Analysis of administrative burden arising from the CAP : final report.
Date: 2019-07-08
Institutions: Directorate-General for Agriculture and Rural Development
Subjects: EU Member State, administrative check, administrative formalities, aid to agriculture, common agricultural policy, cost analysis, digital technology, farming sector, management information system, reform of the CAP

Analysis of administrative 
burden arising from the CAP 
Final Report 

Written by Ecorys 
November – 2018 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for DG for Agriculture and Rural Development 
Directorate C — Strategy, simplification and policy analysis 
Unit C.4 — Monitoring and evaluation 

E-mail: 

AGRI-EVALUATION@ec.europa.eu 

European Commission 

B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Analysis of administrative 
burden arising from the CAP 

Final Report 

2019 

 Directorate-General for Agriculture and Rural Development 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Luxembourg: Publications Office of the European Union, 2019 

ISBN: 
978-92-79-98021-3 

Doi: 
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© European Union, 2018 

Reproduction is authorised provided the source is acknowledged. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table of Contents 

Glossary 

Abstract  

1 

Introduction 
1.1  Context and objectives of the study 
1.2  Content and structure of the report 

7 

8 

9 
9 
11 

2  Methodological approach and limitations 

2.2  Approach and methodologies chosen 

2.1  Definitions and methodological implications emerging from literature 

13 
13 
2.1.1  Assessments of costs and burdens in CAP related scientific literature   13 
17 
2.1.2  Definitions applied in this study 
18 
19 
2.2.1  Key methodologies for cost identification and assessment 
20 
2.2.2  General approach for case studies 
2.2.3 
20 
Extrapolation of findings 
2.2.4  Approach  for  setting  up  the  framework  for  assessing  LPIS  Cost-
21 
Effectiveness 
22 

2.3  Limitations and robustness of the study 

3  Functioning and development of IACS related activities 

3.1  Evolution of the CAP 
3.2  Description of IACS and its major components 

IACS’ main components 
Land Parcel Identification System (LPIS) 

3.2.1 
3.2.2 
3.2.3  Costs of controls 
3.2.4 
3.2.5  Greening 
3.2.6  Cross-compliance 
3.2.7  Rural development measures (IACS based) 

Payment entitlements 

25 
25 
34 
37 
39 
44 
46 
48 
53 
55 

4  Costs and cost drivers of IACS related activities 

4.4  Management and control costs 

4.1  Overall costs of IACS 
4.2  Set-up costs 
4.3  Running costs 

The Land Parcel Identification System (LPIS) 

4.3.1  Horizontal IACS staff 
4.3.2 

59 
59 
66 
71 
72 
82 
94 
4.4.1  Horizontal assessment of cost drivers and aspects concerning controls  96 
106 
4.4.2 
109 
4.4.3  Greening 
116 
4.4.4  Cross-compliance 
120 
4.4.5 
128 

4.5  Administrative burden: farmers’ perspective 

IACS-based rural development measures 

Payment entitlements 

 
 
 
 
 
 
 
 
 
 
Farmers’ understanding of the definition of administrative burden 

4.5.1 
4.5.2  Sources of administrative burden 
4.5.3 
4.5.4 
4.5.5 
4.5.6 

Estimates of time spent on CAP related administrative tasks 
Estimates of financial costs of administrative burden for farmers 
Farmers’ perspectives on specific tools and instruments 
Future CAP and opportunities to reduce administrative burdens 

5  Conclusions and recommendations 

5.1  Key findings and implications for future policy 
5.2  Overall conclusions 

129 
130 
130 
133 
136 
142 

149 
149 
155 

6 

 
 
 
 
 
 
 
 
 
 
 
Glossary 

Acronym 

Description 

AECM 

Agri-environment-climate Measures 

AEM 

AP 

ATS 

BPS 

CAP 

Agri-environmental measures 

Agricultural Parcels 

Abstract Tests Suit 

Basic Payment Scheme 

Common Agricultural Policy 

DG AGRI 

European Commission, Directorate-General for Agriculture and Rural Development 

EAFRD 

European Agricultural Fund for Rural Development 

EAGF 

European Agricultural Guarantee Fund 

EC 

EFA 

ETS 

FTE 

GAEC 

GIS 

GSAA 

IACS 

IT 

LCCS 

LFA 

European Commission 

Ecological Focus Area 

Executable Test Suite 

Full Time Equivalents 

Good Agricultural and Environmental Conditions 

Geographic Information System 

Geo-Spatial Aid Application 

Integrated Administration and Control System 

Information Technology 

Land Cover Classification System 

Less-Favoured Area 

LIDAR 

Light Detection and Ranging 

LPIS 

Land Parcel Identification System 

LPIS QA 

Land Parcel Identification System Quality Assurance 

MTS 

MS 

Model Test Suit 

Member State 

OTSC 

On The Spot Checks 

PA 

RDP 

RP 

RS 

paying agency 

Rural Development Programmes 

Reference Parcels 

Remote Sensing 

SAPS 

Single Area Payment Scheme 

SCM 

SMR 

SPS 

TC 

UAA 

VCS 

VHR 

YF 

Standard Cost Model 

Statutory Management Requirement 

Single Payment Scheme 

Transaction cost 

Utilised Agricultural Area 

Voluntary Coupled Support 

Very High Resolution 

Young Farmers 

7 

 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Abstract  

This study collects evidence and measures the costs related to the implementation 
of  the  Integrated  Administration  and  Control  System  (IACS)  after  the  CAP  2013 
reform. It analyses in-depth the different forms of  IACS, Land Parcel Identification 
System  and  related  control  mechanisms,  as  well  as  the  costs  associated  to  cross-
compliance.  Overall,  the  2013  reform  led  to  an  increase  of  the  administrative 
burden  on  administrations,  which  has  helped  to  avoid  a  significant increase  of  the 
burden on the beneficiaries. For the administrations, IACS administrative costs are 
estimated  to  represent  around  3%  of  the  annual  CAP  budget.  For  farmers,  the 
share of the administrative burden, excluding compliance costs, accounts for about 
2% of the total aid received. The study recommends to consider the administrative 
cost  implications  of  Member  States  interventions  in  the  future  CAP  strategic  plans 
and  to  stimulate  the  use  of  digital  technology.  The  report  proposes  examples  of 
actions that could be taken by the Member States. The study also reveals that there 
is little data available on the administrative costs related to the CAP implementation 
which  makes  comparisons  between  Member  States  difficult  and  which  does  not 
allow for a monitoring of the costs over time. 

les  différentes 

formes  de  SIGC, 

Cette étude rassemble des preuves et mesure les coûts liés à la mise en œuvre du 
système intégré de gestion et de contrôle (SIGC) après la réforme de la PAC 2013. 
Elle  analyse  en  profondeur 
le  système 
d'identification  des  parcelles  de  terrain  (SIPA)  et  les  mécanismes  de  contrôle 
associés, ainsi que les coûts associés à la conditionnalité. Globalement, la réforme 
de  la  PAC  2013  a  entraîné  une  augmentation de  la  charge  administrative  pour  les 
administrations,  ce  qui  a  permis  d'éviter  une  augmentation  significative  de  la 
charge  pour  les  bénéficiaires.  Pour  les  administrations,  les  coûts  administratifs  du 
SIGC représentent environ 3% du budget annuel de la PAC. Pour les agriculteurs, la 
part  de  la  charge  administrative  (coûts  de  conditionnalité  exclues),  représente 
environ 2% du total des aides reçues. L'étude recommande de prendre en compte 
les coûts administratifs des interventions des  États membres dans les  futurs plans 
stratégiques  de  la  PAC  et  de  stimuler  l'utilisation  des  technologies  numériques.  Le 
rapport  propose  des  exemples  d'actions  que  pourraient  entreprendre  les  États 
membres. L'étude révèle également qu'il existe peu de données disponibles sur les 
coûts administratifs liés à la mise en œuvre de la PAC, ce qui rend les comparaisons 
entre  les  États  membres  difficiles  et  ne  permet  pas  un  suivi  des  coûts  dans  le 
temps. 

8 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

1  Introduction 

This chapter provides a brief introduction to the context of the study, its objectives 
and structure. 

1.1  Context and objectives of the study 

Context and study setting 
Since  its  establishment  in  1962,  the  Common  Agricultural  Policy  (CAP)  has 
undergone major  reforms aimed at tailoring and/or simplifying its implementation. 
Among  the  most  influential  were  the  so-called  ‘MacSharry’  reforms  in  the  1990s 
and  the  Agenda  2000  reforms.  Reforms  included  the  introduction  of  a  new 
Integrated Administrative Control System (IACS), which incorporates checks on the 
accuracy  of  farmers’  declared  area  and  livestock  headage  claims,  together  with 
associated  payment  reductions  and  penalties  where  applicable.  The  IACS  system 
has  been  subsequently  developed  and  tailored  across  the  EU,  introducing  specific 
regulatory  requirements  (RDPs,  Greening  etc.)  and  technological  tools  (LPIS,  Geo 
Spatial Aid Application etc.).  

The  2013  CAP  Reforms,  which  provide  the  basis  of  IACS  assessed  by  this  study, 
built  upon  the  previously  introduced  two  Pillar  structure  but  increased  overall 
flexibility  for  Member  States  and  strengthened  the  links  between  the  Pillars.  The 
current  IACS  incorporates  different  databases  (farmers’  register,  animal  register, 
LPIS, entitlement register, claims databases) with cross-checking of the integrity of 
data.  Under  IACS,  Member  States  are  required  to  use  computerised  databases  to 
administer  the  annual  claim  and  control  cycle,  covering  aid  application, 
administrative  and  (where  applicable)  on-the-spot  checks  (OTSC),  and  payments, 
incorporating (where applicable) penalties and deductions.  

The  study  takes  also  into  account  stakeholders’  views  expressed  in  the  public 
consultations  held  at  the  time  of  the  REFIT  exercises  on  agriculture1,  particularly 
those related to Greening in 2016, and the “Simplification and modernisation of the 
CAP”2,  in  2017,  together  with  the  outcomes  of  the  Omnibus  Regulation  20173. 
These give rise to observations on various topics that warrant consideration by this 
study: 
  The impact of good quality advisory services such as the Farm Advisory system 
(FAS)4  and  well-functioning  IT  systems  in  reducing  the  administrative  burden 
placed on different stakeholders; 

  The  impact  of  unclear  or  highly  detailed  and  prescriptive  requirements  on  CAP 

beneficiaries; 

1 https://ec.europa.eu/info/publications/refit-platform-recommendations-agriculture_en  
2 European Commission, DG AGRI (2017): Modernising and simplifying the CAP, Background Document Socio-Economic 
challenges facing EU agriculture and rural areas 
3 https://www.consilium.europa.eu/en/policies/cap-simplification/omnibus-regulation-agriculture/  
4 https://ec.europa.eu/agriculture/direct-support/cross-compliance/farm-advisory-system_en  

9 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  The  impact  of  policy  changes  –  including  their  frequency  and  speed  of 
implementation – on administrative processes at the national, regional and farm 
level; 

  The  impact  of  overlapping  or  stacked  rules  (e.g.  relation  Greening  payment, 

cross-compliance and the AEC measure) on administrative complexity; 

  The  potential  opportunities  from  use  of  results-based  payments,  rather  than 
penalties,  to  achieve  a  better  balance  between  cost  and  effectiveness  of  CAP 
administration; 

  The  ways  in  which  the  prescriptive  nature  of  the  CAP  (as  mentioned  in  the 
Communication  on  the  Future  of  Farming)  impacts  on  Member  States 
implementation of controls and IT systems, and on efforts to find and introduce 
innovative alternatives. 

Objectives of this study 
The  general  objective  of  this  study  is  to  examine  the  costs  and  administrative 
burden, including the effectiveness and efficiency, of current systems for managing 
and  controlling  a  large  share  of  common  agricultural  policy  (CAP)  expenditure. 
Specifically,  the  study  analyses  and  assesses  different  elements  of  the  Integrated 
Administration  and  Control  System  (IACS),  including  the  Land  Parcel  Identification 
System (LPIS) and related control mechanisms in place across the EU. The analysis 
and  findings  provided  by  the  study  should  contribute  to  reflections  on  ways  to 
simplify  and 
for  CAP 
implementation. 

systems  and  procedures 

improve  management 

The  general  objective  of  the  study,  is  further  defined  by  the  following  more 
operational specific objectives: 

  Objective  1  –  Improve 

the  understanding  of  Member  States’ 
implementation  of  IACS:  provide  an  overview  and  description  of  IACS, 
including  LPIS,  cross-compliance  and  related  aspects  of  direct  payments, 
including insights on their implementation by Member States; 

  Objective 2 - Identify the sources of costs for IACS: identify and categorise 

costs of IACS according their source;  

  Objective  3  -  Quantify  and  compare  IACS  costs  across  Member  States: 
provide  a  comparative  quantification  of  the  costs  of  different  components  of 
IACS across Member States; 

  Objective  4  -  Compare  IACS  implementation  procedures  and  their 
associated  costs:  provide  a  comparison  of  Member  States’ 
IACS 
implementation  procedures  and  assess  the  impact  of  observed  differences  on 
IACS costs; 

  Objective  5  –  Undertake  a  ‘fitness  check’  of  IACS  implementation: 
provide  and  assessment  of  the  adequacy,  efficiency  and  effectiveness  of  IACS 
implementation  and  its  regulatory  basis,  together  with  identification  of 
opportunities for improvement and simplification; 

  Objective  6  –  Develop  a  methodological  framework  for  measuring  LPIS 
cost-effectiveness: develop and test a methodological framework for assessing 
the cost effectiveness of LPIS. This methodological framework, after fine-tuning, 
should be suitable for future use by Member States5. 

5 NOTE: The LPIS Cost Effectiveness Framework is a separate study outcome not presented in this report. 

10 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

1.2  Content and structure of the report 

The structure of the report is as follows: 
  Chapter 2 – Methodological approach and limitations: presents the general 

approach and methodology applied in the study;  

  Chapter  3  –  Functioning  and  development  of  IACS:  introduces  the  policy 
background and context, simplification efforts and describes IACS and its major 
components; 

  Chapter  4  –  Costs  and  cost  drivers  of  IACS:  analysis  of  the  administrative 
costs  related  to  the  main  components  of  IACS  and  the  burdens  observed  by 
farmers; 

  Chapter  5  –  Conclusions  and 

recommendations: 

conclusions 

/ 

recommendations based on the analysis of all study components. 

11 

 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

2  Methodological approach and limitations  

This  chapter  presents  the  definitions  and  methodological  implications  emerging 
from  literature  (Section  2.1),  the  approach  for  the  study  including  the  key 
methodologies chosen (Section 2.2) and the limitations and robustness of the study 
findings (Section 2.3).  

2.1  Definitions and methodological implications emerging from literature 

Administrative costs and burdens of EU policy and funds in general and the CAP in 
particular have been part of various reform discussions in recent years. Definitions 
applied  however  often  differ  and  the  political  debate  around  the  topics  of  ‘burden 
reductions’  and  ‘gold-plating’  are  not  always  supporting  methodologically  accurate 
definitions  and  distinctions.  In  the  following  sections,  we  thus  first  provide  a  brief 
introduction  on  assessments  of  costs  and  burdens  in  CAP  related  scientific 
literature, followed by an elaboration of the definitions applied in the remainder of 
this study.  

2.1.1 Assessments of costs and burdens in CAP related scientific literature 

The  administrative  burden  is  often  mentioned  in  assessments  of  measures  and 
policy.  Broadly  speaking,  the  scientific  literature  on  the  administrative  cost  of 
agricultural policy is mostly related to transaction costs, i.e. all costs (except for the 
price of the product itself) needed to carry out a transaction. Transaction costs are 
used by a growing body literature (implicitly or explicitly) to introduce the notion of 
trade-off between the costs and benefits of a more precise or more tailored policy. 
A  more  precise  policy  implies  a  more  accurate  implementation  in  line  with 
objectives,  which  involves  more  demanding  checks,  more  sophisticated  selection 
criteria,  better  targeting  and  better  controls  at  the  stage  of  implementation. 
However, increased targeting and tailoring is expected to bring higher benefits (e.g. 
higher  effectiveness)  yet  also  implies  higher  transaction  costs6.  This  trade  off  can 
be depicted as done in the figure below. 

6 Fahrmann and Grajewski (2013) https://academic.oup.com/erae/article-abstract/40/4/541/428701  

13 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 1  

Visualisation of the balancing exercise between costs and benefits (K = costs, 
B = benefits) 

Source: Fahrmann and Grajewski (2013) 

Precision vs. costs 

Increased  precision  may  not  always  be  efficient,  as  the  costs  of  being  more  precise 

may  outweigh  the  benefits  achieved.  Therefore, there  is  an optimal  level of  precision 

(P*),  balancing  between  costs  and  benefits,  and  hence  also  an  optimal  level  of 

administrative  burden.  The  difficulty  in  striking  or  finding  this  balance  lies  in the  fact 

that  most  of  the  time  both  benefits  and  costs  are  difficult  to  quantify,  especially  in 

their  variation  with  precision.  Benefits  may  be  not  clearly  visible  or  immediately 

quantifiable  as  they  are  linked  to  achieved  or  presumed  environmental  effects,  or 

difficult  to  monitor  economic  and  social  effects  (e.g.  equity,  wellbeing).  Costs  are 

usually easier to identify for some  components (e.g. direct workload)  but others may 

still  be  very  difficult  to  measure.  An  example  is  the  loss  of  efficiency  due  to  high 

workload in conditions of constrained budget or time limitations (i.e. higher unit costs 

with  staff  constraints)  which  implies less  accurate  measure  design  or implementation 

(or lack of implementation in some cases). 

Within  research  literature,  a  broad  distinction  is  made  between  private  and  public 
transaction  costs.  Public  administrative  costs  include  various  types  of  personnel 
costs  and  services.  They  can  also  be  distinguished  based  on  the  stage  of  the 
design, implementation and monitoring of the schemes. The literature analyses the 
determinants of these costs7. 

7 e.g. Mettepenningen, Beckmann and Eggers (2011) https://ideas.repec.org/a/eee/ecolec/v70y2011i4p641-650.html  

14 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 2  

Main categories of determinants of public transaction costs 

Source: Consortium based on Mettepenningen, Beckmann and Eggers (2011) 

Public transaction costs 
Actors involved affect public transaction costs both due to their number (the higher 
the  number  e.g.  of  farmers  involved,  the  higher  the  transaction  costs)  and 
characteristics  (the  more  heterogeneous,  the  higher  the  transaction  costs). 
Transaction  costs  are  also  influenced  by  actors’  features,  such  as  trust,  familiarity 
with  measures,  attitudes  towards  public  administration  and  specific  measures. 
Some  of  these  elements  mostly  affect  monitoring  and  control  needs.  With  their 
influence  based  on  characteristics  and  features,  but  also  individual  or  collective 
policy  choices,  public  administrations  can  cause  (unintentionally  or  deliberately) 
additional  potentially  unnecessary  requirements,  better  known  under  the  term 
“gold-plating”8. 

Scheme  (and  in  general  policy)  characteristics  also  affect  public  transaction  costs. 
Measures  targeting  environmental  prescriptions  have  normally  higher  transaction 
costs  than  measures  related  to  joint  public  and  private  goods  (such  as 
environmental  taxes),  which  are  normally  more  costly  than  simple  subsidies.  In 
addition,  more  locally  targeted  and  territorial  differentiated  measures  have  higher 
transaction  costs.  Higher  transaction  costs  apply  in  more  heterogeneous  local 
conditions, due to asset specificity and to the perceived risk of lock-in by farmers9. 

8  The  European  Commission  defines  'gold-plating'  in  the  context  of  Smart  Regulation,  by  referring  to  the  '[…] 
transposition of EU  legislation,  which goes beyond  what  is required by that  legislation,  while staying within  legality. 
Member States have large discretion when implementing EC directives. They may increase reporting obligations, add 
procedural requirements, or apply more rigorous penalty regimes. If not illegal, 'gold-plating' is usually presented as 
a bad practice because it imposes costs that could have been avoided' 

9   Meaning they have limited ‘free choice’ or flexibility in decision 

15 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Features of measures causing costs 

Other  aspects  depend  more  directly  on  the  feature  of  the  measures:  a)  scope  of  the 

scheme  may  increase  complexity  and  design  costs;  b)  the  possibility  of  taking  up 

multiple  measures  together  can  instead  reduce  costs  for  application  management;  c) 

the possibility for farmers to cooperate may reduce the costs for public administration 

(though  may  increase  private  costs  at  least  of  some  types);  d)  the  degree  of 

monitoring  and  controls  needed  (the  higher  the  controls,  the  higher  the  transaction 

costs); e) the timing in the program and the life cycle of a policy; transaction costs can 

decrease over time due to learning and improvement of procedures (with stable rules). 

An  important  set  of  determinants  is  concerned  with  the  institutional  environment. 
This  includes  broad  political  issues,  such  as  instability  and  degree  of  conflicting 
attitudes  in  an  area.  More  practically,  the  number  of  parties  involved,  the 
contextual  rules,  the  status  quo  linked  to  path  dependency10  can  all  contribute  to 
rather different levels of costs. 

Natural  environment  can  affect  transaction  costs  due  to  different  levels  of 
complexity  or  heterogeneity.  Notably,  different  types  of  transaction  costs  may  be 
related,  positively  or  negatively  with  each  other.  For  example,  higher  costs  for 
stakeholders  participation  in  an  early  stage  of  the  scheme  development  can 
produce  better  compliance  and  hence  reducing  monitoring  and  control  costs. 
Empirical  studies  show  that  complexity  of  schemes  is  the  most  influencing  factor 
affecting paying agencies’ transaction costs in AES11. 

From  the  discussion  above,  it  emerges  that  the  actual  costs  may  depend  both  on 
objective  characteristics  of  prescription  (and  their  complexity)  and  on  preferences 
and  behaviour  by  the  actors  involved12.  The  latter  may  be  the  most  difficult 
component  to  detect  and  is  also  the  most  difficult  to  act  upon,  as  it  implies  long 
terms actions building knowledge, trust and confidence with measures. 

Private transaction costs 
Private  transaction  costs  are  costs  borne  by  farmers  or  other  private  actors.  They 
are affected by largely the same variables as for the public transaction costs, but, 
in  addition,  they  are  strongly  affected  by  the  design  of  the  applied  policy 
instruments  and  by  the  public  administrative  procedures.  Depending  on  the 
scheme, these costs can be more or less compensated by payments (as is the case 
for transaction costs in the calculation of some second pillar payments) or be left as 
a  net  burden  to  farmers.  Rather  important  for  farmers,  more  than  for  the  public 
administration,  transaction  costs  not  readily  detectable  from  the  time  spent  or 
accounting  calculations  may  be  important.  This  includes,  e.g.  uncertainty  and  risk 
perceptions and personal attitudes against complex administrative procedures. 

In  terms  of  wider  interpretations,  the  topic  can  be  further  cast  in  the  issue  of  the 
political  economy  of  decentralisation  and  subsidiarity  and  hence  in  the  wider 

10  Path  dependence  explains  how  the  set  of  decisions  one  faces  for  any  given  circumstance  is  limited  by  the  decisions 

one has made in the past 

11 e.g. Mettepenningen, Beckmann and Eggers (2011) https://ideas.repec.org/a/eee/ecolec/v70y2011i4p641-650.html  
12 Nilsson (2009): Personal and social factors that influence pro-environmental behavior 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

context of decentralised strategic programming13. Indeed, while there is a growing 
attention  to  transaction  costs  from  policies,  implications  for  planning and  measure 
design  are  still  poorly  considered  in  real-life  decision-making  processes  and  policy 
evaluations14. 

2.1.2 Definitions applied in this study 

The  focus  of  this  study  is  on  administrative  costs  of  IACS  for  paying  agencies 
including  the  perspective  on  administrative  burden  from  a  farmers  position.  We 
therefore define as “administrative costs” what is in the scientific literature referred 
to  as  transaction  costs,  distinguishing  between  administrative  costs  for  authorities 
(public transaction costs) and farmers (private transaction costs). 

Figure 3  

Transaction cost, administrative cost and burdens  

Source: Author’s own elaboration 

Administrative  costs  can  be  further  divided  into  the  subcategories  of  compliance 
costs and administrative burdens. 

Table 1  

Cost definitions used in this study 

Cost categories 

Definition 

Administrative costs 

  Compliance costs 

  Administrative burdens 

Source: Author’s own elaboration 

All costs related to the set-up, running and management 
and control of IACS related measures 

Costs  for  complying  with  relevant  legislation  e.g.  the 
implementation of certain requirements 

Information obligations and related activities due to the 
legislation related to IACS 

13 Beckmann, Eggers and Mettepenningen (2009), “Deciding how to decide on agri-environmental schemes: the political 

economy of subsidiarity, decentralisation and participation in the European Union”. 

14 Shahab, Clinch and O’Neill (2018), “Estimates of Transaction Costs in Transfer of Development Rights Programs”. 

17 

 
 
 
 
 
 
 
 
 
  
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The main difference between most compliance costs and administrative burdens is 
that  the  former  usually  include  a  certain  amount  of  what  is  called  “Business-as-
Usual”  costs,  hence  costs  that  would  also  occur  in  the  absence  of  legislation.15 
Administrative  burdens  on  the  other  hand  only  occur  due  to  the  legislative 
requirements of providing and collecting information.16 Given that one could argue 
that the absence of CAP legislation would lead to no remaining activities of paying 
agencies  (directly  or  indirectly  linked  to  information  obligations17),  it  is  harder  to 
distinguish between compliance cost and administrative burden for them. Based on 
this  reasoning  the  European  Commission  in  its  Impact  Assessment  for  the  new 
CAP18  follows  the  previous  assessment19  establishing  that  only  less  than  5%  of 
administrative  cost  can  be  expected  to  occur  also  in  absence  of  legislation  and 
hence  the  remainder  can  be  defined  as  administrative  burden.  However,  the  term 
“burden”  is  often  affiliated  in  the  public  debate  with  unnecessary  obligations  and 
gold-plating that should be abolished and not in its methodological “neutral” sense. 
In  this  report,  we  thus  for  public  authorities  do  not  distinguish  between 
administrative  costs  and  burdens,  assessing  and  describing  the  higher  level 
category  of  administrative  costs.  In  contrast, 
focus  on 
administrative burdens.  

farmers,  we 

for 

2.2  Approach and methodologies chosen 

Building  on  the  context  and  objectives  of  this  study  and  the  considerations 
emerging  from  scientific  literature  of  previous  assessments,  an  approach  was 
chosen  that  acknowledges  the  specificities  of  the  CAP  2014-2020  and  its  efforts 
towards  a  greater  simplification  and  flexibility  for  MS,  as  well  as  the  complexity 
inherent  in  the  controls  and  checks  that  are  required.  The  chosen  methodologies 
build  on  the  EU  Better  Regulation  Guidelines  (revised  in  2017)  for  assessing 
administrative  burden  for  businesses  and  administrations  due  to  EU  regulations 
using the definitions established above. For  information collection overall literature 
review,  extensive  case  study  work  including  farmers’  interviews  and  a  validation 
survey  were  used.  The  general  logic  behind  the  applied  approach  matching 
methodologies  and  data  sources  with  the  sub-objectives  (as  defined  in  Chapter  1) 
is depicted in the following figure and summarised thereafter.  

15 CEPS (2013): Assessing the costs and benefits of regulation 
16 European Commission Better Regulation Toolbox, see: http://ec.europa.eu/smart-

regulation/guidelines/docs/br_toolbox_en.pdf  

17 NOTE: we interpret monitoring, and control activities as information obligations 
18 SEC(2011) 1153 final/2: Common Agricultural Policy towards 2020 Annex 9 
19 EU Project on Baseline Measurement and Reduction of Administrative Costs, 2010, 
http://ec.europa.eu/smartregulation/refit/admin_burden/docs/enterprise/documents/files/abs_development_reduction_r

ecommendations_en.pdf   

18 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 4 

Project approach 

Source: Author’s own elaboration 

2.2.1 Key methodologies for cost identification and assessment 

To  analyse  administrative  costs  and  burdens  of  the  CAP  and  identify  their  sources 
we  rely  on  a  mix  of  two  specific  methods  tailored  to  the  specific  context  of  this 
study: 
  Standard  Cost  Modelling  (SCM):  allows  to  address  the  costs  and  burdens  of 
CAP requirements for paying agencies. It allows the quantification of actual costs 
(i.e. financial/time costs) resulting from CAP regulatory requirements (for paying 
agencies at MS level), to enable an assessment of the extent to which the CAP is 
deemed efficient; 

  Gold-plating  Analysis  (GPA):  provides  a  specific  methodology  to  structurally 
and  qualitatively  identify  Member  State  decisions  on  policy  implementation 
potentially  increasing  costs.  While  the  SCM  is  part  of  the  EU  Better  Regulation 
Toolbox, GPA is a method developed by Ecorys as part of previous Administrative 
Burdens studies related to the CAP.20  

Through this combination, the approach allows for a better identification of possible 
corrective  actions  (i.e.  fitness  checks)  in  addressing  persisting  or  new  burdens  in 
the CAP implementation.  

20  European  Commission 

(2017):  Better  Regulation 

“Toolbox”,  available  at:  http://ec.europa.eu/smart-
regulation/guidelines/docs/br_toolbox_en.pdf  ,  European  Parliament,  Directorate-General  for  Internal  Policies,  Policy 
Department D. Budgetary Affairs (2014): “Gold-plating' in the EAFRD: To what extent do national rules unnecessarily 
add 
at: 
http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/490684/IPOL-JOIN_ET(2014)490684_EN.pdf  

complexity 

available 

errors?”, 

increase 

result, 

and, 

risk 

the 

as 

to 

of 

a 

19 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

A  third  methodology,  which  inspired  the  approach  chosen  for  this  study  is  the 
Cumulative Cost  Assessment (CCA), which aims to identify, assess and, where 
possible,  quantify  the  cumulative  costs  generated  by  selected  areas  of  EU 
legislation on a given industrial sector. The assessment of regulatory costs is based 
on  a  holding’s  cost  structure.  The  CCA  in  its  original  format  was  designed  for  the 
assessment  of  costs  for  industry  and  has  features  which  extend  beyond  the  scope 
of  this  study.  However,  the  following  two  features  were  used  to  reinforce  and 
complete the approach chosen: 
  expansion of the SCM to a broader set of requirements: by referring to a number 
of  regulatory  requirements  (and  in  this  sense  to  slot  in  additional  costs  due  to 
MS and regional relevant regulations that go beyond EU CAP  requirements; 

  allowing  the  assessment  of  cumulative  costs  of  different  legislative  acts: 
providing  a  framework  for  avoiding  double-counting  in  areas  where  regulation 
overlaps. 

As  in  the  case  of  other  better  regulation  instruments,  the  CCA  was  not  originally 
designed  to  judge  the  content  of  policies:21  it  is  rather  a  method  of  insight 
generation  that  potentially  feeds  into  further  policy  decisions.  Yet,  the  CCA  is  in 
some ways more appropriate to policy analysis than a method such as cost-benefit 
analysis;  or  a  process-oriented  instrument  built  on  specific  steps,  such  as 
regulatory impact assessment. 

2.2.2 General approach for case studies 

Twelve Member State case studies22 provide the core evidence base for this study. 
They were used to collect both quantitative and qualitative information for all study 
themes to shed more light on the functioning of the different IACS systems and the 
administrative  costs  stemming  from  these  systems.  The  selection  of  case  studies 
focused  on  identifying  cases,  which  represent  a  typical  coverage  of  different  types 
of  CAP  implementation  and  national/regional  context.  This  allowed  for  the 
extrapolation  of  results  to  the  EU  level  and  the  formulation  of  conclusions  for  all 
Member States. 

In  each  case  study,  evidence  was  collected  via  a  combination  of  desk  research, 
interviews  with  paying  agencies,  and  inquiry  with  other  related  stakeholders  and 
farmers (farmers’ interviews). 

2.2.3 Extrapolation of findings 

The  case  studies  were  selected  on  the  basis  that  they  would  cover  a  range  of 
different  approaches  to  CAP  implementation,  focus  areas  and  contextual  settings 
(e.g.  geographical  and  economic  context,  CAP  priorities  etc.).  For  the  qualitative 
study questions this provided a strong evidence base for a Thematic Cross Analysis, 
providing the basis to draw overarching conclusions for all EU Member States. 

21  Claudio  M.  Radaelli,  “Evidence-based  policy  and  political  control:  what  does  regulatory  impact  assessment  tell  us?”, 

presentation held at the ECPR Joint Sessions of Workshops, University of Rennes, France, April 2008. 

22  Note:  In  the  case  of  regional  implementation  of  the  CAP,  typical  regions  were  selected  and  analysed  instead  or 

complementary to activities performed at the MS level. 

20 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

In  the  case  of  quantitative  information  (personnel  cost,  investment  cost  etc.),  the 
extrapolation is more challenging. Firstly, data collection was not always possible at 
the  desired  level  of  granularity  due  to  a  combination  of  factors  such  as  non-
availability  of  data,  non-existence  of  relevant  monitoring  structures,  different 
reporting  practices,  changes  in  staff,  time  constraints,  confidentiality  of  data  etc. 
Consequently,  data  gaps  had  to  be  filled  using  methods  such  as  cross-country 
shadowing,  contextual  indicator  comparison,  typical  cost  breakdowns  etc.  An 
additional  input  used  was  the  European  Commission,  Directorate-General  for 
Agriculture  and  Rural  Development  (DG  AGRI)  cost  of  controls  survey  2017.  To 
compare, aggregate and extrapolate, contextual indicators of agricultural structure, 
country indicators, and CAP indicators (budget, beneficiaries etc.) were used. 

Given  the  challenges  in  data  collection  and  the  sometimes  heterogeneous 
responses  from  Member  States,  we  integrated  an  additional  validation  and 
assessment  of  transferability  check  into  our  approach  by  installing  a  validation  of 
draft  findings  and  hypotheses  based  on  a  preliminary  report.  In  addition,  key 
findings of the farmers’ interviews were discussed with COPA-COGECA23. 

2.2.4 Approach for setting up the framework for assessing LPIS Cost-Effectiveness 

In  addition  to  the  assessment  of  the  costs  and  burdens  of  CAP  implementation,  a 
specific additional output of this study is to suggest a methodological framework for 
measuring  and  monitoring  the  cost-effectiveness  of  implementing  the  Land  Parcel 
Identification System (LPIS) across EU Member States. As reported by the EU Court 
of  Auditors  –  and  reinforced  by  the  analysis  of  this  study  –  Member  States  have 
“difficulties  in  quantifying  the  overall  investment  cost  of  their  LPISs,  their  annual 
running costs and the cost of specific features, such as the LPIS update process or 
the  different  LPIS  layers  or  QA”  (CoA  2016,  p.25)24.  As  a  result,  “Member  States 
are not in a position to assess the cost‐effectiveness of system improvements”.  

A Cost-effectiveness Framework (CEF) is therefore suggested to identify the specific 
costs  to  be  collected  and  compare  these  with  the  main  effects  of  LPIS 
implementation across EU Member States. 
For  the  purpose  of  this  analysis,  LPIS  can  be  considered  cost-effective  when  it 
efficiently allows Member States to unambiguously locate, identify and measure the 
Maximum  Eligible  Areas  (MEA)  of  the  reference  parcels  declared  by  beneficiaries, 
along  with  reliably  checking  the  related  administrative  requirements  and 
information25.  The  assumption  behind  this  analysis 
is  that,  although  the 
management of LPIS implies certain costs to be incurred by the Paying Agencies, in 
the mid-term, it allows to increase efficiency of checks and controls and to reduce 
errors  incurred  by  beneficiaries.  Importantly,  in  this  respect,  LPIS  fosters  the 
overall digitalisation of the agricultural sector in Europe, towards fully  automatized 
national and EU policy management systems.  

23 the union of the two big European agricultural umbrella organisations COPA and COGECA  
24 https://www.eca.europa.eu/Lists/News/NEWS1610_25/SR_LPIS_EN.pdf  
25 https://marswiki.jrc.ec.europa.eu/wikicap/index.php/LPISQA_Legacy/Rationale  

21 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The framework suggested focuses on the following areas of costs: 

  LPIS  update,  including  the  update  of  LPIS  content  (e.g.  acquisition  of  new 
imagery, photo-interpretation, updates as a result of evidence coming from OTS 
checks or farmer’s request etc.); 

  LPIS  upgrade,  referring  to  system’s  adjustments  required  to  align  with  the 

scope of new regulatory requirements; 

  furnishing  application  process,  including  the  integration  of  information  from 
LPIS on reference parcels and incorporation of GSAA information on agricultural 
parcels into LPIS/IACS; and 

  Enabling activities for administrative and OTS checks. 

To  set  up  the  framework  for  assessing  LPIS  cost-effectiveness,  the  approach 
includes:  

  Identification of LPIS objectives/activities; 
  Definition of some contextual variables to be considered in the analysis; 
  Definition of costs/results Indicators; 
  Set-up the overall Cost-Effectiveness Framework (to be used by MS); 
  Interpretation of the emerging data; 
  Comparison with additional existing indicators. 

2.3  Limitations and robustness of the study 

The  analysis  presented  hereafter  should  be  interpreted  with  awareness  of  the 
following limitations: 
  The  key  source  of  information  are  12  case  studies:  the  study  is  based  on 
extensive research in 12 different Member States (or regions therein). While the 
selection  of  case  studies  aimed  at  covering  all  major  different  types  of  CAP 
implementation  and  contextual  and  agricultural  settings,  overall  conclusions  for 
the  EU  still  needed  to  be  extrapolated.  Despite  the  consecutive  validation 
exercise with responses from 21 Member States, a potential bias of  results due 
to the sample size cannot be fully excluded; 

  Dependency on cooperation and input information from Member States: 
information  collected  (and  in  particular  quantitative  information)  required  the 
extensive  cooperation  of  paying  agencies  and  farmers  and  their  ability  to 
respond  to  the  study  questions.  Unavailability  for  interviews,  non-availability  of 
data/information,  difficulties  in  estimating  efforts  and  diverging  reporting 
structures  reduced  the  evidence  base,  particularly  at  a  very  detailed  level  of 
activities.  At  a  more  aggregate  level  of  key  activities  in  managing  and  running 
IACS,  sufficient  data  was  available  to  estimate  gaps.  These  estimates  were 
further  validated  by  the  paying  agencies  through  the  Committee  for  direct 
payments; 

  Focus on costs and not benefits: the focus of quantification in the study lies 
on costs and not on benefits. This should not be taken as implying that the CAP 
creates  costs  in  disproportion  to  its  benefits.  The  purpose  of  focusing  on  the 
costs is to identify opportunities for efficiency gain; 

  Extrapolation  requires  assumptions:  extrapolating  from  a  sample  to  the  EU 
requires  assumptions  (standard  wage  rates  etc.).  The  assumptions  used  are 

22 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

chosen in a way to reduce the risk of biases as much as possible. Nevertheless, 
assumptions can lead to over- or underestimation of findings;  

  Speed  and  extent  of  implementation  of  new  technologies  and  other 
adjustments: differences in technology uptake or the capability of transforming 
functioning  of  systems. 
management  and  control  structures  affect  the 
Consequently, the comparison of implementation between Member States is not 
always based on the use of same systems or structures; 

  Implementation choices affecting cost estimates: differences in costs may 
be  due  to  different  implementation  choices.  Where  possible,  the  study  aims  to 
identify  the  reasons  for  cost  differences.  In  the  case  of  a  combination  of 
structural,  technological  and  political  (choices)  differences,  it  is  however  not 
always  possible  to  identify  the  exact  drivers  of  costs  given  that  different  issues 
interact or their diverging impacts cross-compensate each other; 

  Combination  of  inputs  and  risk  of  overlaps:  to  enlarge  the  evidence  base, 
the DG AGRI cost of controls survey data was integrated in the estimates. Given 
its  partially  diverging  definitions  and  delineations  in  comparison  to  the  study 
themes and thus data collection tools, there is a risk of overestimating costs; 
  Overlap  of  study  timing  and  MFF  discussions:  although  the  timing  of  this 
study  overlaps  with  discussion  on  the  2021-2027  Multiannual  Financial 
Framework  (MFF),  it  is  not  focussed  on  the  MFF  but  rather  on  improving  the 
systems  which  remain  in  place  or  new  ones  that  may  be  setup.  However,  it 
meant  that  the  study’s  data  collection  activities  corresponded  to  a  period  when 
paying  agencies  where  heavily  occupied  and  when  sensitivities  over  sharing 
detailed information on costs of operation were in a heightened state; 

  Timing of the study in relation to the publication of the proposals for the 
CAP after 2020: this study was conducted to assess the implementation of the 
CAP 2013 reform. It was designed before the publication of the proposals for the 
CAP after 2020. As a consequence it does not provide an in depth analysis in the 
implications of the proposals on the administrative costs.  

To mitigate the risks, which emerged due to the limitations stated above, extensive 
quality checks and a validation exercise have been conducted. The quality checks of 
individual data points consisted of: 
  Internal  and  external  data  consistency  checks:  assessment  of  the  logical 
consistency  of  data  provided,  the  magnitude  of  inputs  and  hence  the  statistical 
identification of reporting errors; 

  Outlier  identification:  cross  country  checking  to  identify  specific  outliers  for 

further assessment; 

  Validation  and  verification:  additional  verification  with 

the  original 
interviewees  if  outliers  of  data  or  inconsistencies  can  be  clarified.  Overall, 
validation of country estimates and overall cost estimates and drivers in the form 
of  a  survey  addressed  to  the  paying  agencies  and  distributed  through  the 
Committee for direct payments survey. 

23 

 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

3  Functioning and development of IACS 

related activities 

This  chapter  presents  the  context  of  the  analysis.  It  provides  a  historical 
background, outlines the key CAP  reforms (Section 3.1) and describes the general 
functioning  of  IACS  and  related  mechanisms  (Section  3.2).  As  such,  this  chapter 
helps to better place the analysis of IACS and its components in a wider context of 
the CAP and its simplification efforts. 

3.1  Evolution of the CAP 

Historical Background 
The  CAP  aims  to  provide  a  decent  standard  of  living  for  farmers  and  viable  food 
production  for  European  citizens,  while  contributing  to  sustainable  management  of 
natural  resources  and  combating  climate  change.26  Since  its  inception  in  1962, 
reforms  of  the  CAP  have  seen  it  evolve  from  a  system  primarily  based  on 
guaranteed  prices,  export  subsidies  and  tariffs  and  quotas  to  a  system  operating 
through  direct  payments  to  farmers  and  with  a  greater  orientation  towards 
environmental sustainability.  

In  1992  the  so-called  'MacSharry  reforms’  initiated  the  shift  from  product  support 
to producer  support. This support would mainly be controlled by a new Integrated 
Administrative  Control  System  (IACS)  focusing  on  checking  the  accuracy  of 
farmer’s declared area and livestock headage claims, with associated reduction and 
penalties where relevant.  

In 2000 the  Pillar II  of  the CAP27 was introduced, giving Member States discretion 
under their agreed rural development programmes to introduce agri-environmental 
and other measures that best suited their environmental aims and taking the form 
of multi-annual schemes not aimed at meeting a specific outcome or obligation in a 
single  year.  These  fell  under  the  IACS  umbrella,  with  checks  needed  to  ensure 
against double benefits or incompatible uses on the same area of land. 

The CAP 2003 reforms removed the link between subsidies and production. Farmers 
were  now  able  to  receive  income  support  based  on  a  “payment  entitlement”, 
providing that they met cross-compliance obligations in terms of looking after their 
land  and  meeting  food  safety,  environmental,  and  animal  health  and  welfare 
standards.  Member  States  were  given  greater  flexibility  over  direct  payments, 
including the ability to retain a proportion of their budgetary ceilings  to meet local 
policy  aims  and  which  could  be  spent  through  existing  or  new  coupled  schemes 
linked to specific areas of production. The reforms also ended a number of market 
measure  schemes,  the  value  of  which  was  incorporated  in  entitlement  budgetary 
ceilings.  Further,  SAPS  -  a  simplified  income  support  scheme  not  requiring  the 

26 https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/cap-glance_en  
27 Pillar I: Direct Payments; Pillar II: Rural Development 

25 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

establishment  of  entitlements  -  was  made  available  to  countries  joining  the  EU  in 
2004 and 2007, with ten out of twelve using this option. 

Simplification  of  the  CAP  has  been  an  ongoing  process  since  the  early  nineties. 
However,  it  gained  additional  impetus  in  2005  with  the  “simplification  initiative” 
that  formed  part  of  the  Lisbon  Strategy  and  the  Commission’s  overall strategy  for 
simplification28.  In  addition  a  study  on  the  administrative  burden  arising  from  the 
Pillar  I  of  the  CAP  in  2003  implemented  in  200729  and  focussing  on  the  single 
payment scheme, found a large impact of public sector use of IT solutions, as well 
the  provisions  of  prefill  forms,  on  administrative  costs  and  burden  both 
administrations  and  beneficiaries.  Variations  in  administrative  burden  between 
Member States were also attributed to the size of national agricultural sectors and 
administrative  structure  and  processes  (e.g.  being  subject  to  rules  of  different 
regions,  assistance  in  filling  in  forms,  the  magnitude  of  certain  one-off  costs).  In 
2009, this culminated in the publication of the Communication “A simplified CAP for 
Europe  -  A  success  for  all”  which  brought  simplifications  to  the  Single  Payment 
Scheme  and  other  support  schemes.  What  followed  were  major  efforts  across  EU 
priority  areas,  including  agriculture  and  agricultural  subsidies,  under  the  “Action 
Programme  for  the  Reduction  of  the  Administrative  Burden”.  Moreover,  studies 
were  commissioned30  and  the  results  presented  by  the  “High  Level  Group 
Independent Stakeholders on Administrative Burdens”31. 

The CAP 2013 reform 
Simplification  has  also  been  at  the  core  of  the  CAP  2013  being  named  one  of  the 
core  objectives  and  key  requirements  in  Regulation  (EU)  No  1307/2013.32  It  thus 
neatly fits into the ongoing debate of previous CAP reforms33 particularly as certain 
measures  imply  direct  costs  and  could  interfere  with  beneficiaries’  business 
decisions.  

Building  on  the  existing  two-pillar  structure,  the  CAP  2013  reform34  aimed  to 
strengthen  the  economic  and  ecological  competitiveness  of  the  agricultural  sector, 
to promote innovation, to combat climate change and to support  employment and 
growth in rural area. New features of the reform package included: 
  A  new  architecture  of  direct  payments  (basic  payment  scheme/single  area 
payment  scheme  integrating  pre-conditions  for  active  farmers  to  access  other 
decoupled direct payments); 

  A  compulsory  payment  element  for  agricultural  practices  beneficial  for  the 

climate and the environment (the so-called ‘greening’ measures); and  

  A compulsory payment scheme for targeting young farmers: the  young farmers 

scheme. 

Member  States  also  got  the  possibility  to  further  target  direct  payments  through 
other  optional  schemes.  To  provide  more  targeted  support  to  small  and  medium 

28 http://europa.eu/rapid/press-release_MEMO-05-382_en.htm?locale=en  
29 DG AGRI,  Study on administrative burden reduction associated with the implementation of certain Rural Development 
measures  (2011).  The  study  analysed  four  groups  of  cost  drivers:  (i)  transposition  of  CAP  regulations,  (ii)  public 
administration,  (iii)  business  culture,  and  (iv)  national  or  cultural  differences  between  the  studied  Member  States 
(Denmark, France, Germany, Ireland and Italy). 

30 e.g. Capgemini (2010): EU Project on Baseline Measurement and Reduction of Administrative Costs 
31 http://europa.eu/rapid/press-release_MEMO-14-574_en.htm  
32 REGULATION (EU) No 1307/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 
33 http://ec.europa.eu/agriculture/simplification/index_en.htm  
34 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0672:FIN:en:PDF  

26 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

sized farms, Member States can apply a redistributive payment to the first eligible 
hectares  of  the  farms.  Moreover,  to  reduce  their  administrative  burden,  Member 
States can apply a specific and simplified support scheme for small farmers and are 
permitted  to  continue  to  grant  limited  coupled  support  to  potentially  vulnerable 
sectors.  Further,  Member  States  may  also  grant  payment  for  areas  with  natural 
constraints. 

The  CAP  2013  reform  also  provided  Member  States  with  additional  flexibility  in 
implementation choices. Particularly important is the flexibility to transfer 15%35 of 
their direct payment envelope between the two pillars.36  

Basic  payments  are  made  either  through  the  basic  payment  scheme  (BPS)  or  the 
single  area  payment  scheme  (SAPS).  Member  States  operating  the  BPS  are 
expected  to  shift  away  from  direct  payments  calculated  on  an  historic  basis, 
towards  a  uniform  (national  or  regional)  rate  per  hectare.  Member  States  that 
implement  SAPS,  which  is  a  flat  payment  per  hectare,  can  continue  to  do  so  until 
2020.  Moreover,  payments  under  both  schemes  are  to  be  reduced  for  those  in 
receipt of over €150,000 of basic payment. 
  Member States also have the  option 
to introduce a redistributive payment (subject to a maximum limit) as a proportion 
of  ‘first  eligible  hectares’  of  farms.  Member  States  that  allocate  over  5%  of  the 
national  ceiling  to  these  types  of  payments  may,  if  they  so  choose,  decide  not  to 
implement  the  reduction  of  payments  rules.  The  new  greening  measures  also 
provide  significant  flexibility  to  better  reflect  the  diversity  of  environmental  and 
production conditions across the EU. 

For  Pillar  II,  one  of  the  most  important  changes  is  the  removal  of  the  previously 
existing  four  axes37.  They  have  been  replaced  by  six  common  EU  priorities  and 
multiple focus areas. 

Priorities and focus areas of the rural development programmes 

1.  Fostering knowledge transfer/innovation in agriculture, forestry, and rural 

areas: 

 

 

 

Innovation and the knowledge base in rural areas; 

Links between agriculture and forestry and research and innovation; 

Lifelong learning and vocational training in the agricultural and forestry sectors; 

2.  Enhancing competitiveness of all types of agriculture and enhancing farm 

viability: 

  Restructuring of farms facing major structural problems, notably farms with a low 

degree of market participation, market-oriented farms in particular sectors and 

farms in need of agricultural diversification; 

  Generational renewal in the agricultural sector; 

3.  Promoting food chain organisation and risk management in agriculture: 

 

Primary producers into the food chain through quality schemes, promotion in local 

35  Some  Member  States  were  allowed  to  transfer  up  to  25%  of  their  Pillar  II  funds  to  Pillar  I,  see  Article  14(2)  of  Regulation  (EU)  No 
fiche  available  here:  https://ec.europa.eu/agriculture/sites/agriculture/files/direct-

information 

1307/2013  or  point  2.3  of 
support/direct-payments/docs/direct-paymenst-financial-mechanisms_en.pdf. 

the 

36  DG  AGRI  (2015).  Presentation  on  “The  CAP  towards  2020:  the  links  between  Pillar  I  and  Pillar  II”.  See  also 

Commission Delegated Regulation (EU) No. 1378/2014. 

37 Axis 1: Improving the competitiveness of the agricultural and forestry sector; Axis 2: Improving the environment and 
the  countryside;  Axis  3:  Improving  the  quality  of  life  in  rural  areas  and  encouraging  diversification  of  the  rural 
economy; Axis 4: LEADER. 

27 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

markets and short supply circuits, producer groups and inter-branch organisations; 

 

Farm risk management; 

4.  Restoring, preserving and enhancing ecosystems dependent on agriculture 

and forestry: 

  Biodiversity, including in Natura 2000 areas and high nature value farming, and 

the state of European landscapes; 

  Water management; 

  Soil management; 

5.  Promoting resource efficiency and supporting the shift towards a low carbon 

and climate resilient economy in agriculture, food and forestry sectors: 

 

 

Efficiency in water use by agriculture; 

Efficiency in energy use in agriculture and food processing; 

  Supply and use of renewable sources of energy, of by products, wastes, residues 

and other non-food raw material for purposes of the bio-economy; 

  Reduce nitrous oxide and methane emissions from agriculture; 

  Carbon sequestration in agriculture and forestry; 

6.  Promoting social inclusion poverty reduction and economic development in 

rural areas: 

  Diversification, creation of new small enterprises and job creation; 

 

Local development in rural areas; 

  Accessibility to, use and quality of information and communication, technologies 

(ICT). 

Source: DG AGRI (2015) 

Aside from implementation modalities and technicalities, Member States can choose 
the focus  of the measures  under these six priorities. There are also possibilities  to 
link the two pillars by:  
  complying with greening through equivalent measures under Pillar II; 
  supporting  young  and  small  farmers  through  both  Pillar  I  and  Pillar  II 

interventions; 

  supporting areas facing natural constraints either under Pillar I or Pillar II; 
  providing  an  option  to  link  the  risk  management  toolkit  under  Pillar  II  to  direct 
payments and market measures under the common market organisation (CMO); 
  providing  cooperation  support  under  Pillar  I,  Pillar  II  and  market  measures 

(CMO). 

Overall,  because  of  the  additional  flexibility  introduced  by  the  CAP  2013  reform, 
attainment  of  the  CAP  objectives  (as  specified  in  Art.  110  (2)  of  Reg.  (EU)  No 
1306/2013  of  the  European  Parliament  and  of  the  Council)  and  administrative 
complexity  can  be  substantially  influenced  by  the  range  and  combination  of 
implementation  choices  made  by  Member  States  under  both  the  Pillar  I  and  Pillar 
II. 

Administrative burden and simplification in the CAP 2013 reform 
Given  the  complex  and  multi-faceted  nature  of  the  CAP  2013  reform,  it  is  not  an 
easy  task  to  assess  the  administrative  costs  associated  to  CAP  regulation  and  its 
implementation.  Generally,  throughout  the  CAP  implementation  process,  the 
for  beneficiaries,  managing 
range  of  administrative  requirements 

28 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

authorities  and  paying  agencies  has  grown.38  National  and  Regional 
further  definition  and  description  of  measures  within  Rural 
regulations, 
Development  Programmes,  administrative  requirements  for  the  management  of 
specific  projects  co-funded  under  RDP  measures,  and  potential  yearly  changes  of 
priorities,  mean  that  even  within  one  Member  State  it  is  extremely  difficult  to 
describe  and  assess  the  highly  complex  situation  of  policy  implementation. 
Comparing across Member States, the CAP 2013 reform contributed additional 
complexity 
even  more 
implementation 
heterogeneous, as it gave Member State greater autonomy in the implementation 
of  measures  and  regulations  for  both  Pillar  I  and  II.  At  the  level  of  national 
authorities,  the  diversity  of  CAP  implementation  choices  means  that  it  is  almost 
impossible to make an overall assessment of CAP administrative requirements, and 
their  consequential  costs.  It  is  nevertheless  possible  to  select  a  relevant  range  of 
different 
implementation  options  across  EU  Member  States  and  different 
institutional settings that characterise such implementation. 

by  making 

processes 

The flexibility provided under the CAP 2013 reform aims to allow Member States to 
find  the  best  solution  tailored  to  their  specific  context  and  thus  reduce 
administrative  burden.  For  instance,  Member  States  have  favoured  different 
mechanisms  for  allocating  payment  entitlements  (e.g.  exclusions  of  some  areas, 
transition  to  flat  rate  value,  different  flat  rate  values  depending  on  the  region). 
However,  the  impact  assessment  conducted  by  the  European  Commission  before 
the  CAP  2013  reform  (based  on  the  initial  Commission  proposal)  pointed  to 
concerns  among  stakeholders  that  these  different  mechanisms  might  not  result  in 
the  most  efficient  choices  for  them.  In  addition,  it  provided  some  early indications 
of  the  related  administrative  burden,  particularly  for  compliance  with  information 
obligations  arising  from  Pillar  I  regulations  (Annex  8  -  Simplification39).  The 
assessment came at a very early stage of discussions for new CAP regulations, but 
provides  a  basis  for  the  assessment  under  this  study.  Notably,  the  impact 
assessment  provided  estimates  of  the  change  (addition)  in  administrative  costs 
arising from changes in legal obligations for direct payments post-2013: 
  about  €354  million  estimated  for  businesses  (of  which  about  80%  due  to  pure 

administrative burden);  

  about  €32  million  estimated  for  public  authorities  (of  which  about  5%  due  to 

pure administrative burden).40 

From  these  estimates,  compared  to  the  previous  CAP  regulation,  the  CAP  2013 
reform  was  expected  to  cause  an  approximately  15%  increase  of  administrative 
cost of the direct payment system.41 

The impact assessment also highlighted  how changes in administrative burden are 
strongly affected by policy choices. For example, the small farmers scheme,  where 
great  efforts  have  been  made  to  simplify  requirements  for  this  beneficiary  group, 
resulted  in  an  estimated  total  reduction  of  €126  million.  Conversely,  greening 

38European Parliament, Directorate-General for Internal Policies, Policy Department D. Budgetary Affairs (2014): “Gold-
plating' in the EAFRD: To what extent do national rules unnecessarily add to complexity and, as a result, increase the 
risk  of  errors?”,  available  at:  http://www.europarl.europa.eu/RegData/etudes/etudes/join/2014/490684/IPOL-
JOIN_ET(2014)490684_EN.pdf  

39  European  Commission  (2011) :  CAP  Impact  Assessment  -  Annex  8,  see :  http://ec.europa.eu/agriculture/policy-

perspectives/impact-assessment/cap-towards-2020/report/annex8_en.pdf 

40 The average wage-per-hour was adjusted to take account of the differing wage levels in EU Member States (based on 

PPS  coefficients) 

41 

European 

Commission 

(2011) : 

CAP 

Impact 

Assessment 

- 

Annex 

8, 

p. 

24., 

see : 

http://ec.europa.eu/agriculture/policy-perspectives/impact-assessment/cap-towards-2020/report/annex8_en.pdf  

29 

 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

schemes  aimed  at  ensuring  that  payments  go  to  environmentally  sustainable 
solutions,  processes  and  products,  were  estimated  to  create  additional  costs  for 
businesses (i.e. farmers) of in total €299 million. 

In 2014, a screening exercise launched by Commissioner Hogan42, which assessed 
agricultural  policy  in  its  entirety,  identified  elements  that  could  be  simplified  and 
that could be better left to the Member States.43 In this respect, the following were 
identified among the priorities: 
  Every  policy  proposal  will  be  screened  and  evaluated  in  terms  of 
simplification, so that simplification potential will be reinforced in the legislative 
process where possible; 

  The  new  direct  payments  regime  will  be  reviewed  in  terms  of 
administrative burden, in particular - but not limited to - the rules on EFAs. 

In 2016, a study on implementation of the 2014 – 2020 CAP, conducted by Ecorys44 
provides  a  preliminary  assessment  of  the  administrative  burdens  for  both  public 
administrations and beneficiaries. 

Previously identified sources of administrative burden arising from CAP 

implementation 

  Adaptation  of  the  IACS.  Adapting  IACS  to  support  the  management  of  new  CAP 

requirements  has  proved  a  complex  task  for  public  authorities.  Specifically,  control 

requirements  and  requirements  on  the  on-the-spot  checks  that  are  often  perceived 

by  public  authorities  to  be  too  rigid,  leading  to  undue  administrative  costs.  To 

minimise  negative  impacts,  administrations’  efforts  have  focussed  on  making 

implementation  choices  on  those  areas  where  administrative  costs  of  meeting 

implementation requirements were not expected to overwhelm benefits; 

 

Insufficient  past  investments  in  LPIS.  Public  authorities  that  were  unable  to 

make  sufficient  earlier  investments  to  assure  efficient  information  systems  for 

mapping  landscape  features  (e.g.  remote  control,  satellite  systems),  appear  to 

encounter particular difficulties in the proper implementation of new CAP regulations; 

 

Inefficient  MS  systems  for  on-the  spot  controls:  systems  set  up  for  such 

controls are not organised in an efficient manner to avoid unnecessary burdens; 

  Recalculation  of  eligibility  and  payment  criteria.  New  requirements  (e.g. 

Greening, BPS) necessitating accurate analysis of local trends and needs (in extreme 

cases resulting in 1 000 pages of analysis) resulted in significant additional burden on 

administrations  with  limited  capacity/experience  (e.g.  new  Member  States)  or  with 

more complex country  systems involving  decentralised implementation systems that 

require  decisions  to be  coordinated  across  various  governance  levels  (e.g.  Southern 

Member States);  

 

Interplay  of  CAP  regulations  across  the  two  pillars.  Particularly  in  relation  to 

land  measures  and  also  cross-compliance,  implementation  of  RDP  is  challenging  for 

some countries. This seems to be more the case for some Southern and New Member 

States  with  more  limited  capacity  and  capabilities  and  complex  implementation 

systems  that  create  challenges  for  the  promotion  of  synergies  between  central  and 

regional authorities. 

Source: Ecorys (2016) 

42 https://ec.europa.eu/agriculture/cap-overview/simplification_en  
43 http://europa.eu/rapid/press-release_SPEECH-14-2343_en.htm  
44  European  Commission 

(2016):  Mapping  and  analysis  of 

the 

implementation  of 

the  CAP,  see: 

https://ec.europa.eu/agriculture/sites/agriculture/files/external-studies/2016/mapping-analysis-implementation-
cap/fullrep_en.pdf  

30 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The 2017 open public consultation on simplifying and modernising the CAP, 
corroborates  the  findings  of  the  Ecorys  study.45  Respondents  highlighted  that  the 
amount  and  accuracy  of  the  required  paperwork  and  the  complexity  of 
continuously changing applications for premia, subsidies or grants are the 
most important factors that add to their administrative burden. The stacking 
of  different  rules  related  to  CAP  instruments  and  measures,  and  the  lack  of 
transparency related to controls were indicated as factors increasing complexity and 
the  perceived  risk  of  being  sanctioned  or  penalised.  Furthermore,  many 
respondents indicated  that the burden relating to greening seems disproportionate 
to  its  environmental  impacts,  with  specific  references  made  to  the  definition  of 
permanent  grassland  and  the  ecological  focus  areas.  Respondents  suggested  that 
simplification  opportunities  could  arise  from  granting  more  flexibility  to  farmers  in 
implementing environmental measures and through adopting a more results-based 
approach,  which  could  potentially  be  more  effective.  Furthermore,  they  suggested 
the  CAP  could  be  simplified  through  the  use  of  ICT  applications  and 
databases  to  reduce  controls,  especially  when  combined  with  e-
government services. 

At  the  end  of  2017,  the  European  Commission  published  a  communication  on  the 
Future  of  food  and  farming46,  which  recognised  the  need  to  “significantly 
decrease  bureaucracy  and  administrative  burden”.  The  communication  recognised 
that  EU  level  requirements  are  detailed  and  feature  tight  controls,  penalties  and 
audit arrangements. Considering the highly diversified farming landscape in Europe, 
the role of the union should be to set basic policy parameters, while placing greater 
responsibilities  on  Member  States  to  decide  how  they  will  reach  policy  targets, 
including  a  larger  role  in  designing  the  compliance  and  control  framework.  In 
conclusion,  the  spirit  of  the  communication  is  to  reduce  the  prescriptive  nature  of 
the CAP at EU level, thereby favouring more integrated and innovative approaches. 
Furthermore,  the  future  delivery  system  should  aim  to  be  more  result-driven, 
making  use  of  opportunities  to  reduce  the  cost  and  burden  of  control  though 
simplified cost options and use of modern technologies. 

45  European  Commission,  Directorate-General  for  Agriculture  and  Rural  Development  (2017):  “Modernising  and 
Simplifying  the  Common  Agricultural  Policy:  Summary  of  the  results  of  the  Public  Consultation”,  available  at: 
https://ec.europa.eu/agriculture/sites/agriculture/files/consultations/cap-modernising/summary-public-consul.pdf  

46 

European  Commission 

(2017).  COM 

(2017) 

713 

final. 

The 

future 

of 

food 

and 

farming. 

https://ec.europa.eu/agriculture/sites/agriculture/files/future-of-
cap/future_of_food_and_farming_communication_en.pdf  

31 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The  Omnibus  Regulation,  which  sets  out  the  financial  rules  applicable  to  the 
general budget of the Union, includes a proposal for a further simplification exercise 
of  the  four  CAP  regulations  to  the  benefit  of  both  farmers  and  national 
authorities47,48.  The  agricultural  provisions  of  the  Omnibus  Regulation49  were 
approved  on  12  December  2017  and  entered  into  force  on  1  January  2018.  In 
terms of simplification, key amendments include: 
  Direct  Payments  Regulation  (Reg.  (EU)  No.  1307/2013).  The  active  farmer 
definition  has  been  made  optional  to  Member  States,  greater  flexibility  is  given 
to Member States in the rules related to Permanent Grassland, and other aspects 
of the Greening payment are simplified; 

  Rural  Development  Regulation  (Reg.  (EU)  No.  1305/2013).  The  use  of 
financial  instruments  is  simplified,  and  coherence  with  other  EU  Structural  and 
Investment Funds is improved; 

  Horizontal  regulation  (Reg.  (EU)  No.  1306/2013).  The  procedure  for 
is  simplified,  and  is  placed  under  single 

controlling  financial  discipline 
management of the Commission. 

Proposed CAP post 2020 
In  June  2018,  the  European  Commission  published  its  proposal  for  the  CAP  post-
2020.  The  legislative  changes  proposed  by  the  European  Commission  revolve 
around  modernisation  and  simplification.  Furthermore,  the  CAP  2013  reform  will 
shift  away  from  rules  and  compliance  towards  a  more  results  and  performance-
oriented approach, while allowing greater flexibility to Member States.  

The  main  features  of  the  Commission’s  proposal  for  a  modernised  and  simplified 
CAP include: 
  a focus on strategy and objectives; 
  a fairer subsidy system; 
  a focus on environmental and climate actions. 

Member  States  will  have  more  flexibility  to  design  measures  targeting 
national  and  regional  needs,  and  more  flexibility  when  agreeing  strategic 
plans  with  the  EU  for  the  application  of  controls,  which  should  provide  a 
better fit to the package of measures they put in place. Member States will produce 
performance reports that show how these measures have been applied.  

The  figure  below  presents  the  nine  objectives  of  the  future  CAP  set  out  in  the 
Commission’s  proposal.  Member  States’  national  strategic  plans  will  be  subject  to 
approval by the Commission and Member States will have to report on progress on 
an  annual  basis,  with  under-performance  subject  to  possible  suspension  of 
payments.  

47  Council  of  the  EU  (2017).  Omnibus  Regulation:  Agricultural  rules.  http://www.consilium.europa.eu/en/policies/cap-

simplification/omnibus-regulation-agriculture/  

48  Council  of 

regulation:  Council  adopts  new,  simplified,  agricultural 
http://www.consilium.europa.eu/en/press/press-releases/2017/12/12/omnibus-regulation-council-adopts-new-
simplified-agricultural-rules/  

the  EU  (2017).  Omnibus 

49 PRE-CONS 56/17. http://www.consilium.europa.eu/media/32072/pe00056en17.pdf  

rules. 

32 

 
 
 
 
 
 
 
 
 
 
  
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 5  

CAP objectives for 2020 - 2026 

Source: https://www.agronaplo.hu/nagyvilag/common-agricultural-policy-post-2020-simplification-and-

modernisation  

As  with  the  CAP  2013  reform,  Member  States  will  have  the  possibility  to  transfer 
15%  of  their  CAP  allocations  between  the  two  pillars.  In  addition,  Member  States 
may  choose  to  transfer  an  additional  15%  from  Pillar  I  to  Pillar  II  to  support 
environmental  and  climate  actions.  The  proposal  sees  IACS  as  a  key  element  of 
control of CAP expenditure. 

Direct  payments,  which  will  continue  to  represent  74%  of  the  overall CAP  budget, 
will  remain  at  the  core  of  income  support  to  farmers.  Payments  will  occur  in  the 
form  of  an  annual  decoupled  payment  per  eligible  hectare.  The  CAP  after  2020 
aims  to  change  the  distribution  of  financial  means  across  farm  holdings 
(20% of farmers receiving 80% of payments), by proposing an updated system of 
interventions.  This  system  will  encourage  small  and  medium-sized  farms,  via  a 
reduction  of  payments  exceeding  €60,000  and  an  aid  capping  of  payments 
exceeding  €100,000.  Member  States  will  have  to  set  aside  an  amount 
corresponding  to  at  least  2%  of  the  annual  direct  payments  allocation  to  support 
young farmers.  

The  CAP  after  2020  will  require  farmers  to  achieve  a  higher  level  of  ambition 
through  both  mandatory,  and  incentive-based  measures.  A  mandatory  proportion 
(30%) of payments to farmers under Pillar II will be conditional upon environmental 
and  climate  requirements.  Greening  will  be  discontinued,  but  several  of  its 
principles  will  be  carried  forward  under  the  conditionality  compliance 
structure.  In  addition,  it  will  be  mandatory  for  Member  States  to  introduce  eco-
schemes to incentivise  farmers to go beyond  mandatory requirements with regard 
to  environmental  and  climate  action.  Participation  in  these  eco-schemes  will  be 

33 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

voluntary  for  farmers.  Overall,  it  is  expected  that  40%  of  the  CAP  budget  will 
contribute to climate action.  

The  increased  opportunities  afforded  by  technology  are  a  key  element  of 
the  proposal  for  the  CAP  after  2020.  The  draft  IACS  legislation,  which  retains  the 
key elements of the current system, includes the requirement to introduce an area 
monitoring  system  that  allows  regular  and  systematic  observation,  tracking,  and 
assessment  of  agricultural  activities  and  practices  on  agricultural  areas  using 
Copernicus  Sentinels  satellite  data  or  other  equivalent  data.  Although  Member 
States  will ultimately  be  responsible  for  designing  their  own  control systems,  such 
technologies may lead to a decrease in the number of on-the-spot checks. 

3.2  Description of IACS and its major components  

For the EU, the IACS is a fundamental tool in the achievement of policy objectives 
and  the  management  of  the  risk  to  the  EAGF/EAFRD.  It  has  been  the  key  control 
mechanism  over  aid  application  and  payment  claim  declarations  made  by  farmers 
and  beneficiaries  since  its  introduction  in  1992.  Member  States  are  required  to 
develop  and  then  adapt/replace  systems  and  processes  to  meet  both  policy  and 
technological requirements. IACS, its components and related aspects are the 
focus of this study. 

In  compliance  with  EU  regulations50,  Member  States  management  and  control  of 
CAP expenditure for direct payments (e.g. BPS, SAPS) and some rural development 
schemes  is  undertaken  using  IACS51,  which  consists  of  databases  of  holdings, 
applications, land, and for Member States applying the BPS, payment entitlements. 
Member  States  operate  IACS  to  ensure  that  payments  are  made  correctly 
irregularities  are  prevented  and,  if  revealed  by  controls,  are  properly  followed  up, 
as  well  as  making  sure  that  undue  payments  are  recovered.  Failure  to  properly 
implement  the  required  key  and  ancillary  controls  can  result  in  the  EU  applying 
financial corrections to recover sums considered to present a risk to the fund. IACS 
covers  about  94%52  of  expenditure  made  under  the  European  Agricultural 
Guarantee  Fund  (EAGF)  and  approximately  53%53  of  overall  expenditure  for  the 
relevant  measures  made  under  the  European  Agricultural  Fund  for  Rural 
Development  (EAFRD).  The  remaining  proportions  of  these  funds  are  appointed  to 
rural  development 
non-IACS  measures  (i.e.  market  measures,  non-IACS 
measures). 

The cost and complexity of implementing IACS is often identified by Member States 
as  challenging  for  administrators  and  beneficiaries,  particularly  during  periods  of 
significant  reforms.  Their  implementation  approaches  are  shortly  presented  in  the 
textbox below.  

50 https://ec.europa.eu/agriculture/direct-support/iacs_en  
51  See  European  Parliament  and  Council  Regulation  (EU)  No  1306/2013,  Commission  Regulation  (EU)  No  640/2014, 

Commission Regulation (EU) No 809/2014 

52 Ecorys calculation based on expenditures in 2015,  see: http://www.europarl.europa.eu/factsheets/en/sheet/104/the-

common-agricultural-policy-in-figures  

53  Ecorys  calculation  based  on  https://ec.europa.eu/agriculture/sites/agriculture/files/rural-development-2014-

2020/country-files/common/rdp-list_en.pdf  

34 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Implementation of IACS 

Member  States  have  adopted  a  range  of  technological  approaches  to  meet  IACS 

requirements.  Some  have  developed  systems  linking  the  various  elements  together  to 

perform  the  necessary  checks.  In  other  instances,  they  have  installed  commercially 

available IACS/CAP specific software packages with pre-loaded common rules that can be 

further  configured  to  meet  national  and  regional  implementation  policies  and  choices. 

Some use  web-enabled applications that  allow beneficiaries to apply online, whilst others 

allow use trusted third parties or regional offices.  

In some Member States IACS is developed centrally. In others, some elements such as the 

entitlement  register  are  developed  and  held  at  national  level  and  LPIS/claims  databases 

are  developed and  maintained at  regional level.  In  other instances, paying agencies take 

feeds  of  data  from  registered  administrations  elsewhere;  for  example  where  farmer’s 

registration  is  managed  by  a  different  government  department  or  agency.  Given  the 

dynamic  nature  of  the  regulatory  environment  some  Member  States  have  invested  in 

business  rules  engines  that  allow  rules  to be  reconfigured  relatively  swiftly, whilst  others 

may use a hard-coded solution. Some or all elements can be managed and developed in-

house,  or  alternatively  outsourced  to  IT  or  service  companies.  All  these  variables  may 

have  an  impact  on  the  speed,  cost  and  complexity  of  the  implementation  of  regulatory 

changes. 

Key IACS changes and technological requirements  
In  parallel  with  the  major  policy  changes  affecting  the  IACS  legislation,  which  are 
summarised  in  the  previous  section,  changes  in  requirements  coupled  with 
technological  advances  have  created  both  needs  and  opportunities  to  strengthen 
and enhance IACS. Key among the requirements and other factors influencing the 
shape of IACS are the following: 
  requirements to cross-check claims under animal premia, voluntary coupled 
support and cross-compliance obligations against animal registration databases; 
  opportunities  to  replace  physical  on-the-spot  checks  with  the  use  of 

 

remote sensing satellite imagery; 
information requirements  for  LPIS, covering the incorporation of up-to-date 
imagery  or  other  mapping  data  spatially  recording  each  agricultural  parcel  and 
allowing  the  electronic  cross-check  against  aid  applications  and  payment  claims 
under direct payment and relevant rural development schemes; 

  requirements  to  pre-populate  aid  applications  and  payment  claims  with 
recorded  control  data  on  previously  declared  land  parcels  and  entitlements 
including providing each claimant with up-to-date maps; 

  the  opportunity  to  submit  a  single  annual  application  for  all  IACS-related 

aid schemes; 

  the  opportunity  to  allow  electronic  submission  of  aid  applications  and 
payment claims whilst still providing an equivalent service for those unable to do 
so; 

  the  introduction  of  additional  information  requirements  for  greening 
including  additional  spatial  layers  in  the  LPIS  to  control  ESG  and  chosen  EFA 
features; 

  the  requirement  to  incrementally  introduce  GSAA  allowing  electronic  and 
spatial identification, as well as amendments to beneficiaries’ claims and land so 
that by 2018, 100% of land on aid applications and payment claims are covered;  

35 

 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

  provisions to allow Sentinel satellite and other Earth observation data to 
be used as evidence in control checks and cross-compliance requirements, along 
with  the  ability  to  use  evidence  such  as  geo-tagged  photos  or  other  relevant 
evidence  submitted  by  the  beneficiary  and  information  from  drones  or  other 
aerial imagery. 

regulations  allow  Member  States 

Implementation approaches 
EU 
to  choose  IACS  policies  and 
implementation approaches that best suit their needs. As a result, variations 
exist  in  Member  States’  implementation  of  the  different  systems  composing  the 
IACS, with the following models being identified: 
  Centralised  model:  all  IACS  databases  and  processes  are  managed  and 

administered by one central agency; 

  Regionalised  model:  responsibilities  are  shared  between  federal/central  and 
regional  authorities/paying  agencies.  For  instance,  farmer  and  animal  registers, 
as well as the entitlement register, may be managed centrally, while claims and 
land controls are managed at the regional level; 

  Multi-agency involvement: Member States may opt to have different agencies 
administering EAGF and EAFRD claims, or may use more complex arrangements 
for control and administration through local authorities and delegated inspection 
and control bodies. 

Figure 6  

Administrative structure by Member State 

Source: Author’s own elaboration 

36 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Other implementation dimensions that are also at the discretion of Member States 
include: 
  entitlements type, i.e. regionalised on a geographic or topographic basis; 
  range of landscape features included in EFA; 
 

inclusion of non-mandatory schemes (e.g. schemes for small farmers and VCS); 
and 

  options for quantification of grassland areas. 

Member  States  have  pursued  different  IT  implementation  approaches. 
Some  use  in-house  development  teams  and  others  outsource  part  or  all  the 
development  to  third  party  companies.  Further,  some  Member  States  have  a 
network  of  third-party  groups  or  structures  on  hand  to  assist  or  receive  digital 
applications  and  transfers,  while  others  provide  web-enabled  services  that  allow 
beneficiaries  to  enter  their  applications  directly.  And,  in  addition,  levels  of  digital 
sophistication  of  beneficiaries  and  administrations  also  differs  across  and  within 
Member States. 

Differences  in  Member  States  choices  over  the  various  elements  outlined  above 
have  the  potential  to  influence  the  complexity  and  costs  of  implementing  and 
managing IACS, particularly when changes take place. Chapter 4 of this report sets 
out to identify and understand these differences and analyse their impact on costs.  

A  specific  topic  of  interest  is  whether  advances  in  the  availability,  frequency  and 
accuracy  of  satellite  systems  (e.g.  Sentinel  systems)  can  enhance  or  replace 
existing  methods  of  land  data  collection,  such  as  aerial  photography  and  national 
land  surveys.  More  broadly,  it  is  important  to  identify  if  there  are  assistive 
technologies  currently  in  use  or  being  considered  by  administrators,  beneficiaries 
and  tin  he  wider  market  that  have  the  potential  to  reduce  administrative  burden. 
For example, are there robust geo-tagging solutions that can assist in areas such as 
confirmation of crop type or achievement of retention periods, and that can provide 
alternatives  to  more  traditional  control  methods?  Similarly,  it  is  important  to 
consider  the  potential  impact  of  future  policy  changes  that  under  consideration  on 
the IACS framework and technology options and solutions.  

3.2.1 IACS’ main components 

The main components of the  IACS are shown in the following figure and described 
thereafter. 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Figure 7 

IACS and its main components 

Source: Ecorys 2018 

Farmers’ register 
The  farmers’  register  is  a  single  system  for  recording  the  identity  of  each 
farmer claiming under an aid scheme administered through IACS. It covers 
beneficiaries, identified as “Active Farmers”, making claims for basic payments and 
under other related aid schemes. The system should uniquely identify each holding 
and  apply  appropriate  controls  over  business  structures,  mergers,  splits  and 
changes,  in  order  to  ensure  that  artificial  structures  are  not  created  so  as  to  gain 
inappropriate benefits from EU schemes. 

Animal register 
Where  Member  States  decide  to  have  voluntary  or  other  IACS-related  schemes 
based  on  animal  numbers  or  identities,  then  the  IACS  should  also  include  the 
relevant  electronic  registers  used  to  identify  and  track  animal  birth  and 
movement. 

Entitlements register 
The  entitlements  register  is  a  database  that  uniquely  identifies  each  payment 
entitlement,  its  value,  when  it  was  established  or  surrendered,  and  who  owns  or 
leases  it.  It  is  updated  when  entitlements  are  transferred  between  farmers.  The 
register  is  cross-checked  against  other  databases  and  is  the  key  basis  for 
calculating  payment  values.  It  also  maintains  and  allows  applications  and 
allocations from the national reserve. 

38 

IACS systems & databasesFarmers’ RegisterData on farmers’ identities, holdings and their changesAnimal RegisterData on animal births and movementEntitlement registerData on payment entitlements (e.g. value, owner)LPISData on reference parcels, geo-spatial information on llocation and typeClaims DatabasesData on claimants details from previous applicationsControl ProcessesPre-populated control dataIACS enables management and controls for: BPS/SAPSCross complianceGreeningRural development measuresYoung farmers scheme, Small farmers scheme, Voluntary coupled support, National reserve etc. 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Claims Databases and control processes 
The  claims  database  is  an  integrated  database  for  recording  details  for  each 
claimant  taken  from  their  aid  applications  and  covering  at  least  the  previous 
10 years.  Provided  compatibility  between  systems  is  maintained,  claims  databases 
may  be  decentralised.  The  database  is  managed  following  an  annual  cycle,  where 
farmers  submit  applications  for  direct  payment  and  IACS-relevant  payment 
schemes within a defined time period, and containing details of their land, number 
of payment entitlements to be activated, and scheme specific information. Member 
States  must  prepopulate  the  application  with  the  relevant  control  data  they  hold, 
which  should  be  available  electronically  to  farmers  in  a  geo-spatial  format  that 
allows  them  to  make  any  necessary  amendments.  The  application  covers  all 
relevant direct payment schemes, such as greening and small farmers’ scheme, as 
well as relevant rural development measures. 

3.2.2 Land Parcel Identification System (LPIS) 

LPIS is a geographic information system that allows the IACS to geolocate, display 
and  spatially  integrate  its  constituent  data.  LPIS  contains  reference  parcels,  for 
which  Member  States  need  to  ensure  correct  quantification  of  maximum  eligible 
area  and  must  check  that  all  declared  agricultural  parcels  for  IACS  schemes  are 
properly  identified  inside  of  reference  parcels.  Information  about  location  of 
reference  parcels  and  maximum  eligible  area  must  be  provided  to  farmers  as  part 
of their aid applications. From 2018, all aid applications must include pre-populated 
and amendable geo-spatial information including the location and size of ecological 
focus areas (EFAs). 

LPIS should also include data or layers that support a range of eligibility checks; for 
example,  EFA,  permanent  grassland  layer,  Environmentally  Sensitive  Grassland, 
Natura 2000 and Rural Development measures. LPIS may also be used to assist in 
cross-compliance controls. 

LPIS  is  maintained  using  aerial  or  satellite  ortho-photos  (imagery),  national 
mapping  systems,  validated  farmer  notifications,  and  results  of  on-the-spot 
controls.  Member  States  must  ensure  that  the  spatial  data  is  sufficiently  accurate 
and up-to-date that they allow effective checks of declared areas to be performed. 
There  is  a  regulatory  obligation  for  MS  to  perform  an  annual  quality  self-
assessment  of  LPIS,  with  the  results  provided  to  the  EU  for  consideration.  If  LPIS 
consistently  meets  the  quality  criteria,  it  can  enable  Member  States  to  reduce  the 
number of on-the-spot controls.  

Reference parcels 
Reference parcels are at the core of application process. A reference parcel is “a 
uniquely  identified  and  geographically  delimited  agricultural  area”.54 
Farmer’s  applications  to  the  paying  agency  contain  all  claims  for  the  current  year 
and  the  area  of  all  reference  parcels,  such  as  agricultural  parcels.  Regulations 
define an agricultural  parcel as “a continuous area of land, declared by one 
farmer, which does not cover more than one single crop group”. Agricultural 
parcels can change depending on the farming priorities, such as crop rotation, set-
aside,  aggregation  or  subdivision  of  fields,  different  extent  of  use,  market 

54 Articles 2(25) and 5(1) of Regulation (EU) No 640/2014 as well as Article 4(1)(e) of Regulation (EU) No 1307/2013 

39 

 
 
 
 
 
 
 
 
  
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

considerations etc. Therefore, for the purpose of unique identification of agricultural 
parcels, reference parcels were introduced by the CAP regulations. 

Reference  parcels  serve  as  a  spatial  container  for  allocation  and  identification  of 
agricultural  parcel(s).  EU  regulations  offer  Member  States  a  choice  between 
different types of reference parcels.  The four types of reference parcels applied by 
the Member States are summarised in the table below.  

Table 2  

Different types of reference parcels 

Agricultural 
parcel (Single 
Crop) 

Farmer’s Block 

Physical Block 

Cadastral parcel 

e
l
p
m
a
x
E

s
e
r
u
t
a
e
f
n
i
a
M

e
c
r
u
o
S

  One single crop 

group; 

  single farmer;  
  annual life cycle. 

  One or several 
crop groups; 
  single farmer; 
  multi-annual life 

  One or several 
crop groups;  
  one or several 
farmers;  

cycle. 

  semi-permanent. 

Farmer’s application 

Farmer’s application 

Administrative 
classification 

  Do not always 

match 
agricultural 
pattern; 
  one or several 
farmers;  

  object life cycle in 

database 
depending on 
property rights. 

Cadastre, land 
register and farmers 
application 

Source: Zielinski, R., Sagris, V., 2009. Summary Results of the LPIS Survey 2008. EUR 23828 EN. 
Luxembourg (Luxembourg): OPOCE; 2009. JRC51413. 

Regulation  (EU)N°1307/2013  defines  ‘agricultural  area’  (Art.  2)  as  any  area  taken 
up  by  arable  land,  permanent  grassland/pasture  or  permanent  crops.  In  practice, 
the four main types of agricultural area can have very different appearance on the 
image  or  in  the  field,  depending  on  geographical  location  and  agricultural  practice 
of each Member State. To provide for common interpretation of possible sub-types, 
the  Land  Cover  Classification  System  (LCCS)  originally  developed  by  the  FAO  is 
used. There is, however, an ongoing process of re-definition of LCCS in accordance 
with the INSPIRE Directive for land cover. The  maximum eligible area (MEA) is the 
officially  known  and  recorded  maximum  quantity  of  agriculture  land,  read  eligible 
hectare, per reference parcel. This indicator is used in cross-checks with other IACS 
registries  for  possible  over  declarations  for  the  reference  parcel.  The  figure  below 
presents  the  distribution  of  different  types  of  reference  parcels  used  in  each  EU 
Member State in 2015.  

40 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Figure 8 

Distribution of different reference parcel types across the EU in 2015. 

Source: Author’s own elaboration based on the European Court of Auditors and the 2014 and 2015 LPIS 

Quality Assessment Reports 

Another term with key importance for the LPIS is eligible hectare, as defined by the 
Regulation  (EU)  N°1307/2013.  Eligible  hectare  refers  to  any  agricultural  area  of  a 
holding that is: (i) used for an agricultural activity or, where the area is also used 
for non-agricultural activities, is predominantly used for agricultural activities, or (ii) 
certain  areas  that  gave  a  right  to  payments  under  the  single  payment  scheme 
(SPS) or the single area payment scheme (SAPS) in 2008.  

Member  States  need  to  ensure  correct  quantification  of  maximum  eligible  area  of 
reference parcels and check that all declared agricultural parcels for IACS schemes 
are  properly  identified inside  the  reference  parcels.  Information  about  the  location 
of  reference  parcels  and  maximum  eligible  area  must  be  provided  to  farmers  as 
part  of  their  aid  applications.  From  2018,  all  aid  applications  must  be  submitted 
through geo-spatial aid application (GSAA), which should contain pre-populated and 
amendable  geo-spatial  information  including  the  location  and  size  of  ecological 
focus  area  (EFA).  As  described  earlier,  for  the  purposes  of  administrative  checks, 
LPIS should include data or layers allowing a range of eligibility checks to be made. 

41 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Article 5 of Regulation (EU) N°640/2014 specifies that the identification system for 
agricultural  parcels  shall  operate  at  reference  parcels  level.  Member  States  shall 
ensure that (i) declared agricultural parcels are reliably identified through reference 
parcels and (ii) aid applications and payment claims are furnished with information 
that  enables  each  agricultural  parcel  to  be  located  and  measured.  For  each 
reference parcel, the database shall contain information that allows to: 
  Determine  a  maximum  eligible  area  for  the  purpose  of  the  support  for  direct 

payments schemes of Regulation (EU) No 1307/2013; 

  Determine a maximum eligible area for the purpose of the area-related for rural 

development measures of Regulation (EU) No 1305/2013; 

  Locate and determine the size of EFA; 
  Determine  whether  provisions  of  Regulations  mentioned  in  Article  5(d)  of 

R640/2014 apply. 

LPIS in practice 
LPIS  uses  aerial  or  satellite  ortho-photos  (imagery)  to  provide  necessary 
information  that  can  be  aligned  with  the  reference  parcels  to  quantify  the  eligible 
area.  Thus,  imagery  with  very  high  spatial  resolution  is  a  key  element  for  LPIS 
quality. A three-year cycle of imagery update appears to be the most efficient and 
reference  parcels’  layer  is  subject  to  regular  update  as  soon  as  new  imagery  is 
available.  In  addition,  LPIS  contains  other  spatial  data  sets  from  multiple  sources 
that, together with reference parcels classifications, permit quantification of eligible 
area  and  enable  checking  of  commitments  and  obligation.  Therefore,  the  LPIS 
already  takes  advantage  of  the  synergy  with  other  EU  policies  including  data  sets 
created for those policies; e.g. environmental regulations on protected areas Natura 
2000.  LPIS  may  also  include  spatial information  from  other  national  governmental 
registries such as a cadastre.  

There  are  currently  44  national  or  regional  LPISs  in  operation  in  the  EU, 
containing  over  135  million  reference  parcels.55  LPIS  is  connected  through 
reference  parcels  with  other  IACS  components.  A  quantity  of  eligible  hectares  is 
accompanied  by  beneficiary  entitlements  and  should  be  stated  in  the  aid 
application.  Key  elements  of  the  administrative  burden  arising  from  LPIS  relate  to 
its  main  functions  in  the  IACS  (as  illustrated  in  the  figure  below).  It  includes  the 
submission  of 
information,  and 
information for administrative and on-the-spot (OTSC) checks. Producing graphical 
maps  of  the  reference  parcels  for  each  application is  simplified  through  the  use  of 
Internet  map  portals,  which  allow  farmers  to  identify  relevant  reference  parcels, 
obtain  necessary  information  for  declaration  and  print  out  required  maps.  E-
application solutions permit the integration of graphical information with declaration 
forms  and  avoid  paper  forms.  The  GSAA,  obligatory  from  2018,  is  a  further  step 
towards the process of simplification.  

farmers’  applications, 

including  graphical 

Member  States  are  obliged  to  ensure  that  the  system  works  properly  and, 
therefore,  that  necessary  information  updates  and  IT  system  upgrades  are 
implemented.  The  main  trigger  for  systematic  updates  is  the  acquisition  of  new 
ortho-photo  imagery  that  may  potentially  reveal  that  changes  have  occurred. 

55 This number reflects the total number of “polygons” stored in the LPIS, including also non-declared parcels, cadastral 

parcels on non-agricultural area, non-eligible exclusions, landscape features, etc. 

42 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Updates  may  also  be  triggered  by  information  gathered  from  farmers'  declaration, 
or during the OTSC checks of farmer’s applications. 

Figure 9 

Model of basic concepts of subsidies’ administration 

Source: Sagris, V., Kikas, T., Angileri, V. (2015). Registration of land for the common agricultural policy 
management: potentials for evaluation of environmental policy integration. Int. J. Agricultural 
Resources, Governance and Ecology, Vol. 11, No. 1, 2015  

LPIS QA 
Member  States  are  obliged  to  perform  an  annual  assessment  of  the  LPIS  quality 
and  its  effectiveness  in  determining  maximum  eligible  areas.56  After  this  self-
assessment  exercise,  actions  to  remedy  deficiencies  need  to  be  taken  where 
necessary.  LPIS  quality  can  roughly  be  defined  as  an  ability  of  the  system  to  fulfil 
two  explicit  LPIS  functions,  namely  the  (i)  localisation  of  all  declared  agricultural 
parcels  by  farmer  and  inspectors,  and  (ii)  correct  quantification  of  all  eligible  area 
for crosschecks. The LPIS Quality Assessment (LPIS QA) framework is composed of 
two major components:  
  Database  design  testing,  also  known  as  abstract  or  models  test  suite  (ATS  or 

MTS); and 

  Testing  of  data  records  stored  in  the  system,  so-called  executable  tests  suite 

(ETS).  

The  ETS  exercise  must  be  performed  annually,  while  ATS/MTS  should  be 
undertaken  only  if  there  are  changes  in  the  database  model  or  in  underlying 
concepts;  e.g.  change  of  reference  parcel  type.  Member  States’  information 
obligations arise from the quality assessment exercise include the reporting of tests 
results and remedial actions (if needed) to the European Commission (DG AGRI and 
JRC).  After  receiving  Member  States’  reports  and  the  data  subject  to  the  testing, 
the  JRC  undertakes  a  screening  to  assess  correctness  of  applied  tests  and 
disseminates the results to Member States and DG AGRI.  

The key elements of the administrative burden in the LPIS QA are related to 
three main activities: 
  Understanding  of  the  methodology  and  coping  with  methodological 

changes; 

56 Article 6 of Regulation 640/2014 

43 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  Time  and  efforts  spent  for  performing  tests  and  conducting  rapid  field 
visits,  if  necessary.  This  may  include  also  the  acquisition  of  additional  imagery 
or pre-processing of imagery acquired by DG JRC; 

  Communication of results to the European Commission. 

The Executable Test Suite (ETS) consists of the following steps: 
  Preparation  of  layer  of  reference  parcels  for  Member  States  and  the 
random  selection  of  test  samples.  In  case  of  absence  of  the  most  recent 
imagery selection of samples constrained to the spatial windows of the imagery 
especially  purchased  by  the  Commission  for  the  purpose  of  controls;  imagery 
should  be  tested  and,  if  necessary,  corrected  for  geometric  errors  by  the  LPIS 
custodian.  The  required  sample  size  is  determined  from  the  total  number  of 
active  parcels  in  LPIS,  such  that  more  parcels  should  be  checked  for  bigger 
systems,  therefore  impacting  the  amount  of  effort  required  for  subsequent 
steps; 

  Undertaking  ETS  observations,  including  two  conformance  levels:  (i) 
Level 1, which includes the re-digitizing of reference parcels in order to correctly 
quantify the maximum eligible area and classification of major types of errors, so 
called  critical  defects,  that  were  found  during  observation;  (ii)  Level  2,  which 
includes calculation of different types of quality indicators from observations and 
critical errors; 

  Conducting rapid field visits, if necessary;  
  Reporting to the Commission (reports to DG AGRI and to the JRC), covering 
formal  communication  and  submission  of  actual  geospatial  data  and  testing 
results for screening by the JRC. 

3.2.3 Costs of controls  

Before  the  approval  of  payments,  CAP  regulations  require  controls  of  applications 
registered in the claims database. 

Figure 10 

IACS annual claim cycle and controls 

Source: Ecorys 

Controls for IACS based measures consist of administrative checks and on-
the-spot-checks  (OTSCs).  While  all  claims  are  subject  to  administrative  cross 
checks for accuracy, scheme eligibility and conformity with IACS rules, at least 5% 
must  undergo  OTSCs.  The  majority  of  OTSCs  are  conducted  on  the  basis  of  a 
predetermined risk assessment,  while others (~1.5%) are selected  randomly. In a 

44 

Aid application(incl. geospatial)Administrative checksOn the spot checks (physical, remote)Payments, penalties and deductionsPre-population of application 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

typical  year,  around  190,000  on-the-spot  checks  (with  57,000  randomly  selected) 
are made from a base of about 3.8 million beneficiaries.57 

Member  States  must  ensure  that  inspections  are  carried  out  at  the  most 
appropriate  time  (for  instance,  for  crop  diversification  under  greening  when  the 
crop  is  in  the  ground  or  within  a  prescribed  retention  period  when  animals  are  on 
the  holding).  To  help  reduce  the  burden  on  beneficiaries,  they  can  simultaneously 
be  included  in  the  sample  of  inspections  for  several  measures.  For  instance, 
farmers  inspected  under  BPS  can  also  be  included  in  the  sample  for  greening 
controls.  If  high  levels  of  error  are  identified,  Member  States  must  increase 
inspection  levels  and  implement  corrective  measures  to  reduce  error  levels. 
Inspections may be aided by new technological developments. Many field inspectors 
use  hand-held  devices  and  tablets  with  downloaded  claim  and  geo-spatial 
information,  allowing  them  to  validate  parcel  and  feature  size  and  upload  their 
reports  electronically.  In  addition,  information  of  one  year  is  used  to  pre-populate 
the database for the following year. 

Administrative checks 
All  claims  are  subject  to  administrative  crosschecks  against  the  relevant 
IACS  databases  to  confirm  accuracy  and  eligibility  with  scheme  and  IACS  rules. 
This typically includes: 
  checks  beneficiary’s  registration  as  meeting  relevant  criteria  and  eligibility  of 

claim; 

  checks against the LPIS that the declared area is not overstated; 
  checks  against  animal  registers  to  ensure  that  livestock  are  registered  and 

associated with the correct holding; 

  checks  against  entitlements  registers  to  validate  the  number  of  declared 

entitlements (and if applicable within the correct region); 

  check that total claims do not exceed 100% of the parcel, in the case of multiple 
farmers  or  beneficiaries  declaring  the  same  agricultural  parcel  is  at  their 
disposal; 

  checks that the declared land use (e.g. wheat production) is compatible with the 

land cover determined in the LPIS (e.g. arable); 

  checks that different uses are not incompatible, in the case that a land parcel is 

declared under different schemes (e.g. BPS and rural development); 

  checks  between  regions  within  a  Member  State  to  ensure  there  are  no  double 
claims for a single holding and unintentional errors that could lead to reductions 
or penalties are avoided.   

In addition to IACS crosschecks, a number of scheme specific checks can be made 
to  ensure  that  the  relevant  regulatory  obligations  are  met  before  payments  are 
made. These include, for instance: 
  checks  that  relevant  payments  are  only  made  to  active  farmers  rather  than 
companies  whose  primary  activity  is  on  a  prescribed  negative  list  from  which 
they have no exemption; 

57 

Borchmann, 

Christina 

(DG 

AGRI): 

CAP 

audit 

system 

2014-2020, 

see: 

https://ec.europa.eu/futurium/en/system/files/ged/c._borchmann_dg_agri_eafrd_audits_-_facts_and_figures.pdf 

45 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  checks  that  farmers  meet  crop  diversification,  EFA  and  permanent  grassland 
rules and thresholds under greening, and that claims for exemptions as organic 
farmers are legitimate; 

  checks  that  young  farmers  meet  national  definitions  and  have  sufficient 

controlling interest in the holding to demonstrate eligibility to subsidy; 

  checks  that  applications  to  the  National  Reserve  from  young  farmers,  new 
entrants  and  other  categories  meet  eligibility  criteria  and  entitlements  are  not 
falsely awarded; 

  checks  that  specific  options  and  programmes  under  IACS-related  rural 

development measures meet the laid down control and verifiability criteria. 

On-the-Spot Controls 
Within  each  scheme,  a  defined  proportion  of  beneficiaries  must  be  selected 
for  on-the-spot  checks.  Typically,  they  are  selected  using  a  predetermined  risk 
assessment,  with  a  smaller  proportion  chosen  randomly.  On-the-spot  checks  may 
be  conducted  by  physical  inspection  on  the  ground  or  remotely  using  remote 
sensing via satellite.  

Cross-compliance has its own on-the spot control requirements. Samples of 
beneficiaries  under  both  Pillar  I  and  Pillar  II  IACS  schemes  are  selected  from 
populations  covering  SMR,  GAEC  or  both.  In  some  instances,  the  levels  of 
inspection  are  prescribed  in  other  sectoral  legislation,  such  as  that  governing  the 
traceability of livestock. Errors  found during these inspections or  other checks and 
notifications  must  be  evaluated  for  their  severity,  extent,  permanence  and 
reoccurrence of the non-compliance before the appropriate penalty is applied across 
all IACS-related Pillar I and Pillar II payments in that year. 

Penalties 
Both  IACS  and  the  different  schemes  have  their  own  prescribed  reduction  and 
penalty  regimes  for  payment  reductions,  which  depend  on  the  gravity  of  the  error 
or  over-declaration.  The  EU  legislation  has  introduced  the  concept  of  a  “yellow 
card”  in  2016,  where  some  initial  errors  or  over-declarations  in  aid  applications 
through  IACS  are  treated  with  a  reduction  of  the  penalty  of  50%.  If  a  reporting 
error is observed in the next claim year for the same support plan or measure, the 
affected beneficiary will have to pay the portion of the administrative penalty from 
which it was exempted the previous year. The “yellow card” has not yet been fully 
implemented in all Member States. 

3.2.4 Payment entitlements 

The Basic Payment Scheme from 2015  
Payment  entitlements  are  a  key  component  of  the  basic  payment  scheme. 
They  link  payments  back  to  farmers  and  facilitate  the  correct  allocation  of  the 
annual  direct  payments  under  the  Pillar  I  of  the  CAP.  The  BPS  is  a  compulsory 
scheme for all Member States, but those having applied the single area payment 
scheme under Regulation (EC) 73/2009 have been allowed to continuing applying 
the  SAPS  for  a  transitional  period  until  202058.  In  countries  where  SAPS  is 
applied59, there are no payment entitlements, and the support is paid solely based 

58 10 Member States in total: BG, RO, CZ, SK, PL, EE, LT, LV, CY, HU. 
59 European Commission: CAP explained. Direct payments for farmers 2015 – 2020 (2017). 

46 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

on  the  eligible  hectares.  However,  the  logic  behind  the  allocation  of  resources  is 
similar to BPS. 

Payment  entitlements  are  linked  to  eligible  land  (de-coupled  payment  system).  In 
general, “the number of payment entitlements a farmer can obtain [is] equal to the 
number of eligible hectares he declares in his aid application in 2015 and which are 
at  his  disposal  at  a  date  fixed  by  the  Member  State.”60  Payment  entitlements  are 
activated  on  an  annual  basis  by  declaring  eligible  hectares  with  an  accompanying 
number of payment entitlements.  

The envelope available for the BPS is not a fixed percentage of the national ceiling 
fixed  in  Annex  II  Regulation  (EU)  N°1307/2013.  The  BPS  ceiling  is  obtained  by 
subtracting  from  the  national  ceiling  in  Annex  II,  the  amounts  foreseen  for  the 
redistributive  payment,  the  payment  for  agricultural  practices  beneficial  for  the 
climate  and  the  environment  (greening),  the  payment  for  areas  under  natural 
constraints, the young farmer payment and the voluntary coupled support. 

Member  States  need  to  operate  a  (national  or  regional)  reserve.  In  2015,  the 
reserve  is  established  by  allocating  a  certain  share  of  the  BPS  ceiling  to  it,  in  the 
later years amounts available in the reserve correspond to those remaining from a 
previous year and any replenishments thereafter. Priority for the allocation of these 
funds  is  to  be  given  to  young  farmers  and  new  entrants  (This  is  regulated  in  Art. 
30-6.  Regulation  (EU)  N°1307/2013).  Member  States  can  set  additional  eligibility 
criteria  relating  to  appropriate  skills,  education  or  experience  applicable  to  these 
groups of farmers. 

Payment  entitlements  have  been  allocated  under  BPS  for  the  first  time  in 
2015 (this is regulated in Art. 24 Regulation EU 1307/2013). Some Member States, 
under specific conditions, decided to use the option to allocate BPS entitlements by 
keeping  those  allocated  to  farmers  under  the  SPS61  (this  is  regulated  in  Art.  21-3 
Regulation EU 1307/2013).  

The  BPS  can  be  applied  at  national  or  regional  level.  Six  Member 
States/regions (DE, EL, ES, FR, FI, UK - applied in Scotland and England) opted for 
the  possibility  offered  under  Art.  23  Regulation  EU  1307/2013.  Member  States 
applying the BPS at regional level are allowed to establish regional reserves. Among 
them, only France has opted for this system. 

The three main models of internal convergence 
Within a given country/region, all entitlements allocated to a farmer have the same 
value,  but  difference  in  the  values  of  entitlements  may  occur  among  farmers.  In 
order  to  ensure  a  more  equitable  distribution  of  direct  support  between  farmers, 
Member States implement internal convergence. The main options 62 available to 
achieve the convergence are explained in the info box below. 

60 European Commission: Direct Payments. Basic Payment Scheme (2016). 
61 DK, UK-England, SE, FI, European Commission: Direct Payments. Basic Payment Scheme (2016). 
62 For a more detailed description of the three options, please refer to European Commission: Direct Payments: the Basic 
Payment Scheme from 2015 – Convergence of the value of payment entitlements (‘Internal Convergence’) (2015). 

47 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Main models of internal convergence 

  Flat  rate  from  2015:  in  this  model  the  value  of  PEs  is  calculated  by  dividing  a  fixed 

percentage  of  the  national  ceiling  available  for  granting  direct  payments  (Annex  II  to 

Regulation  EU  1307/2013)  for  each  year  by  the  total  number  of  PEs  allocated  in  2015, 

except  the  ones  allocated  from  the  reserve  –  Art.  25-1  Regulation  EU  1307/2013).  This 

fixed percentage corresponds to the share of the BPS ceiling excluding the reserve in the 

national ceiling in 2015. It means that all PEs will have the same value (yearly average) 
in a Member State or in a region from 2015 onwards63; 

  Flat rate by 2019: in this model the objective is to reach a uniform amount per hectare in 

maximum 5 steps. Member States differentiate initially the values of PEs which converge 

progressively  until  reaching  a  uniform  value  by  2019  (Art.  25-3  Regulation  EU 

1307/2013).  The  starting  point  is  the  Initial  Unit  Value  (IUV)  calculated  on  the  basis  of 

the direct support the farmer was entitled to in 2014, adjusted to the proportion of BPS in 

2015  and  to  the  national  ceiling  as  amended  by  the  Multiannual  Financial  Framework 
2014-202064;  

  Partial convergence (the tunnel model): the adjustment is similar to the flat rate by 

2019 model, but no complete convergence is achieved by that date. The target value for 
2019  is  between  90%  and  100%  of  the  2019  average65.  The  2019  average  is  also 
calculated  on  the  basis  of  the  "theoretical  BPS  ceiling  excluding  the  reserve"  (This  is 

regulated in Art. 25 Regulation EU 1307/2013). 

3.2.5 Greening 

‘Greening’  is  one  of  the  key  features  introduced  in  the  CAP  2013  reform.  It  is  a 
component of direct payments adopted to achieve the CAP objective to enhance the 
environmental  performance  of  European  agriculture  and  accounts  for  30%  of  the 
direct  payments  budget.  The  principle  behind  the  greening  payment  is  to 
remunerate  farmers  for  their  efforts  towards  the  environment  and 
biodiversity.  The  greening  payment  is  linked  to  a  number  of  sustainable 
agricultural  practices  beneficial  for  climate  and  environment.  It  targets  three  main 
areas:  
  the  maintenance  and  protection  of  permanent  grassland:  Member  States 
are  required  to  monitor  the  proportion  of  permanent  grassland  in  the  total 
agricultural area covered by direct payments and to designate areas of sensitive 
permanent grassland; 

  ecological  focus  areas:  farmers  with  more  than  15  ha’s  of  arable  land  must 
devote  an  equivalent  of  5%  of  that  land  to  EFAs  (EU  legislation  provides  for 
19 distinct EFA types); 

  crop diversification: farmers with more than 10 ha’s of arable land will have to 

cultivate a minimum of two  or three different crops.66 

The  greening  component  complements  the  cross-compliance  rules  and  the 
environmental measures under rural development (Pillar II). 

63 Implemented in DE, MT, FR-Corsica and UK-England. 
64 Implemented in NL, AT, FI, UK-Scotland and UK-Wales. 
65  Implemented  in  BE-Flanders,  BE-Wallonia,  DK,  IE,  EL,  ES,  Continental  FR,  HR,  IT,  LU,  PT,  SI,  SE  and  UK-Northern 

Ireland. 

66 https://ec.europa.eu/agriculture/direct-support/greening_en  

48 

 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 11  

Cross-compliance,  greening  and  environmental  measures  under  rural 
development 

Source: ECA(2017): Special Report No 21/2017 — ‘Greening: a more complex income support scheme, 
not yet environmentally effective’ 

Both, greening and cross-compliance are compulsory, whereas farmers get financial 
support only for greening. Environmental measures under rural development  (with 
the  exception  of  the  Agri-environmental-climate  measure  –  AECM)  are  voluntary, 
but receive financial support. 

The  design,  management  and  control  of  the  greening  scheme  have  led  to 
additional administrative tasks for Member States and farmers, especially in 
the  first  year  of  implementation  (e.g.  the  creation  of  the  EFA  layer  in  the  IT-
systems). In 201185, the European Commission performed an impact assessment of 
the  new  legislative  proposals  for  the  CAP  2013  reform.  This  impact  assessment 
already  pointed  to  the  potentially  high  administrative  burden  and  costs  for 
businesses as regards the greening scheme. It was estimated that total costs would 
amount  to  €299  million  for  the  2013-2020  period.  The  same  study  estimated  that 
largest  share  of 
the  greening  scheme  would 
administrative  burden  to  the  Member  State  administrations  (71%  of  the  total 
administrative  burden  to  the  public  authorities).67  In  the  course  of  reducing  the 
environmental  reach  of  the  Commission’s  original  proposals,  the  co-legislators 
(Council and European Parliament) added to the complexity of the direct payments 
system (Hart et al., 2016)68. Following the introduction of the greening obligations 
to  farmers,  and  the  Commission’s  ambition  to  simplify  the  CAP,  an  analysis  of 
greening implementation was undertaken.  The Review of greening after one year69 
included  a  consultation  to  collect  feedback  from  relevant  stakeholders  on  the 
functioning  of  the  greening  scheme  after  the  first  year  of  implementation.  The 
stakeholder consultation strategy is presented in the box below.  

furthermore  represent  the 

67 see also the Impact Assessment, Annex 8, Table 4 
68  Hart,  K.,  Buckwell,  A.  and  Baldock  (2016).  Learning 

the 

lessons  of 

the  Greening  of 

the  CAP. 

http://publications.naturalengland.org.uk/publication/5851680709541888  

69 SWD(2016) 218 final: Review of greening after one year 

49 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The  focus  of  this  greening  review  after  one  year  was  on  one  feature  of  the  green 
direct  payment  scheme,  the  ecological  focus  area.  The  review  addressed  three 
aspects,  1)  any  administrative  burden  arising  from  this  new  instrument;  2)  the 
impact on the level playing field for farmers of implementation by Member States of 
green direct payments; and 3) the impact on production potential. Concerning the 
first  aspect  –  most  relevant  for  this  study  –  the  review  concluded  that  “After  only 
one  year  of  implementation,  sufficient  hard  data  on  the  costs  and  burdens 
associated with the new greening measures is still not available”. 

Stakeholder Consultation on greening 

Dedicated consultation activities included discussions in Expert Groups on Direct Payments 

(three  meetings  during  the  second  half  of  2015),  a  meeting  of  the  Expert  Group  on 

Simplification  (February  2016)  and  two  meetings  of  the  Civil  Dialogue  Group  for  Direct 

Payments and Greening (November 2015 and April 2016). In addition, from 15 December 

2015 to 8 March 2016, an online survey sought to collect stakeholders’ views on the main 

themes of the Commission declaration of 2 April 2014 covering experiences from the first 

year of application of greening, especially the ecological focus areas (EFA), the impact on 

the  level  playing  field  and  production  potential,  administrative  burden  and  simplification 

ideas. This Open Public Consultation (OPC) also sought respondents’ preliminary views on 

the effects of greening. 

The  results  from  the  Open  Public  Consultation  “Experience  with  the  first  year  of 
application  of  the  greening  obligations  under  the  direct  payment  scheme  (CAP)” 70 
show  that  the  majority  of  farmers,  professional  farmer  organisations  and 
public  authorities  consider  the  implementation  requirements  for  greening 
difficult to very difficult. Also understanding the rules and complying with them 
for  crop diversification and the Ecological Focus Areas were aspects highlighted by 
respondents as being very demanding.71  

Because  of  the  consultation,  the  Commission  published  a  Staff  Working  Document 
in  2017  addressing  efforts  to  simplify  and  reduce  regulatory  burdens.  Many  of  its 
conclusions  related  to  greening  were  based  upon  the  findings  from  the  OPC  (e.g. 
aid application for greening requiring extra time, farmers need to hire professional 
support  to  complete  the  declaration,  and  the  perception  of  additional  risks  as 
regards making costly mistakes and additional controls72).73  

In  light  of  the  results  of  the  greening  review  after  one  year,  including  the 
consultation activities, the parallel Refit exercise aimed at improve the effectiveness 
of the policy and the need to address the actions identified in the Mid-term review 
of  the  EU  biodiversity  Strategy  to  2020,  the  Commission  identified  four  priority 
areas to amend the secondary legislation.  

Such  changes  aimed  from  one  side  to  simplify  the  greening  scheme  and  on  the 
other to increase its environmental effectiveness (especially the ban of use of plant 

70 https://ec.europa.eu/agriculture/sites/agriculture/files/consultations/greening/greening-001-results-online-survey_en.pdf  

71 Based on participants to the Expert and Civil Dialogue Groups and the OPC 
72  Some  noted  that  these  administrative  aspects  are  the  only  consequence  of  greening  for  those  farmers  whose 

production methods were and would be in line with greening even in the absence of the legislation. 
73 SWD(2017) 675 final: Overview of the Union’s Efforts to Simplify and to Reduce Regulatory Burdens 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

protection products on productive EFA), as the results of the review after one year 
showed potential to improve it.   

The  priority  areas  were  further  elaborated  into  14  concrete  amendments  to  the 
delegated and implementing acts: 
  Better  specification  and/or  clarification  of  what  is  required  from  farmers  and 

national administrations, especially as regards landscape features; 

  Eliminating  some  burdensome 

technical 

requirements  without 

lowering 

environmental benefits; 

  Providing  more 

flexibility  or  alternatives  where 

these 

increases 

the 

environmental and climate benefit of the greening; 

  Additional harmonisation of some requirements and conditions.74 

Table 3  

Overview of priority areas for review of the Greening Payment after one year 
of implementation 

Priority Issues 
identified 

Planned way forward 

changes 
Implemented 
Commission 
by 
the 
Delegated 
Regulation 
(EU)  2017/1155  of  15 
February 201775 76 

Better  specification  and/or 
clarification  of  what 
is 
required from farmers and 
national  administrations, 
regards 
especially 
landscape features 

as 

certain 

farmers, 

forward.  For 

Merging certain EFA types such as strips 
(e.g. buffer strips and field margins) and 
streamlining 
conditions 
associated to these EFA types could be a 
these 
way 
simplifications  would  reduce  the  risk  of 
errors  in  the  declaration.  For  national 
administrations, the need for definitions, 
clarifications  and  specific  checks  would 
be reduced. It should therefore facilitate 
the  uptake  of  some  landscape  features 
as  ecological  focus  areas  and  therefore 
increase their environmental benefits. 

Landscape  features  and 
strips:  
  Certain 

(buffer 
strips 
strips and field margins) 
have  been  merged  and 
associated 
conditions 
streamlined  (min  and 
max  width:  1  to  20  m 
production 
and 
requirements) 

no 

  Certain 

have 

landscape 
features 
been 
merged  (trees  in  line, 
wooded 
and 
hedges)  

strips 

  Associated  conditions  for 
landscape  features  are 
streamlined  

Common  definition  and 
conditions  
    No 

production 
requirement  applicable 
to  Land  Lying  Fallow 
and  all  strips  without 
production)  means  no 
agricultural  activity  as 
defined  under  Art  4  (1) 
of 
(reg 
n°1307/2013)  without 
other 
prejudice 
under 
requirements 

basic 

act 

74 DS/EGDP/2016/04 rev 2 (greening) 
75 http://epkk.ee/wp-content/uploads/2017/05/Unit-D2-CDG-DP-greening-2017-05-19.pdf  
76 https://ec.europa.eu/transparency/regdoc/rep/3/2017/EN/C-2017-735-F1-EN-MAIN-PART-1.PDF  

51 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Priority Issues 
identified 

Planned way forward 

changes 
Implemented 
Commission 
the 
by 
Delegated 
Regulation 
(EU)  2017/1155  of  15 
February 201775 76 

GAEC ; 

Eliminating 
burdensome 
requirements 
lowering 
benefits 

some 
technical 
without 
environmental 

Providing  more  flexibility 
or  alternative  where  this 
the 
increases 
environmental  and  climate 
benefit of the greening 

the 

Introducing 

Revisions of certain aspects (e.g. species 
to  be  used,  allowing  more  mixtures) 
could  be  considered  in  order  to  make 
some  EFA  types  more  attractive  and 
environmental 
increase 
improvement. 
some 
flexibility as regards certain geographical 
criteria  and  deadlines  could  also  be 
considered  with  a  view  to  preventing 
undue  constraints  upon  farmers  arising 
from  their  inadequacies  with  respect  to 
the  climatic 
the  plant  cycle  and 
conditions,  especially  for  green  cover  or 
catch crops 

Crop diversification: 
  Possible differentiation for 
crop 
at 
sub 

the  period  of 
diversification 
regional 
regional level. 

and/or 

Catch  crops  /  green 
cover 
  Deletion  of  deadline  for 
sowing  catch  crops  or 
green  cover  (before  1st 
October)  

  Common 

minimum 
duration  of  8  weeks  for 
catch  crops  and  green 
cover  

  Adjustment  of  the  list  of 
under 
(allowing 

species 
sowing 
leguminous) 

for 

NFCs 
Allowing  mixture  of  seeds 
for  Nitrogen  Fixing  Crops 
(NFC) 

for 

fully  relevant 

Certain  eligibility  rules  for  landscape 
features  are 
the 
definition  of  agricultural  land,  but  have 
been  shown  to  be  too  restrictive  for 
ecological  focus  areas,  in  particular  as 
regards  their  size  and  their  location  in 
the  parcel  of  land.  In  such  situations, 
farmers can be reluctant to declare these 
landscape features because of the risk of 
possible 
the 
fulfilment  of  the  mandatory  5  %.  This 
biodiversity 
reduces 
the 
delivery  of  ecological 
focus  areas. 
Certain  modifications  could  be  useful  to 
promote  other  potential 
landscape 
features. 

non-compliance  with 

potential 

  More 

flexibility 

for  the 
land  lying  fallow  EFA 
(see previous row) 
flexibility 

  More 

for  the 
of 

qualification 
landscape features: 

up 

area 
  Corresponding 
calculated 
the 
maximum width or size  
  Adjacency  notion  extend 
the  2nd  element 
to 
the  1St 
adjacent 
element 
directly 
adjacent  to  the  arable 
land. 

to 

Additional  harmonisation 
of  some  requirements  and 
conditions 

This first year experience has shown that 
certain  definitions  are  missing  or  would 
benefit  from  a  better  specification  to 
their  environmental 
better  achieve 
objective,  in  particular  for  EFA  types 
such  as  land  lying fallow,  catch  crops  or 
green  cover.  In  addition,  the  potential 
biodiversity  value  added  of  EFA  types 
has to be properly considered in view of 
favouring  the  use  of  the  most  valuable 

  Ban  of  use  of  pesticides 
on productive EFA areas 
(nitrogen  fixing  crops, 
catch  crops  and  green 
cover  land  lying  fallow 
and strips along forest) 

  Weighting  and  conversion 
factors  of  EFAs  have 
been  amended  (Annex 
X  of  Reg.  (EU)  No. 

52 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Priority Issues 
identified 

Planned way forward 

EFA  types  by  farmers.  As  regards  the 
method  of  calculation  of  EFA  areas,  the 
definition  of  weighting 
factors  could 
better  reflect  the  potential  to  enhance 
biodiversity  of  the  various  features  of 
ecological  focus  areas.  The  modification 
of 
could 
therefore  be  considered  in  this  respect. 
The harmonisation of some management 
requirements  may  also  be  needed.  In 
this  perspective,  a  limitation  of  the  use 
of  inputs  on  productive  EFA  areas  could 
be considered. 

these  weighting 

factors 

changes 
Implemented 
Commission 
the 
by 
Delegated 
Regulation 
(EU)  2017/1155  of  15 
February 201775 76 

1307/2013) 

EFAs: 
Land lying fallow  
The article now includes the 
duration 
‘no 
of 
production’ restriction  while 
the 
taking 
farmers 
need 
resuming main crops before 
the end of year.  

into  account 
to  allow 

the 

Source: Commission Delegated Regulation (EU) 2017/1155 of 15 February 2017 

3.2.6 Cross-compliance 

Cross-compliance was first introduced on a voluntary basis during the Agenda 2000 
CAP  reform,  and  further  developed  in  the  2003  CAP  reform.  Cross-compliance  is 
based on a conditionality principle, whereas farmers direct payments are made 
conditional upon compliance with basic standards and requirements laid out 
in  Regulation  1306/2013.  The  objective  of  cross-compliance  is  to  raise  the 
awareness  of  CAP  beneficiaries,  to  contribute  to  the  development  of  sustainable 
agriculture and making the CAP more compatible with the expectations of society.  

The cross-compliance system consists of two main elements:  
  Statutory  management  requirements  (SMRs):  13  legislative  standards  in 
the  field  of  the  environment,  food  safety,  animal  and  plant  health  and  animal 
welfare; 

  Standards for good agricultural and environmental conditions (GAEC): a 
range of standards related to soil protection, maintenance of soil organic matter 
and  structure,  avoiding  the  deterioration  of  natural  habitats,  and  water 
management.77 

Prior to the introduction of cross-compliance, the basic obligations under the SMRs 
already  existed  under  the  sectorial  EU  legislation.  They  apply  to  all  farmers 
disregarding if they are CAP beneficiaries or not. 

The  SMRs  that  stem  from  sectorial  legislation  are,  for  Directives,  applied  as 
implemented  by  Member  States.  They  contain  selected  requirements  addressed  to 
farmers (and not to Member States) which are measurable and controllable and are 
linked to farming activity under the following policies:  
  Public, animal and plant health: General Food Law, Hormones ban Directive, 
Regulations  on  identification  and  registration  of  pigs,  bovine,  ovine  and  caprine 
animals, Regulation on prevention, control and eradication of TSEs78, Regulation 
on plant protection products; 

77 https://ec.europa.eu/agriculture/direct-support/cross-compliance_en  
78  Transmissible  Spongiform  Encephalopathies  (TSEs)  are  a  family  of  diseases  occurring  in  man  and  animals  and  are 

characterised by a degeneration of brain tissue giving a sponge-like appearance leading to death 

53 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  Animal  welfare:  Directives  on  the  protection  of  calves,  pigs  and  animals  kept 

for farming purposes; 

  Environmental  protection:  Nitrates  Directive,  NATURA  2000  Directives  (wild 

birds and habitats). 

The  GAEC  standards,  specifically  applicable  for  farmers  receiving  CAP  payments 
refer to a set of standards aimed at: 
  preventing soil erosion: minimum soil cover, minimum land management; 
  maintaining  soil  organic  matter  and  soil  structure:  maintenance  of  soil 

organic matter level; 

  biodiversity  and  ensure  a  minimum  level  of  maintenance:  retention  of 
landscape  features  including  a  ban  on  cutting  hedges  and  trees  during  the  bird 
breeding and rearing season; 

  protection  and  management  of  water:  establishment  of  buffer  strips  along 
water  courses,  authorisation  on  water  for  irrigation  and  protection  of  ground 
water against pollution. 

The policy framework for standards of good agriculture and environmental condition 
(GAEC) was restructured with the current CAP programme (2014-2020) to take into 
account  the  introduction  of  the  greening  measures  (Hart  et  al.,  2016).  The  main 
changes  as  compared  to  the  previous  CAP  programming  period  are  that  all 
standards  are  now  compulsory  and  the  standards  have  been  consolidated  into  a 
shorter  list.  For  example,  the  maintenance  of  permanent  grassland  became  a 
greening requirement, and optional standards for crop rotation were superseded by 
the  compulsory  crop  diversification  (greening)  requirement.  The  number  of  SMRs 
was also shortened. 

The  philosophy  behind  cross-compliance  follows  a  “whole  farm-approach”.  This 
implies  that  when  non-compliance  is  detected,  the  payments  farmers  receive  may 
be reduced proportionally to the extent, permanence, severity and reoccurrence of 
the  infringement  specified.  Furthermore,  it  is  considered  if  the  infringement  was 
committed  intentionally  or  due  to  negligence  having  an impact  on  the  reduction´s 
calculation. 
The payments subject to a reduction may include: 
  the direct payments (decoupled or coupled) (Pillar I, CAP); 
  most rural development payments (Pillar II CAP) such as Area Based Payments, 
which  include  agri-environmental  measures,  Areas  with  natural  constrains, 
Natura 2000 measures, Afforestation measures, Forest environmental payments, 
Agroforestry, Organic farming, and two payments specifically linked to the wine 
sector ("Restructuring and conversion of vineyards" and "Green harvesting"). 

Cross-compliance  is  a  good  example  of  the  search  for  striking  a  balance 
between  transaction  costs  and  benefits,  as  it  covers  all  farmers  eligible  for 
direct  payments.  As  such,  a  large  agricultural  area  is  subject  to  the  cross-
compliance conditions, ensuring a basic environmental standard could be reached79. 
Yet, the following elements should be taken into account: 
  to what extent this actually ensures a given level of environmental quality; 

79  OECD  (2010),  Environmental  cross  compliance  in  agriculture.  See:    http://www.oecd.org/tad/sustainable-

agriculture/44737935.pdf  

54 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  the amount of monitoring costs involved. 
Farmers  not  respecting  the  standards/requirements  risk  a  penalty  reducing  their 
direct  payments  from  1%  to  15%  (the  higher  threshold  applies  for  repetitions  of 
infringements), as a general rule by 3%  which is in practise often lowered to 1%. 
In  case a minor infringements, instead of applying a reduction, the paying agency 
may  give  in  writing  an  early  warning  to  the  beneficiary  informing  on  the  non-
compliance  identified,  the  corrective-action  required  and  the  time  limit  for  such 
action. However, such early warning does not call for a mandatory follow-up visit to 
control if the beneficiary implemented in due time the required corrective action.  

3.2.7 Rural development measures (IACS based) 

The  EU's  rural  development  policy,  or  so-called  Pillar  II  of  the  CAP,  is  funded 
through  the  EAFRD.80  The  EAFRD  finances  the  EU’s  contribution81  to  118  different 
RDPs,  either  at  national  or  regional  level  (20  single  national  programmes  and 
8 Member States opting to have two or more programmes).82  

In the CAP 2013 reform, the EU switched from the previously existing four axes to 
a framework setting the following priorities: 
  fostering  knowledge  transfer  and  innovation  in  agriculture,  forestry  and  rural 

areas; 

  enhancing  the  viability  and  competitiveness  of  all  types  of  agriculture,  and 
promoting innovative farm technologies and sustainable forest management; 
  promoting  food  chain  organisation,  animal  welfare  and  risk  management  in 

agriculture; 

  restoring,  preserving  and  enhancing  ecosystems  related  to  agriculture  and 

forestry; 

  promoting resource  efficiency and supporting the shift toward a low-carbon and 

climate-resilient economy in the agriculture, food and forestry sectors; 

  promoting social inclusion, poverty reduction and economic development in rural 

areas.83 

The  rural  development  priorities  are  then  broken  down  into  the  so-called  “focus 
areas”.  

While  IACS  applies  to  all  direct  payment  schemes,  it  only  covers  those  rural 
development  support  measures  that  are  granted  based  on  the  number  of 
hectares or animals held by the farmer.84 The specific measures are defined in 
Council  Regulation  1305/201385  and  1303/201386,  as  summarised  in  the  table 
below: 

80  https://ec.europa.eu/agriculture/rural-development-2014-2020_en  
81  https://ec.europa.eu/agriculture/cap-funding_en  
82  https://ec.europa.eu/agriculture/rural-development-2014-2020_en  
83  https://ec.europa.eu/agriculture/rural-development-2014-2020_en  AND  REGULATION  (EU)  No  1305/2013  OF  THE 
EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL  of  17  December  2013  on  support  for  rural  development  by  the 
European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 

84 https://ec.europa.eu/agriculture/direct-support/iacs_en  
85  REGULATION  (EU)  No  1305/2013  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL  of  17  December  2013  on 
support  for  rural  development  by  the  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and  repealing 
Council REGULATION (EC) No 1698/2005 

86 Regulation (EU) No 1303/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of  17 December 2013 laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund,  the  Cohesion 
Fund,  the  European  Agricultural  Fund  for  Rural  Development  and  the  European  Maritime  and  Fisheries  Fund  and 
laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion 
Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 

55 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Table 4  

Article 

IACS-based rural development measures 

Measure  Heading 

Sub Heading 

21 
reg.1305/2013 

08 

28 
reg.1305/2013 

29 
reg.1305/2013 

30 
reg.1305/2013 

31 
reg.1305/22013 

33 
reg.1305/2013 

34 
reg.1305/2013 

40 

35.1 of 
1303/2013 

10 

11 

12 

13 

14 

15 

- 

- 

Investments in forest area 
development and improvement of 
the viability of forests* 

(a) afforestation and creation of 
woodland; 
(b) establishment of agroforestry 
systems. 

Agri-Environment and Climate 

Organic Farming 

Natura 2000 and Water 
Framework Directive Payments 

Payments to areas facing natural 
or other specific constraints 

Animal Welfare 

Forest-environmental and climate 
services and forest conservation 

Financing of complementary 
national direct payments for 
Croatia 

Support from the ESI Funds for 
community-led local development 
(LEADER) 

Where applicable:  
(b)implementation of operations 
under the community-led local 
development strategy; 
(c) preparation and implementation 

of the local action group's 
cooperation activities. 

*this  measure  has  an  investment  and  a  maintenance  component.  The  IACS  part  relates  to  the 

maintenance only. 

Source: Council Regulation 1305/13 

As  with  all  the  measures  in  RDPs,  also  RDP  measures  that  are  IACS-based  are 
based on voluntary participation (exception AECM, which is compulsory for MS, 
see “shall” in Article 28(1) of Reg. 1305/2013). Though the basic measures are set 
up  by  EU  regulations,  they  usually  undergo  a  rather  significant  adaptation  to local 
needs connected to local environmental and climate objectives, the latter being the 
core  of  most  of  them.  Consequently,  the  detailed  design  of  measures  and  of  the 
related prescriptions can change remarkably from an area (region) to the other. For 
instance, technical prescriptions can also differ within the same programming area. 
In  addition,  their  implementation  typically  involves  zoning  (i.e.  identification  of 
areas  with  different  needs)  and  targeting  of  enrolled  land,  to  provide  a 
concentration  of  measures  in  some  specific  areas  (e.g.  Nitrate-vulnerable  zones). 
This  can  be  achieved  through  locally  defined  selection  criteria  (although  EU-wide 
eligibility  criteria  remain  valid  for  most  measures).  These  criteria  usually  focus  on 
environmental concerns and possibly interact with general farm or farmers’ features 
(e.g.  specialisation,  age).  These  criteria  can  represent  a  useful  selection  tool,  in 
case  the  budget  available  is  not  sufficient  for  funding  all  eligible  applicants.  As  a 
matter  of  fact,  selection  criteria,  as  well  as  eligibility  criteria,  may  be  locally-
specific. 

56 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Eligible  farms  have  to  comply  with  the  eligibility  conditions  (eligibility 
criteria,  commitments  and  other  obligations)  established  in  the  programme,  which 
are  checked  by  the  competent  authority  through  administrative  and  on-
the-spot  checks.  The  compliance  with  some  eligibility  conditions  may  be  difficult 
to  check,  mainly  due  to  time  restrictions  (e.g.  activities  carried  out  only  in  a 
restricted  time  period)  or  because  they  imply  the  reduction  of  fertilisers  and/or 
pesticides,  which  is  difficult  to  assess.  In  any  case,  Member  States  are  obliged  to 
comply  with  Article  62  of  Regulation  (EU)  1305/2013,  which  stipulates  that  all 
measures  implemented  in  the  programme  have  to  be  verifiable  and  controllable. 
This  obligation  brings  the  risk  that  some  measures  are  not  implemented  by 
programming  authorities  because  their  commitments  are  difficult  to  verify  and 
control. 

57 

 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

4  Costs and cost drivers of IACS related 

activities 

This chapter presents the key results of the analysis structured in five sections. The 
first  four  analyse  the  administrative  cost  of  national  public  authorities  (Managing 
Authorities and Paying Agencies): overall costs of IACS (Section 4.1), set-up costs 
(Section 4.2), running costs (Section 4.3), management and control costs (Section 
4.4). The analysis of the administrative burden for farmers is presented in Section 
4.5. 

4.1  Overall costs of IACS 

Total IACS cost, ~ €10 per ha of UAA, 

Total IACS cost reflect 3.5% - 3.9% of IACS 

~€170 per agricultural holding   

managed CAP budget 

94% of EAGF and 53% of EAFRD managed by IACS 

There is wide variation between 

Member States 

The impact is disproportionate for 

IACS-related running costs increased on average by 

smaller Member States 

one third after the CAP 2013 reform 

The total annual  administrative cost87 of  IACS for national and regional competent 
authorities  are  estimated  to  be  within  a  range  of  €1.7  billion  and  €1.9  billion 
corresponding to  3.0% - 3.3% of the total CAP  budget  or  3.5% - 3.9% of 
CAP  budget  managed  through  IACS.  To  bring  these  numbers  into  context,  the 
European  Commission  spends  about  6%  of  its  annual  budget  on  administration.88 
Alternatively,  national  administrations’  management  and  control  cost  of  the  EAGF 
and  EAFRD  are  estimated  at  3.9%  of  public  expenditure.89  Also,  estimated 
administrative costs for IACS are below overall estimates for ESIF.90 

87  NOTE:  Set-up  cost  for  the  whole  period  are  divided  by  the  number  of  years  of  the  planning  period  to  make  annual 

expenses comparable 

88 http://ec.europa.eu/budget/explained/myths/myths_en.cfm.  
89 

(2017), 

Annual 

AGRI 

DG 

activity 

report, 

Available 

at: 

https://ec.europa.eu/info/sites/info/files/file_import/agri_aar_2017_final.pdf  

90  Spatial  Foresight  &  t33  (2018)  New  assessment  of  ESIF  administrative  costs  and  burden,  Available  at: 

https://publications.europa.eu/en/publication-detail/-/publication/4f4b7bcc-e18f-11e8-b690-
01aa75ed71a1/language-en/format-PDF/source-80003963  

59 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Table 5  Comparative assessment of administrative costs for public authorities 

Fund 

Share of administrative 

cost 

European Agricultural Fund for Rural Development * 

European Territorial Cooperation* 

European Maritime Fisheries Fund* 

European Structural and Investment Funds - overall* 

European Agricultural Guarantee Fund and European Agricultural Fund 

for Rural Development ** 

European  Structural  and  Investment  Funds  *  overall  for  national 

administrations  (excluding  national  coordination  and  programme 

preparation) 

8.3% 

6.7% 

4.4% 

4.0% 

3.9% 

3.8% 

IACS-based CAP as estimated in this study 

3.5% - 3.9% 

European Social Fund* 

European Regional Development Fund* 

Cohesion Fund* 

2.8% 

2.3% 

1.8% 

*The  comparative  estimates  are  extracted  from  the  Spatial  Foresight  &  t33  (2018)  study91.  These 

estimates  also  incorporate  (unless  otherwise  stated)  the  programming  aspect  of  funds,  which  are  not 

captured by this study.  

** Emerging from the DG AGRI annual activity report as share of public expenditure  

In  2017,  the  average  annual  costs  of  IACS  administration  per  country  was 
around €65 million. There is, however, significant variation across Member States 
and  years,  ranging  from  estimated  annual  costs  of  €2  million  to  more  than 
€300 million.  

Per  hectare  of  utilised  agricultural  area  (UAA),  the  annual  IACS  cost  of 
administration  is  estimated  at  €10.47.  Across  the  EU,  the  annual  IACS  cost 
ranges from €2 to €208 per hectare of UAA, indicating considerable variation across 
Member  States.  Similarly,  average  annual  IACS  costs  per  agricultural  holding  are 
estimated  at  €168.61.  There  is,  however,  considerable  variation  across  Member 
States,  with average annual IACS  cost  per agricultural holding ranging from  €18 - 
€4,000.  
In particular, the data shows large differences between smaller and larger Member 
States,  with  a  disproportionately  high  cost 
for  smaller  Member  States. 
Administrative  tasks  linked  to  the  IACS  are  more  burdensome  for  smaller  Member 
States that do not benefit from economies of scale. For example, all Member States 
need  to  implement  an  IACS  IT  infrastructure  but,  although  the  absolute  cost  of 
IACS IT infrastructure is higher for large Member States, the cost per beneficiary is 
lower. 

Several  factors  have  the  potential  to  impact  on  administrative  costs  at  a 
Member  State  level.  These  include  country  specific  characteristics  such  as  the 
geography  of  the  country,  the  size  and  structure  of  its  agricultural  sector  and  the 
organisational structure of the national authorities. On top of those, factors related 
to  the  CAP  implementation  choices  and  budget  allocation  such  as  the  amount  of 
CAP budget received, the number and types of available schemes,  implementation 

91  Spatial  Foresight  & 

t33  (2018):  New  assessment  of  ESIF  administrative  costs  and  burden,  see: 

http://ec.europa.eu/regional_policy/sources/docgener/studies/pdf/assess_admin_costs.pdf  

60 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

choices,  and  the  level  of  technology  use.  Statistical  analysis  shows  a  negative 
correlation  between  the  ratio  of  administrative  cost  to  CAP  budget  (‘share  of 
administrative  costs’)  and  indicators  reflecting  the  volume  of  CAP  and  the  size  of 
the agricultural sector in a Member State (i.e. number of holdings, UAA, amount of 
aid received). By way of illustration, the figure below shows the correlation between 
the ‘share of administrative costs’ and number of agricultural holdings, which points 
to    proportionally  higher  administrative  costs  for  Member  States  with  fewer 
agricultural  holdings.  However,  the  correlation  is  rather  weak  (r=-0.2),  indicating 
that more from the aforementioned factors also impact the ‘share of administrative 
costs’. 

Figure 12   Costs  as  share  of  total  CAP  expenditure  vs  number  of  agricultural  holdings  (EU 

28 – excluding two outlier Member States) 

Source: Consortium’s data collection and Member State estimates 

Based  on  the  available  data  it  was  not  possible  to  identify  causal  relationship 
between other types of factors potentially affecting the overall administrative costs. 
However,  the  following  sections  of  this  chapter  (Sections  4.2-4.4)  contain  more 
information  and  analysis  on  the  main  cost  drivers  and  factors  affecting 
administrative costs for different IACS schemes. 

Main sources of cost for administrations 
For  the  purposes  of  the  analysis  and  cost  breakdown,  this  study  identifies  three 
main  types  of  costs  for  national  administrations:  set-up  costs,  running  costs,  and 
management and controls costs. The overall annual costs incurred for management 
and  controls  of  the  applications  received  through  the  different  schemes  are 
estimated to represent the largest share of total IACS related costs (74%), followed 
by set-up costs (14%) and running costs (12%).92  

92  NOTE:  The  percentages  presented  reflect  the  proportion  of  the  administrative  cost  of  the  Member  States  at  an 
aggregate (EU) level. They do not reflect the breakdown of a representative Member State. Individual Member State 
splits may thus vary greatly.  

61 

​​​​​​​​​​​​​​​​​​​​​​​​​0% - 1,000 2,000Costs as share of total CAP expenditureNumber of holdings (2013, thousands)HighLow 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 13  

Main types of IACS related costs borne by national administrations 

Source: Consortium’s data collection and DG AGRI Cost of Controls Survey 2018 

Set-up  costs  presented  in  this  study  represent  the  annualised  value  of  the  total 
amount  of  spending  on  IT  systems  for  IACS  after  the  CAP  2013  reform;  unlike 
other cost categories, the quantification of set-up costs reflects the total amount of 
costs in the programming period divided by the number of years since the start of 
the programming period. Key cost components include: the worked hours spent by 
IT  staff,  purchases  of  products  and  services  associated  with  establishing  all 
necessary  infrastructure  (hardware),  applications  (software),  and  other  IT-related 
costs to operate IACS. Set-up costs are typically one-off investment in IT, which is 
often outsourced. The need for the development of new IT systems,  or updates of 
existing systems, is often created by the adoption of new schemes (e.g. adoption of 
greening), integration of new tools and e-solutions (e.g. GSAA), or modifications in 
schemes  or  processes.  However,  changes  in  the  set-up  of  IACS  may  also  be 
initiated by the Member States with the aim of improving efficiency, usability etc.  

Set-up costs could be further broken down into sub-categories. For instance, costs 
for  initial  establishment  of  IACS,  costs  for  integrating  LPIS,  costs  for  setting-up 
greening  etc.  However,  cost  information  at  such  a  detailed  level  could  not  be 
retrieved. 

62 

Set-up costs, 14%Running costs, 12%Management and controls costs, 74% 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Running  costs  presented  in  this  study  represent  the  total  annual  amount  of 
spending  for  the  running  of  IACS.  These  include  the  worked  hours  of  staff, 
purchases  of  products  and  services  associated  with  system  maintenance, 
monitoring  and  reporting,  and  evaluations,  as  well  as  costs  associated  with  LPIS. 
Running costs are split into the following three categories, which are  elaborated in 
the indicated sections:  
  Horizontal  IACS  staff  (Section  4.3.1)  covers  overall  IACS  management 
operations,  such  as  database  management,  applications  management,  control 
management etc.; 

  LPIS  (Section  4.3.2),  which  includes  provision  of  correct  reference  parcel 
information  (including  imagery  acquisition),  furnishing  the  application  process, 
and enabling checks; 

  LPIS QA (Section 4.3.3), which covers preparing and carrying out tests (i.e. the 
LPIS  QA  data  test  suite)  and  communicating  results,  including  reporting  to  the 
Commission. 

Management  and  controls  costs  represent  the  total  spending  for  managing  all 
the  specific  IACS  based  schemes  and  measures  (excluding  the  overall  IACS 
management) directly or indirectly linked to conducting controls. These include the 
worked  hours  and  purchases  of  products  and  services  associated  with  the  day-to-
day  management  activities  of  all  specific  schemes,  such  as  calculating  and 
conducting  of  payments,  processing  and  selection  of  applications  as  well  as 
organising  and  conducting  controls.  For  the  purposes  of  this  study  management 
and controls costs are divided in the following, which are elaborated in the indicated 
sections: 
  Horizontal  controls  costs  (Section  4.4.1),  which  are  horizontal  costs  -  for  all 
IACS  measures  -  for  the  execution  of  administrative  checks  and  on-the-spot 
checks; 

  Payment entitlements (Section 4.4.2), which covers the operations required to 
initiate  the  basic  payment  scheme  (e.g.  initial  allocation  of  entitlements, 
establishing  values),  run  all  recurring  operations  related  with  payment 
entitlements  (e.g.  keeping  track  of  updates,  processing  applications)  and 
conduct the controls on the basic payment scheme applications; 

  Greening  (Section  4.4.3),  which  covers  the  operations  related  to  dealing  with 
greening  claims,  such  as  calculating  and  transferring  payments  due  to 
beneficiaries, and conducting administrative and on-the-spot checks for greening 
applications; 

  Cross-compliance (Section 4.4.4), which covers the execution of all compliance 
checks  required  under  GAEC  and  SMR,  as  well  as  the  relevant  reporting  and 
follow-up; 

  Rural development measures (Section 4.4.5), which covers operations related 
to  the  IACS  based  rural  development  measures,  such  as  managing  the  open 
calls,  selecting  the  applications,  processing  the  payments,  conducting  controls 
etc.  

Cost  structures  for  these  three  cost  elements  vary  among  Member  States.  As 
shown  in  the  figure  below,  the  case  studies  indicate  a  moderate  correlation   
between  the  size  of  the  agricultural  sector  (represented  by  agricultural  holdings) 
and  the  shares  of  set-up  costs  (r=-0.31),  and  management  and  controls  costs 
(r=0.33).  

63 

 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Figure 14   Cost structure of individual Member States 

Source: Consortium’s data collection through case studies 

factors  (e.g.  continuity  of 

Set-up  costs  are  often  higher  for  Member  States  with  fewer  agricultural  holdings. 
There  also  appears  to  be  a  trade-off  between  the  shares  of  set-up  costs  and 
management  and  control  costs.  Moreover,  other  aspects  defining 
the 
implementation  choices  of  Member  States  have  an  impact  on  the  overall  costs. 
Such  factors  often  are  geographic  considerations  (e.g.  mountainous  areas), 
funding),  structural  conditions  (e.g. 
historical 
regionalisation),  technological  advancements  (e.g.  adoption  of  GSAA)  or  political 
ambitions  (e.g.  environmental  conditions).  Particularly  the  latter  combined  with 
flexibility  in  the  interpretation  of  legal  prescriptions,  fears  of  auditors  and  lack  of 
alignment  between  stakeholders  lead  to  what  is  often  interpreted  as  gold-plating. 
Gold-plating  could  however  not  be  quantified  as  it  is  often  the  outcome  of 
intentional  choices  with  expected  benefits  (and  can  as  such  not  be  declared 
“unnecessary”)  or  overcompensated  by  other  implementation  decisions  (including 
technological uptake).  

Looking at the cost estimates from a more granular point of view, the figure below 
illustrates  that  rural  development  measures  represent  the  highest  cost 
driver  with  a  median  value  of  32%  of  the  total  costs.  IACS  IT  Investment  and 
payment  entitlements  (Basic  payment  scheme)  are  also  significant  cost 
sources with a median value of 14%. As for the Member State cost structures from 
the case studies presented above, ranges for each category vary. 

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Figure 15  

Breakdown of main of IACS related costs borne by national administrations 

Source: Consortium’s data collection and DG AGRI Cost of Controls Survey 2018 

Note: the category “other DP related activities” should not be mixed-up with the horizontal assessment 

of  control  costs  as  described  in  chapter  4.4.1.  This  category  quantifies  the  remaining  costs  for 

management and controls deducting PE, greening, cross-compliance and RDP, hence capturing aspects 

such as young farmers scheme and voluntary coupled support.  

Cost impact of the CAP 2013 reform 
Evidence  from  the  case  studies  indicates  increases  in  IACS-related  running  costs 
increased  following  the  CAP  2013  reform  of  between  17%  and  58%,  with  an 
average  of  about  one  third.  Some  case  study  respondents  attributed  the  cost 
increases  to  the  introduction  of  the  greening  obligations  (see  Section  4.4.3).  The 
cost  of  establishing  new  reference  layers,  outsourced  data  acquisition,  and 
subsequent  verification  by  the  paying  agency  were  also  indicated  as  factors, 
particularly due to the need to recruit additional staff. IT systems also needed to be 
modernised  to  cater  for  these  changes.  In  other  instances,  a  combination  of  the 
control  requirements  arising  from  the  legislation  alongside  existing  national  legal 
framework increased complexity and raised cost.  

While paying agencies observe increased costs due to the CAP reform,  interviewed 
farmers  indicated  that  there  was  no  significant  increase  in  their  administrative 
burden.93.  

93  NOTE:  the  farmers  survey  focuses  on  administrative  burden  and  not  compliance  cost,  which  are  of  much  higher 

relevance for farmers than for administrations. 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

4.2  Set-up costs 

Estimated set-up costs of €250 m - 

€275 m or 14% of overall IACS cost 

(yearly costs) 

Costs ranging from 6% in larger Member States, to 

40% in smaller ones 

IT choices and architecture have a major impact on 

the variability of costs and the ability of Member 

States to adapt to changing regulations 

System enhancement can deliver a 

20-30% reduction in costs 

The greater the level of customisation 

Disproportionate impact of set-up costs on smaller 

the greater the cost 

Member States   

Set-up costs cover all costs arising from establishing or upgrading IACS to meet the 
legislative  framework  following  the  2013  CAP  reform.  Set-up  costs  are  typically 
one-off investment in IT, which is often outsourced. 

Set-up  costs  are  estimated  at  €250  million  to  €275  million,  or  14%  of  the  annual 
IACS  cost  borne  by  Member  States.  In  practice,  these  costs  are  higher  at  the 
beginning of the planning period and decrease over time. Cost estimates show that 
set-up costs also have a disproportionate impact on smaller Member States ranging 
from around 6% in larger Member States to up to 40% in smaller Member States.94  

94  NOTE:  Set-up  costs  could  conceptually  be  further  broken  down  into  sub-categories  of  costs  such  as  costs  for  initial 
establishment  of  IACS,  costs  for  integrating  LPIS,  costs  for  setting-up  greening  etc.  However,  cost  information  at 
such a level of detail is not collected by Member States under assessment.  

66 

Set-up costs, 14% 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

The need for the development of new IT systems, or updates of the existing ones is 
often  created by the adoption of new  schemes (e.g.  Greening), integration of  new 
tools  and  e-solutions  (e.g.  GSAA)  or  modifications  in  schemes  or  processes.  The 
case  studies  indicate  extensive  preparation,  adaptation  and  maintenance  of  IT-
systems due to the new greening requirements, e.g. the development of new layers 
to incorporate the greening elements in the system. The case studies confirm that 
considerable time and effort were spent to set-up and prepare IT-systems, both to 
incorporate the greening requirements, and to inform farmers about the changes in 
the legislation. These costs are considered the largest driver of overall cost and can 
account to up to 20% of establishment costs.95 

Table 6  

Main sources of costs related to greening requirements 

Main sources of costs mentioned by (regions of) Member States 

Mentioned 
Member States 

by 

X 

IT 

Preparations  and 
requirements for administration and control system 

technical  refurbishment  of 

the  IT  systems  and 

Layer digitisation  

Layer maintenance 

Modification aid application form 

Information to farmers 

Information to farmers 

Controls 

Differentiated 
requirements 

and 

time-divided 

on-the-spot-inspections 

for 

EFA 

Source: Consortium based on case studies 

4 

6 

1 

3 

1 

9 

Changes in the set-up of IACS may not only be due to new requirements, but also 
be initiated by Member States aiming to increase  efficiency, usability etc. Key cost 
components  include:  hours  spent  by  IT  staff  and  purchases  of  products  and 
services  associated  with  establishing  all  necessary  infrastructure  (hardware)  and 
applications (software) to operate IACS.  

95  Alliance  Environnement  and  Thünen  Institute  (2017):  Evaluation  study  of  the  payment  for  agricultural  practices 
see: 

environment, 

beneficial 
the 
https://ec.europa.eu/agriculture/sites/agriculture/files/fullrep_en.pdf  

climate 

and 

the 

for 

67 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 16  

Share  of  Set-up  cost  out  of  total  IACS  administrative  cost  in  relation  to 
number of agricultural holdings 

Source: Consortium’s data collection and Member State estimates 

Solutions for and costs of setting-up IACS 
Most Member States  covered by the case studies developed purpose-built systems 
by either adapting general licenced software to meet IACS requirements or creating 
bespoke  systems  using  either in-house  or  external  developers.  This  often  involved 
the  integration  of  several  different  components,  sometimes  developed  by  different 
suppliers  to  deal  with  the  challenge  of  changes  resulting  from  major  reforms.  In 
other  cases,  Member  States  either  (i)  procured  software  where  a  component  or 
components were developed/provided by commercial suppliers to meet the specific 
requirements of the CAP/IACS or (ii) used suppliers that were established primarily 
to  develop  CAP/IACS  solutions,  such  as  LPIS  systems  or  remote  sensing  modules. 
The former has the benefit of introducing systems that do not need to be designed 
from  scratch,  though  they  will  still  need  to  be  adapted  to  national  needs  and 
integrated  with  other  IACS  systems.  In  the  latter,  Member  States  are  able  to 
leverage  the  IT  skills  of  companies  that  are  familiar  with  the  complexities  of  CAP 
which can reduce analysis and design time and costs. 

In  addition,  Member  States  operating  regional  models  either  provided  common 
software to the regions or national technical specifications96 to ensure that systems 
were developed to harmonised standards. In these instances, Member States were 
able  to  benefit  from  a  degree  of  commonality,  though  systems  still  needed  to  be 
adapted  to  meet  national  or  regional  needs  and  required  integration  with  other 
components.  

Other  Member  States  purchased  “out  of  the  box”  software  packages 
specifically  designed  to  deliver  a  fully  integrated  IACS  solution.  These 
provide  all  the  relevant  core  registers  and  databases  to  manage  and  control  IACS 
schemes,  together  with  modules  available  for  specific  elements  such  as  LPIS  QA, 
EU  payments,  accounting,  and  remote  sensing.  Updates  to  common  elements  are 

96 National technical specifications are developed by some Member States to ensure compatibility of regional systems. 

68 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

provided,  but  other  elements  need  configured  to  local implementation  choices  and 
potentially  some  customised  solutions  are  required  where  certain  practices  are 
unique  to  a  Member  State,  region,  or  a  processes  for  handling  transactions  and 
claims  that  is  different  to  the  standard  design.  Local  implementation  choices 
increasing overall costs, can be defined in a wider sense as gold-plating. Such gold-
plating  is  however  usually  happening  based  on  good  intention  and  to  provide 
additional benefits,  which could cause higher costs  for administrations. In general, 
the greater the level of customisation the greater the cost, but this approach 
has  the  advantage  of  sharing  the  costs  of  development,  reducing  and  simplifying 
integration, and reducing testing costs.  

There were instances of enhancements of existing IT systems to achieve identified 
benefits  either  in  the  speed  of  payment  using  existing  resources  or  maintaining 
levels of service with fewer people.  

Insights from the case studies 

One Member State experienced a 40%  increase  in costs following the introduction of the 

CAP  2013  reform  package.  Just  under  90%  of  this  was  due  to  increased  set-up  costs.  A 

significant  amount  of  the  increase  can  be  attributed  to  increased  costs  in  the  use  of 

external IT suppliers.  

In  one  example,  a  system  enhancement  that  allowed  the  electronic  input  and  capture  of 

inspection reports and findings delivered a 20-30% reduction in costs and improved the 

speed of input and resolution compared with the previous position, enhanced the quality of 

the  information  as  results  no  longer  needed  to  be  manually  transposed,  and  eliminated 

previous paper and printing costs.  

Both  the  level  of  integration  and  the  modernity  of  the  systems  impact  on 
the  speed  and  cost  of  development  required  by  major  reforms.  With  the 
exception of one Member States, which reported a development cycle of less than a 
year,  all  case  study  Member  States  reported  a  development  lifecycle  to 
implement changes associated with a major reform package of at least two 
years.  In  most  cases,  a  three-year  cycle  from  the  production  of  draft  council 
regulations  to  the  introduction  of  a  new  scheme  was  considered  to  be  the  norm. 
Based  on  preliminary  analysis  of  their  current  IT  systems  and  the  emerging 
proposals,  most  Member  States  envisage  a  similar  or  lengthier  development  cycle 
for the next reform period, once clear requirements are known.  

These  case  studies  indicate  that  the  existing  IT  architecture  has  a  significant 
impact on the ability of Member States to adapt to changing regulations. In 
general, those Member States using integrated solutions or components specifically 
designed  to  meet  IACS  requirements  have  shorter  development  lifecycles  than 
those using general purpose IT software (adapted to meet regulatory requirements) 
and/or  requiring  the  integration  of  multiple  different  components.  In  these  latter 
cases,  development  and  test  cycles  are  longer.  This  is  particularly  the  case  when 
responsibility for IT systems is shared between national and regional authorities, or 
different implementation bodies. Sharing the implementation is also always a factor 
that increases the risk of gold-plating, given the increased need for communication 
and  alignment  between  the  implementation  bodies.  A  previous  study  focussing  on 

69 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

the EAFRD showed that in case of no clear agreement, bodies tend to prefer being 
“on the safe side”, by introducing stricter rules than what is absolutely necessary.97  

Some  Member  States  are  experiencing  difficulties  in  adapting  their  IT  systems  to 
conform  to  the  last  set  of  reforms.  At  that  time,  some  Member  States  took  the 
opportunity  to  upgrade  or  change  some  or  all  elements  of  their  IT  platforms  to 
better  deliver  their  services  and  obligations.  In  other  cases,  the  reforms  were 
managed by through incrementally developments of existing IT platforms. Some of 
the EU13 Member States, which developed some of the most modern IT platforms 
after accession (approximately 10 years ago) that are now reaching the end of their 
life-cycle,  are  considering  upgrading  or  changing  their  systems  to  cater  for  the 
forthcoming  reforms.  This  could  lead  to  more  flexible  and  cost-effective  solutions 
but there could be risks from changing IT at the same time as implementing major 
regulatory  reforms.  In  addition,  because  of  the  risks  involved  or  the  limitations  of 
their  existing  IT  solutions,  Member  States  may  be  cautious  or  discouraged  from 
considering  control  systems  that  differ  significantly  from  those  currently  in  place, 
even though this could potentially deliver attractive benefits. 

Future CAP and opportunities to reduce administrative burdens 
Member  States  indicate  that  they  frequently  find  it  necessary  to  initiate 
developments  of  their  IT  systems  based  on  assumptions  made  in  advance  of 
regulations  being  agreed,  which  can  necessitate  subsequent  adaptation  causing 
implementation delays. Such unclarity also provides additional room for overarching 
rules or activities which later might be interpreted as gold-plating. 

There  is  a  consensus  view  that  impact  assessments  and  high-level  estimates  of 
development  cost  and  effort  can  begin  while  regulations  are  in  negotiation  but 
system  analysis  starts  after  their  adoption,  and  development  starts  when  there  is 
agreement on delegated and implementing acts, which need to be in place at least 
one year before systems need to be operational.  

Some  Member  States,  stress  that  the  timing  of  the  regulation  is  not  the  major 
factor,  but  internal  timings  of  IT  development  are  critical.  IT  development  often 
takes place in phases; for example, software to receive and confirm an application 
may be developed in advance of software to calculate values and make payments. 
Taking  into  account  the  IACS  scheme  cycle,  Member  States  indicate  that 
confirmation  of  rules  relevant  to  different  aspects  of  the  cycle  (e.g.  application 
design  and  receipt,  administrative  validation  and  controls  and  later  payment 
calculations and penalties) should be prioritised according to the timing of the cycle 
in  which  they  are  to  be  implemented.  This  is  considered  more  important  than 
developing  a  comprehensive  regulation  covering  all  aspects,  if  doing  so  introduces 
delays  and  uncertainty.  Hence,  the  IACS  scheme  cycle  should  be  taken  into 
consideration when specifying the CAP after 2020. 

97 European Parliament, Directorate-General for Internal Policies, Policy Department D. Budgetary Affairs (2014): ‘Gold-plating’ in the 

EAFRD. To what extent do national rules unnecessarily add to complexity and, as a result increase the risk of errors? 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

4.3  Running costs 

Estimated running costs of €200 m - €225 

Horizontal IACS staff cost is estimated at €65 

m  or 12% of overall IACS cost 

m - €75 m  or 4% of overall IACS cost 

Regionalisation may constitute practical constraint to 

deliver economies of scale 

A number of existing new 

technologies have not yet been 

tested by the Member States 

Initial results from the use of GSAA and 

Sentinel imagery indicate potential cost 

reductions and other benefits 

44 LPISs in operation, with some 135 million 

reference parcels 

LPIS is estimated at €133 m - €147 m and LPIS QA at 

€3.5 m - €4.2 m  or 8% and 0.2% of overall IACS 

respectively 

Acquisition of imagery is a main 

source of costs under LPIS 

Agricultural parcel and Farmer’s block most 

effective 

LPIS QA has led to improvement of LPIS 

71 

Running costs, 12% 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Under running costs, we included the worked hours and purchases of products and 
services  associated  with  general  system  maintenance,  monitoring  and  reporting, 
evaluations as well as associated with LPIS. These costs can be seen as the linking 
piece between the set-up of the system and the control related costs. We estimate 
running costs to represent 12% of the annual IACS costs. They consist of costs for 
horizontal IACS staff, LPIS and LPIS QA related costs.  Running costs also largely 
vary  between  individual  Member  States  (in  the  case  studies  ranging  from  4%  to 
37% of total annual costs).  

Figure 17  

Breakdown of main of IACS related costs borne by national administrations98 

s
n
o

i
l
l
i

m
€

 250

 200

 150

 100

 50

 -

Horizontal IACS staff

LPIS staff

LPIS QA staff

Source: Consortium’s data collection and DG AGRI Cost of Controls Survey 2018 

Costs for horizontal IACS staff account for about one third of running costs and 4% 
of total IACS costs. They are thus the second cost component after LPIS staff which 
is reflecting about two thirds of running costs and 8% of total IACS costs. LPIS QA 
on  the  other  hand  represents  only  2%  of  running  costs  and  0.2%  of  total  IACS 
costs.    Horizontal  IACS  staff  covers  all  overall IACS  management  operations, such 
as  database  management,  applications  management,  control  management  etc. 
LPIS  includes  providing  correct  reference  parcel  information  (including  imagery 
acquisition), furnishing the application process and enabling checks. LPIS QA entails 
preparing  and  carrying  out  tests  (i.e.  the  LPIS  QA  data  test  suite)  and 
communicating results, including reporting to the Commission. 

4.3.1 Horizontal IACS staff 

Estimated annual  costs  for horizontal IACS staff account for 4% of total IACS cost 
at  the  aggregate  (EU)  level  and  about  one  third  of  running  costs,  ranging  from 
€65m  to  €75m.  The  case  studies  identified  a  number  of  different  approaches 
and  variables that  have  an  impact  on  the  relative  costs  and  complexity  of 
implementing regulatory changes. However, the level of granularity in the costs 

98 A breakdown of the  IACS costs  incurred by Member States in running  IACS was not always available at the level  of 
granularity to identify the individual IACS components and the cost drivers within those components. This was mainly 
due  to  the  integrated  nature  of  the  IACS  and  how  IT  systems  are  designed  to  reflect  that  integration.  In  many 
instances the study was able to use secondary sources, such as the “Cost of Management and Controls” from Member 
States to either identify missing data or validate financial information supplied by the Member States. 

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
 
 
Analysis of administrative burden arising from the CAP 

provided  makes  it  difficult  to  reach  clear  financial  conclusions  on  the  factors  that 
influence the administrative burden on Member States.  

Main cost elements of horizontal IACS activities 

Organisational level and structure 
One  aspect  defining  the  cost  structure  of  horizontal  IACS  management,  is  the 
organisational  structure  applied.  The  main  distinction  can  be  made  between  those 
Member  States  that  adopted  a  regional  model  and  those  that  operate  with  one 
central  paying  agency.  The  choice  of  these  models  often  reflects  the  level  of 
delegated  autonomy  at  a  political  level.  De-centralised  (regional)  managing 
models  may  constitute  a  practical  constraint  to  delivering  economies  of 
scale,  and  cost-effective  and  less  burdensome  structures  and  processes. 
This introduces additional overhead costs.  

Insights from the case studies 

One Member State needed to establish an operational team to cover the regions and the 

ministry  to  oversee  and  monitor  the  management  and  development  of  IACS  systems. 

Regions  can  use  nationally  developed  systems,  but  maintain  the  autonomy  to  choose 

whether these are deployed and in some instances choose to manage their own. 

In  addition  to  the  general  central  vs  regional  structure,  Member  States  have 
different  approaches  concerning  the  involvement  of  different  bodies  or  the 
delegation to other state bodies such as local municipalities. Such choices can also 
affect the application processes. Most Member States in the case studies had a 
single  application  covering  both  Pillar  I  and  Pillar  II  IACS  schemes.  This 
was however not always the case where responsibilities were managed by different 
bodies  or  agencies.  However,  not  only  the  integration  of  applications  into  one 
system in one year allows for simplification, but also the integration of historic data 
and  applications  into  updates  and  new  applications.  Several  Member  States 
invested  heavily  in  processes  and  structures  that  allowed  both  farmers  and 
administrations to update key data on an ongoing basis rather than having this 
information  checked  at  the  point  of  aid  application  or  payment  claim  submission. 
This  reduces  the  amount  of  anomalies  found  and  the  amount  of  effort  required  to 
manage these.  

Insights from the case studies 

One  paying  agency  has  over  three  times  as  many  people  working  in  its  “front  office” 

managing updates and receiving claims as it has in its “back office” dealing with anomalies 

found during administrative cross checks. 

Structural decisions are also taken with respect to  outsourcing of specific services. 
While  in  some  instances,  there  has  been  little  or  no  outsourcing,  others  have 
chosen to outsource where they do not have the practical in-house specialist skills 
or capacity. As some tasks, such as confirmation of crops for greening, have a very 
tight timescale, more resources and greater flexibility are needed. In these cases, it 
makes  more  sense  to  outsource  specific  tasks,  to  manage  them  in  a  more  cost 
effective way.   

73 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Overall,  the  analysis  does  not  allow  for  general  conclusions  on  the  ideal 
organisational structure, given that it always has to be built in the national/regional 
context.  The  case  studies  show  however  that  there  are  examples  on  how  cost 
savings  were  achieved  due  to  structural  changes  in  the  way  that  services 
were delivered.  

Insights from the case studies 

One  Member  State  reorganised  its  paying  agency  to  become  more  activity  based, 

recognising  that  there  needed  to  be  greater  overall  management  responsibility  and 

accountability for IACS. This new structure envisages delivery at reduced cost and greater 

oversight  and  control  over  how  IACS  is  implemented.  Another  country  was  able  to 

significantly  reduce  the  costs  associated  with  a  rural  development  nature  management 

scheme  (from  €27  million  to  €15  million)  due  to  the  changes  to  managing  applications 

through regional collectives starting in 2015. 

Levels of e-take up 
There  is  a  significant  variation  in  the  levels  of  electronic  take  up  between 
Member States. In some instances all key transactions are managed electronically, 
whilst in others take up is extremely low (less than 1% of all transactions). This is a 
reflection  of  the  levels  of  sophistication  of  the  overall  electronic  enablement  and 
expectations  of  how  the  Member  State  interacts  with  its  citizens.  This  is  closely 
linked to the wider challenges in increasing e-take up due to the aspects of the age 
of  the  farming  population,  its  relative  sophistication  and  the  ability  to  access 
sufficient  broadband  services  in  remote  rural  areas.  Consequently,  Member  States 
often  provide  extensive  local  physical  support  to  farmers.  Such  “Front  Office” 
facilities to farmers who are physically able to present their proposed changes and 
updates  and  have  any  issues  identified  in  real  time,  provide  reassurance  and  a 
cost-effective option for both administrators and farmers appropriate to the nature 
of the Member States. This option is cost-effective if not provided only to a handful 
of farmers. It however might also act as a disincentive for them to use online tools.  

Investments in new and extended IT systems are often costly (see Section 4.2). We 
however also see that they often substantially decrease the amount of paper work 
and the manual works to be done, which leads to a positive benefit cost ratio in the 
longer run.  

Insights from the case studies 

One  Member  State  was  able  to  reduce  the  cost  of  maintaining  a  paper  channel  of 

applications tenfold over 10 years as the take-up in e-claims increased. There would also 

be  additional  associated  paying  agency  labour  costs  savings  by  avoidance  of  manual  or 

other data capture or the opportunity to transfer staff to more productive validation work 

to speed up payments. 

Impact of new technologies on costs 
The majority of the administrations made investments or identified opportunities to 
use  technology  to  cater  for  the  changes  arising  from  the  CAP  2013  reform.  Often 
the  main  driver  of  these  investments  was  the  need  to  address  perceived  or 
identified  control  risks  and  therefore  eliminate  or  reduce  the  risks  and  cost  of 

74 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

financial  corrections  for  incorrect  application  of  EU  rules.  In  other  instances, 
additional  investment  was  required  to  comply  with  regulatory  requirements  that 
were  prescribed  incrementally  or  needed  to  be  met  in  later  years  such  as  the 
introduction of GSAA or the establishment of an EFA control layer. In the following 
a  further  assessment  of  GSAA,  Remote  Sensing,  Sentinel  Satellite  Data,  Spatial 
Software tools, Geo-tagging, Drones, robots is presented. 

a.  Geo-Spatial Aid Application 

GSAA is not completely new. Some Member States adopted electronic claims with a 
geo-spatial  component  before  GSAA  became  a  requirement.  This  provides  several 
attractive  features  for  farmers,  such  as  on-line  crosschecks  with  paying  agency 
databases  and  instant  anomaly  warnings  that  can  help  minimise  the  number  of 
mistakes  in  declarations.  It  also  reduces  the  number  of  errors  and  checks  the 
paying  agency  needs  to  undertake  between  the  receipt  of  the  application  and 
making  payment.    Comparing  Member  States  with  GSAA  in  place  for  several 
years  against  those  that  have  only  recently  implemented  the  requirement 
shows  that  the  costs  of  controls  are  about  50%  higher  for  the  latter.  This 
suggests  that  the  marginal  benefits  of  introducing  GSAA  are  high.  However,  the 
available data is relatively thin and does not allow a robust calculation of the cost-
benefit  ratio.  The  cost  reductions  would  need  to  be  further  validation  with  a  more 
comprehensive data set before reliable conclusions could be drawn. 

Insights from Case Studies - Specific Member State reflections on the use of 

GSAA 

The most enthusiastic comments on  GSAA indicated that  it  provides  higher accuracy  and 

speed  of  the  procedure  for  aid  applications,  and  that  that  having  everything  online  (web 

based)  and  automated,  allow  a  continually  improvement  of  the  communication  between 

farmers and the assistance bodies.  

Another  Member  State  highlighted that  the  GSAA  reduces  time  spent by  farmers  and  for 

different controls, thanks to one shared information base. The online application (including 

the  GSAA)  was  first  tested  in  the  Member  State  in  question  in  2005  and  has  been 

progressively deployed during the 2007-2013 period. Automatic controls were launched in 

2015  and  the  system  has  been  operational  since  2017.  The  main  difficulty  arises  from 

farmers’  double  declaration  on  a  same  parcel  (superposition  in  the  GSAA)  and  shared 

utilities. Transfers are also more difficult to deal with, as they requires specific verification, 

including notarial deed, which is not automatable. 

A  Member  State  has  introduced  the  GSAA  according  to  the  timing  established  by  EU 

regulation.  Currently,  it  applies  the  GSAA  at  100%  for  direct  aid  and  at  25%  for  rural 

development  measures,  with  wide  differences  between  paying  agencies.  The  adoption  of 

the  GSAA  is  deemed  to  contribute  to  a  high  extent  to  improve  cost-effectiveness. 

Furthermore,  on  the  basis  of  a  specific  action  plan  shared  with  the  competent  EU 

Commission  services,  the  overcoming  of  the  cadastral  parcel  with  a  new  model  of 

reference  agricultural  parcel  being  planned.  The  Member  State  expects  that  the  surfaces 

will  not  have  to  be  measured  in  the  new  control  model  for  monitoring,  thanks  to  the 

measurements determined in the GSAA system and the cross checks with LPIS.  

The paying agency from another Member State with 100% GSAA coverage, stated that the 

use  of  the  GSAA  has  already  improved  the  cost-effectiveness  of  IACS  (EAGF  &  EAFRD). 

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The most important improvement has been the reduction of the administrative burden due 

to  the  use  of  the  digitization  of  the  land  parcels  and  the  improved  reliability  of  land 

register that leads to fewer OTSCs. 

In  Member  States  where  the  GSAA  has  been  available  more  recently  (since  2015)  a 

Member  State  indicates  as  the  main  effects  included  improving  cost-effectiveness  to  an 

average  extent,  while  two  others  argue  it  has  not.  In  terms  of  control  of  double  claims 

(two applications for the same parcel or for the same farmer) at the margins, decrease in 

the number of them and control of large farms. One Member State points to low update of 

online applications due to low digital literacy of farmers’ population in the Member State.  

b.  Remote Sensing 

A few Member States, particularly the smaller ones, already use remote sensing to 
the maximum extent as part of their control regime. This has allowed a reduction 
in the number of on-the-spot controls and more targeted use of resources 
when  inspectors  need  to  be  deployed  on-farm.  The  use  of  the  imagery  together 
with  other  data  sources  or  technologies  could  be  optimised  to  add  value  to  the 
overall control regime. 

Insights from the case studies 

One  Member  State  uses  Light  Detection  and  Ranging  (LIDAR)  which  an  active  remote 

sensing system that can be used to measure vegetation height across wide areas. It uses 

light in the form of a pulsed laser to measure ranges (variable distances) to the earth. Its 

use,  in  conjunction  with  remote  sensing  has  enabled  a  better  evaluation  of  the  eligible 

areas of grassland under the pro-rata method for areas of permanent grassland. Its use in 

conjunction with crop identification software has provided the potential to support a more 

cost  effective  means  of  undertaking  the  greening  crop  diversification  inspection 

requirements in a short period.  It can also be used to scan terrain multiple times a year, 

and  crosscheck  this  against  other layer  of  information  to identify  anomalies  and  changes 

for further consideration. It provides the opportunity for more targeted control checks such 

as  in  large  areas  of  land  which  are  difficult  to  physically  access  or  where  land  is  under 

shared or common ownership. However, reliance on this as a method is often tempered by 

the existence of cloud cover over these inaccessible areas. 

c.  Sentinel Satellite Data 

A  number  of  Member  States  are  either  piloting  or  considering  the  use  of  Sentinel 
imagery.  Recent  regulatory  changes  and  the  new  CAP  reform  proposals 
introduce  the  possibility  for  the  greater  use  of  monitoring  techniques 
across IACS schemes where Sentinel is likely to play a significant role.  

Insights from the case studies 

One Member State has tested and used Copernicus Sentinel-1 and Sentinel-2 imagery with 

other software to check its grassland-mowing obligation and uses the results to fine-tune 

the application for 2018. To minimise the number of non-compliances the system notifies 

farmers  by  e-mail  or  text  when  they  have  two  weeks  until  mowing  deadline  reminding 

them  of  the  need  to  mow  together  with  spatial  information  locating  the  area  concerned. 

The aim is to expand this to crop group identification and look at other potential uses such 

as the detection of nitrogen fixing crops and cultivated fallow land. Another Member States 

has used Sentinel data for a couple of years.  

In  2016,  Sentinel-2  data  was  used  in  support  of  its  remote  sensing  campaign  (about 

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50 000  sampled  and  verified  farmers)  through  the  European  Space  Agency  (ESA)  portal 

and other open services. In 2017, it expanded this by using multi-temporal analysis with 

multiple  Sentinel-2  images.  In  this  Member  State  74  sample  areas  of  30  000  sq  km, 

230 Sentinel-2  images  were  acquired  to  provide  information  throughout  the  agricultural 

year: winter, spring, until late summer. 

Existing  feedback  from  case  studies  and  other  pilots  are  largely  positive  towards 
the further increase of using Sentinel. However, these pilots are mostly in the early 
stages to determine if sentinel uses are cost-effective. Moreover, there were also a 
number of more challenging aspects to the introduction of this technology 
that will need to be addressed.  

Insights from the case studies 

In  one  Member  State,  initial  analysis  is  that  whilst  100%  monitoring  via  satellites  is  an 

aim, it would require a significant amount of additional labour. With 100% monitoring, the 

level  of  potential  inconclusive  cases  that  may  need  field  checks  would  be  more  onerous 

than  traditional  5%  sample  on-the-spot-checks.  Similarly,  early  indications  from  another 

also indicate high utilisation costs.  

The following table provides an overview on the key benefits and issues identified: 

Table 7  

Benefits 

Benefits and issues of using Sentinel 

  The introduction of checks by monitoring would 
provide  the  opportunity  to  replace  5%  on-
the-spot  checks  with  a  system  for  100% 
monitoring, based on the automatic detection 
of agricultural activities by each farmer; 
It  is  possible  that  farmers  could  have  the 
possibility  to  alter  claims  and  rural 
development  agreements  on  an  ongoing 
basis  to  reflect  changes  in  their  holdings  and 
management obligations; 

 

  Potentially  simplifying 

the  annual  claims 
process  by  basing  payments  on  monitoring 
checks and technologies and portals for farmer 
notification.  In  addition,  the  size  of  a  control 
unit  can  be  reduced.  This  could  reduce  costs 
particularly in Member States where large 
numbers of inspections are required; 

  Increased  accuracy  and  simplification  of 
the  aid  application  from  farmers,  through 
the  confirmation  of 
the 
monitoring  and  the  combined  use  of  geo-
tagged photographs; 

results  of 

the 

  Elimination  of  bottlenecks  improving  the 

speed of payments for beneficiaries; 

  Reductions in penalties and error rates; 
  More timely identification of irregularities; 
  Cost reductions in the cost of procurement 
of  control  imagery  by  using  this  “open 
source” data; 

  Using sentinel imagery in tandem with land use 

Issues 

  The  administrative,  technical  and 
cultural  challenge  of  moving  from  a 
system  of  change  being  identified  on 
an  annual  or  less  frequent  basis  to 
one  where  change 
constantly 
identified; 

is 

  Sentinel  alone  is  unlikely  to  fully 
replace  existing  methods  (and  their 
cost) 
to  determine  boundaries  and 
ineligible  features  and  higher  resolution 
images  are  needed  to  provide  a  full 
picture; 

  The  geometric  resolution  of  Sentinel-2 
(10m  pixels)  is  insufficient  for  some 
elements and features such as hedges, 
ponds, ditches, trees in line or in groups, 
margins  of  field,  traditional  walls.  Also 
updating  parcel  boundaries  and  for  many 
permanent  crops  (olive  groves,  scattered 
orchards); 

  Monitoring parcels of <0.5 ha (present 
in  very  high  numbers  in  some  Member 
States); 
  Potential 

total  cost  of 

increased 
ownership including: 
- 

costs  of  developing  the  associated 
software; 

-  algorithms  for  accessing  processing 

and interpreting the images; 

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Issues 

-  data 

storage 

capacity  or 

cloud 
together  with 
the 

computing 
costs 
digitising  costs  of  managing 
availability of changes. 

Benefits 

particularly 

identification software to determine crops. This 
is 
as  potential 
pertinent 
alternatives for greening controls where a 
large  number  of  inspections  need  to  be 
undertaken  in  a  narrow  control  window 
and catch and cover crops must be determined 
in different periods. The greater frequency and 
availability  of  sentinel  imagery  can  be  more 
capability, 
remote 
reliable 
particularly in areas of greater cloud cover; 
of 

areas, 
grassland  and  other  features  for  direct 
payments  and  some  rural  development 
commitments  such  as  vineyards,  wild  bird 
cover 
traditional 
meadowland; 

establishment 

cultivated 

sensing 

than 

and 

  Determination 

  Using 

  Support  for  compensation  or  derogations 
associated  with  unnatural  events  such  as 
flood  or  severe  drought  conditions  where  the 
areas 
impacted  can  be  monitored  more 
precisely over time; 
the 

indicate  potential 
in  eligible  areas  (though  not 
anomalies 
accurate 
tandem  with 
dimensions) 
automated  software  that  produces  alerts  to 
digitisers  or  controllers  for  future  follow 
up. 

imagery 

to 

in 

The preliminary assessment confirms that Sentinel data has the potential to be 
a  key  component  of  a  future  monitoring  system.  Their  use  presents  the 
possibility  to  reduce  the  burden  of  on-the  spot  controls  on  administrations  and 
beneficiaries in some areas. It is however more likely to be a cost-effective solution 
for  those  Member  States  with  high  numbers  of  farmers,  which  require  large 
numbers  of  checks.  In  other Member States or regions, particularly with a smaller 
land  area  where  the  LPIS  can  be  updated  by  imagery  sources  annually,  there  is  a 
risk  that  sentinel  will  introduce  additional  development  and  maintenance  costs 
without a commensurate improvement in control or potential for cost reduction. 

d.  Spatial Software tools 

One of the more positive areas of development and consideration is around 
the use of tools to assist the ingestion and analysis of change. These range 
from: 
  software that determines specific land use; to 
  hyperspectral  analysis  that  allows  for  identifying  the  type  of  land  cover  by 

interpretation of the colours on ground; and 

  the  identification  of  potential  anomalies  for  further  research  through  tools  that 
automatically  update  the  LPIS  where  the  area  is  considered  to  be  sufficiently 
accurate against a specified set of rules thereby eliminating the need for manual 
digitisation.  

Imagery,  whether  regularly  obtained  via  sentinel  or  more  traditional  means  is 
combined with other layers of developed, procured or open source data that allow a 
suite  of  checks  against  different  regulatory  direct  payment  and  rural  development 

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requirements to take place. The majority of these tools use probability assessments 
where parcels, land uses, areas or features are flagged as potential anomalies often 
using  “traffic  light”  coding.  The  higher  the  level  of  probability  required  then  the 
greater  the  number  of  potential  anomalies  that  may  require  follow  up  or 
investigation.  The  key  to  ensuring  that  these  and  other  technologies  are  able  to 
make a cost-effective investment proposition compared with those currently in use 
is  agreeing  a  sensible  level  of  acceptable  residual  risk  to  both  Member  States  and 
EU  funds.  If  this  is  not  achieved  then  it  is  likely  that  Member  States,  fearful  of 
financial corrections, will set very high probability levels, identifying large numbers 
of anomalies that need investigation or ratification. This introduces the capacity for 
significantly increased costs or having to invest in several different technologies to 
reach the required level of assurance. 

e.  Geo-tagging 

There are a number of Member States considering or using geo-tagging capability. 
Inspectors or farmers provide evidence via time, date and location stamped images 
taken  via  smartphones  or  tablets.  Geo-tagging  refers  to  adding  the  metadata  for 
these geo-spatial information on images or other media. Identified uses include: 
  Providing  an  effective  means  for  any  area  that  is  not  effectively 
monitored  by  imagery  or  where  there  is  doubt  that  needs  verification  as  the 
result of controlled use of that imagery; 

  Validation  of  crop  type  or  feature  within  a  land  parcel  particularly  in 
determining crop diversification obligations under greening but also for specified 
crops  or  areas  under  voluntary  coupled  schemes  and  features  in  rural 
development measures; 

  A  potential  cost-effective  alternative  means  of  confirmation  of  small 
land parcels against a combination of sentinel and high resolution imagery; 
  Where  the  model  provides  the  opportunity  for  the  farmer  or  representative  to 
submit  the  geo-tagged  evidence,  the  ability  to  save  travel  and  resource 
costs  by  eliminating  or  reducing  the  need  for  rapid  field  visits  or  even  full  on-
the-spot controls; 

  A  supplementary  route  to  provide  secondary  information  for  certain 

crops or schemes such as details of seed labels; 

  Another  tool  for  updating  and  maintaining  the  accuracy  and  currency  of 

the LPIS. 

Overall  there  are  positive  views  about  the  potential  uses  of  geo-tagging 
within  an  overall  framework  of  spatial  and  technical monitoring  tools. The 
full  costs  of  using  this  technology  are  however  only  currently  being  explored. 
Moreover,  its  use  is  not  without  challenges.  Technical  skills  are  needed  to  provide 
an authoritative set of images that can be used to assure the accuracy of control or 
declared areas. It should be reasonably easy to train control officers in its use but it 
may  be  more  problematic  where  farmers  would  supply  the  evidence.  In  several 
Member States, particularly those showing low current levels of direct e-take up on 
claims  and  other  transactions  by  farmers  where  there  is  also  an  aged  farming 
population;  there  may  be  insufficient  current  technical  capability  to  make  this  a 
widespread  option  that  can  reduce  control  costs.  The  technology  needs  to  be 
tamper-proof  to  provide  assurance  that  the  image  represents  the  actual  parcel  or 
area  on  the  date  and  time  in  question.  There  is  also  a  need  to  ensure  that  any 
photographs  taken  or  used  for  control  purposes  do  not  include  any  unauthorised 

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personal  data  of  either  people  associated  with  the  holding  being  controlled  or  any 
third parties with no such ties. 

One on the use of geo-tagging from the Member States and the costs it entails are 
rather limited. One single Member State indicated the costs for the development of 
a  working  model  of  around  €50  000,  indicating  it  has  the  potential  to  provide  a 
cost-effective component.  

f.  Drones 

The most realistic use of drones is for targeted campaigns on specific areas where 
physical  access  is  difficult  for  traditional  on-the-spot  controls.  Currently  their 
coverage  and  range  limits  their  usefulness.  Several  Member  States  have 
considered and discounted their use on cost effectiveness grounds and the 
need to avoid too many different technologies seeking to achieve the same 
aim. The time and cost to acquire the details of the area under control, preparation 
and  processing  combined  with  the  level  of  initial  and  ongoing  capital  investment 
have  dissuaded  its  widespread  use  and  placed  the  focus  on  targeted  “high  value” 
inspections.  There  are  also  legal  limitations  in  some  Member  States  where  it  is 
currently national law that drones cannot be flown out of the sight of the operator. 
As  well  as  the  practical  challenges,  there  are  wider  issues  that  need  to  be 
overcome.  In  areas  of  relatively  high  population  density  or  where  the  drones  are 
being  used  to  monitor  agricultural  land  within  sight  of  non-agricultural  areas  or 
businesses there may be suspicion from those not subject to the control regarding 
their  use.  Public  bodies  are  sensitive  to  the  negative  publicity  and  challenge  that 
may arise in these circumstances. 

However as the sophistication and ability of drones to operate successfully beyond 
the  eye  of  the  controller  improves,  so  too  does  the  opportunity  to  complement 
other  control techniques. Drones  of this type  may be fuelled by hydrogen and can 
therefore undertake a control check over a greater area. In addition to eliminating 
controls  in  areas  difficult  to  access,  they  could  also  resolve  issues  where  remote 
sensing  images  are  impacted  by  cloud  and  therefore  on-the-spot  controls  are 
needed.  

g.  Robots 

Robots  are  an  option  to  reduce  the  time  intensive  tasks  of  staff  in  checking 
applications.  They  are  particularly  interesting  when  interacting  with  software 
applications. So far experience with robots is however limited, which does not allow 
to draw overall conclusions on their cost-effectiveness. A few Member  States have 
investigated the possible use of robots with one of them having piloted the use of a 
robot since 2017. 

Insights from the case studies 

In March 2017, one of the analysed Member States introduced robotics to perform certain 

functions.  The  robot  is  software  capable  of  working  with  a  number  of  other  software 

applications.  It  has  already  evaluated  thousands  of  applicants  and  their  annual 

applications. In a similar manner to paying agency staff, the robot does its work following 

clear procedures and rules. When evaluating a document received, it checks employment-

related income and / or state social insurance pensions received and transfers the data to 

paying  agency  forms  in  order  to  correctly  calculate  the  support  amount.  It  interrogates 

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other data sources to check the number of animals kept, and saves the generated report 

in  the  paying  agency’s  internal  system.  The  robot  also  completes  the  evaluation 

questionnaire,  checks  the  calculations  and  evaluates  the  application.  In  24  hours,  it 

handles  a  daily  workload  of  6  employees  alone,  evaluating  more  than  400  applications. 

