  of  area  aid 
applications  were  incorrectly  completed  and  had  to  be  corrected  in  1993  (e.g. 
because  of errors in identifying  parcels,  in calculating  the  rate  of  set-aside, etc.). 
In  the  livestock  sector,  where  fewer  changes  were  made  to  the  scheme 
arrangements,  the  number  of  files  containing  anomalies  was  smaller. 

1994,  the  second  year  of  implementation  of  the  system,  saw  a  distinct 
improvement. The availability  of preprinted declaration forms  for farmers  and the 
possibility,  in some Member  States, of submitting  applications  in electronic  form 
through producers'  organizations  are expected  to improve  the situation  further  in 
the  future. 

For  on-the-spot  inspection visits, the minimum percentage  of files to be checked 
is  set  at  5%  for  area-linked  aid  and  10%  for  livestock  aid.  The  Community 
average  for  checks  actually  carried  out  is slightly  above  7%  for  area-linked  aid. 
While  the  equivalent  figure  for  livestock  aid  (17%  in  1993)  seems  fairly  high, 
some Member States (notably France and Portugal) only carried out the minimum. 
The  number  of  area  aid  files  checked  using  remote  sensing  has  risen,  with  31% 
of applications having been checked  in this way in  1993. The figure  rose to 40% 
in  1994 . 

The  percentage  of  area  aid  files  in  which  the  amount  sought  was  reduced 
following  on-the-spot inspections amounted to 2,2% in 1994: 0,7% of applications 
were reduced  without penalty;  1% had  a penalty  applied  and  0,5% were  rejected 
outright.  In  1993,  0,8%  of  area  aid  applications  had  a  penalty  applied  or  were 
rejected  as against  1% of  livestock  aid  applications.  From  this it can  be  inferred 
that  the  penalties  introduced  under  the  integrated  system  have  had  a  deterrent 
effect  and  that  as a rule  the  level  of  compliance  has been  acceptable. 

Details  and  frequency  of  planned  evaluation: 

The implementation  of the  integrated  system has been monitored  very closely  by 
the Commission.  Discussions and control visits have taken place in each Member 
State at least quarterly.  Ten one- or two-day  meetings of the EAGGF  Committee 
have  been  given  over  entirely  to  discussion  of  the  introduction  of  the  system. 

A report has been prepared  for  the Council  giving details of the  setting  up of the 
system  and  setting  out  findings  regarding  its  implementation. 

Assessment of the results obtained (where an existing operation is to be continued 
or  renewed) 

37 

Given the wide range of technical and administrative problems to be resolved and 
their scale, all Member States are having difficulties  in respecting the deadline for 
bringing  all  the elements  of  the  integrated  system  into  effect.  As  matters  now 
stand, there is reason to believe that with an extra year to complete the work the 
system will  be fully  operational. 

38 

ISSN 0254-1475 

COM(96) 174 final 

DOCUMENTS 

EN 

03 

Catalogue number  :  CB-CO-96-184-EN-C 

ISBN 92-78-03032-5 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg