Special Report No 8/2008#Is cross compliance an effective policy?
Date: 2008-11-08
Institutions: European Court of Auditors
Subjects: EU environmental policy, agricultural holding, animal welfare, common agricultural policy, environmental law, environmental protection, opinion of the Court of Auditors, socioeconomic conditions, terms for aid

EUROPEAN COURT 
OF AUDITORS

IS CROSS COMPLIANCE 
AN EFFECTIVE POLICY?

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Special Report No 8  

 2008

IS CROSS COMPLIANCE 
AN EFFECTIVE POLICY?

(pursuant to Article 248(4), second subparagraph, EC)

EUROPEAN COURT OF AUDITORS

2

EUROPEAN COURT OF AUDITORS
12, rue Alcide De Gasperi
1615 Luxembourg
LUXEMBOURG

Tel. +352 4398-45410
Fax +352 4398-46430
E-mail: euraud@eca.europa.eu
Internet: http://www.eca.europa.eu

Special Report No 8  

 2008

More information on the European Union is available on the Internet (http://europa.eu).

Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 2009

ISBN 978-92-9207-117-2

DOI 10.2865/34445

© European Communities, 2009

Reproduction is authorised provided the source is acknowledged.

Printed in Belgium

CONTENTS

Paragraph 

IIV 

18 

16 

78 

911 

911 

1284 

1221 
1215 
1618 
1921 

2244 
2223 
2428 
2937 
3844 

4558 
4751 

5258 

5975 
5966 
6775 

7684 
7680 
8184 

INDEX OF TERMS AND ABBREVIATIONS

EXECUTIVE SUMMARY

INTRODUCTION

CROSS COMPLIANCE AND THE COMMON AGRICULTURAL POLICY

LEGAL FRAMEWORK AND IMPLEMENTATION OF CROSS COMPLIANCE

AUDIT SCOPE AND APPROACH

THE AUDIT OBJECTIVE WAS TO ASSESS THE EFFECTIVENESS OF CROSS COMPLIANCE

OBSERVATIONS

THE OBJECTIVES AND THE SCOPE OF CROSS COMPLIANCE
THE OBJECTIVES ARE NOT DEFINED IN A “SMART” MANNER
THE SCOPE OF CROSS COMPLIANCE IS NOT WELL DEFINED
ONLY LIMITED RESULTS CAN BE EXPECTED AT FARM LEVEL

IMPLEMENTATION OF THE LEGAL FRAMEWORK
THE MEMBER STATES IMPLEMENTED REQUIREMENTS AND STANDARDS ONLY PARTIALLY
THE SMRS WHICH FARMERS MUST COMPLY WITH ARE NUMEROUS AND COMPLEX
THE FRAMEWORK FOR GAEC IS RESTRICTED
MORE COMMISSION GUIDANCE AND CONTROL ON REQUIREMENTS AND STANDARDS WAS NEEDED

CROSS COMPLIANCE AND RURAL DEVELOPMENT
 CERTAIN KEY ELEMENTS OF THE RURAL DEVELOPMENT CONTROL AND SANCTION SYSTEMS ARE WEAKENED 
BY THE INTRODUCTION OF CROSS COMPLIANCE
THE SEPARATION BETWEEN CROSS COMPLIANCE AND AGRIENVIRONMENT MEASURES IS NOT ALWAYS CLEAR

THE CONTROL AND SANCTION SYSTEMS
THE CONTROL SYSTEM PROVIDES INSUFFICIENT ASSURANCE ON FARMERS’ COMPLIANCE
THE SANCTION SYSTEM IS WEAK AND THE RESULTING REDUCTIONS IN DIRECT PAYMENTS ARE LOW

MONITORING AND REPORTING
DATA IN SOME AREAS IS NOT RELIABLE AND OVERESTIMATES CONTROL AND COMPLIANCE RATES
THE COMMISSION’S PERFORMANCE MONITORING WAS FOUND WANTING

8590 

CONCLUSIONS AND RECOMMENDATIONS

REPLIES OF THE COMMISSION

 
 
4

INDEX OF TERMS 
AND ABBREVIATIONS

CAP: Common Agricultural Policy

Direct payments: Payments directly granted to farmers under an income support scheme 
listed in Annex I of Council Regulation (EC) No1782/2003

EU: European Union 

GAEC:  Good  Agricultural  and  Environmental  Condition.  This  refers  to  sets  of  standards 
defined  by  the  Member  States  for  soil  preservation  and  minimum  land  maintenance  (on 
the basis of the framework defined in Annex IV to Council Regulation (EC) No 1782/2003), 
and obligations in relation to permanent pasture

Legal framework: 

The Council Regulation: Council Regulation (EC) No 1782/2003 of 29 September 2003 
establishing common rules for direct support schemes under the common agricultural 
policy  and  establishing  certain  support  schemes  for  farmers  and  amending  Regula-
tions (OJ L 270, 21.10.2003, p. 1)

The Commission Regulation: Commission Regulation (EC) No 796/2004 of 21 April 2004 
laying  down  detailed  rules  for  the  implementation  of  cross  compliance,  modulation 
and the integrated administration and control system provided for in of Council Regu-
lation (EC) No 1782/2003 (OJ L 141, 30.4.2004, p. 18)

Legislation adopted by the Member States within the provisions of the above

Permanent pasture: In the context of cross compliance, permanent pasture is defined as 
land used to grow grasses or other herbaceous forage which has not been included in the 
crop rotation of a farm for five years or longer. It is one element of GAEC

SMART: Specific – Measurable – Achievable – Relevant – Timed

SMR: Statutory Management Requirements. These are set out in selected articles  pertaining 
to 19 Directives and Regulations (listed in Annex III to Council Regulation (EC) No 1782/2003) 
in the areas of environment; public health, animal and plant health; and animal welfare.

EXECUTIVE 
SUMMARY

I. 
Cross  compliance,  which  is  a  vital  element  of 
t h e   C A P ,   a p p l i e s   s i n c e   2 0 0 5   a n d   l i n k s   m o s t 
CAP  payments  to  the  respect  of  certain  rules 
in the areas of environment, health and animal 
welfare.

II. 
Based  on  the  results  of  an  audit  on  the  effec-
tiveness  of  cross  compliance,  the  Court  con-
cluded that:

 –

 –

 –

 –

 –

the objectives and the scope of cross com-
p l i a n c e   a r e   n o t   w e l l   d e f i n e d ,   m a k i n g   i t 
unclear what cross compliance is designed 
to achieve;

t h e   l e g a l   f r a m e w o r k   p o s e s   c o n s i d e r a b l e 
d i f f i c u l t i e s ,   n o t a b l y   b e c a u s e   i t   i s   t o o 
complex;

cross  compliance  and  rural  development 
are not well adapted to one another;

Member  States  did  not  take  their  respon-
sibility to implement effective control and 
s a n c t i o n   s y s t e m s .   A s   a   c o n s e q u e n c e   t h e 
control system provides insufficient assur-
ance on farmer compliance;

d a t a   p r o v i d e d   b y   t h e   M e m b e r   S t a t e s   o n 
c h e c k s   a n d   i n f r i n g e m e n t s   i s   n o t   r e l i a b l e 
and  the  Commission’s  performance  moni-
toring was found wanting. 

III. 
I n   t h e   s h o r t   r u n   c r o s s   c o m p l i a n c e   c a n   b e 
i m p r o v e d   b y   i m p l e m e n t i n g   t h e   f o l l o w i n g 
recommendations:

t h e   C o m m u n i t y   l e g i s l a t o r   m a y   w i s h   t o 
consider:

 –

whether such elements of the rural develop-
ment policy as the approval of standards by 
the Commission and the obligation of Mem-
ber States to lay down verifiable standards 
should also apply to cross compliance;

7

EXECUTIVE 
SUMMARY

 –

revising the principles underlying the sanc-
tion system to make reductions in payments 
proportional  to  or  dependent  on  the  seri-
ousness of the breach of cross compliance 
obligations by the farmer sanctioned;

the Commission should:

 –

implement  effective  control  and  sanction 
s y s t e m s   w h i c h   p r o v i d e   s u f f i c i e n t   a s s u r -
ance  on  farmers’  compliance  and  respect 
all legal provisions;

 –

s u b m i t   c o m p l e t e   a n d   r e l i a b l e   d a t a   i n   a 
timely manner.

 –

 –

 –

 –

 –

 –

develop and detail the objectives set out in 
the Council regulation in order to formulate 
them  in  a  “SMART”  manner  and  organise 
them in a logical hierarchy;

h a r m o n i s e   c r o s s   c o m p l i a n c e   a n d   r u r a l 
development policies, in particular by rein-
stating  the  rural  development  provisions 
which  have  been  weakened  following  the 
introduction of cross compliance;

d r a w   a   c l e a r   d e l i n e a t i o n   b e t w e e n   c r o s s 
compliance  and  agri-environment  with  a 
view  to  ensuring  that  rural  development 
benefits only compensate obligations going 
beyond cross compliance requirements and 
standards;

amend  the  control  system  with  a  view  to 
controlling at least 1 % of the farms apply-
ing each obligation;

i m p l e m e n t   t h e   k e y   e l e m e n t s   o f   a   s o u n d 
performance  monitoring  system,  notably 
by  defining  relevant  indicators  and  base-
line levels;

carry  out  closer  verification  and  analysis 
of the data reported by Member States and 
be more demanding on the quality of such 
data;

the Member States should:

 –

define a complete set of verifiable require-
ments and standards, to be applied at farm 
level;

IV. 
I f   c r o s s   c o m p l i a n c e   i s   t o   a c h i e v e   i t s   p o t e n -
t i a l   p o s i t i v e   e f f e c t s   i n   t h e   l o n g   r u n ,   t h e 
p o l i c y   m u s t   b e   i m p r o v e d   c o n s i d e r a b l y ,   i n 
p a r t i c u l a r   b y   i m p l e m e n t i n g   t h e   f o l l o w i n g 
recommendations:

the Commission should:

 –

 –

 –

simplify the legal framework, in particular 
by  organising  it  around  the  principal  ele-
ments  of  farming  activity  where  improve-
ments are sought, by specifying the results 
t h a t   a r e   e x p e c t e d   a n d ,   b y   p r i o r i t i s i n g 
requirements and standards;

base  the  results  to  be  achieved  on  needs 
assessments and specific studies;

assess the quality of the requirements and 
standards defined by the Member States;

the Member States should:

 –

be required to lay down the precise obliga-
tions  deriving  from  the  legislation,  taking 
account  of  the  specific  characteristics  of 
the areas and farming practices concerned 
where appropriate.

INTRODUCTION

1. 

2. 

CROSS COMPLIANCE AND THE COMMON 
AGRICULTURAL POLICY

Until 2005, CAP payments were linked to agricultural production, which was 
seen as distorting markets and having negative consequences for the land-
scape and for the environment, such as water pollution due to increased 
use of pesticides and fertilisers and impairment of biodiversity. The 2003 
CAP  reform,  which  took  effect  in  January  2005,  aims  to  address  these 
issues principally through severing the link between CAP payments and 
agricultural production (“decoupling”).

1  See Council Regulation (EC) 
No 1782/2003 (see index of terms 
and abbreviations).

The Council 1 introduced cross compliance as an element of the CAP. Cross 
compliance  links  most  CAP  payments  to  compliance  with  rules  relating 
to the environment, public, animal and plant health, and animal welfare 
and to maintain agricultural land (especially when it is no longer used for 
production purposes) in good agricultural and environmental condition. 
These  rules  are  set  out  in  statutory  management  requirements  (SMRs) 
and standards of good agricultural and environmental condition (GAEC). 
If a farmer does not respect the requirements and standards his CAP pay-
ments may be reduced or, in extreme cases, cancelled. In addition, apart 
from  cross  compliance,  he  may  also  be  sanctioned  under  the  Directives 
or Regulations concerned.

T A B L E   1

OVERVIEW OF THE SMRs TO BE RESPECTED FOR CROSS COMPLIANCE

Type 
of 
provision

Reference 
to the 
Council 
Regulation

Applicable 
from

Policy area

Selected articles from the following 
Community legislation 
(see Annex III of the Council Regulation 
for further details) 

SMRs

Article 4

2005

Environment

Birds Directive

Annex III

Groundwater Directive 

Sewage sludge Directive

Nitrates Directive

Habitats Directive

2006

Public, animal 
and plant 
health

Two Directives and two Regulations on the 
Identiﬁ cation and Registration of animals

Directive on placing plant protection products on 
the market

Directive on the prohibition to use certain 
products for stock farming

Regulation on food and feed law

Three Directives and one Regulation on the 
prevention, control and eradication of certain 
animal diseases

2007

Animal welfare

Three Directives on the protection of animals

 
 
9

3. 

4. 

In a previous report 2, the Court recognised the importance of the principle 
of linking CAP payments to compliance with rules relating to the environ-
ment, public, animal and plant health, and animal welfare.

2  Special Report No 14/2000 on 
“Greening the CAP”(OJ C 353, 
8.12.2000).

3  They applied in Bulgaria and 
Romania when they became Member 
States in January 2007.

Standards for GAEC apply in all Member States from 1 January 2005 3, while the 
introduction of SMRs into cross compliance, i.e the possibility to reduce 
CAP payments, is gradually being phased in. Member States applying the 
single  payment  scheme  (EU  15  plus  Malta  and  Slovenia)  are  required  to 
implement  SMRs  between  2005  and  2007,  depending  on  the  policy  area 
considered  (environment,  health  and  animal  welfare).  The  timetable  for 
the  implementation  of  SMRs  in  the  other  Member  States  is  spread  out 
between  2009  and  2011  for  the  EU  10  (minus  Malta  and  Slovenia)  and 
between 2012 and 2014 for Bulgaria and Romania.

5. 

Tables 1 and 2 provide an overview of the provisions to be respected for 
cross compliance.

T A B L E   2

OVERVIEW OF THE GAECs TO BE RESPECTED FOR CROSS COMPLIANCE

Type 
of 
provision

Reference 
to the 
Council 
Regulation

Applicable 
from

GAECs

Article 5(1)

2005

Issue 
of Annex IV 
and permanent 
pasture

Soil 
erosion

Standards of Annex IV and obligation 
in relation to permanent pasture

Minimum soil cover
Minimum land management
Retain terraces

Soil organic 
matter

Standards for crop rotation where applicable
Arable stubble management

Annex IV

Soil structure

Appropriate machinery use

Minimum level of 
maintenance

Minimum livestock stocking rates
Protection of permanent pasture
Retention of landscape features
Avoiding the encroachment of unwanted 
vegetation on agricultural land
Maintenance of olive groves in good vegetative 
condition

Article 5(2)

2005

Permanent 
pasture

Land under permanent pasture at a certain date 
is maintained as such

 
 
 
10

6. 

Cross compliance does not involve the outlay of budgetary funds per se. On 
the contrary, 75 % of the reductions in direct aid payments are credited 
to the EU budget. Although the amounts concerned (some 10 million euro 
in 2005) are limited, cross compliance applies to the implementation of 
a  major  part  of  the  EU  budget  (around  40  billion  euro)  and  to  around 
5 million farmers. 

LEGAL FRAMEWORK AND IMPLEMENTATION 
OF CROSS COMPLIANCE

7. 

The legal framework for the implementation of cross compliance results from 
the combination of four types of pronouncements: 

(a) 

the SMRs and the GAECs annexed to the Council Regulation;

(b) 

the Commission Regulation (see index of terms and abbreviations) on 
the implementation of the Council Regulation;

(c) 

further guidance documents issued by the Commission for the Mem-
ber States; and 

(d) 

national  legislation  adjusting  general  obligations  to  the  domestic 
context of each Member State.

8.  Member States are thus mainly responsible for the implementation of cross 
compliance: first, they should “translate” SMRs and GAEC standards into 
operational  requirements  and  standards  which  farmers  have  to  respect 
and, second, they have to establish a control system under which a sam-
ple of farmers are checked with a view to detecting non-compliance. The 
Commission is responsible for ensuring that Member States carry out these 
responsibilities  according  to  the  legal  provisions  and  for  reviewing  the 
application of cross compliance.

 
 
 
AUDIT SCOPE AND APPROACH

11

THE AUDIT OBJECTIVE WAS TO ASSESS 
THE EFFECTIVENESS OF CROSS COMPLIANCE

9. 

The Court’s audit was to determine whether cross compliance is effective by 
analysing  its  setting  up  and  the  first  years  of  its  implementation  by  the 
Commission  and  the  Member  States.  More  specifically,  the  audit  aimed 
at answering the following questions:

 –

 –

 –

 –

 –

Are  the  objectives  and  the  scope  of  cross  compliance  well  defined, 
and can results be expected at farm level?

Can  the  legal  framework  defining  cross  compliance  be  effectively 
implemented?

Are  cross  compliance  and  rural  development  policy  adapted  to  one 
another?

Are the control and sanction systems effective?

Is reporting and monitoring adequate?

10. 

11. 

The audit work was carried out at Commission headquarters and in a sample 
of seven Member States: Finland, France, Greece, the Netherlands, Poland, 
Portugal, and Slovenia. On-the-spot visits took place between September 
and November 2007.

Audit evidence was collected and examined by means of interviews and analy-
sis of documents and data. In each Member State a number of farms were 
visited  in  order  to  review,  with  the  farmers  and  the  inspectors  charged 
with  carrying  out  the  on-the-spot  checks,  the  implementation  of  cross 
compliance at farm level. 

 
 
 
OBSERVATIONS 

THE OBJECTIVES AND THE SCOPE 
OF CROSS COMPLIANCE

THE OBJECTIVES ARE NOT DEFINED IN A “SMART” MANNER

12. 

The global objectives are stated in the Council Regulation. They are not formu-
lated in the operative paragraphs of the Regulation but in the “whereas” 
paragraphs, and are expressed as follows:

13. 

(a) 

“The  full  payment  of  direct  aid  should  be  linked  to  compliance  with 
rules relating to agricultural land, agricultural production and activ-
ity.  Those  rules  should  serve  to  incorporate  in  the  common  market 
organisations basic standards for the environment, food safety, animal 
health  and  welfare  and  good  agricultural  and  environmental  condi-
tion” (paragraph 2);

(b) 

“In  order  to  avoid  the  abandonment  of  agricultural  land  and  ensure 
that  it  is  maintained  in  good  agricultural  and  environmental  condi-
tion,  standards  should  be  established  which  may  or  may  not  have  a 
basis in provisions of the Member States” (paragraph 3);

(c) 

“Since  permanent  pasture  has  a  positive  environmental  effect,  it  is 
appropriate to adopt measures to encourage the maintenance of exist-
ing  permanent  pasture  to  avoid  a  massive  conversion  into  arable 
land” (paragraph 4).

As can be seen from the above quotation, the objectives set out by the Council 
are fairly general, as befits the wording of high-level legislation. However, 
they were not further developed and detailed in the operative paragraphs 
of the Council Regulation or in its annexes. Annex III lists SMRs which, in 
effect, consist in a series of articles pertaining to pre-existing Regulations 
and Directives that were not established in the context of cross compli-
ance. Similarly, Annex IV articulates very general “issues” and “standards” 
that are intended to define good agricultural and environmental condition 
but  are  also  not  directly  applicable  at  farm  level.  With  few  exceptions 
(for instance the requirements deriving from the Regulation on food and 
feed law, see Table 1) these legal provisions were not clarified nor more 
precisely defined by the Commission or the Member States. The end result 
of  this  legal  framework  is  that  the  objectives  to  be  achieved  by  cross 
compliance  are  nowhere  defined  in  a  “SMART”  manner.  The  principles 
of  sound  financial  management  (to  which  Article  27(3)  of  the  Financial 
Regulation  of  the  Council  specifically  refers)  require,  in  particular,  that 
policy  objectives  be  formulated  in  a  specific,  measurable,  achievable, 
relevant  and  timed  manner  (in  one  word,  they  should  be  “SMART”)  and 
that  they  be  arranged  into  a  hierarchy  going  down  from  the  global  to 
the  intermediate,  to  the  specific  and  the  operational.  Another  principle 
which  is  not  fulfilled  is  that  performance  indicators  and  baseline  levels 
be  established.  Due  to  the  absence  of  “SMART”  objectives,  performance 
indicators and baseline levels, achievement of objectives cannot be pre-
cisely monitored (see also paragraphs 81 to 84).

 
 
13

14. 

As an illustration of the situation outlined above, one may consider the 
objective  of  avoiding  the  abandonment  of  agricultural  land.  The  Com-
mission  did  not  provide  a  precise  definition  of  land  abandonment  and 
did not explain which problems (environmental and/or social) needed to 
be  addressed  nor  how  cross  compliance  could  contribute  to  this  objec-
tive amongst the different available policy instruments. The Commission 
did not gather data to monitor the different kinds of land abandonment 
such as land which is not used at all or semi-abandoned. In the absence 
of  more  precise  definitions  and  the  collection  of  relevant  data,  it  is  not 
possible to measure whether the objective of avoiding abandonment of 
agricultural land is achieved.

15. 

In this context, the audit disclosed that, while some relevant obligations were 
imposed  at  farm  level,  depending  on  the  Member  State  and  the  policy 
area concerned, in a significant number of cases these obligations were 
purely formal and could not be expected to produce the relevant results. 
Box 1 below provides examples of both situations.

B O X   1

THE EFFECTS OF CROSS COMPLIANCE AT FARM LEVEL

Regarding the objective of incorporating basic environmental standards in the common market organi-
sations, the Council Regulation refers to fi ve Directives (see Table 1), and requires Member States to 
defi ne operational requirements which farmers have to respect. At farm level, the audit found that:

 –

 –

 –

In Slovenia, the only requirement checked for most farmers in respect of the two Directives aim-
ing to protect birds and habitats is that they do not have criminal convictions for off ences against 
certain legal provisions. Th  ere are no requirements concerning farming practices which may be 
harmful for birds or habitats.

In France, for the Directive aiming to protect the soil when sewage sludge is spread, the only 
requirement checked is the existence of a contract with the sludge provider articulating some formal 
provisions. Th  e content of the sludge (e.g. the quantity of heavy metals) or the quality of the soil 
are not taken into consideration to defi ne the requirement.

In the Netherlands, the inspection body responsible for checking cross compliance requirements 
deriving from the Directive aiming to protect groundwater against pollution, decided that a visit 
to the farm was not necessary on the grounds that “the farm was connected to a sewage system”. 
Agricultural practices which may cause pollution were not checked.

 
 
14

THE SCOPE OF CROSS COMPLIANCE IS NOT WELL DEFINED

The determination of the scope of cross compliance by Council was not sup-
ported by relevant studies or other forms of documentary evidence from 
the Commission assessing action needed as well as potential difficulties. 
Thus the Commission could not provide to the auditors documented jus-
tification  of  the  reasons  why  certain  SMRs  or  GAEC  standards  had  been 
included within cross compliance while others had not. For example, the 
initial proposals submitted by the Commission included a GAEC standard 
to “ensure balance of irrigation, drainage and water table replenishment”. 
This  standard  was  not  retained,  although  it  addressed  one  of  the  main 
environmental  problems  in  most  Member  States.  Furthermore,  certain 
key  issues,  such  as  air  pollution,  were  not  even  included  in  the  initial 
proposals. 

Concerning the scope of GAEC, the Council Regulation stipulates that Member 
States shall ensure that all agricultural land, especially land which is no 
longer used for production purposes, is maintained in good agricultural 
and environmental condition. However, a significant proportion of agricul-
tural land is not subject to GAEC rules. Examples of such situations include 
small olive oil producers in Greece, horticulturists (who are in some areas 
amongst the heaviest polluters) in the Netherlands, and parcels in Austria 
held by Slovenian farmers residing in Slovenia and conversely. In each of 
these cases, farmers did not receive direct payments and the agricultural 
land was not controlled in the framework of cross compliance.

16. 

17. 

B O X   1

Regarding the objective of ensuring that agricultural land is maintained in good agricultural and envi-
ronmental condition, the Council Regulation specifi es the issues concerned (see Table 2) and requires 
the Member States to defi ne operational standards which farmers have to respect. Th  e audit revealed 
that, although Poland and the Netherlands defi ned some national standards, these standards could 
not be considered as suffi  cient to maintain all agricultural land in GAEC because either their scope or 
their nature was too limited.

Regarding the objective of avoiding massive conversion of permanent pasture into arable land, the 
Commission adopted a number of measures in its Regulation. However, the audit disclosed that, in 
Portugal for example, more than half of the permanent pasture area registered by Eurostat was not 
included under cross compliance (see also paragraph 36). For the area which is included (47 %), farm-
ers do not have to meet any requirement related to this objective. Th  e Council Regulation invokes the 
“positive environmental eff ect” of preserving permanent pasture, but neither the Commission nor the 
Portuguese authorities defi ned any indicators to measure such an eff ect. Th  e same situation was found 
in the other Member States audited.

 
 
15

4  Commission working document 
“Guidance document of the 
Commission services on the hygiene 
provisions relevant for cross 
compliance”, DS/2006/16-final, 
May 2006.

18. 

 Furthermore, the scope of the framework is rendered unclear by unresolved 
disagreements between the Commission and the Member States. For exam-
ple, the framework for GAEC annexed to the Council Regulation consists 
of four “issues” (three related to soil preservation and one to land mainte-
nance) which are detailed in eleven standards. The Commission considers 
that Member States should define norms for the implementation of all 11 
standards,  except  those  not  relevant  to  the  national  context.  However, 
France  and  Portugal  consider  that  such  norms  only  need  to  be  defined 
for the four “issues” mentioned in the framework. With respect to SMRs, 
the  audit  revealed  that  the  exact  scope  of  the  Regulation  on  food  and 
feed  law  (see  Table  1)  was  still  not  clear.  For  example,  the  Portuguese 
authorities  and  the  Commission  disagree  on  which  hygiene  regulations 
should be checked as part of cross compliance. The Commission specified 
in a working document 4 that three Regulations on food and feed law, in 
addition  to  the  one  mentioned  in  Annex  III  to  the  Council  Regulation, 
were  part  of  cross  compliance.  But  Portugal  considers  that  there  is  no 
legal basis for adding to the requirements listed in Annex III.

B O X   1

In contrast to the above examples, the audit also identifi ed a small number of cases where obliga-
tions imposed on farmers under cross compliance were designed to produce positive environmental 
results.

 –

 –

 –

Surveys identifi ed that the GAEC standard defi ned by France, which requires farmers to leave 
unfertilised buff er strips of 5–10 metres width along watercourses, is a good way to prevent water 
pollution.

Th  e standard applied in Greece for crop rotation aims to improve soil organic matter by requiring 
farmers to cultivate grain legumes and incorporate these into the soil on 20 % of the cultivated 
area of their farm each year.

Th  e detailed and strict requirement for the application of animal fertilisers established by the 
 Netherlands is one of the main factors which has contributed to a signifi cant reduction of green-
house gas emissions by agricultural activity.

 
16

19. 

20. 

21. 

ONLY LIMITED RESULTS CAN BE EXPECTED AT FARM LEVEL 

The objective of the Council Regulation is “to incorporate basic standards 
into the common market organisations”. However, SMRs and in many cases 
also standards for GAEC, are derived from pre-existing legislation which 
may have been in place for a long time. For instance, the environmental 
SMRs are based on five legal acts (see Table 1) which were introduced in 
1979, 1980, 1986, 1991 and 1992. In cases where national legislation sets 
higher  standards,  the  Commission  has  clarified  in  a  working  document 5 
that cross compliance should be based on the lower EU standards.

5  Commission working document 
“Concerning the statutory 
management requirements to be 
respected under cross compliance 
as from 2007 — List of cases where 
Community law sets minimum 
requirements and where the 
Member States may set higher, more 
demanding, standards in national 
law”; AGR 022361, 8 May 2005.

Consequently, at farm level, almost all obligations introduced under cross 
compliance policies were already included in existing usual practices. For 
instance,  in  Portugal,  around  75  %  of  the  farmers  receiving  direct  pay-
ments did not have to fulfil any cross compliance requirement to respect 
the environmental SMRs. Their farming practices were thus not affected. 
More  generally,  the  audit  disclosed  that  farmers  in  the  Member  States 
audited were usually not required to change their existing practices. 

For example, only one Member State visited (Greece) defined specific farming 
practices to protect colonies of wild fauna on agricultural parcels, e.g. by 
setting  out  requirements  for  mowing  and  grazing.  In  France,  a  national 
environmental  institute  identified  that  limiting  the  tillage  depth  was  a 
change in farming practice which could improve soil structure. However, 
the French authorities did not include this standard under cross compli-
ance. An advisory body in the Netherlands, which included environmen-
tal  organisations  and  representatives  of  the  farming  sector,  proposed  a 
standard on crop rotation. This standard for GAEC was not included under 
cross  compliance  as  the  Netherlands  made  the  policy  choice  to  include 
only standards which were based on existing national legislation.

 
 
 
17

IMPLEMENTATION OF THE LEGAL FRAMEWORK

THE MEMBER STATES IMPLEMENTED REQUIREMENTS 
AND STANDARDS ONLY PARTIALLY

22. 

The legal framework leaves the main responsibility for detailing the obli-
gations  to  be  complied  with  by  farmers  to  the  Member  States.  This  is 
consistent with the need to adapt general rules to the specific situation 
of a wide variety of agricultural areas. However, the Court’s audit found 
that none of the Member States visited “translated” all elements required 
by  the  framework  into  operational  requirements  at  farm  level.  National 
authorities  did  not  always  define  such  requirements  and  standards  or, 
when they did, did not do it fully and did not always include them in the 
cross  compliance  checks.  Missing  and  incomplete  checks  were  numer-
ous,  including  those  that  should  take  place  in  key  areas  (environment, 
food  safety).  The  reasons  for  this  are  analysed  in  the  remainder  of  this 
section. 

23. 

Box 2 provides some examples of requirements and standards which were 
not or only partially implemented.

B O X   2

EXAMPLES OF MISSING AND INCOMPLETE REQUIREMENTS AND STANDARDS

Portugal did not implement the requirements applicable at farm level in the area of food and feed 
safety. In addition, it did not defi ne the requirements for the groundwater Directive. Th  ese are two key 
areas. In Finland, several requirements resulting from the nitrates Directive were set out in the guides 
distributed to farmers but there was no evidence that they were checked on the spot. Th  ese require-
ments, such as not spreading fertiliser within 5 metres of water courses, are of key importance for the 
prevention of water pollution with nitrates. 

Some Member States did not defi ne a GAEC standard for crop rotation at all. Th  e standard defi ned 
by the Netherlands (a green cover crop between 31 May and 31 August on set-aside land) is insuf-
fi cient. It has a very limited application (it only covers 0,1 % of the agricultural area) and cannot be 
considered as a crop rotation standard as it does not concern the growing of diff erent series of crops 
in the same place in sequential seasons. Th  e standard in Slovenia requires a triennial rotation on 50 % 
of the arable area of the farm. Th  e audit could not establish the reason why the obligation is limited 
to 50 % of the arable land.

 
 
18

24. 

25. 

26. 

THE SMRS WHICH FARMERS MUST COMPLY 
WITH ARE NUMEROUS AND COMPLEX

Amongst the 19 Regulations and Directives which form the framework for 
SMRs,  there  are  14  Council  Directives.  Directives  prescribe  the  result  to 
be  achieved,  but  leave  the  choice  of  form  and  methods  to  the  National 
authorities. Member States must therefore transpose the Directives into 
national law. The Commission found that this transposition was not always 
complete, and when it pursued legal action the Court of Justice decided 
in  favour  of  the  Commission 6.  This  was  the  case,  in  particular,  of  the 
three environmental Directives which require the designation of specific 
implementation  areas,  and  the  definition  of  measures  to  protect  these 
areas (the birds, nitrates and habitats Directives, see Table 1). 

6  See for example Case C-334/04, 
Judgment of the Court (Second 
Chamber) of 25 October 2007, 
Commission of the European 
Communities v Hellenic Republic, 
failure of a Member State to fulfil 
obligations – birds Directive.

Insufficient transposition into national law means that certain requirements 
are  not  or  only  partly  included  in  national  legislation.  In  such  cases  the 
potential  effects  of  cross  compliance  are  reduced.  In  addition,  farmers 
facing the same environmental problem are confronted with unjustified 
different  requirements.  This  leads  to  unequal  treatment  of  farmers  in 
different Member States. This is also the case in the same Member State 
when different requirements apply to areas with the same environmental 
problems.

The framework for SMRs provided by the Council Regulation contains 48 arti-
cles which refer in most cases to other legal provisions (articles, annexes, 
lists) pertaining to the same or other legal acts. These other legal provi-
sions  thus  become  part  of  the  cross  compliance  framework  as  they  are 
needed  to  make  the  48  selected  articles  operational.  In  addition,  the 
provisions  to  which  reference  is  made  also  refer  to  the  same  or  other 
legal texts, which, in turn, further refer to other legal provisions. 

27.  Member States need to identify the requirements to be checked. This results 
in  long  lists  of  requirements:  for  example,  the  2007  checklist  used  by 
the  Dutch  inspectors  for  visits  on  the  spot  mentions  172  different  legal 
provisions to be verified.

 
 
 
 
19

28. 

29. 

30. 

31. 

32. 

An additional complication results from the fact that some SMRs do not spe-
cifically  relate  to  farming  activities.  This  is  the  case  of  provisions  relat-
ing  to  hunting  and  to  the  transport  of  livestock  to  the  market.  Articles 
pertaining to the birds and habitats Directives, such as those prohibiting 
the killing of protected species, apply to all citizens and are not targeted 
to  specific  farming  practices.  In  some  Member  States,  the  groundwater 
Directive (see Table 1) was transposed with a view to addressing the pol-
lution originating in industrial activities rather than in agricultural ones. 
Difficulties arise when such requirements are transformed into conditions 
to be applied to farming activities.

THE FRAMEWORK FOR GAEC IS RESTRICTED

Sets of standards defined by the Member States

The framework for GAEC is more directly related to farming practices. This 
means that it does not suffer from the problems identified for the SMRs. 
However, the audit identified other problems for GAEC. 

The first part of the GAEC framework is defined in Article 5(1) of the Council 
Regulation which refers to Annex IV of the Regulation. This Annex consists 
of  a  table  identifying  4  “issues”  and  11  related  standards.  The  scope  of 
these four issues (and the related standards) is limited in that they only 
concern soil and minimum land maintenance, while other key issues, such 
as water usage, are not included. 

In July 2007, the Commission wrote to the Member States that, under cross 
compliance,  farmers  cannot  be  sanctioned  for  disregarding  obligations 
relating  to  issues  or  standards  which  are  not  included  in  Annex  IV.  This 
is the case of standards which can bring positive effects such as the one 
defined  by  France  for  irrigation  or  by  Portugal  for  renewal  of  pasture 
through burning.

The prohibition to define additional standards, combined with the limited set 
of issues considered, make the scope of the GAEC framework restricted. 
Moreover,  problems  within  the  scope  of  the  four  issues  cannot  always 
be addressed. For instance, soil structure is one of the four issues in the 
table.  But  damage  to  soil  structure  caused  by  cattle,  which  is  an  issue 
in  Poland,  for  example,  cannot  be  addressed  through  cross  compliance 
because  the  standards  mentioned  in  Annex  IV  are  only  concerned  with 
damages resulting from the use of machinery.

 
 
 
 
 
20

33. 

34. 

35. 

Obligations in relation to permanent pasture

The second part of the GAEC framework is defined in Article 5(2) of the Council 
Regulation  that  provides  for  land  which  was  under  permanent  pasture 
at a certain date to be maintained as such. Derogations are allowed, but 
only  in  duly  justified  circumstances,  and  under  the  condition  that  the 
Member State takes action to prevent any significant decrease in its total 
permanent pasture area.

In the Commission Regulation, this derogation is granted to all Member 
States.  By  granting  a  general  derogation,  the  Commission  did  not  feel 
compelled to “duly justify the circumstances”, nor did it request Member 
States  to  do  so.  In  the  same  Regulation,  the  Commission  specified  that 
decreases would be “significant” when they exceeded 10 % of a reference 
ratio and that such significant decreases were not authorised. However, 
the Commission could not provide studies or other relevant documents to 
justify whether 10 % is the right level to prevent negative environmental 
effects. 

The purpose of the reference ratio is to set a benchmark. But, given the mode 
of computation of the ratio (basically the permanent pasture area divided 
by the total agricultural area), simultaneous decreases in permanent pas-
ture and arable land have no impact on the value of the ratio. Yet, such 
simultaneous decreases resulting from the conversion of entire areas to 
other forms of land use (e.g. urbanisation of rural areas) have represented 
a major cause (around 50 %) of the decreases in the recent past.

36.  Member States had difficulties with the calculation of the reference ratio 
defined  in  the  Commission  Regulation,  and  the  necessary  data  was  not 
always available. This enabled some Member States (e.g. the Netherlands 
and  Portugal)  to  set  this  reference  ratio  at  an  unrealistically  low  level. 
Eurostat data indicates that the proportion of permanent pasture (relative 
to total agricultural area) is much higher than the ratio retained by these 
two Member States. In effect, the audit established that a 10 % decrease 
from the reference ratio would correspond to a decrease of around 30 % 
of actual permanent pasture. Slovenia could not apply the Commission’s 
d e f i n i t i o n   o f   t h e   r e f e r e n c e   r a t i o ,   a s   t h e   l a n d   a n d   p a r c e l   s y s t e m s   h a d 
changed; the audit found that the reference ratio could not be reconciled 
with the underlying data.

 
 
 
 
7  The SMRs did not apply in Poland 
at the time of the audit.

21

37. 

38. 

39. 

40. 

The Council Regulation links the goal of maintaining permanent pasture 
with its positive environmental effects. However, the measures adopted 
by  the  Commission  do  not  protect  the  quality  of  permanent  pastures. 
Certain  types  of  permanent  pasture,  in  particular  species-rich  natural 
grasslands,  are  more  important  for  the  environment  than  others.  The 
current system allows for decreases in such high nature value permanent 
pasture  to  be  compensated  by  increases  in  pastures  of  lower  environ-
mental  quality.  Since  data  on  the  environmental  quality  of  permanent 
pastures is not available, it is not possible to estimate to what extent this 
has occurred.

MORE COMMISSION GUIDANCE AND CONTROL ON REQUIREMENTS 
AND STANDARDS WAS NEEDED

One of the main initiatives taken by the Commission to help Member States 
implement  cross  compliance  is  issuing  guidance  documents.  However, 
none  of  these  documents  cover  GAEC  standards.  With  respect  to  SMRs, 
the  scope  and  the  practical  pertinence  of  the  documents  is  limited,  as 
they do not provide the Member States with guidance on how to define 
operational obligations applicable to farmers.

For instance, the Commission prepared a guidance document on environ-
mental SMRs, for the purpose of defining a workable set of relevant and 
verifiable standards. However, the document merely copies the relevant 
legal texts, the only guidance given is that Member States should establish 
obligatory  standards  at  farm  level  for  each  of  these  articles.  Types  and 
examples of farmers’ practices and related control points are not detailed, 
which  is  necessary  to  make  the  legal  framework  operational.  The  audit 
in  the  Member  States  revealed  that  for  some  environmental  Directives, 
notably  those  for  birds  and  habitats,  only  general  legal  requirements 
(i.e. not specifically related to farming activities) were established.

The requirements deriving from the Regulation on food and feed law (see 
Table  1)  were  applicable  under  cross  compliance  as  from  January  2006. 
The  Commission  published  a  guidance  document  in  May  2006  to  define 
the  exact  scope  of  certain  of  the  provisions  of  food  and  feed  law.  This 
d o c u m e n t   w a s   i s s u e d   t o o   l a t e ,   a n d   m o s t   M e m b e r   S t a t e s   h a d   a l r e a d y 
planned  their  cross  compliance  checks  or  started  implementing  them. 
As  a  result,  the  Court’s  audit  found  that  five  out  of  six  Member  States 7 
had not performed the checks in accordance with the Commission’s 2006 
guidelines.

 
 
 
 
22

Concerning SMRs, Member States are not only responsible for establishing the 
requirements applicable at farm level, but also for checking that farmers 
respect all elements of the legal framework for the SMRs. A key check to 
ensure that the SMRs are implemented according to the legal provisions 
is  therefore  that  of  the  completeness  and  quality  of  the  requirements. 
In  other  words,  the  Commission  must  ensure  that  Member  States  have 
defined adequate control points for all the legal texts of the framework. 
The Commission did not check whether and where this was the case.

8  The SMRs did not apply in Poland 
at the time of the audit.

The Court checked the completeness and quality of a sample of require-
ments.  This  revealed  significant  shortcomings  (missing  requirements, 
requirements with a limited extent or scope, checks which had not been 
carried  out)  (see  paragraphs  22  and  23)  in  all  Member  States  audited 8, 
notably  in  the  area  of  the  environment.  Since  the  Commission  does  not 
systematically  identify  such  cases,  it  could  not  take  action  to  address 
these shortcomings.

Concerning GAEC, the Commission checked whether or not Member States had 
defined standards. But no systematic action was taken to address cases of 
unjustified  missing  standards  until  July  2007.  This  caused  difficulties  at 
the  time  of  approving  rural  development  programmes.  The  Commission 
was  faced  with  cases  where  Member  States  proposed  agri-environment 
measures  to  address  environmental  problems  which  should  have  been 
treated in the framework of GAEC. The Commission did request the Mem-
ber States to define GAEC standards appropriate to these cases. However, 
when no agri-environment measure was proposed by the Member States, 
the Commission did not take any action with the result that the standards 
involved were left missing. 

The Commission did not check whether the standards avoided the abandon-
ment of land and ensured that land is maintained in GAEC. The legal provi-
sion that standards must take into account the specific characteristics of 
regions  (Article  5(1)  of  the  Council  Regulation)  was  not  checked  either. 
The  audit  identified  problems  relating  to  the  quality  of  the  standards 
for GAEC in all Member States visited. Such cases are not systematically 
identified and addressed by the Commission.

41. 

42. 

43. 

44. 

 
 
 
 
23

CROSS COMPLIANCE AND RURAL DEVELOPMENT

According to financial plans, around one quarter of the CAP expenditure dur-
ing  the  2007-2013  period  should  go  to  Rural  Development.  The  Council 
Regulation on Rural Development 9 stipulates that, as from January 2007, 
cross  compliance  applies  to  8  of  the  42  measures  established  by  this 
Regulation. These eight area- or animal-related measures, including the 
financially most important one, agri-environment, represent around 40 % 
of Rural Development expenditure. 

9  Council Regulation (EC) 
No 1698/2005 of 20 September 2005 
on support for rural development 
by the European Agricultural Fund 
for Rural Development (EAFRD)
(OJ L 277, 21.10.2005, p. 1).

The audit disclosed that, in reality, cross compliance would apply to around 
a  third  of  Rural  Development  expenditure  over  the  period.  This  situa-
tion results from the following oversight in the implementation of cross 
c o m p l i a n c e   p o l i c y .   A g r i - e n v i r o n m e n t   m e a s u r e s   a r e   g e n e r a l l y   i m p l e -
mented  through  five  year  contracts  with  farmers.  But,  in  most  Member 
States  audited,  the  audit  found  that  cross  compliance  would  not  apply 
to expenditure incurred in 2007 and subsequent years and based on con-
tracts concluded before January 2007. These contracts were concluded for 
a new period of five years and therefore their execution will extend into 
the  new  financial  period  but  they  did  not  specify  that  cross  compliance 
would apply as from January 2007.

CERTAIN KEY ELEMENTS OF THE RURAL DEVELOPMENT CONTROL 
AND SANCTION SYSTEMS ARE WEAKENED BY THE INTRODUCTION 
OF CROSS COMPLIANCE

Before cross compliance applied to rural development, farmers benefitting 
from  the  two  financially  largest  measures  (agri-environment  and  com-
pensatory allowances under less favoured areas) needed to adhere to at 
least the standard of “usual good farming practice” throughout the farm. 
This was defined as the standard which a reasonable farmer would follow 
in the region concerned, including compliance with mandatory environ-
mental  and  animal  welfare  requirements.  Member  States  had  to  define 
verifiable  standards  in  their  rural  development  plans,  which  were  part 
of  the  Commission’s  approval  procedure.  Good  farming  practice  was  an 
eligibility criterion to benefit from the two measures, and it was checked 
on at least 5 % of the farms.

45. 

46. 

47. 

 
 
 
24

48. 

A comparison of the standards defining usual good farming practice with 
requirements and standards established under cross compliance revealed 
that in most Member States audited many important obligations no longer 
applied. This resulted in a significant weakening, notably in Poland where 
the SMRs do not yet apply. Since January 2007, such requirements as those 
which existed under rural development for habitat protection, prevention 
of  water  contamination,  etc.  are  no  longer  checked  under  cross  compli-
ance.  This  situation  will  continue  until  SMRs  are  introduced  in  Poland 
between 2009-2011.

49. 

The introduction of cross compliance has weakened the following rural devel-
opment provisions: 

(a) 

there  is  no  longer  a  regulatory  provision  that  Member  States  must 
define verifiable standards;

(b) 

the  standards  at  Member  State  level  are  no  longer  approved  by  the 
Commission;

(c) 

cross compliance conditions are no longer eligibility criteria;

(d) 

good farming practice is checked on 5 % of farms and cross compliance 
requirements and standards are checked on 1 % of farms;

(e) 

important  conditions  of  the  old  system  of  good  farming  practice  no 
longer apply;

(f) 

s a n c t i o n s   a r e   g e n e r a l l y   l o w e r ,   e v e n   f o r   a   v i o l a t i o n   o f   t h e   s a m e 
requirement.

50. 

As noted before (see paragraph 46), most Member States audited decided to 
keep  the  old  rules  for  current  expenditure  relating  to  agri-environment 
contracts  concluded  before  2007.  Because  cross  compliance  applies  to 
expenditure related to contracts concluded since 2007, two control sys-
tems  are  in  place  at  the  same  time.  In  view  of  the  differences  between 
these systems (control rates, requirements etc.) this requires additional 
administrative work for Member State authorities.

 
 
 
25

51. 

52. 

In addition, this leads to the situation of two farmers benefiting from the same 
agri-environment scheme having to fulfil different obligations depending 
on when they signed their contract, before or after 2007. Consequently, 
one farmer will be sanctioned for violation of an obligation, while another 
will not as he does not have to respect this obligation. This situation will 
remain  until  2011,  when  the  five  year  contracts  concluded  in  2006  will 
expire.

THE SEPARATION BETWEEN CROSS COMPLIANCE 
AND AGRIENVIRONMENT MEASURES IS NOT ALWAYS CLEAR

A clear delineation between agri-environment and cross compliance is impor-
tant. Firstly, this must ensure that farmers are not paid under agri-envi-
ronment for what they are legally required to do under cross compliance. 
Secondly,  cross  compliance  applies  to  all  farmers  receiving  direct  pay-
ments,  whereas  agri-environmental  commitments  are  voluntary.  Cross 
compliance  requirements  and  standards  are  necessary  to  set  a  sound 
minimum level.

53.  With respect to cross compliance, Member States have considerable room to 
define the obligations imposed on farmers, especially for GAEC standards. 
Where cross compliance and agri-environment apply to the same objects 
(landscape elements, biodiversity, etc.) this means that the level of agri-
environment  obligations,  and  consequently  its  effects,  are  determined 
by the level of cross compliance obligations.

54. 

In each of the Member States visited, the audit found obligations established 
under  agri-environment  schemes  which  could  also  have  been  included 
under  cross  compliance.  Doing  so  would  have  led  to  a  reduction  of  the 
agri-environment  payments  concerned.  For  instance,  in  Portugal,  there 
are agri-environmental schemes to retain terraces and for crop rotation, 
but the standards required for this by cross compliance were not applied. 
When these standards are included under cross compliance the amounts 
to be paid under agri-environment will be reduced, because farmers are 
only compensated for additional obligations.

 
 
 
 
26

55. 

56. 

57. 

In Greece, the main aim of the agri-environment scheme for the extensifica-
tion  of  animal  farming  is  to  reduce  stocking  densities  for  pasture  land. 
Limits  to  stocking  density  were  also  set  under  cross  compliance  by  the 
GAEC standard for protecting permanent pasture. The Greek authorities 
could  not  explain  whether  the  agri-environment  measure  was  stricter 
than the cross compliance standard.

10 Catch crops are crops that are 
sown to prevent minerals (e.g. 
nitrates) being flushed away from 
the soil.

The different choices made by the Member States lead to a situation where 
farmers  may  be  paid  for  certain  obligations  in  one  Member  State,  while 
they  are  required  to  do  so  without  compensation  in  another  Member 
State.  For  instance,  farmers  in  the  Netherlands  are  required  to  sow  a 
catch  crop 10  after  the  maize  harvest,  as  this  is  a  requirement  under  the 
nitrates Directive. Across the border, in Belgium, farmers are paid for that 
same  practice,  as  it  is  included  under  an  agri-environmental  scheme  in 
Flanders. 

The overlap between agri-environment and cross compliance can be illus-
trated by the example of buffer strips. These are strips bordering agricul-
tural parcels where certain farming practices are prohibited. For instance, 
strips  left  untilled  alongside  water  courses  prevent  soil  erosion,  which 
is  a  GAEC  issue.  The  prohibition  to  apply  manure  and  plant  protection 
products on buffer strips reduces water contamination and is beneficial 
for  biodiversity.  These  issues  are  included  in  the  framework  for  cross 
compliance.  Consequently,  several  Member  States  implemented  buffer 
strips  under  cross  compliance.  However,  not  all  Member  States  did  as 
there is no specific obligation to do so. Some Member States decided to 
include buffer strips in agri-environment schemes.

58. 

Box 3 shows the different choices made by some of the Member States audited 
for  implementing  buffer  strips.  These  choices  affect  the  level  of  agri-
environment payments and the environmental impacts to be achieved.

 
 
 
 
27

59. 

60. 

THE CONTROL AND SANCTION SYSTEMS

THE CONTROL SYSTEM PROVIDES INSUFFICIENT ASSURANCE 
ON FARMERS’ COMPLIANCE

As mentioned before, Member States implemented requirements and stan-
dards  only  partially  (see  paragraphs  22  and  23).  As  a  result,  the  corre-
sponding obligations are not checked under cross compliance as required. 
This  weakness  was  mainly  found  in  the  areas  of  environment  and  food 
safety. In Finland for instance, more than 30 requirements resulting from 
the  legal  framework  for  SMRs  (15  for  the  environmental  Directives  and 
15  for  the  Regulation  on  food  and  feed  law 11)  were  not  checked  under 
cross compliance.

11 Regulation (EC) No 178/2002 of 
the European Parliament and of 
the Council of 28 January 2002 
laying down the general principles 
and requirements of food law, 
establishing the European Food 
Safety Authority and laying down 
procedures in matters of food safety 
(OJ L 31, 1.2.2002, p. 1).

Farms are normally visited only once for cross compliance, but the timing 
of the visit does not depend on when the requirements or standards can 
best be checked. Cross compliance checks are concentrated in a limited 
period of the year, typically in the summer months. However, a significant 
number  of  environmental  SMRs  and  GAEC  standards  cannot  be  checked 
i n   t h i s   p e r i o d ,   a s   t h e y   d e p e n d   o n   f a r m i n g   p r a c t i c e s   w h i c h   b e l o n g   t o 
other  seasons  (ploughing,  spreading  manure,  mowing  of  pastures).  As 
a  result,  the  number  of  checks  actually  carried  out  for  the  obligations 
concerned was low, and, in some cases, reduced to zero.

B O X   3

EXAMPLES OF DIFFERENT USE OF BUFFER STRIPS 

In Finland, buff er strips of 0,6 metre are required by the GAEC standard for soil erosion. Agri-envi-
ronment payments are made for wider buff er strips (at least 1 metre).

France requires farmers to leave unfertilised buff er strips of 5–10 metres width along watercourses 
under the GAEC standard for soil erosion. Wider buff er strips are compensated under agri-environment 
schemes.

In the Netherlands, fertilisation is not allowed on buff er strips along surface waters under a require-
ment deriving from the nitrates Directive. Th  e width of the strips vary from 0,25–9 metres depending 
on the crop and the method of applying plant protection products. Th  ere are no agri-environment 
schemes for buff er strips. 

In Poland, no obligations were set for buff er strips under cross compliance, but farmers are compensated 
for buff er strips under an agri-environment scheme.

In Slovenia, there are no farmer obligations for buff er strips under cross compliance, and there are also 
no agri-environment schemes for buff er strips relating to arable land or grassland. 

 
 
28

61. 

62. 

63. 

64. 

In all Member States visited, the audit also found examples of obligations 
in the areas of environment and food safety which were difficult to ver-
ify,  and  where  clear  instructions  for  inspectors  were  missing.  Cases  in 
point include obligations such as “to avoid using heavy machines on wet 
ground”,  “food  stuffs  must  be  safe”,  “agricultural  installations  must  be 
in good condition”, or “it is forbidden to apply plant protection products 
during flowering if bees are present in the field”. Such conditions are dif-
ficult to check, especially in the absence of a definition of the underlying 
terms and clear instructions as to what constitutes a non-compliance. 

12 Data for 2007 was not yet available 
at the time of the audit.

However, the problems described above do not exist in all cross compliance 
areas. The proper identification and registration of animals, for example, 
can  be  verified  throughout  the  year,  and  the  related  checks  are  more 
clearly defined (e.g. all animals must have ear tags or all animals on the 
farm must be recorded in the holding’s register).

The weaknesses identified before that the checks carried out at farm level 
were often minimal (see paragraphs 39, 59 and 60) concerned in particular 
the birds and habitats Directives. In Finland, checks were only carried out 
at  farms  where  it  was  known  that  there  were  protected  species,  and  a 
visual check while measuring the parcels to see if “anything looked wrong” 
was the sole check for many of the obligations in practice. In France and 
the  Netherlands  parcels  are  not  visited  as  part  of  the  cross  compliance 
checks for the birds and habitats Directives, even when such parcels are 
located in Natura 2000 areas. Requirements and checks in these areas are 
of key importance to protect birds and habitats.

Due to the limited number and extent of the checks carried out for these two 
Directives, only a very low number of infringements was detected in 2005 
and  2006 12.  For  example,  in  Finland,  France,  Greece  and  Slovenia  not  a 
single infringement was detected in 11 633 cross compliance checks for 
the birds Directive and 14 896 checks for the habitats Directive. 

 
 
 
 
29

65. 

66. 

67. 

The audit sought to compare the number and results of cross compliance 
checks with those of other checks. Where this information was available, 
it  showed  that  comparable  checks  outside  cross  compliance  resulted 
in  significantly  higher  rates  of  non-compliance.  In  the  Netherlands,  no 
non-compliance  was  detected  in  2006  for  the  environmental  Directives. 
Outside  the  cross  compliance  control  sample,  a  relatively  high  number 
of cases of non-compliance was detected (101 for the nitrates Directive, 
for  instance).  The  Dutch  authorities  could  not  explain  the  reasons  for 
this situation. In Finland, not all cases of non-compliance were reported 
in  the  cross  compliance  statistics,  yet  in  2006  checks  for  milk  hygiene 
detected  920  infringements,  representing  48  %  of  the  farms  checked.  It 
is a requirement of the regulations that non-compliances with the SMRs 
detected should result in cross compliance sanctions and be reported to 
the Commission. However, non-compliance detected in the cross compli-
ance sample and reported to the Commission was only 6 %.

Certain obligations were easier to check, and resulted in higher rates of 
non-compliance.  This  was  generally  the  case  for  requirements  relating 
to the identification and registration of animals. Specific cases of checks 
which  resulted  in  high  rates  of  non-compliance  were  found  in  Slove-
nia,  which  carried  out  administrative  controls  to  check  whether  or  not 
farms exceeded limits for nitrates resulting from fertilisation with animal 
manure, and in Greece for crop rotation.

THE SANCTION SYSTEM IS WEAK AND THE RESULTING REDUCTIONS 
IN DIRECT PAYMENTS ARE LOW

The Council Regulation states that if basic standards are not met, “Member 
States should withdraw direct aid in whole or in part on the basis of cri-
teria which are proportionate, objective and graduated.” Article 7 of the 
Regulation provides for such reductions to be calculated as a percentage 
of  the  aid  received.  This  links  cross  compliance  reductions  to  historical 
CAP payments, because the latter form the basis for the aid received. As 
a  result,  reductions  in  direct  aid  payments  are  not  based  on  the  cost  of 
compliance nor on the consequences of non-compliance. Under the cur-
rent  system,  big  polluters  receiving  low  amounts  of  direct  aid  face  low 
reductions,  while  small  polluters  receiving  large  amounts  face  higher 
reductions.

 
 
 
13 Higher rates apply to repeated 
cases of non-compliance (see 
paragraph 70) and to cases of 
non-compliance considered by the 
Member States as intentional (see 
paragraph 75).

30

68. 

69. 

70. 

71. 

72. 

The Commission Regulation sets the reduction, as a general rule, at 3 % of the 
amount granted 13. Member States may decide not to impose any reduction 
or to reduce the rate to 1 % or to increase it to a maximum of 5 %. 

For many obligations, the cost of compliance is higher than the maximum 
reduction rate of 5 %. This means that the reductions do not have a deter-
rent effect. In the Netherlands, a cross compliance requirement deriving 
from the nitrates Directive is that the manure storage must have sufficient 
capacity to store the manure produced in the period September–February. 
A milk farmer visited estimated that constructing a storage vessel meeting 
the  technical  requirement  would  cost  between  20  000  and  30  000  euro. 
Non-compliance  with  the  requirement  only  leads  to  a  reduction  of  1  %, 
the average reduction in the Netherlands was 100 euro.

The Council Regulation provides for higher rates of reduction in case of 
repeated  non-compliance.  Although  this  should  make  the  system  more 
deterrent,  data  shows  that  this  is  not  yet  the  case.  For  instance,  in  Fin-
land, more than half of the 104 farms that had been sanctioned for non-
compliance in 2005 were sanctioned again in 2006.

The Council Regulation requires that, within the range of 1 % to 5 %, the 
reduction  take  account  of  the  severity,  extent  and  permanence  of  non-
compliance. However, the Member States audited generally did not define 
these terms adequately. As a result, the sanctions neither depend on the 
extent  nor  on  the  consequences  of  the  non-compliance,  and  flat  rates, 
typically  of  1  %,  were  applied.  For  instance,  a  farmer  in  Portugal  who 
had  not  complied  with  the  identification  rules  for  209  animals  received 
the same sanction (1 %) as a farmer in the same situation with only one 
animal.  In  Poland,  a  farmer  with  a  higher  number  of  cases  of  non-com-
pliance  may  even  face  lower  sanctions  than  a  farmer  with  less  cases  of 
non-compliance.

The audit revealed that there was a variety of reasons why detected non-com-
pliance did not result in a reduction of the payment. Some Member States 
give  farmers  the  possibility  to  remedy  the  situation,  or  have  a  system 
of  warnings.  Coordination  between  the  different  control  bodies  did  not 
always function properly, so that detected cases of non-compliance were 
not  reported  to  the  body  applying  the  sanctions.  There  are  obligations 
for  which  non-compliance  results  in  a  “sanction”  of  0  %.  Poland  did  not 
apply a sanction if the agricultural area concerned is less than 0,1 hectare. 
In Finland, although a case of non-compliance for groundwater require-
ments was detected, the sanction was set at 0 % on the grounds that the 
farmer was absent when his contractor used the prohibited products.

 
 
 
 
 
31

73. 

74. 

As a result, most sanctions were low, both in relative and absolute terms, 
including in cases of non-compliance with key requirements such as those 
relating to the environment or public health. Box 4 gives some examples 
of this.

As of 1 January 2008, the Council Regulation gives Member States the pos-
sibility  not  to  apply  a  reduction  or  exclusion  amounting  to  100  euro  or 
less. While this may reduce the administrative burden, this will also signifi-
cantly reduce the number of sanctions applied, also for non-compliance 
with key requirements. For instance, in the Netherlands the average sanc-
tion  is  100  euro;  in  Finland,  65  %  of  the  sanctions  were  below  100  euro 
while in Poland this rate was as high as 94 %. 

B O X   4

EXAMPLES OF LOW SANCTIONS FOR NONCOMPLIANCE WITH KEY REQUIREMENTS

In Finland, 35,5 % of the number of sanctions in 2006 were 0 %. One of the requirements which is 
“sanctioned” with 0 % is the use of prohibited plant protection products which have been banned 
since December 2003.

France uses a calculation method which has the eff ect of decreasing the sanctions for the environmental 
Directives. Severe breaches of the nitrates Directive, such as not respecting the ceiling of 170 kg nitrate 
per hectare, spreading manure in forbidden periods or using a storage vessel with insuffi  cient capacity 
lead in practice to a reduction of payments of 1 %.

In the Netherlands, regular controls (i.e. outside cross compliance) detected that a farmer used illegal 
growth hormones. Following the Dutch law implementing cross compliance this led to a cross compli-
ance sanction of 1 %, amounting to 94,04 euro.

Non-compliance with requirements for the identifi cation and registration of animals by a farmer in 
Slovenia resulted in a 1 % reduction rate, which amounted to 0,97 euro. Another farmer in Slovenia 
had breached requirements deriving from three legal acts: the nitrates Directive, the Regulation on 
identifi cation and registration of animals, and the Regulation on food and feed law. Th  e sanction applied 
was 3 %, the amount concerned 15,26 euro.

 
 
32

75. 

76. 

77. 

The different interpretations given by different Member States to certain 
elements  of  the  sanction  system  lead  to  a  situation  where  farmers  are 
not treated equally for the same infringement. For instance, in the Neth-
erlands  missing  ear  tags  for  fewer  than  10  pigs  or  5  bovines  results  in 
a  warning  while  in  Greece  a  single  missing  ear  tag  is  sanctioned.  The 
different  calculation  methods  used  by  the  Member  States  in  the  case  of 
multiple cases of non-compliance may result in a farmer in one Member 
State  getting  twice  the  sanction  rate  as  the  farmer  in  another  Member 
State.  Intentionality  is  defined  differently  in  different  Member  States. 
Some Member States consider the use of illegal substances such as hor-
mones  in  stock  farming  as  negligence,  leading  to  a  maximum  sanction 
of 5 %. Other Member States consider this to be intentional, leading to a 
sanction of 20 %.

MONITORING AND REPORTING

DATA IN SOME AREAS IS NOT RELIABLE AND OVERESTIMATES 
CONTROL AND COMPLIANCE RATES

The Commission Regulation determines that Member States must report 
on the number and results of the cross compliance checks, the area and 
proportion  of  the  land  under  permanent  pasture,  and  basic  elements  of 
the control system. 

The audit found that data pertaining to different years was not always com-
parable over time and that, as a consequence, trend changes could not be 
detected. One reason is that legislation may change. For instance, Dutch 
national legislation implementing the nitrates Directive was completely 
overhauled in 2006, so that the number of cases of non-compliance before 
and  after  the  change  is  not  comparable.  Another  reason  is  that  large 
changes  in  the  size  and  the  composition  of  the  population  occurred.  In 
Greece, the population from which the annual cross compliance control 
sample was selected more than doubled between 2005 and 2006. 

 
 
 
33

78. 

The reporting format prescribed by the Commission is not precise enough. For 
certain elements it is unclear how they should be reported, e.g. warnings 
or cases of non-compliance where sanctions are not yet determined fol-
lowing appeals by farmers. Farmers who breach more requirements may be 
reported in the same way as farmers with only one breach. Also the nature 
of  the  non-compliance  is  not  identified.  A  formal  non-compliance  such 
as  a  missing  document  is  reported  in  the  same  manner  as  a  substantial 
one  such  as  the  use  of  prohibited  hormones.  These  limitations  make  it 
difficult to compare data between Members States and to aggregate them 
in  a  meaningful  manner.  The  Commission  Regulation  requires  that  the 
selection of the farms controlled for cross compliance be based on a risk 
analysis.  It  is  difficult  to  assess  to  what  extent  cases  of  non-compliance 
found  in  a  sample  of  farms  selected  on  the  basis  of  a  risk  analysis  are 
representative  of  all  farms  in  a  Member  State.  Risk  factors  used  change 
in time and vary between different Member States. This is an additional 
complicating factor for detecting trend changes and aggregating data. 

79. 

The audit found that data reported by the Member States suffered from 
serious  weaknesses.  Box  5  identifies  some  examples  of  incomplete  and 
inaccurate  reporting  which  affected  the  quality  of  data  reported  to  the 
Commission.

B O X   5

EXAMPLES OF INCOMPLETE AND INACCURATE REPORTING14

Th  e audit found that data reported by Finland to the Commission was incomplete and inconsistent. 
For instance, the non-compliance rate reported to the Commission for GAEC was 14 %, while an audit 
of the underlying data showed that in reality this was almost double (27 %). Th  e Finnish authorities 
were not able to explain this situation.

France reported to the Commission that 4 277 farms were checked for each of the fi ve standards for 
GAEC. Th  is fi gure includes farms where the standard did not apply. Th  e real fi gure, i.e. the number 
of checks in case the standard applied, was much lower, e.g. 1 339 for the GAEC standard relating to 
irrigation. 

Th  e control reports used in Greece do not have a space to indicate that obligations do not apply. In 
such cases it is reported that the farmer complies. For example, Greece reported to the Commission 
that 4 784 farms were checked and complying with legislation for the sewage sludge Directive. Th  is 
overestimates control and compliance rates as none of the farms actually used sewage sludge. 

Th  e Netherlands reported that no non-compliance was found in the checking of 658 farms for the food 
and feed law. Th  ese fi gures do not take into account that a signifi cant number of requirements, e.g. 
relating to milk hygiene, were not checked.

14 The examples are based on the most recent available data at the time of the audit, which was 2006, except for Greece where the 

most recent data concerned 2005.

 
 
34

As the above examples show, control and compliance rates are in reality lower 
than those reported to the Commission. Therefore, statistics reported to 
the  Commission  cannot  be  used  to  draw  conclusions  on  compliance  by 
farmers.  This  difficulty  is  illustrated  by  a  report  of  the  European  Parlia-
ment’s Agriculture and Rural Development Committee, which stated that, 
“Looking at the numbers presented by the Commission in its report, it is 
clear  that  most  controlled  farms  do  comply  with  set  standards…” 15.  The 
Court’s audit found that the Commission’s cross compliance data cannot 
be used to support this statement.

THE COMMISSION’S PERFORMANCE MONITORING 
WAS FOUND WANTING 

A principle of sound financial management, set by Article 27(3) of the Financial 
Regulation, is that achievement of objectives is monitored by performance 
indicators.  Thus,  the  Commission  considered  that  the  establishment  of 
clear objectives and indicators 16 was a first requirement of a good quality 
monitoring system. However, such sound indicators were not established. 
This has hampered monitoring of cross compliance from the start.

15 European Parliament document 
2007/0177(CNS); draft report on the 
proposal for a Council Regulation 
amending Regulation (EC) 
No 1782/2003; 21.9.2007.

16 ‘Ex ante evaluation: A practical 
guide for preparing proposals 
for expenditure programmes’, 
DG Budget, December 2001, p. 22. 
Indicators are defined as information 
that helps to monitor progress and 
to report on objectives.

80. 

81. 

B O X   5

In Slovenia, three out of four requirements for the birds and habitats Directives only apply to parcels 
inside Natura 2000 areas. Out of the 620 farms included in the cross compliance sample, only 34 (5 %) 
had parcels in Natura 2000 areas. Th  e control rate for the Natura 2000 requirements was twenty times 
below the one reported to the Commission.

When Poland reported the number of cases of non-compliance to the Commission, it did not include 
the 678 farms where cases of non-compliance had been detected but where the entire aid claim had 
been rejected. Non-compliance rates based on the correct fi gures were signifi cantly higher. 

Portugal has defi ned for several SMRs a tolerance margin, below which sanctions are not applied. 
Non-compliance below the tolerance margin is not reported to the Commission. Tolerance margins 
were also defi ned for requirements deriving from the TSE Regulation17. If missing documents and 
certifi cates concern less than 10 % of the animals, or fewer than two animals for small farms, non-
compliance is not reported. 

17 Regulation (EC) No 999/2001 of the European Parliament and of the Council of 22 May 2001 laying down rules for the prevention, 

control and eradication of certain transmissible spongiform encephalopathies (OJ L 147, 31.5.2001, p. 1).

 
 
35

82. 

83. 

84. 

Concerning  indicators,  the  annual  information  reported  by  the  Member 
States  allows  the  Commission  to  check  certain  elements  of  the  control 
and sanction systems. However, the Commission did not define perform-
ance  indicators  to  monitor  the  achievement  of  the  objectives  set  out  in 
the  Council  Regulation  (see  paragraph  12).  There  are,  for  instance,  no 
performance indicators for compliance with rules relating to agricultural 
land, the abandonment of agricultural land, or the extent to which land 
is maintained in good agricultural and environmental condition.

Baseline information, in the form of systematic data describing the situation 
before cross compliance became operational (e.g. 2003 and 2004), is not 
available.  The  Commission  and  the  Member  States  did  not  use  the  time 
available since the adoption of the Council Regulation establishing cross 
compliance,  in  September  2003,  to  gather  baseline  data  for  monitoring 
and evaluating, for instance on the number of checks and the number of 
infringements.  Due  to  the  problems  with  data  and  reporting  (see  para-
graphs 77 and 78) there is still no reliable baseline.

The Commission defines monitoring as a continuous process of examining the 
delivery of programme outputs, and finds that the use of indicators always 
needs  to  be  complemented  with  an  analysis  of  qualitative  factors  and 
with an interpretation of the data produced 18. The audit found that such 
a continuous process or analysis and interpretation of data did not exist 
for cross compliance. Due to the lack of clear objectives and monitoring 
data, evaluations are difficult to carry out. Consequently, accountability 
for results and impacts is problematic 19.

18 ‘Ex ante evaluation: A practical 
guide for preparing proposals 
for expenditure programmes’, 
DG Budget, December 2001, p. 14.

19 The Communication on evaluation 
of July 2000 (point 2.3.1) states 
“…reliable ex post evaluation, and 
hence accountability for results 
and impacts, is largely dependent 
on the quality of the preparation 
of the intervention at its outset.” 
DG Budget’s ‘Evaluating EU 
activities: A practical guide for the 
Commission services’ (July 2004) 
states on p.71: “The fixing of 
objectives when an intervention is 
being designed is an essential aid to 
evaluation since they are an integral 
part of assessing an intervention 
directly with regard to the issues of 
relevance and effectiveness.”

 
 
 
CONCLUSIONS 
AND RECOMMENDATIONS

85. 

The Court considers that cross compliance is a vital element of the CAP. Where 
properly applied it has the potential to make EU farmers who receive CAP 
payments  comply  with  rules  relating  to  agricultural  land,  agricultural 
production  and  activity.  To  be  effective  it  requires  the  relevant  rules  to 
be  translated  into  controllable  requirements  at  farm  level.  The  Court’s 
audit  found  that  this  was  not  yet  the  case.  This  was  because  the  objec-
tives  and  the  scope  of  cross  compliance  are  not  well  defined,  making  it 
unclear what cross compliance is designed to achieve. In particular, the 
global objectives set out by Council have not yet all been translated into 
adequate operational requirements and standards to be applied at farm 
level. The Court recommends that:

• 

• 

the Commission develop and detail the objectives set out in the Coun-
cil  Regulation  in  order  to  formulate  them  in  a  “SMART”  manner  and 
organise them in a logical hierarchy;
the  Member  States  define  a  complete  set  of  verifiable  requirements 
and standards, to be applied at farm level.

86. 

The framework of cross compliance poses considerable difficulties, notably 
because  of  its  complexity.  In  order  for  cross  compliance  to  achieve  its 
potential positive effects, the Court recommends that:

• 

• 

• 

• 

the  Commission  simplify  the  framework,  in  particular  by  organising 
it  around  the  principal  elements  of  farming  activity  where  improve-
ments are sought, by specifying the results that are expected, and by 
prioritising requirements and standards;
the  specific  results  to  be  achieved  be  based  on  needs  assessments 
and specific studies;
t h e   M e m b e r   S t a t e s   b e   r e q u i r e d   t o   l a y   d o w n   t h e   p r e c i s e   o b l i g a -
tions  deriving  from  the  legislation,  taking  account  of  the  specific 
characteristics  of  the  areas  and  farming  practices  concerned  where 
appropriate; 
the Commission assess the quality of the requirements and standards 
defined by the Member States.

87. 

Cross compliance and rural development policies are not well adapted to 
one another. The Court recommends that:

• 

• 

• 

the Commission harmonise cross compliance and rural development 
policies,  in  particular  by  reinstating  the  rural  development  provi-
sions which have been weakened following the introduction of cross 
compliance;
the Community legislator consider whether such elements of the rural 
development policy as the approval of standards by the Commission 
and the obligation of Member States to lay down verifiable standards 
should also apply to cross compliance;
the  Commission  draw  a  clear  delineation  between  cross  compliance 
and agri-environment with a view to ensuring that rural development 
benefits only compensate obligations going beyond cross compliance 
requirements and standards.

 
 
 
37

88.  Member States did not take their responsibility to implement effective con-
trol and sanction systems. As a consequence, the control system provides 
insufficient  assurance  on  farmers’  compliance.  The  sanction  system  is 
also  not  effective  as  the  underlying  principles  are  not  sound.  The  Court 
recommends that:

• 

• 

• 

Member  States  implement  effective  control  and  sanction  systems 
which provide sufficient assurance on farmers’ compliance;
the Commission amend the control system with a view to controlling 
at least 1 % of the farms applying each obligations;
the Community legislator consider revising the principles underlying 
the sanction system to make reductions in payments proportional to 
or  dependent  on  the  seriousness  of  the  breach  of  cross  compliance 
obligations by the farmer sanctioned.

89.  Monitoring and reporting were found wanting as some of the basic elements 
of  a  monitoring  system  are  missing  and  data  reported  by  the  Member 
States to the Commission is unreliable. The Court recommends that:

• 

• 

• 

the  Commission  implement  the  key  elements  of  a  sound  perform-
ance monitoring system, notably by defining relevant indicators and 
baseline levels;
M e m b e r   S t a t e s   s u b m i t   c o m p l e t e   a n d   r e l i a b l e   d a t a   i n   a   t i m e l y 
manner;
the Commission carry out closer analysis of the data reported by Mem-
ber States and be more demanding on the quality of such data.

90. 

Overall, the Court concludes that cross compliance as currently managed by 
the Commission and implemented by the Member States is not yet effec-
tive. Significant efforts are still required from all parties concerned for it 
to reach its full potential. The Court considers that the implementation of 
the above recommendations should help in furthering the achievement of 
the potential benefits which are expected from cross compliance policy, 
as it is a vital element of the CAP.

This report was adopted by the Court of Auditors in Luxembourg at its meet-
ing of 6 November 2008. 

For the Court of Auditors

Vítor Manuel da Silva Caldeira
President

 
 
 
 
 
 
 
 
 
 
 
REPLIES OF THE 
COMMISSION

39

EXECUTIVE SUMMARY

II.
First indent 
T h e   C o m m i s s i o n   c o n s i d e r s   t h a t   t h e   o b j e c -
tives  of  cross  compliance  are  clear.  The  CAP 
payments  received  by  the  farmer  are  reduced 
w h e r e   b a s i c   s t a n d a r d s   f o r   t h e   e n v i r o n m e n t , 
f o o d   s a f e t y ,   a n i m a l   h e a l t h   a n d   w e l f a r e   a n d 
good  agric  ultural  and  environmental  condi-
tion are not respected.

The scope of cross compliance is well defined 
a t   E U   l e v e l .   I t   c o n s i s t s   o f   r u l e s   r e l e v a n t   f o r 
farming activity. Most of these rules come from 
existing Directives and Regulations.

Second indent 
T h e   C o m m i s s i o n   h a s   p r o p o s e d   i n   i t s   2 0 0 7 
report 1 improvements of the legal framework, 
which have been agreed by the Member States. 
The Commission will continue to bring improve-
ments as far as needed.

H o w e v e r ,   t h e   l e g a l   f r a m e w o r k   c o n s i s t s   o f 
1 9   R e g u l a t i o n s   a n d   D i r e c t i v e s ,   w h i c h   h a v e 
existed  already  for  years  independently  from 
cross compliance. Therefore, the complexity is 
not a consequence of the introduction of cross 
compliance.

Third indent 
Cross  compliance  is  defined  in  the  legislation 
a n d   a s   a   m a t t e r   o f   c o n s i s t e n c y   i t   i s   a p p l i e d 
the  same  way  both  for  EAGF  and  Rural  Devel-
o p m e n t .   I t   f o r m s   a   c o m m o n   a n d   c l e a r   b a s i s 
for  Member  States  and  provides  comparative 
ground.

1  COM(2007)147.

There is no conflict between cross compliance 
and rural development. Cross compliance repre-
sents the demarcation line between penalising 
farmers for the non-compliance with mandatory 
requirements  (the  “polluter  pays  principle”) 
and  rewarding  farmers  for  the  voluntary  pro-
vision of environmental benefits through agri-
environmental or animal welfare commitments. 
Thus,  cross  compliance  and  agri-environment 
or animal welfare measures complement each 
other without any possible overlap.

Fourth indent 
In case of weaknesses of implementation of the 
control  system  by  Member  States  the  finan-
cial  risks  are  covered  by  the  audit  activity  of 
the  Commission  and  financial  corrections  are 
applied where necessary.

As  regards  the  reduction  system  under  cross 
compliance, it is the responsibility of Member 
States to implement it properly and weaknesses 
found  in  this  respect  are  also  followed  up  by 
the Commission during its audit activity.

Fifth indent 
T h e   C o m m i s s i o n   i s   c u r r e n t l y   e x a m i n i n g   t h e 
question of monitoring. Regarding the analysis 
of data the Commission has made considerable 
efforts for analysing the cross compliance sta-
tistics.  Cases  of  missing  or  inconsistent  data 
are followed up. Incorrect applications of cross 
compliance  rules  are  followed  up  under  the 
clearance  of  accounts  procedure  (if  appropri-
ate  by  desk  audits),  in  addition  to  the  audit 
mission programme.

III.
First indent 
A   s i g n i f i c a n t   d e g r e e   o f   f l e x i b i l i t y   m u s t   b e 
o f f e r e d   t o   M e m b e r   S t a t e s   t o   a l l o w   t h e m   t o 
a d a p t   t h e   o b l i g a t i o n s   t o   t h e   s p e c i f i c   c h a r -
acteristics  of  the  areas  concerned.  The  Com-
mission  does  not  intend  to  approve  national 
standards within the cross compliance system. 
The  respect  by  Member  States  of  a  minimum 
level-playing  field  is  however  ensured  by  the 
Commission through its monitoring and audit 
activity.

M o r e o v e r ,   t h e   r u r a l   d e v e l o p m e n t   p o l i c y   i s 
based  on  programming  periods  and  national 
p r o g r a m m e s   a r e   a p p r o v e d ,   n o t   i n d i v i d u a l 
standards. Therefore the comparison with cross 
compliance is not necessarily relevant.

The  principle  that  Member  States  shall  define 
verifiable  standards  is  already  underlying  the 
legislation on cross compliance.

Second indent 
The principle that possible reductions are pro-
portional  to  or  dependent  on  the  seriousness 
of  the  breach  is  already  laid  down  in  the  cur-
rent legislation on cross compliance. The Com-
mission  does  not  see  reasons  to  modify  this 
framework at this stage.

40

Third indent
The Commission considers that the objectives 
of cross compliance are “SMART”. The general 
objectives  of  cross  compliance  are  defined  in 
the  Council  Regulation.  The  Commission  has 
further  specified  its  view  on  the  objectives  of 
cross compliance in its 2007 report 2. This report 
was  welcomed  by  the  Council 3.  As  early  as  in 
2007 an evaluation study 4 was carried out. The 
external  evaluator  has  clearly  identified  the 
operational, specific and general objectives of 
cross compliance, as well as a set of indicators 
for  assessing  the  contribution  of  cross  com-
pliance  to  its  intended  objectives.  The  Com-
mission  considers  that  this  demonstrates  the 
“smartness” and the logic of the objectives of 
cross compliance.

Fourth indent 
T h e   i n t r o d u c t i o n   o f   c r o s s   c o m p l i a n c e   h a s 
allowed  for  harmonising  requirements  at  EU 
level and for aligning provisions with the EAGF, 
thus producing important benefits.

T h e   C o m m i s s i o n   c o n s i d e r s   t h a t   i m p o r t a n t 
r e q u i r e m e n t s   o f   g o o d   f a r m i n g   p r a c t i c e   s t i l l 
apply in cross compliance.

2  COM(2007)147. This report specified the general cross 
compliance objective in specific objectives as follows: “(1) to 
contribute to the development of a sustainable agriculture […] 
through the respect by the farmer of the rules relating to the 
relevant aspects of cross compliance and (2) to make the CAP 
more compatible with the expectation of the society at large 
[as] there is now a growing body of opinion that agricultural 
payments should no longer be granted to farmers who fail to 
comply with basic rules in certain important areas of public 
policy.”

3  Council conclusions No 10682/07.

4  Evaluation of the application of cross compliance as foreseen 
under Regulation (EC) No 1782/2003.

41

Fifth indent
T h e r e   s h o u l d   b e   n o   o v e r l a p   b e t w e e n   c r o s s 
c o m p l i a n c e   a n d   a g r i - e n v i r o n m e n t a l   c o m -
mitments.  This  has  been  checked  during  the 
a p p r o v a l   p r o c e s s   o f   t h e   r u r a l   d e v e l o p m e n t 
programmes. Member States had to prove that 
the agri-environment measures go beyond the 
baseline as defined by Article 39 (3) of Regula-
tion No 1698/2005.

Eight indent
Regarding the analysis of data the Commission 
has made considerable efforts for analysing the 
cross  compliance  statistics.  Cases  of  missing 
o r   i n c o n s i s t e n t   d a t a   a r e   f o l l o w e d   u p .   I n c o r -
rect applications of cross compliance rules are 
followed  up  under  the  clearance  of  accounts 
procedure  (if  appropriate  by  desk  audits)  in 
addition to the audit mission programme.

Cross compliance and agri-environmental meas-
ures complement each other without any pos-
sible overlap. In other words, cross compliance 
represents the delineation between penalising 
farmers  for  the  non-compliance  with  manda-
tory  requirements  (in  line  with  the  “polluter 
pays principle”) and rewarding farmers for the 
voluntary provision of environmental benefits 
through agri-environmental commitments.

The legislator made a deliberate choice to give 
Member  States  a  certain  degree  of  discretion 
w i t h   r e s p e c t   t o   b o t h   t h e   d e f i n i t i o n   o f   m a n -
datory  requirements  and  the  design  of  agri-
environmental measures. This discretion allows 
Member  States  to  take  into  account  national 
and regional specificities.

Sixth indent
The basic principle is that at least 1 % of farm-
ers receiving CAP payments are subject to cross 
compliance  controls  each  year.  Following  the 
principle  of  risk  analysis  Member  States  have 
requested a margin of flexibility in order to be 
able to focus the controls on the more risky obli-
gations, however without ignoring the remain-
ing  obligations.  The  Commission  has  agreed 
to this request and consequently adopted new 
rules in 2007 allowing this flexibility.

Seventh indent
T h e   C o m m i s s i o n   i s   c u r r e n t l y   e x a m i n i n g   t h e 
question of monitoring.

The Commission has also reinforced the human 
resources in this area.

Ninth indent
The  principle  that  Member  States  shall  define 
verifiable  standards  is  already  underlying  the 
legislation on cross compliance.

Tenth indent
T h e   C o m m i s s i o n   e n s u r e s ,   t h r o u g h   i t s   m o n i -
toring  and  audit  activity,  that  Member  States 
respect a minimum of level-playing field.

Eleventh indent
The Commission follows up where data is miss-
ing or is inconsistent.

IV.
First indent
T h e   s i m p l i f i c a t i o n   o f   t h e   l e g a l   f r a m e w o r k   i s 
always  a  priority  for  the  Commission.  Accord-
ingly,  the  legal  framework  should  be  as  sim-
ple  as  possible  and  focused  on  the  elements 
of  farming  activity  where  improvements  are 
sought.  This  is  the  reason  why  the  legislator 
has  deliberately  decided  to  use  the  most  rel-
evant part of the existing legislation at EU level 
and to add under cross compliance a link with 
CAP payments.

Second indent
The  proposal  for  changing  the  scope  of  cross 
compliance  made  in  the  course  of  the  “health 
c h e c k ”   e x e r c i s e   i s   b a s e d   o n   a   f u l l   i m p a c t 
assessment.

42

Third indent
The  Commission  assesses  independently  from 
cross compliance the requirements under SMRs 
defined  by  the  Member  States  in  the  frame-
w o r k   o f   t h e   i m p l e m e n t a t i o n   o f   t h e   s p e c i f i c 
legislation  of  the  concerned  areas  (environ-
ment,  health,  etc.).  This  assessment  is  carried 
out on the basis of the national implementing 
provisions  communicated  by  Member  States. 
As  regards  GAEC  standards  an  assessment  is 
c a r r i e d   o u t   b y   t h e   C o m m i s s i o n   o n   a   r e g u l a r 
basis however taking into account the margin 
of  manoeuvre  given  to  Member  states  by  the 
legislator.  In  the  more  specific  framework  of 
c r o s s   c o m p l i a n c e   t h e   p r a c t i c a l   i m p l e m e n t a -
tion  of  the  national  provisions  implementing 
requirements  and  standards  is  verified  in  the 
framework  of  the  audit  programme.  Failures 
found  with  regard  to  the  legal  obligations  of 
the  Member  States  are  followed  up  according 
to the procedures available to the Commission, 
where appropriate (clearance of accounts and 
infringement procedures).

Fourth indent
The Member States are obliged pursuant to the 
current  legislation,  to  define  precise  obliga-
tions at farm level, as well as the corresponding 
reduction matrices, and communicate them to 
farmers in a consistent manner.

INTRODUCTION

8. 
S M R s   s h o u l d   h a v e   b e e n   “ t r a n s l a t e d ”   i n t o 
operational  requirements  at  farm  level  in  the 
framework  of  the  normal  implementation  of 
t h e   D i r e c t i v e s   a n d   R e g u l a t i o n s ,   n o t   i n   t h e 
framework of cross compliance. When this was 
not  the  case  cross  compliance  has  played  an 
incentive role for defining obligations at farm 
level.

OBSERVATIONS

13. 
The Commission considers that the objectives 
of cross compliance are “SMART”. The general 
objectives  of  cross  compliance  are  defined  in 
the  Council  Regulation.  The  Commission  has 
further  specified  its  view  on  the  objectives  of 
cross compliance in its 2007 report 5. This report 
was  welcomed  by  the  Council 6.  As  early  as  in 
2007 an evaluation study 7 was carried out. The 
external  evaluator  has  clearly  identified  the 
operational, specific and general objectives of 
cross compliance, as well as a set of indicators 
for  assessing  the  contribution  of  cross  com-
pliance  to  its  intended  objectives.  The  Com-
mission  considers  that  this  demonstrates  the 
“smartness” and the logic of the objectives of 
cross compliance.

Moreover  data  on  inspections  and  aid  reduc-
tions are available. They were considered by the 
external evaluator as useful performance indi-
cators for assessing the achievements of cross 
compliance against its indended objectives.

The Commission does not consider that the list 
of  GAEC  and  SMRs  jeopardise  the  “smartness” 
of the objectives of cross compliance.

5  COM(2007)147. This report specified the general cross 
compliance objective in specific objectives as follows: “(1) to 
contribute to the development of a sustainable agriculture […] 
through the respect by the farmer of the rules relating to the 
relevant aspects of cross compliance and (2) to make the CAP 
more compatible with the expectation of the society at large 
[as] there is now a growing body of opinion that agricultural 
payments should no longer be granted to farmers who fail to 
comply with basic rules in certain important areas of public 
policy.”

6  Council conclusions No 10682/07.

7  Evaluation of the application of cross compliance as foreseen 
under Regulation (EC) No 1782/2003.

43

The Commission’s audit carried out in 2008 has 
identified  problems  of  calculation  of  the  per-
manent  pasture  area  in  Portugal.  This  is  sub-
ject  to  the  clearance  of  accounts  procedure. 
This aspect is regularly covered by Commission 
audits.  However,  the  fact  that  farmers  do  not 
have  to  meet  any  requirements  is  allowed  by 
the legislation 8 as long as the permanent ratio 
is not significantly decreasing.

16. 
The objectives of cross compliance do not lead 
to  the  inclusion  of  all  aspects  of  the  relevant 
policies (environment, public, animal and plant 
health,  animal  welfare  and  good  agricultural 
and  environmental  condition)  into  the  scope 
o f   c r o s s   c o m p l i a n c e .   I t   i s   o n l y   “ b a s i c   s t a n d -
ards” (see recital (2) of Council Regulation (EC)  
No 1782/2003) which are included, i.e. neither 
the whole concerned policies nor the whole set 
of obligations in selected policy elements. The 
list of these basic standards was made through 
the  adoption  of  Annex  III  and  IV  of  the  Coun-
cil  Regulation.  The  Commission  proposal  was 
based initially on the main pieces of legislation 
relevant  for  farming  activity  in  the  area  con-
cerned. The further discussion at Council level 
developed on an assessment of the relevancy of 
these texts for cross compliance. The Commis-
sion  is  of  the  opinion  that  the  main  elements 
of  the  concerned  policies  are  reflected  in  the 
final list, which fulfils the general objective of 
the  Council  regulation  to  “contribute”  to  the 
development of sustainable agriculture.

The  Commission  can  however  agree  with  the 
C o u r t   t h a t   t h e   f r a m e w o r k   m a y   e v o l v e   a s   i s 
t h e   c a s e   w i t h   a n y   o t h e r   i n s t r u m e n t ,   s h o u l d 
an assessment of different policy options find 
that  this  is  the  best  option.  In  the  context  of 
the health check the Commission has proposed 
to introduce requirements for water and land-
scape features.

8  Articles 3 and 4 of Commission Regulation (EC) No 796/2004.

14. 
The  2003  CAP  reform  introduced  the  decou-
pling  of  income  support  from  production.  In 
this context, GAEC standards were introduced 
to inter alia address the risk inherent to decou-
pling  such  as  land  abandonment  that  certain 
agricultural land, falling under Regulation (EC) 
No  1782/2003,  would  no  longer  be  cultivated 
and no longer be maintained. Moreover, cross 
c o m p l i a n c e   d o e s   n o t   a i m   a t   s u b s t i t u t i n g   t o 
other policies such as rural development.

15. 
Obligations must be defined by Member States 
to  implement  the  specific  legislation,  part  of 
which  being  included  into  the  scope  of  cross 
compliance. The fact that Member States have 
sometimes defined weak obligations under this 
specific  legislation  does  not  mean  that  cross 
compliance  objectives  are  not  sound.  Weak-
n e s s e s   i n   t h e   i m p l e m e n t a t i o n   b y   M e m b e r 
States are followed up in the framework of the 
clearance  of  accounts  procedure  as  detailed 
below.

Box 1 — The effects of cross compliance 
at farm level
 –

The weaknesses of implementation of these 
two directives in Slovenia are followed up 
by the clearance of accounts procedure.
The  implementation  of  cross  compliance 
in  France  is  subject  to  ongoing  clearance 
procedures,  following  two  audits  carried 
out by the Commission in 2005 and 2006.
The implementation of cross compliance in 
the Netherlands is subject to ongoing clear-
ance procedures, following an audit carried 
out by the Commission in 2007.

 –

 –

The abovementioned audit in the Netherlands 
as well as the audit in Poland carried out by the 
Commission in 2007, identified weaknesses at 
the level of GAEC definition, which are subject 
to ongoing clearance procedures.

44

17. 
Cross  compliance  itself  applies  by  its  nature 
only to farmers receiving CAP payments. In the 
absence of any payment, there is obviously no 
reduction  possible  through  cross  compliance 
Making the GAEC applicable to all agricultural 
land would entail dissociating GAEC from cross 
compliance and setting up a general legal basis, 
including a specific sanction system independ-
ent from cross compliance (as for SMRs).

Moreover,  the  objective  of  cross  compliance 
is  only  to  “contribute”  to  the  development  of 
sustainable agriculture, not to address all envi-
ronmental problems.

18. 
The  legal  situation  is  clear  according  to  the 
C o m m i s s i o n   a n d   t h i s   w a s   c o m m u n i c a t e d   t o 
Member States on their request at several occa-
sions, in particular for the GAEC framework and 
for  the  Regulation  on  food  and  feed  law.  The 
fact  that  some  Member  States  disagree  does 
not mean that the scope is unclear.

20. 
It  was  a  deliberate  political  choice  that  cross 
compliance  would  cover  existing  legislation. 
The aim was to provide a clear baseline of basic 
standards. These are regularly improved to take 
account of the last developments as the cross 
compliance  provisions  foresee  that  the  latest 
version  of  the  legal  acts  applies.  Cross  com-
pliance  is  only  one  instrument  among  others. 
Rural development policy is well-suited to tai-
lor measures that address aspects not covered 
under cross compliance and to encourage more 
beneficial farming practices that go beyond the 
baseline provided by cross compliance.

With respect to Portugal, the audit missions of 
the Commission (2006 and 2008) found that the 
control system in place was not in accordance 
with  Community  legislation.  The  findings  are 
followed  up  under  the  clearance  of  accounts 
procedure.

21. 
The Commission verifies the conformity of the 
implementation  of  GAECS  in  relation  with  the 
C o m m u n i t y   f r a m e w o r k .   I t   i s   n o t   r e q u i r e d   t o 
examine  systematically  all  alternative  possi-
bilities of GAEC implementations.

22. 
T h e   C o m m i s s i o n   i s   a w a r e   o f   c e r t a i n   w e a k -
nesses  in  the  definition  of  requirements  and 
standards by Member States. Any failure found 
with regard to the legal obligations of Member 
States  is  followed  up  according  to  the  proce-
dures  available  to  the  Commission  (clearance 
of accounts, infringement procedure, etc). The 
risks for the CAP funds are covered by possible 
financial corrections as specified below.

Box 2 — Examples of missing and 
incomplete requirements and standards
The  abovementioned  audit  in  Portugal  covers 
these weaknesses.

The problem mentioned in Finland is subject to 
an audit carried out in October 2008.

In its audits, the Commission verifies the com-
pleteness  of  the  implementation  and  control 
of  annex  IV  (issues  and  standards)  of  Council 
Regulation (EC) No 1782/2003.

25. 
The 19 Regulations and Directives which form 
the  framework  for  SMRs  exists  for  years  inde-
pendently  from  cross  compliance.  The  Com-
m i s s i o n   i s   a w a r e   o f   t h e   s i t u a t i o n   o f   u n e v e n 
implementation  of  these  legal  acts  by  Mem-
ber States and is taking the necessary remedial 
actions. However this is not a consequence of 
the introduction of cross compliance.

45

26. 
T h e   d i f f e r e n t   l e g i s l a t i v e   a c t s   a r e   l i s t e d   i n 
Annex III. It was a deliberate choice that Annex 
III would refer only to existing Community leg-
islation and that these acts would apply, in case 
of  Directives  as  implemented  by  the  Member 
States.  There  was  no  intention  to  introduce  a 
n e w   f r a m e w o r k   o f   r e q u i r e m e n t s   t h a t   w o u l d 
be  different  from  the  obligations  that  apply 
at farm level following the implementation of 
the Community acts 9.

28. 
The Commission can agree with the Court and 
the  review  of  the  current  Annex  III  provisions 
carried out for preparing the health check has 
led to conclude that some obligations are not 
relevant  to  cross  compliance.  These  includes 
inter  alia  provisions  relating  to  hunting  and 
killing protected species. The Commission has 
therefore proposed in the health Check to with-
draw these provisions from the scope of cross 
compliance.

30. 
The purpose of cross compliance including GAEC 
was not to address all environmental problems. 
I t   i s   c o m p l e m e n t a r y   t o   o t h e r   i n s t r u m e n t s . 
The  scope  of  the  GAEC  framework  defined  in 
2003  is  not  restricted  but  rather  targeted  to 
address the issues identified as relevant at that 
time. The Commission has made a proposal of 
changes  in  the  course  of  the  “health  check” 
exercise  to  introduce  requirements  for  water 
and landscape features.

9  Article 4(2) of Regulation (EC) No 1782/2003.

32. 
The set of issues and standards under the GAEC 
framework must be defined at EU level so as to 
ensure a minimum level playing field between 
farmers  of  different  areas  or  different  Mem-
ber States. It implies that the list is closed and 
limited. However Member States have a broad 
margin of manoeuvre for defining national pro-
visions addressing their local need within the 
current framework. For instance damage to the 
soil caused by cattle could be dealt with already 
on the basis of the current framework.

34. 
The aim of the management system of perma-
nent  pasture  (recital  4  of  the  Council  Regula-
tion)  is  to  avoid  a  “massive”  conversion  into 
arable land, thus allowing a certain margin of 
evolution  of  the  ratio  of  permanent  pasture 
in  relation  to  the  total  agricultural  area.  The 
implementing rules have taken due account of 
this  intention  and  used  the  margin  given  by 
the  legislator  to  set  the  rule  for  a  maximum 
variation  at  10 %,  this  rate  being  considered 
as the appropriate one by the Commission and 
Member States.

35. 
The preservation of the land under permanent 
pasture  must  be  considered  in  relation  to  the 
total  agricultural  area  and  therefore  the  right 
computation is a ratio. That is the only way to 
take into account the evolution of farm land at 
Member State or regional level.

36. 
The  calculation  of  the  reference  ratio  of  per-
manent  pasture  is  based  on  the  various  data 
e x i s t i n g   i n   t h e   I A C S ,   w i t h   a   v i e w   t o   a v o i d 
“opportunity effects”. The Commission is aware 
that  some  Member  States  had  difficulties  fol-
l o w i n g   t h e i r   o b l i g a t i o n s   a s   r e g a r d s   t h e   c a l -
culation  of  the  reference  ratio  of  permanent 
pasture.  Where  necessary  a  follow  up  will  be 
considered by the Commission.

Eurostat data is based on different definitions 
a n d   t i m e f r a m e s   w h i c h   e x p l a i n   t o   a   c e r t a i n 
extent the differences.

37. 
The  objective  of  the  permanent  pasture  man-
agement system is to “avoid a massive conver-
sion” of these pastures (recital 4 of the Council 
Regulation). The legislator defined it therefore 
a s   p u r e l y   q u a n t i t a t i v e   a n d   n o t   q u a l i t a t i v e . 
However,  the  quality  of  permanent  pasture  is 
addressed  by  other  cross  compliance  means 
via requirements in national legislation trans-
posing  the  Habitat  Directive  (designation  of 
Natura  2000  zones)  or  via  implementation  of 
the GAEC standard on protection of permanent 
pasture.

46

38. 
T h e   C o m m i s s i o n   c o n s i d e r s   i t   v e r y   u s e f u l   t o 
i s s u e   g u i d a n c e   d o c u m e n t s   t o   h e l p   M e m b e r 
States  implementing  cross  compliance.  Most 
of the guidance documents were circulated on 
Member  States’  request  and  these  have  often 
expressed  interest  for  this  information.  As  far 
as SMRs are concerned, they derive from legis-
lation often existing for years, and there should 
be  no  overlap  or  contradiction  between  the 
jurisprudence  established  over  time  regard-
i n g   t h e s e   l e g a l   a c t s   a n d   p o s s i b l e   g u i d a n c e 
documents  in  the  framework  of  cross  compli-
ance. However the Commission has clarified a 
number a useful questions in this respect, e.g. 
the fact that requirements to be included into 
cross  compliance  for  implementing  the  gen-
eral food law are limited to primary production. 
This  was  welcomed  by  Member  States.  As  far 
as GAEC is concerned there was no request for 
more guidance from Member States.

39. 
The Commission issued guidance on the request 
by Member States on the legal questions raised 
as  regards  practices  imposed  to  farmers  and 
c o n t r o l   p o i n t s .   C o n s i d e r i n g   t h e   d i v e r s i t y   o f 
p o s s i b l e   s i t u a t i o n s   t h r o u g h o u t   t h e   E U ,   t h e 
only  possibility  to  provide  guidance  to  Mem-
ber  States  was  sharing  experience.  This  was 
allowed  by  the  organisation  of  several  work-
shops and experts group, which were welcomed 
by  Member  States.  The  Commission  is  aware 
that  environmental  Directives  including  birds 
and habitat are not always fully implemented at 
farm level. These cases are followed up under 
the clearance of accounts procedure.

40. 
T h e   C o m m i s s i o n   m e n t i o n e d   i t s   i n t e n t i o n   t o 
draft  a  guidance  document  on  certain  of  the 
provisions  of  food  and  feed  law  as  early  as  at 
the meeting of agriculture ministers in Febru-
ary  2006.  The  Commission  services  presented 
the  draft  guidance  document  to  the  Member 
States  in  March  2006,  allowing  them  to  take 
i t   i n t o   a c c o u n t   f o r   t h e i r   c o n t r o l   p r o g r a m m e 
of that year. This document was subsequently 
f i n a l i s e d   i n   M a y   2 0 0 6   t o   t a k e   i n t o   a c c o u n t 
Member  States’  requests.  The  document  aims 
only at providing guidance and Member States 
shall apply their obligations under the legisla-
tion, including checking the hygiene provisions 
u n d e r   t h e   g e n e r a l   f o o d   l a w ,   i n d e p e n d e n t l y 
from it.

It was found, however, that Member States did 
perform checks that were not in conformity with 
the requirements deriving from the Regulation 
on food and feed law. Moreover some Member 
States did not perform checks at all in relation 
to this Regulation. These cases are followed up 
by clearance of accounts procedures.

41. 
The Commission ensures an ongoing monitor-
ing of the specific legislation constituting the 
SMRs and a follow-up of Member States’ failure 
to  implement  it.  Moreover,  under  cross  com-
pliance,  the  requirements  and  corresponding 
control  points  are  effectively  checked  in  the 
framework of the Commission’s audit activity. 
Any  failure  found  in  that  respect  is  followed 
up under the clearance of accounts procedure, 
including the application to Member States of 
possible financial corrections.

47

42. 
The  audit  missions  are  decided  on  the  basis 
of  a  central  risk  analysis,  in  line  with  interna-
tionally accepted auditing standards. Therefore 
not every requirement in every Member States 
are audited every year on the spot and it may 
happen that failures to implement cross com-
pliance are not immediately detected. However 
the financial risk for the agricultural funds are 
covered  by  the  possibility  to  apply  financial 
corrections  to  Member  States.  These  financial 
corrections  are  effected  as  long  as  the  short-
comings have not been addressed by the Mem-
ber States concerned.

43. 
The Commission has closely followed the imple-
mentation of the GAEC framework by Member 
States.  A  questionnaire  was  sent  to  Member 
States  after  the  start-up  phase,  as  early  as  in 
June 2006. When unjustified missing standards 
h a v e   b e e n   f o u n d ,   t h e y   h a v e   b e e n   d i s c u s s e d 
b i l a t e r a l l y   w i t h   M e m b e r   S t a t e s   d u r i n g   t h e 
first semester of 2007 if they were relevant to 
the baseline for agri-environmental measures. 
T h i s   i s   n o t   a   d i f f i c u l t y   b u t   i n s t e a d   a   n o r m a l 
exercise  in  the  framework  of  the  approval  of 
r u r a l   d e v e l o p m e n t   p r o g r a m m e s   t o   d i s c u s s 
both the baseline and the undertakings going 
beyond  the  baseline  and  which  are  financed 
by  the  agri-environmental  measures.  Signifi-
cant  progress  was  obtained  on  that  occasion 
with regard to both the number and the qual-
ity  of  GAEC  standards  defined.  Subsequently 
the  Commission  communicated  in  July  2007 
to  Member  States  its  assessment  of  the  GAEC 
situation  resulting  from  the  approval  of  rural 
development programmes. Remaining unjusti-
fied missing standards are followed up by the 
C o m m i s s i o n   w i t h   t h e   a v a i l a b l e   l e g a l   m e a n s . 
T h r o u g h o u t   t h e   p e r i o d   t h e   C o m m i s s i o n   h a s 
also  checked  the  implementation  on  the  spot 
of the GAEC through its audit activity and any 
case  of  missing  GAEC  or  control  failure  found 
is followed up under the clearance of accounts 
procedure.  Therefore  the  Commission  consid-
ers having taken all the necessary measures in 
the framework of its legal responsibilities and 
will continue to do so.

48

44. 
The GAEC standards defined by Member States 
were checked by the Commission to verify that 
these  national  standards  implement  a  stand-
ard listed in the EU GAEC framework. However 
Member States, from the very legal basis, have 
a large flexibility to define their national stand-
ards and to adapt them to the specific charac-
teristics of regions. The Commission would not 
be  able  to  assess  case  by  case  each  national 
standard due to the high level of detail in the 
s t a n d a r d s   a n d   t h e   m a n y   p o s s i b l e   l o c a l   c o n -
ditions.  This  is  the  reason  why  the  legislator 
did  not  foresee  any  approval  of  the  national 
provisions.

46. 
As  the  Court  points  out,  agri-environmental 
commitments are generally made for five years 
w h e r e a s   t h e   l a s t   p r o g r a m m i n g   p e r i o d   w a s 
seven years. The Commission did not have any 
legal  possibilities  to  prevent  Member  States 
to  allow  committing  new  five-year  agri-envi-
ronmental commitments under the old regime 
which then expanded to the current program-
ming period.

However, the Commission tried to remedy the 
situation  by  encouraging  Member  States  first 
b y   p r o v i d i n g   t h e m   t h e   p o s s i b i l i t y   t o   a l l o w 
t r a n s f o r m a t i o n   o f   o l d   c o m m i t m e n t s   t o   n e w 
ones 10  and  second  by  providing  the  possibil-
ity to extend existing commitments to the end 
o f   t h e   l a s t   p r o g r a m m i n g   p e r i o d 1 1.   H o w e v e r , 
n o t   a l l   M e m b e r   S t a t e s   c h o s e   t o   a p p l y   t h e s e 
possibilities.

Finally, legitimate expectations of beneficiaries 
must be respected.

10 Article 11 of Regulation (EC) No 1320/2006 (transitional 
regulation).

11 See Article 1(1) of Regulation (EC) No 1360/2005.

47. 
Cross  compliance  is  defined  in  the  legislation 
and it is applied both for EAGF and Rural Devel-
opment thus forming a common and clear basis 
for Member States.

In the case of agri-environment, cross compli-
ance remains also as a part of the baseline for 
the agri-environment commitments.

48. 
Many  important  requirements  of  usual  good 
f a r m i n g   p r a c t i c e   w e r e   t a k e n   o n   b o a r d   b y 
cross  compliance 12  and  some  others  continue 
to  apply  in  national  legislation  outside  cross 
compliance.

A s   r e g a r d s   P o l a n d ,   o l d   M e m b e r   S t a t e s   h a d 
a   t h r e e - y e a r   t r a n s i t i o n a l   p e r i o d   f o r   S M R s   i n 
2005-2007 in the case of direct payments. Simi-
larly, new Member States applying SAPS 13 have 
a phasing in period in 2009-2011 and Bulgaria 
and Romania in 2012-2014. As cross compliance 
in rural development is aligned to the EAGF, a 
similar transitional period applies.

49. (a) 
The  requirement  for  Member  States  to  define 
s e p a r a t e   v e r i f i a b l e   s t a n d a r d s 1 4  h a s   b e c o m e 
obsolete because they are now defined in the 
Community legislation for cross compliance.

H o w e v e r ,   i t   i s   s t i l l   s t i p u l a t e d   t h a t   M e m b e r 
S t a t e s   m u s t   e n s u r e   t h a t   r u r a l   d e v e l o p m e n t 
measures are verifiable 15.

12 Comparing the requirements on the coverage of Good 
Farming Practise issued in 1999 to the cross-compliance, 
Nitrates, Birds and Habitats and Ground water directives have 
remained as requirements as well as issues relating to animal 
welfare and fertiliser and plant protection product use.

13 Single area payments scheme.

14 Second sub-paragraph of Article 35(1) of Regulation (EC) 
No 817/2004 with reference to verifiable standards.

15 See Article 48(1) of Regulation (EC) No 1974/2006 as well as 
Article 5 of Regulation (EC) No 1975/2006.

49

49. (b) 
As cross compliance standards are now set out 
in Regulation (EC) No 1782/2003 16, no separate 
approval procedure is necessary.

49. (f) 
F o r   c o n s i s t e n c y   r e a s o n s   t h e   r a t e s   o f   r e d u c -
tions  and  exclusions  are  aligned  to  those  of 
the EAGF.

Member  States  have  now  to  confirm  that  the 
cross compliance requirements in rural devel-
opment  are  identical  to  those  applied  in  the 
context of direct payments.

49. (c) 
F o r   a g r i - e n v i r o n m e n t a l   a n d   a n i m a l   w e l f a r e 
commitments  cross  compliance  is  part  of  the 
baseline.  The  full  agri-environment  payment 
is  subject  to  the  respect  of  cross  compliance 
conditions 17.

49. (d) 
For consistency reasons the control rate of cross 
compliance in rural development is aligned to 
the control rate of the EAGF This alignment and 
the provisions of a clear legal framework have 
reinforced the transparency of the system and 
the verifiability of conditions.

Where conditions form part of the baseline, they 
are still subject to 5 % control rate. In addition, 
now  a  higher  number  of  Rural  Development 
measures are subject to these conditions 18.

49. (e) 
Many  important  conditions  of  good  farming 
practice  are  taken  on  board  in  cross  compli-
ance 19 and some others continue to apply in the 
national legislation outside cross compliance.

E v e n   t h o u g h   t h e r e   m a y   b e   p o s s i b l e   l o w e r 
percentages  of  reduction,  the  reductions  or 
exclusions  now  apply  to  both  EAGF  and  Rural 
D e v e l o p m e n t   a n d   a l s o   t o   h i g h e r   n u m b e r   o f 
measures in Rural Development 20.

50. 
The Commission encouraged Member States to 
remedy the situation by firstly allow transfor-
mation  of  old  commitments  to  new  ones  and 
second to extend old commitments to the end 
of the last programming period.

However, not all Member States chose to apply 
these actions. In these cases the egibility rules 
of the old programming period remain to apply 
and it leads to different control systems.

Finally legitimate expectations of beneficiaries 
must be respected.

51. 
The situation described by the Court is transi-
tional due to a change in the legislation.

52. 
The clear delineation is provided in the legisla-
tion: cross compliance is a part of the baseline 
for agri-environment 21.

16 See third indent of point 5.2 of Annex II of Regulation (EC) 
No 1974/2006.

21 See Article 39(3) of Regulation (EC) No 1698/2005.

20 See Article 51(1) of Regulation (EC) No 1698/2005.

17 For agri-environment cross compliance as well as minimum 
requirements for fertiliser and plant protection product use 
and other relevant mandatory requirements established by 
national legislation and identified in the programme. See 
Article 39(3) of Regulation (EC) No 1698/2005.

18 See Article 51(1) of Regulation (EC) No 1698/2005.

19 Comparing the requirements on the coverage of Good 
Farming Practise issued in 1999 to the cross-compliance, 
Nitrates, Birds and Habitats and Ground water directives have 
remained as requirements as well as issues relating to animal 
welfare and fertiliser and plant protection product use.

50

53. 
As the environmental situation differs between 
different regions and between Member States 
and  as  their  respective  environmental  needs 
are  different,  it  is  justified  that  GAEC  stand-
ards differ too. This principle that MS need to 
reflect national differences of agriculture and 
environment  in  their  baseline  rules  has  been 
applied  in  the  past  in  the  case  of  usual  good 
farming practice and now it applies in the case 
of cross compliance.

In addition, most of the compulsory legislation 
forming the SMRs under cross-compliance is in 
the form of directives, which provide margin for 
interpretation  and  which  are  transposed  into 
force  by  Member  States  taking  into  account 
their respective situations.

F i n a l l y ,   a g r i - e n v i r o n m e n t a l   m e a s u r e s   m u s t 
be  implemented  in  a  spatially  differentiated 
m a n n e r   i n   o r d e r   t o   r e s p o n d   t o   s i t e - s p e c i f i c 
needs as well as agronomic and environmental 
circumstances.

These  three  factors  together  justify  different 
d e l i m i t a t i o n   b e t w e e n   c r o s s   c o m p l i a n c e   a n d 
agri-environment.

54.
Cross compliance and agri-environment meas-
ures complement each other without any pos-
sible overlap. In other words, cross compliance 
represents the demarcation line between penal-
ising farmers for the non-compliance with man-
datory requirements (in line with the “polluter 
pays principle”) and rewarding farmers for the 
voluntary provision of environmental benefits 
through agri-environmental commitments.

A c c o r d i n g   t o   t h e   R u r a l   D e v e l o p m e n t   P r o -
g r a m m e   f o r   m a i n l a n d   P o r t u g a l ,   t h e s e   t w o 
standards were requested to be included within 
the description of the cross compliance during 
the programme negotiations. An audit mission 
carried out by the Commission found that these 
standards were defined but not yet published 
at  the  beginning  of  2008.  This  is  followed  up 
under the clearance of accounts procedure.

55.
The extensification scheme in Greece is based 
on reduction of stocking density. The maximum 
livestock density set by GAEC is 3 LU/ha 22 and 
t h e   a g r i - e n v i r o n m e n t a l   a i d   i s   p a y a b l e   o n l y 
when  the  reduction  of  the  livestock  density 
is  at  least  20 %.  Thus,  the  agri-environmental 
measure is going beyond GAEC.

56.
T h e   D u t c h   a n d   F l e m i s h   s i t u a t i o n s   a r e   n o t 
comparable.

The  Dutch  requirement  of  a  catch  crop  after 
maize in nitrate sensitive zones is only valid for 
sandy and loam soils, not for other soil types.

The  “green  cover”  agri-environmental  meas-
ure  was  implemented  in  Flanders  during  the 
last  programming  period.  It  is  not  continued 
u n d e r   t h e   n e w   p r o g r a m m i n g   p e r i o d   a s   t h e 
e n t i r e   t e r r i t o r y   o f   F l a n d e r s   b e c a m e   n i t r a t e s 
sensitive zone.

57.
There is no overlap between agri-environment 
and cross compliance as they complement each 
other  without  any  possible  overlap.  In  other 
words, cross compliance represents the demar-
cation line between penalising farmers for the 
non-compliance with mandatory requirements 
(in line with the “polluter pays principle”) and 
rewarding farmers for the voluntary provision 
of  environmental  benefits  through  agri-envi-
ronmental commitments.

There  is  no  legal  basis  that  allows  the  Com-
mission  to  make  a  judgement  on  the  need  to 
include buffer strips in the implementation of 
t h e   G A E C   f r a m e w o r k .   T h e   l e g i s l a t o r   m a d e   a 
deliberate choice to give Member States a cer-
tain degree of discretion with respect to both 
the definition of mandatory requirements and 
the design of agri-environment measures. This 
discretion  allows  Member  States  to  take  into 
account national and regional specificities.

22 The stocking density is expressed in the format of livestock 
units (LU) divided by hectares (ha).

51

Box 3 — Examples of different use 
of buffer strips
There is no Community-wide definition of the 
minimum width of buffer strips and such strips 
are  not  even  listed  as  a  standard  in  the  GAEC 
framework.

61. 
In its exchanges with Member States, the Com-
mission regularly put the onus on the definition 
of  obligations  at  farm  level  which  are  under-
standable  for  farmers,  limited  to  the  farmer’s 
responsibility, applicable and controllable.

The legislator made a deliberate choice to give 
Member  States  a  certain  degree  of  discretion 
w i t h   r e s p e c t   t o   b o t h   t h e   d e f i n i t i o n   o f   m a n -
datory  requirements  and  the  design  of  agri-
environment  measures.  This  discretion  allows 
Member  States  to  take  into  account  national 
and regional specificities.

59. 
T h e   C o m m i s s i o n   e n s u r e s   a n   o n g o i n g   m o n i -
toring  of  the  specific  legislation  constituting 
the  SMRs  and  a  follow-up  of  Member  States’ 
failure to implement it. Moreover, under cross 
compliance, the existence and completeness of 
requirements and corresponding control points 
are  checked  in  the  framework  of  the  Commis-
sion’s  audit  activity.  Any  failure  found  in  that 
respect  is  followed  up  under  the  clearance  of 
a c c o u n t s   p r o c e d u r e ,   i n c l u d i n g   t h e   a p p l i c a -
t i o n   t o   M e m b e r   S t a t e s   o f   p o s s i b l e   f i n a n c i a l 
corrections.

A  mission  in  Finland  will  be  performed  at  the 
end  of  2008  when  the  efficacy  of  the  control 
system in Finland will be checked.

60. 
The Commission has reviewed in 2007 the man-
agement and control rules for cross compliance 
in  order  to  take  into  account  the  experience 
of  implementation  by  Member  States.  On  this 
basis  proposals  for  improvements  were  listed 
in the Commission report issued in March 2007 
a n d   f u r t h e r   t r a n s l a t e d   i n t o   l e g a l   p r o v i s i o n s 
at  the  end  of  that  year.  These  modifications 
i n c l u d e   a   s p e c i f i c a t i o n   o f   t h e   t i m i n g   o f   o n -
the-spot  checks  for  the  various  requirements 
at  farm  level.  The  principle  is  that  the  timing 
of  checks  should  be  optimised  in  relation  to 
the  requirements  but  no  requirement  should 
be ignored in the control system. This principle 
addresses the Court’s criticism.

63. 
The  implementation  of  the  birds  and  habitat 
directives is part of the scope of the Commis-
sion’s audits, and such weaknesses are followed 
up via clearance procedure.

64. 
Audit  missions  of  the  Commission  found  that 
the controls performed on the bird and habitat 
directives in both Greece and France were not 
in line with the legislation. These findings are 
followed  up  under  the  clearance  of  accounts 
procedure.

65. 
In  principle  the  control  system  for  cross  com-
pliance should be based on the control systems 
existing under the various specific policies. Fol-
lowing this principle infringements found dur-
ing  the  checks  carried  out  under  the  specific 
legislations should also lead to reduction under 
cross  compliance  if  the  farmer  benefits  from 
CAP payments.

A n   a u d i t   m i s s i o n   b y   t h e   C o m m i s s i o n   i n   t h e 
Netherlands found that the competent control 
authorities  for  SMR  2  and  (a  part  of)  SMR  4, 
contrary to the legislation, did in 2006 not per-
form all their obligatory controls in the frame-
work of cross compliance. Moreover, results of 
findings from other checks by these competent 
authorities  were  not  taken  into  account  and, 
contrary to the legislation, no cross compliance 
reductions  were  applied.  These  findings  are 
followed  up  under  the  clearance  of  accounts 
procedure.

An audit mission in Finland at the end of 2008 
will check the effectiveness of the control sys-
tem in place.

52

67. 
The reductions under cross compliance are not 
based  on  the  cost  of  compliance  nor  on  the 
financial consequences of non-compliance. The 
reasoning  is  different,  in  line  with  its  objec-
tives. Cross compliance is the link between CAP 
payments received by a farmer and the respect 
of  basic  requirements.  This  link  is  expressed 
in  concrete  terms  through  the  possibility  of 
a  reduction  of  the  payments  received  by  the 
farmer  and  the  reduction  should  be  propor-
tionate to the severity of the infringement. The 
reduction is therefore expressed as a percent-
age, proportionate to the level of infringement 
for  these  payments.  The  amount  reduced,  in 
absolute  terms,  could  therefore  be  low  if  the 
farmer receives low amount of payments, even 
for severe infringements.

69. 
In  defining  the  scale  of  reductions,  Member 
S t a t e s   s h o u l d   t a k e   i n t o   a c c o u n t   t h e   e x t e n t , 
severity,  and  permanence  of  the  non-compli-
a n c e ,   a s   w e l l   a s   t h e   r e p e t i t i o n   o f   n o n - c o m -
pliance  in  subsequent  years.  A  multiplication 
factor  is  applied  to  the  percentage  of  reduc-
tion  in  the  case  of  repeated  non-compliance.  
The reduction could therefore increase the fol-
lowing  years  making  this  calculation  useless. 
M o r e o v e r   t h e   f a r m e r   w o u l d   b e   i d e n t i f i e d   a s 
high  risk  in  the  management  system  leading 
to  a  higher  probability  to  be  controlled.  This 
would have also a deterrent effect.

70. 
T h e   r e p e t i t i o n   f a c t o r   s h a l l   a p p l y   e v e r y   y e a r 
following  the  finding  of  the  non-compliance 
i f   t h e   l a t t e r   i s   n o t   r e s o l v e d .   A f t e r   a   n u m b e r 
of  repetitions  the  non-compliance  is  deemed 
intentional  and  the  reduction  is  increased  up 
to the total exclusion from the aid schemes for 
one or more calendar years, ensuring therefore 
the necessary deterrent effect.

71. 
T h e   r e d u c t i o n   m a t r i c e s   a p p l i e d   b y   M e m b e r 
S t a t e s   a r e   c h e c k e d   i n   t h e   f r a m e w o r k   o f   t h e 
C o m m i s s i o n ’ s   a u d i t   a c t i v i t y .   A n y   w e a k n e s s 
f o u n d   i n   r e l a t i o n   t o   t h e   l e g a l   o b l i g a t i o n s   i s 
followed  up  under  the  clearance  of  accounts, 
procedure and risks for the CAP funds are cov-
ered by possible financial corrections.

72. 
T h e   2 0 0 7   r e p o r t   p r o p o s e d   i m p r o v e m e n t s 
including  allowing  Member  States  to  define 
c a s e s   o f   m i n o r   n o n - c o m p l i a n c e s   w h e r e   n o 
reduction would be applied. This exemption is 
however allowed only with certain limitations, 
and these cases shall be followed up in years to 
come.  Other  clarifications  were  made  as  well, 
s u c h   a s   o n   t h e   c o m m u n i c a t i o n   a n d   r e p o r t -
ing  between  bodies  involved  in  the  controls. 
If  a  Member  State  fails  to  properly  apply  this 
new legal framework, financial corrections are 
applied when it is found that there is a risk for 
CAP funds.

Box 4 — Examples of low sanctions 
for non-compliance with key requirements
The  scale  of  calculation  of  reductions  is  sys-
tematically  part  of  the  scope  of  Commission 
audits, and is followed up by the clearance of 
accounts procedure.

74. 
A p p l y i n g   r e d u c t i o n s   o f   l e s s   t h a n   1 0 0   e u r o 
requires  burdensome  administration  without 
a real deterrent effect. The 2007 report there-
fore  proposed  not  to  apply  such  reductions, 
however with certain limitations and the obli-
gation to follow up the infringements in years 
to come — although the application of this rule 
could exclude a significant number of farmers 
from reductions, but only for the first infringe-
ment. In case of repeated non compliance, this 
rule  should  not  apply  and  the  farmer  would 
face  a  higher  reduction,  with  a  real  deterrent 
effect.

53

75. 
T h e   C o m m i s s i o n   h a s   o r g a n i s e d   a   n u m b e r   o f 
meetings  of  the  experts  group  on  cross  com-
pliance  as  well  as  a  number  of  workshops  to 
discuss,  compare  and  allow  benchmarking  of 
the  calculation  of  reductions.  However  when 
Member States did not set the reduction scale 
at a sufficient level, this is considered as a fail-
ure  to  apply  properly  the  legislation  and  the 
cases  found  are  followed  up  under  the  clear-
ance of accounts procedure.

The  Council  Regulation  does  not  distinguish 
between  formal  and  substantial  non  compli-
ances as mentioned by the Court. The level of 
reduction  depends  on  the  ‘severity’,  ‘extent’, 
‘permanence’ and ‘repetition’ of the finding.

Box 5 — Examples of incomplete 
and inaccurate reporting 23
All the facts mentioned will be analysed by the 
Commission with a view to improve the statis-
tics for the coming period.

77. 
T h e   d a t a   c o m m u n i c a t e d   b y   M e m b e r   S t a t e s 
reflects  the  situation  existing  during  the  year 
concerned. Of course if the situation changes, 
e.g. a change of the legislation or the inclusion 
of  new  farmers  in  the  system  of  cross  compli-
ance, the figures will evolve the following year 
but  it  does  not  put  in  question  the  fact  that 
data are comparable.

78.
The  Commission  improves  the  templates  for 
the communication of statistics every year and 
is  ready  to  continue,  taking  into  account  the 
limitation  that  the  administrative  burden  at 
Member State level should be reasonable. The 
statistics are analysed by the Commission serv-
ices,  which  if  appropriate  launch  desk  audits 
on this basis. In addition statistics are used for 
the preparation of audit missions. However, it 
cannot be expected from the annual statistics 
to  give  a  detailed  view  and  quantification  of 
all  kinds  of  non-compliance  which  can  occur 
in  every  Member  State.  As  regards  the  repre-
sentativity of the farms selected, the Commis-
sion introduced in Regulation (EC) No 796/2004 
the  obligation  to  have  both  a  risk  and  a  ran-
dom  part  in  the  sample  which  should  ensure 
good representativity of the sample. However 
it remains necessary that the main part of the 
s a m p l e   b e   r i s k - b a s e d ,   i n   o r d e r   t o   m a k e   t h e 
checks more effective.

In general, at all audit missions Member States 
have to provide the Commission data in relation 
to  all  checks  performed  by  the  Member  State 
( a m o n g s t   o t h e r s :   k i n d   o f   c h e c k s   p e r f o r m e d 
on  requirement/standard  level,  reduction(s) 
a p p l i e d ) .   T h e s e   d a t a   a r e   a n a l y s e d   a n d   i t   i s 
c h e c k e d   i f   t h e y   c o r r e s p o n d   t o   t h e   s t a t i s t i c s 
provided.  All  differences  should  be  explained 
by  the  Member  State  and  potentially  the  sta-
tistics need to be adapted.

80. 
T h e   f i r s t   c r o s s   c o m p l i a n c e   s t a t i s t i c s   w e r e 
r e l a t e d   t o   c l a i m   y e a r   2 0 0 5 .   T h e   C o m m i s s i o n 
considers  that,  through  the  number  of  reduc-
tions  applied,  they  give  a  useful  overview  of 
the level of compliance of farmers throughout 
the EU.

In  this  respect,  a  significant  improvement  is 
already  introduced  from  claim  year  2007:  the 
statistics will allow the calculation of the error 
rate  in  monetary  terms  (percentage  of  cross 
compliance reductions relative to the payments 
made to the cross compliance control sample), 
for each Member State.

81. 
As  early  as  in  2007  an  evaluation  study 24  was 
carried  out.  In  this  context,  available  data  on 
inspections and aid reductions were considered 
helpful  to  monitor  progress  and  to  report  on 
achievements against the intended objectives 
of cross compliance.

23 The examples are based on the most recent available data at 
the time of the audit, which was 2006, except for Greece where 
the most recent data concerned 2005.

24 Evaluation of the application of cross compliance as foreseen 
under Regulation (EC) No 1782/2003.

82. 
D a t a   o n   i n s p e c t i o n s   a n d   a i d   r e d u c t i o n s   a r e 
a v a i l a b l e .   T h e y   w e r e   c o n s i d e r e d   a s   u s e f u l 
p e r f o r m a n c e   i n d i c a t o r s   f o r   m o n i t o r i n g   t h e 
achievements  of  cross  compliance  objectives 
in  the  context  of  the  external  evaluation  car-
ried out in 2007 25.

83. 
C r o s s   c o m p l i a n c e   w a s   i n t r o d u c e d   i n   2 0 0 5 . 
Therefore  no  information  in  relation  to  cross 
compliance may be available before that date. 
For instance there were no checks in the frame-
work of the IACS for the requirements included 
into  the  scope  of  cross  compliance.  Informa-
tion concerning the number of checks and the 
number of infringements are available only as 
from  2005  and  this  year  represents  the  base-
line  level.  The  Commission  considers  that  the 
data communicated by Member States consti-
tutes a reliable baseline: they allow comparison 
between Member States and over time.

84. 
The Commission considers that the objectives 
o f   c r o s s   c o m p l i a n c e   a r e   c l e a r .   A n   e x t e r n a l 
evaluation study on cross compliance was car-
ried  out  in  2007 26,  including  the  definition  of 
operational, specific and general objectives. In 
this  context,  available  monitoring  data  were 
considered as useful indicators for monitoring 
the achievements of cross compliance against 
its intended objectives.

25 Evaluation of the application of cross compliance as foreseen 
under Regulation (EC) No 1782/2003.

• 

26 “Evaluation of the application of cross compliance as 
foreseen under Regulation (EC) No 1782/2003”.

54

CONCLUSIONS 
AND RECOMMENDATIONS

85. 
The Commission considers that the objectives 
of cross compliance are clear: to make EU farm-
ers respect standards laid down in legislation. 
The  CAP  payments  received  by  the  farmer  are 
reduced where basic standards for the environ-
ment,  food  safety,  animal  health  and  welfare 
and good agricultural and environmental con-
dition are not respected.

The Commission believes also that the scope of 
cross compliance is well defined at EU level. It 
consists of the relevant set of legal acts in the 
areas covered and a set of standards for good 
agricultural  and  environmental  condition  as 
well  as  for  the  maintenance  of  the  amount  of 
land under permanent pasture.

• 

The  Commission  considers  that  the  objec-
tives of cross compliance are “SMART”. The 
general  objectives  of  cross  compliance  is 
d e f i n e d   i n   t h e   C o u n c i l   R e g u l a t i o n .   T h e 
Commission  has  further  specified  its  view 
on the objectives of cross compliance in its 
2007 report 27. This report was welcomed by 
the Council 28. As early as in 2007 an evalu-
ation study 29 was carried out. The external 
evaluator has clearly identified the opera-
tional,  specific  and  general  objectives  of 
cross compliance, as well as a set of indica-
tors for assessing the contribution of cross 
compliance to its intended objectives. The 
C o m m i s s i o n   c o n s i d e r s   t h a t   t h i s   d e m o n -
strates the “smartness” and the logic of the 
objectives of cross compliance.

T h e   p r i n c i p l e   t h a t   M e m b e r   S t a t e s   s h a l l 
define verifiable standards is already under-
lying the legislation on cross compliance.

27 COM(2007)147. This report specified the general cross 
compliance objective in specific objectives as follows: “(1) to 
contribute to the development of a sustainable agriculture […] 
through the respect by the farmer of the rules relating to the 
relevant aspects of cross compliance and (2) to make the CAP 
more compatible with the expectation of the society at large 
[as] there is now a growing body of opinion that agricultural 
payments should no longer be granted to farmers who fail to 
comply with basic rules in certain important areas of public 
policy.”

28 Council conclusions No 10682/07.

29 Evaluation of the application of cross compliance as foreseen 
under Regulation (EC) No 1782/2003.

86. 
T h e   C o m m i s s i o n   h a s   p r o p o s e d   i n   i t s   2 0 0 7 
r e p o r t 3 0  i m p r o v e m e n t s   o f   t h e   l e g a l   f r a m e -
work, which have been agreed by the Member 
States. The Commission will continue to bring 
improvements as far as needed.

• 

H o w e v e r ,   t h e   l e g a l   f r a m e w o r k   c o n s i s t s   o f 
1 9   R e g u l a t i o n s   a n d   D i r e c t i v e s ,   w h i c h   h a v e 
existed  already  for  years  independently  from 
cross compliance. Therefore, the complexity is 
not a consequence of the introduction of cross 
compliance.

• 

• 

• 

The  simplification  of  the  legal  framework 
i s   a l w a y s   a   p r i o r i t y   f o r   t h e   C o m m i s s i o n . 
Accordingly,  the  legal  framework  should 
be  as  simple  as  possible  and  focused  on 
t h e   e l e m e n t s   o f   f a r m i n g   a c t i v i t y   w h e r e 
improvements  are  sought.  This  is  the  rea-
s o n   w h y   t h e   l e g i s l a t o r   h a s   d e l i b e r a t e l y 
decided  to  use  the  most  relevant  part  of 
the  existing  legislation  at  EU  level  and  to 
add under cross compliance a link with CAP 
payments.

T h e   p r o p o s a l   f o r   c h a n g i n g   t h e   s c o p e   o f 
cross compliance made in the course of the 
“health  check”  exercise  is  based  on  a  full 
impact assessment.

The  Member  States  are  obliged,  pursuant 
to  the  current  legislation,  to  define  pre-
c i s e   o b l i g a t i o n s   a t   f a r m   l e v e l ,   a s   w e l l   a s 
the corresponding reduction matrices, and 
communicate them to farmers in a consist-
ent manner.

30 COM(2007)147.

55

T h e   C o m m i s s i o n   a s s e s s e s   i n d e p e n d e n t l y 
from  cross  compliance  the  requirements 
under SMRs defined by the Member States 
in the framework of the implementation of 
the  specific  legislation  of  the  areas  con-
c e r n e d   ( e n v i r o n m e n t ,   h e a l t h ,   e t c . ) .   T h i s 
assessment  is  carried  out  on  the  basis  of 
the national implementing provisions com-
municated  by  Member  States.  As  regards 
GAEC  standards  an  assessment  is  carried 
out  by  the  Commission  on  a  regular  basis 
h o w e v e r   t a k i n g   i n t o   a c c o u n t   t h e   m a r g i n 
of  manoeuvre  given  to  Member  states  by 
the  legislator.  In  the  more  specific  frame-
w o r k   o f   c r o s s   c o m p l i a n c e   t h e   p r a c t i c a l 
implementation of the national provisions 
implementing requirements and standards 
is  verified  in  the  framework  of  the  audit 
p r o g r a m m e .   F a i l u r e s   f o u n d   w i t h   r e g a r d s 
t o   t h e   l e g a l   o b l i g a t i o n s   o f   t h e   M e m b e r 
S t a t e s   a r e   f o l l o w e d   u p   a c c o r d i n g   t o   t h e 
procedures  available  to  the  Commission, 
where  appropriate  (clearance  of  accounts 
and infringement procedures).

87. 
Cross  compliance  is  defined  in  the  legislation 
a n d   a s   a   m a t t e r   o f   c o n s i s t e n c y   i t   i s   a p p l i e d 
the  same  way  both  for  EAGF  and  Rural  Devel-
o p m e n t .   I t   f o r m s   a   c o m m o n   a n d   c l e a r   b a s i s 
for  Member  States  and  provides  comparative 
ground.

There is no conflict between cross compliance 
and rural development. Cross compliance rep-
resents  the  demarcation  line  between  penal-
i s i n g   f a r m e r s   f o r   t h e   n o n - c o m p l i a n c e   w i t h 
mandatory requirements (in line with the “pol-
luter  pays  principle”)  and  rewarding  farmers 
for  the  voluntary  provision  of  environmental 
benefits through agri-environmental or animal 
welfare commitments. Thus, cross compliance 
and agri-environment or animal welfare meas-
ures complement each other without any pos-
sible overlap.

56

• 

• 

The  introduction  of  cross  compliance  has 
allowed for harmonising requirements at EU 
level  and  for  aligning  provisions  with  the 
EAGF, thus producing important benefits.

 The  Commission  considers  that  important 
requirements of good farming practice still 
apply in cross compliance.

A  significant  degree  of  flexibility  must  be 
offered to Member States to allow them to 
adapt the obligations to the specific char-
a c t e r i s t i c s   o f   t h e   a r e a s   c o n c e r n e d .   T h e 
C o m m i s s i o n   d o e s   n o t   i n t e n d   t o   a p p r o v e 
national standards within the cross compli-
ance system. The respect by Member States 
of  a  minimum  level-playing  field  is  how-
ever  ensured  by  the  Commission  through 
its monitoring and audit activity.

 M o r e o v e r ,   t h e   r u r a l   d e v e l o p m e n t   p o l i c y 
i s   b a s e d   o n   p r o g r a m m i n g   p e r i o d s   a n d 
n a t i o n a l   p r o g r a m m e s   a r e   a p p r o v e d ,   n o t 
individual  standards.  Therefore  the  com-
parison with cross compliance is not neces-
sarily relevant.

 T h e   p r i n c i p l e   t h a t   M e m b e r   S t a t e s   s h a l l 
define verifiable standards is already under-
lying the legislation on cross compliance.

• 

There should be no overlap between cross 
compliance  and  agri-environmental  com-
mitments.  This  has  been  checked  during 
the programme approval process. Member 
states  had  to  prove  that  the  agri-environ-
ment  measures  go  beyond  the  baseline  as 
defined by Article 39 (3) of Regulation (EC) 
No 1698/2005.

 A g r i - e n v i r o n m e n t   a n d   c r o s s   c o m p l i a n c e 
complement  each  other  without  any  pos-
sible overlap. In other words, cross compli-
ance  represents  the  delineation  between 
penalising farmers for the non-compliance 
with mandatory requirements (in line with 
the  “polluter  pays  principle”)  and  reward-
ing  farmers  for  the  voluntary  provision  of 
environmental benefits through agri-envi-
ronmental commitments.

 T h e   l e g i s l a t o r   m a d e   a   d e l i b e r a t e   c h o i c e 
to give Member States a certain degree of 
discretion  with  respect  to  both  the  defi-
nition of mandatory requirements and the 
d e s i g n   o f   a g r i - e n v i r o n m e n t   m e a s u r e s . 
T h i s   d i s c r e t i o n   a l l o w s   M e m b e r   S t a t e s   t o 
t a k e   i n t o   a c c o u n t   n a t i o n a l   a n d   r e g i o n a l 
specificities.

88. 
In case of weaknesses of implementation of the 
control  system  by  Member  States  the  finan-
cial  risks  are  covered  by  the  audit  activity  of 
the  Commission  and  financial  corrections  are 
applied where necessary.

As  regards  the  reduction  system  under  cross 
compliance, it is the responsibility of Member 
States to implement it properly and weaknesses 
found  in  this  respect  are  also  followed  up  by 
the Commission during its audit activity.

• 

• 

• 

The Commission ensures, through its moni-
t o r i n g   a n d   a u d i t   a c t i v i t y ,   t h a t   M e m b e r 
S t a t e s   r e s p e c t   a   m i n i m u m   l e v e l - p l a y i n g 
field.

The  basic  principle  is  that  at  least  1 %  of 
farmers  receiving  CAP  payments  are  sub-
ject to cross compliance controls each year. 
F o l l o w i n g   t h e   p r i n c i p l e   o f   r i s k   a n a l y s i s 
M e m b e r   S t a t e s   h a v e   r e q u e s t e d   a   m a r g i n 
of  flexibility  in  order  to  be  able  to  focus 
the controls on the more risky obligations, 
however  without  ignoring  the  remaining 
obligations. The Commission has agreed to 
this request and consequently adopted new 
rules in 2007 allowing this flexibility.

The  principle  that  possible  reductions  are 
proportional  to  or  dependent  on  the  seri-
ousness of the breach is already laid down 
in the current legislation on cross compli-
ance. The Commission does not see reasons 
to modify this framework at this stage.

 
 
 
 
 
57

The Commission services, together with Mem-
b e r   S t a t e s ,   h a v e   b e e n   v e r y   a c t i v e   i n   h a r m o -
nising  application  at  Member  State  level  and 
guidelines were produced to improve identifi-
cation  of  obligations  to  be  respected  at  farm 
level.

Cross compliance has certainly contributed to 
a  better  respect  of  the  relevant  environment, 
food safety, health, and animal welfare Direc-
tives and Regulations.

H o w e v e r   t h e   C o m m i s s i o n   a k n o w l e d g e s   t h a t 
t h e   e f f e c t i v e n e s s   o f   c r o s s   c o m p l i a n c e   c o u l d 
be  further  improved  and  sees  the  best  way  to 
achieve  this  in  pursuing  and  reinforcing  the 
efforts already initiated.

89.
• 

• 

• 

The Commission is currently examining the 
question of monitoring.

The  Commission  follows  up  where  data  is 
missing or is inconsistent.

Regarding  the  analysis  of  data  the  Com-
mission  has  made  considerable  efforts  for 
analysing  the  cross  compliance  statistics. 
Cases  of  missing  or  inconsistent  data  are 
followed up. Incorrect applications of cross 
compliance rules are followed up under the 
clearance of accounts procedure (if appro-
priate  by  desk  audits)  in  addition  to  the 
audit mission programme.

The Commission has also reinforced the human 
resources in this area.

90. 
The instrument of cross compliance, agreed by 
the Council and Parliament in 2003 and phased 
in from 2005, was completely new and obliged 
a   n u m b e r   o f   M e m b e r   S t a t e s   t o   i n c r e a s e   a n d 
reorganise  their  efforts  to  better  implement 
and control the relevant Directives and Regula-
tions at farmer level.

Difficulties in the implementation of cross com-
pliance stem from the reorganisation of control 
bodies, from the identification of controllable 
obligations relating to farming activities in the 
different Directives and Regulations, and from 
sometimes  an  incomplete  conversion  of  such 
Directives into national law.

European Court of Auditors

Special Report No 8/2008

Is cross compliance an effective policy?

Luxembourg: Office for Official Publications of the European Communities

2009 — 57 pp. — 21 × 29.7 cm

ISBN 978-92-9207-117-2

DOI 10.2865/34445

How to obtain EU publications

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where you can place an order with the sales agent of your choice.

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UNDER THE NEW COMMON AGRICULTURAL POLICY CAP, WHICH ENTERED INTO 

FORCE IN 2005, THE SINGLE PAYMENTS DUE TO EACH BENEFICIARY MAY BE REDUCED 

IF RULES IN THE AREAS OF ENVIRONMENT, FOOD SAFETY, ANIMAL AND PLANT HEALTH 

AND ANIMAL WELFARE HAVE NOT BEEN RESPECTED, OR IF THE REQUIREMENT TO 

MAINTAIN ALL AGRICULTURAL LAND IN GOOD AGRICULTURAL AND ENVIRONMENTAL 

CONDITION HAS NOT BEEN FULFILLED. IN 2008 THE EUROPEAN COURT OF AUDITORS 

CARRIED OUT AN AUDIT OF THE CROSS COMPLIANCE POLICY AT THE COMMISSION 

AND IN SEVEN MEMBER STATES REPRESENTING THE DIVERSITY OF AGRICULTURE 

ACROSS EUROPE. IN THIS REPORT, THE COURT CONCLUDES THAT THE OBJECTIVES 

OF THE POLICY HAVE NOT BEEN DEFINED IN A SPECIFIC, MEASURABLE, RELEVANT, 

AND REALISTIC WAY. AS A RESULT, AT FARM LEVEL MANY OBLIGATIONS ARE STILL 

ONLY FOR FORM’S SAKE AND THEREFORE HAVE LIT TLE CHANCE OF LEADING TO 

THE EXPECTED CHANGES OR IMPROVEMENTS. OVERALL, THE COURT CONSIDERS 

THAT CROSS COMPLIANCE IS A VITAL ELEMENT OF THE CAP BUT CONCLUDES THAT 

IT IS NOT EFFECTIVE AS CURRENTLY MANAGED AND IMPLEMENTED. THE COURT 

RECOMMENDS THAT THE APPLICABLE RULES SHOULD BE SIMPLIFIED, CLARIFIED 

AND PRIORITISED.

EUROPEAN COURT OF AUDITORS

ISBN 978-92-9207-117-2