This has the clear potential to reduce administrative costs, operate longer  working hours, 

support more timely payments to farmers and avoid human errors. 

Future CAP and opportunities to reduce administrative burdens 
Member States are generally supportive of simplification initiatives and the changes 
in current regulations. They highlighted however instances where changes  aimed 
at  simplifying  IT  processes 
in  additional 
for 
administration costs to adapt the IT.  

resulted 

farmers 

Insights from the case studies 

One  example  was  the  “Yellow  Card”  approach  for  applying  a  more  proportionate  penalty 

regime  where  more  discretionary  application  of  penalties  for  unintentional  first  time 

breaches. From the administrative perspective, the need to apply a retrospective element 

was  seen  as  particularly  difficult.  In  most  instances,  Member  States  suggestions  would 

require  a  less  rigorous  application  of  controls  to  get  the  simplification  benefit  such  as  a 

more  liberal  application  of  tolerances  than  currently  permitted  where  the  costs  of 

application of the control can be seen to be greater than the identified risk. Similarly, there 

were  proposals  that  specific  circumstances  of  a  Member  States  or  region  because  of  its 

scale or geography should allow derogation or flexibility in the application of some controls 

going forward.   

Looking  at  the  future  of  the  CAP,  case  study  interviews  show  largely  consistent 
views  with  those  expressed  in  the  Commission  proposal  for  the  post  2020  period 
such  as  greater  use  of  monitoring  techniques  and  other  technologies  to  allow  the 
reduction  of  traditional  inspections.  In  addition,  the  less  centralised  approach  to 
IACS  control  via  strategic  plans  presents  the  opportunity  to  address  some  of  the 
concerns  highlighted.  A  number  of  Member  States  were  supportive  of  the 
ability  to  design  their  control  systems  reflective  of  local  needs  and  to  set 
priorities within the overall  IACS framework. There are  clear opportunities to 
simplify  control  systems  with  properly  targeted  risk-based  solutions  that  can  both 
reduce  administrative  costs  and  the  burden  on  beneficiaries.  Nevertheless,  there 
were  concerns  identified  through  the  case  studies  that  the  move  of  emphasis 
towards  national  legislation  and  the  need  to  achieve  agreement  of  the  proposed 
approach  with  the  EU  would 
introduce  greater  risk  of  delay,  cost  and 
implementation  challenges  including  the  risk  of  being  accused  for  gold-plating  for 
the  next  reform  package  than  previously.  In  particular  if  the  timing  of  the 
introduction  of  new  schemes 
following  the  production  of  delegated  and 
implementing  act  is  not  adjusted  to  reflect  these  new  procedures.  In  many  cases, 
these  changes  may  have  to  be  enacted  into  national  legislation  where  previously 
the  EU  regulations  did  not  require  any  actions  for  their  transposition.  This  could 
also  lead  to  some  Member  States  coming  forward  with  conservative  proposals, 
fearful  that  more  radical  plans  will  fall  foul  of  subsequent  audit  criticism  and  risk 
financial  corrections.  In  this  scenario,  costs  and  complexity  could  increase,  as 
Member  States  apply  new  technologies  and  local  systems  in  addition  to  all  the 
existing procedures rather than rationalising or replacing them.  

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Moreover, there are fears that certain elements in the proposed CAP after 2020 are 
likely  to  require  manual  rather  than  automated  checks,  which  may  perpetuate  or 
add  to  the  administrative  burden  under  the  proposed  new  regulatory  regime.  In 
particular the proposals for payment reductions and “genuine farmers”.  

4.3.2 The Land Parcel Identification System (LPIS)  

Costs estimated for running LPIS (excl. LPIS QA) range between €133m - €147m or 
8% of IACS cost at the aggregate (EU) level and two thirds of annual running costs. 
In addition, there is a small share of costs related to LPIS QA (namely around 0.2% 
reflecting  about  2%  of  LPIS  running  costs,  ranging  in  absolute  terms  between 
€3.5m - €4.2m.) 

Main cost elements of LPIS 
LPIS cost elements identified are:  
  LPIS  update,  including  the  update  of  LPIS  content  (e.g.  acquisition  of  new 
imagery, photo-interpretation, updates as a result of evidence coming from OTS 
checks or farmer’s request etc.); 

  LPIS  upgrade,  referring  to  system’s  adjustments  required  to  align  with  the 

scope of new regulatory requirements; 

  furnishing  application  process,  including  the  integration  of  information  from 
LPIS  and  incorporation  of  GSAA  information  on  agricultural  parcels  into 
LPIS/IACS; and 

  enabling  checks,  including  activities  that  enable  administrative  checks  with 

other registries of IACS and furnish OTS checks with ground information. 

Figure 18  

Average structure of costs for running LPIS 

Activity types 

Expected share of cost 

Standard deviation 

Update 

Upgrade 

77.5% 

18% 

Furnishing application process  4% 

Enable checks 

0.3% 

Source: Ecorys based on case studies 

11.7% 

5.2% 

8.9% 

0.7% 

We  estimate  annual  LPIS  update  costs  to  be  the  major  cost  component  of 
running  LPIS,  for  both  the  main  layer  of  reference  parcels  and  ancillary  layers 
dedicated  to  ineligible  exclusions,  environmental  elements,  ecological  focus  areas 
and permanent and sensitive grassland. Depending on the type of LPIS parcels and 
methodology  to  derive  eligibility,  Member  States  report  that  they  perform  the 

82 

Update, 77.50%Upgrade, 18%Furnishing application process, 4%Enable checks, 0.5% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

update  parcel-by-parcel  (including  changes  for  different  layers),  while  in  some 
cases,  the  work  is  conducted  layer-by-layer,  e.g.  ineligible  features,  are  treated 
separately, sometimes by different administrations.  

Overall, upgrading is considered the second largest cost item, being placed 
at about one fifth of the cost. In some Member States it is only responsible for 
13-16% of LPIS costs, while in others it can go up to almost 26%. The amount of 
data  to  be  digitalised  depends  on  Member  States’  approach.  Some  Member 
States decided to include into ecological focus areas only those elements that were 
relevant to  GAECs and  environmental schemes in the previous period. Since these 
data  had  been  used  before,  costs  on  ecological  focus  areas  layer  decreased 
considerably.  In  those  Member  States,  the  highest  costs  are  reported  for  the 
separation  of  land  use  –  arable  land,  permanent  grassland  and  permanent  crop. 
These countries declared that the costs linked with LPIS are significantly high.  

In  those  Member  States  where  the  percentage  of  GSAA  is  relatively  high  or 
close  to  100%,  authorities  report  zero  costs  for  furnishing  application  and 
enabling  checks,  because  no  effort  from  paying  agency  staff  is  needed  to 
incorporate parcel data into the system. Overall, most Member States assess these 
as  marginal  costs.  Dispersion  in  our  case  study  sample  is  driven  mainly  by  the 
response  of  a  single  Member  State,  which  indicated  these  cost  items  to  represent 
respectively 20% and 2% of total LPIS cost. 

In  the  following  section,  we  present  further  insights  concerning  the  two  main  cost 
items “update” and “upgrade”. 

LPIS update costs  
LPIS  update,  responsible  for  77.5%  of  costs  in  running  LPIS,  consists  of  the 
following main cost items: 
  Acquisition of imagery; 
  Regular LPIS update (with new imagery) by means of photo-interpretation; 
  Ad-hoc updates (based on evidence coming from administrative and OTS checks, 

farmer’s request); 

  Costs of annual update of ancillary  layers (not RP); 
  Costs of implementation of remedial action plan (after LPIS QA). 

The following table provides an overview on the costs and the structure of the LPIS 
update  per  reference  parcel  based  on  case  studies  findings.  These  estimates  are 
extrapolated  from  rough  estimates  provided  by  the  Member  States  in  question,  in 
order to give an indication on the LPIS update costs.  

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Table 8 

Costs of update per reference parcel and structure of the costs in LPIS update 

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376 

3.75 

1 910  

955  

700 

0.73 

161  

92  

428 

4.65 

1 101  

367  

565 

1.54 

104  

- 

26  

82 

3.14 

- 

5 839 

34 696  

11 565  

5 128 

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- 

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50% 

59% 

65% 

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PhB  

PhB 

FB  

FB 

FB 

SC 

CadP 

CadP 

Country 1 

Country 2** 

Country 3 

Country 4*** 

Country 5 

Country 6 

Country 7 

Country 8 

Source: Ecorys based on case studies 
* Calculated on the basis of annual update cycle when exact number is not reported;  
** Country 2 reported that Remedial Action Plan after LPIS QA took up to 5% of LPIS related costs; 
*** Country 4 applies 2-year cycle;  
PhB= physical block; FB= farmer’s block; SC= single crop; CadP= Cadastral parcel 

The acquisition of the imagery is one of the main sources of costs in running 
LPIS.  
Insights  from  the  case  studies  show  that  Member  States  can  be  grouped  in  two 
categories: 
  Member States where aerial ortho-photo imagery is acquired and pre-processed 
by  national  (or  regional)  mapping  authorities.  This  imagery  is  normally  multi-
purposed  and  used  by  different  state  agencies  within  Member  States.  It  is 
therefore difficult to derive the specific, CAP related cost from the common use;  
  Member  States  in  which  the  paying  agencies  are  in  charge  of  the  imagery 
acquisition,  and  usually  outsource  it  to  a  commercial  provider.  Within  these, 
three  Member  States  reported  imagery  acquisition  costs  and  in  one  case  they 
considerably  exceed  other  LPIS  update  costs.  For  these  Member  States,  costs 
per sq.km varied from €10-€40. 

Up-to-date  ortho-photo  imagery  is  a  key  element  for  the  quality  of  LPIS 
data.  Evidence  from  the  case  study  Member  States,  points  to  an  average  of  2-
3 years  cycles  of  imagery  acquisition  and  LPIS  update.  The  majority  of  Member 
States  in  the  case  study  sample  (8  from  10  responses)  manages  to  produce 
imagery  within  the  3-year  or  even  shorter  cycle  –  which,  according  to  the  CAP 
regulation, allows them to reduce the number of some LPIS related checks. Two of 
them  reported  a  2-year  cycle.  In  the  northern  parts  of  Sweden,  where  weather 
does not permit often cloud free acquisition, it is done every 6-10 years. 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Insights from the case studies 

One  Member  State  reported  regular  use  of  Very  High  Resolution  (VHR)  satellite  imagery 

for LPIS update, whereas partially it is imagery purchased by the Commission for the need 

of  OTS  checks  with  remote  sensing.  In  addition,  other  two  reported  that  their  PAs 

purchased VHR imagery to map reference parcels along an EU external border where it is 

difficult  to  arrange  aerial  survey  flights.  Another  Member  State  uses  satellite  imagery  to 

map oversea territories. 

Regular  LPIS  update  by means  of  visual  photo-interpretation  on  the  screen 
based  on  aerial  ortho-photos  is  reported  as  the  main  methodology  for  the 
reference  parcel  regular  update.  Additional  data  requirements  in  the  current 
programming  period  such  as  separation  by  agricultural  land  type  and  mapping  of 
EFA led to a considerable increase of time needed for parcel updates.  

Insights from the case studies 

The majority of countries declared that the amount of reference parcel updates per year is 

strongly  connected  to  the  imagery  acquisition  cycle.  The  goal  is to  ensure  correctness  of 

parcel  information  and  prevent  a  situation  where  LPIS  contains  parcels,  which  were 

updated more than 4 years ago.  However, shortening imagery acquisition time may lead 

to an increase in costs – for imagery and for the more frequent update exercise .  

The  wide  range  of  costs  does  not  allow  making  reliable  conclusions  on  the 
dependency  from  the  reference  parcel  type.  For  the  physical  block  type,  the  only 
information  needed  for  interpretation  are  physical  borders  from  imagery  and  land 
cover.  For  other  parcel 
information  are  needed 
types,  some  additional 
(ownership/cadastral  borders).  Therefore,  interpretation  of  physical  blocks  is 
theoretically considered as less costly. An overview on cost estimates based on 
the case studies is presented below. The exemplary information collected does not 
fully support this consideration. 

Table 9 

Costs for photo-interpretation per RP per type 

Parcel type 

Cost of photo-interpretation  
per parcel, € 

Country 1 

Country 2 

Country 3* 

Country 4 

Country 5 

Country 6 

Country 7 

PhB 

PhB 

FB 

SC 

FB 

FB 

CadP 

0.08 

0.54 

1.54 

0.48 

0.36 

1.00 

0.44 

Source: Ecorys based on case studies 

* Country  3  reported  that  during  photo-interpretation  of  RP  all  ancillary  layers  are  also  updated  if 

necessary. 
PhB= physical block; FB= farmer’s block; SC= single crop; CadP= Cadastral parcel 

Costs of ad-hoc updates (triggered by evidence coming from administrative and 
on-the-spot  checks,  farmer’s  request)  are  considerably  low  and  reported  as  a 
part  of  the  regular  update.  Regarding  the  ad-hoc  updates  of  farmer’s  blocks,  in 
some  countries,  the  feedback  from  the  applicant  is  required.  For  instance,  in 
France, when the ecological focus areas layer is updated, farmers should be notified 
and  confirm  its  correctness.  A  considerable  amount  of  time  is  spent  for 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

updates stemmed from field measurements during on-the-spot checks. The 
ratio of field visits to the regular updates may differ from 10% to 35%.  

Costs  related  to  the  implementation  of  remedial  action  plan  are  incurred  only  if 
needed as an outcome of the LPIS QA99. In the study conducted, only two Member 
States  reported  these  costs,  which  represented  approximately  13.5%  and  17%  of 
LPIS update costs.  

LPIS upgrade costs 
Upgrade costs, being responsible for estimated 18% of LPIS running costs, 
are deemed as considerably high – sometimes close to annual LPIS update 
cost (see table below). The main workload accumulated in the two first years of the 
programming period indicates considerable increase in administrative burden at the 
beginning.  Some  Member  States  report  that  it  costs  additional  staff  to  employ  to 
keep-up  with  the  reform  timetable.  Regarding  different  layers,  evidence  indicates 
that the EFA layer was the most expensive.  

The cost of the additional layers should be weighted against the purposes it serves. 
For  instance,  layers  added  to  LPIS  to  serve  requirements  of  the  CAP  2013  reform 
may  also  have  an  important  role  in  the  monitoring  and  evaluation  process  and 
serve the enforcement and controls of other environmental legislations.  

Insights from the case studies 

Member  States  that  made  the  choice  to  use  only  elements  of  agro-environmental 

measures  and  landscape  features  of  previous  programming  period  as  EFA,  saved  on  the 

new  layer  digitalization  costs.  The  decision  was  also  supported  by  the  assumption  that 

those  environmental  elements  are  already  familiar to  the  farmers.  There  were  also  more 

ambitious,  environmentally  dedicated  approaches  by  some  countries  trying  to  include  as 

many different features as possible. Those countries run in considerable costs, as reported 

by  one  of  them:  “this  problem  comes  from  the  initial  Member  States  LPIS  choice: 

delimiting  every  non-agricultural  surface  at  the  level  of  isolated  trees,  as  long  as  they 

present a scenic and ecological interest, it needs to be delimited”.  

Based  on  the  information  collected  from  the  case  studies,  the  following  table 
provides  individual  cost  estimates  for  LPIS  upgrade  for  the  period  2013-2017,  as 
compared to the annual LPIS update cost. 

Table 10 

Cost  of  annual  LPIS  update  and  upgrade  from  the  start  of  the  CAP  2013 
reform 

Update for year 
2017, thousands 
€  

Upgrade for program 
period 2013-2017, 
thousands €  

Ratio of upgrade in 
terms of annual 
update 

Country 1 

Country 2 

Country 3 

Country 4 

Country 5* 

Country 6 

700.0 

428.1 

5839.8 

376.3 

82.3 

565.6 

Source: Ecorys based on case studies 
* Country 5 does not apply EFA. 

300.0 

319.1 

3607.5 

508.5 

11.3 

290.0 

43% 

75% 

62% 

135% 

14% 

51% 

99 https://marswiki.jrc.ec.europa.eu/wikicap/index.php/LPIS_TG_ETS  

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
                                                           
Analysis of administrative burden arising from the CAP 

Costs  incurred  are  related  to  the  development  of  application  and  integration  with 
different  IT  systems  of  IACS.  They  are  lower  for  countries  which  introduced  e-
application with its graphical part long time before the reform. In fact, they needed 
to  conduct  only  maintenance  updates  to  conform  with  new  rules  and  to  achieve 
integration  with  other  IT  systems  that  were  applicable  for  these  countries. 
Concerning  IT  costs  for  GSAA,  Member  States  did  not  separately  specify  the  cost 
related to integration with LPIS. 

Insights from the case studies 

One  Member  State  under  observation  with  relatively  low  number  of  beneficiaries,  spent 

€709k for GSAA-related IT-development in the programming period (but first introduction 

of the e-application was long ago). Since 2013, the Member State saved €18.5 thousands 

on  pre-printing  maps  and  €95  thousands  on  mailing  costs  due  to  graduate  increase  in 

number  of  on-line  applications.  The  total  cost  of  printers  with  soot  and  paper  costs  has 

decreased from €26 thousands to €8 thousands per year. 

Effectiveness and efficiency of approaches 

Effectiveness of update methodologies 
All  case  study  Member  States  indicate  that  the  visual  photo-interpretation  on  the 
computer  screen  using  aerial  ortho-photo  imagery  unanimously  is  the  best 
methodology for updating reference parcels. This process is supported to different 
extents  with  on-the-spot  checks  and,  in  particular,  GPS  field  measurements  of 
eligible  area.  The  complexity  of  eligibility  criteria  and  number  of  small 
features/landscape elements, which are eligible at certain circumstances (e.g. size, 
width or length), do not permit automatic classification with the existing capabilities 
and,  human  decision  is  needed.  Therefore,  VHR  satellite  imagery  cannot  support 
the level of detail needed to establish eligibility areas precisely. 

Additional actions to address the aforementioned issues include the following: 
  In  the  systems  with  farmer’s  block  and  cadastral  parcel  (Estonia,  France, 
Sweden,  Spain),  it  is  frequent  that  declarations  of  the  farmer  and  cadastral 
ownership boundaries are also taken into account to associate an applicant to a 
particular parcel; 

  Previous year declaration are consulted, farmers should confirm land use of the 

previous year or submit changes; 

  Information  on  ineligible  inclusion  (presence  and  extent)  detected  from  the 
institution)  should  be 

(or  associated 

photo  by 
the  paying  agency 
confirmed/objected by the farmer; 

  Additional information is consulted, different state registries according to nature 

and heritage protection legislation. 

Overall,  aerial  ortho-photo  imagery  seems  to  be  the  best  and  most  precise  data 
source for LPIS update. VHR satellite pictures are used by very small countries , for 
border areas and outermost territories. 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Effectiveness and efficiency in determining reference parcel eligibility 
Member  States  follow  three  main  different  approaches  for  determining  reference 
parcel eligibility: 
  Agricultural parcel (Single crop) and farmer’s block use an approach where 
100% of the parcel graphical shape is eligible (in other words only eligible land is 
digitised).  Some  ineligible  features,  which  are  smaller  than  digitalisation 
threshold,  as  stored  alfa-numerically  (pro-rata).  Reference  parcels  are  digitised 
based on eligibility criteria (this process only includes eligible land, separated by 
land use). For farmer’s block it is also important that parcels belong to one farm, 
and during the update data from previous application years are consulted; 

  In  case  of  physical  block  (sometimes  also  called  topographical-block)  borders 
of  topographical  elements  such  as  roads  and  water  courses  from  imagery  form 
reference parcel boundaries. This makes digitalisation/updating much faster and 
changes  are  minimal  over  time.  This  type  of  reference  parcels  is  always 
supported  by  layers  of  land  uses  and  one  of  small  ineligible  features,  which  is 
updated  more  frequently  to  take  account  of  ineligible  land.  Eligible  areas  on 
reference  parcels  are  calculated  by  spatial  or  alpha-numerical  subtraction  of 
these layers; 

  Cadastral  boundaries  are  the  primary  container  of  eligible  land  in  cadastral 
parcels.  Such  parcels  are  subdivided  by  sub-parcels  of  different  land  use  (for 
example recinto in Spain). In addition, small ineligible elements and the eligible 
element of EFA are added to eligibility by land use spatially or alpha-numerically. 

When  number  and  frequency  of  the  ineligible  features  are  high  and  manual 
digitisation is burdensome, a pro-rata approach is used / operator assess the ratio 
of  inclusions  for  wider  territory  (some  specific  landscapes  such  as  alvars,  wooded 
meadows,  independent  of  type  of  the  parcel).  Since  the  pool  of  ecological  focus 
areas’ features accommodates a former pro-rata element, it seems that the number 
of MSs using pro-rata method has decreased. 

Evidence from the case studies shows that agricultural parcel (Single crop) and 
farmer’s  block  are  the  most  effective  solutions  in  terms  of  administrative 
checks,  due  to  tighter  delineation  of  eligible  land  and  their  direct  link  to  the 
particular  beneficiary  (lower  risk  of  double  declaration).  This  is  the  reason  why 
some  Member  States  underwent  evolutional  transition  from  physical  to  farmer’s 
block.  However,  those  two  types  lose  considerably  to  physical  block  in  terms  of 
maintenance costs and therefore advantages in efficiency diminish – the physical 
block system is more stable, with faster and cheaper update requirements. 
In addition, the number of parcels in the system increases when the parcel type is 
changed  from  physical  to  farmer’s  block.  The  cadastral  parcel  is  less  effective  in 
cross-checks  than  the  farmer’s  block  as  by  definition  does  not  match  any 
boundaries of agricultural land. However, there is no evidence that it is more or less 
expensive  to  maintain  compared  to  e.g.  physical  block  (Member  States  with 
cadastral parcel provided only sum of cost, but failed to give statistics on number of 
parcels and rate of update).  

88 

 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Therefore,  we  conclude  that  the  farmer’s  block  is  the  most  efficient  in 
administrative checks and therefore most secure to the funds in the current IACS 
set-up.  Nevertheless,  the  case  studies  show  that  its  superiority  is  not  absolute 
and  since  conditions  in  and  choices  of  Member  States  differ  greatly,  all  of  the 
parcel types can perform effectively100.  

LPIS QA: quality assurance framework and annual assessment  
Total estimated costs for LPIS QA represents a small share of the total IACS cost at 
the aggregate (EU) level, namely around 0.2% reflecting about 2% of LPIS running 
costs, ranging in absolute terms between €3.5m - €4.2m. 

LPIS QA procedures and associated costs 
Regarding the LPIS QA procedures, the following cost elements were identified:  
  Understanding the methodology and coping with methodological changes; 
  Preparing the work (including imagery); 
  Carrying out the LPIS QA data test suite (ETS) observations (central part of the 

QA); 

  Conducting rapid field visits, if necessary; 
  Reporting to the Commission (reports to DG AGRI and to the DG JRC). 

We observe the carrying out of the ETS to be the main cost item of LPIS QA. 
The range of costs attributed to each step based on the case study Member States 
is presented in the table below. 

Table 11 

Ranges in cost for LPIS QA between the Member States 

Range 

5-10% 

5-15% 

Steps in the LPIS procedure 

Understanding the methodology and coping with methodological changes 

Preparing the work (including imagery) 

60-70% 

Carrying out the LPIS QA data test suite (ETS) observations (central part of the QA) 

0-2% 

Conducting rapid field visits, if necessary 

15-25% 

Reporting to the Commission (reports to DG AGRI and to the DG JRC) 

5-15% 

Preparing Remedial Action Plan* 

Source: Ecorys based on case studies 

 *Not always the case, only when MS fail to pass ETS 

The  size  of  sampling  lot  for  LPIS  QA  is  calculated  from  the  total  number  of 
reference parcels falling under its scope101 by employing industry standard and may 
vary from 500 up to  1,250102. The time needed for quality assurance  may depend 
on  a  number  of  factors,  such  as  the  lot  size,  the  type  of  reference  parcel  and  the 
complexity  of  the  eligible  area  determination  rules.  Overall,  case  study  evidence 
shows  that  larger  sample  sizes  (1,250  parcels)  are  associated  in  absolute 
terms  to  higher  time  spent  for  LPIS  QA  (table  below).  Nevertheless,  there  is 
the  exception  of  a  Member  State  reporting  relative  low  time  spent,  despite  the 
relatively large sample size. An overall assessment in terms of FTE per parcel does 
not  lead  to  clear  conclusions.  This  finding  may  suggest  however,  a  correlation 

100 NOTE: LPIS can be considered effective when it allows Member States to unambiguously locate, identify and measure the maximum 
eligible  areas  (MEA)  of  the  reference  parcels  declared  by  beneficiaries,  along  with  reliably  checking  the  related  administrative 
requirements and information. 

101 https://marswiki.jrc.ec.europa.eu/wikicap/index.php/ETS_Scope   
102 JRC ( 2011): LPIS quality inspection: EU requirements and methodology 

89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

between  the  time  needed  for  LPIS  QA  and  the  reference  parcel  type. 
Looking  at  the  reference  parcel  type  in  fact,  countries  adopting  agricultural 
parcel (Single crop) and farmer’s block reported less time spent for quality 
assurance  compared  to  the  others,  irrespective  of  the  lot  size.  For  these 
countries, time spent on LPIS QA ranges between 0.13 to 0.56 FTEs.  

In  absolute  terms,  reported  costs  of  LPIS  QA  ranged  from  €8  thousands  to 
€16  thousands.  There  is  one  exception  amongst  the  cases  reporting  very  high 
cost.  A  possible  explanation  for  that  refers  to  the  fact  that  the  same  country 
reported that LPIS QA methodology is deemed not to be sufficiently tailored to the 
specificity of the national system.  
The following table provides an overview of the case study responses. 

Table 12 

Total time taken by LPIS QA 

RP type 

Sample  size  – 
Nr.  of  parcels 
under the test 

Time spent to 
in 
LPIS  QA 
2017, FTE 

Costs  of  LPIS  QA, 
thousands € 

Country 1 

PhB 

Country 2 

Country 3 

Country 4 

Country 5 

Country 6 

FB 

FB 

SC 

CadP 

CadP 

1,250 

800 

1,250 

500 

1,250 

1,250 

1.27 

0.33 

0.13 

0.56 

6.9   

1.33 

16.2 

7.8 

8.5 

12.5 

278.9 

16 

Source: Ecorys based on case studies 
PhB= physical block; FB= farmer’s block; SC= single crop; CadP= Cadastral parcel 

Regarding the time spent per reference parcel an indicative value of approximately 
half an hour was derived from the case study Member States. However, this 
value  varies  depending  on  the  quality  of  imagery.  Some  countries  reported  that 
they consult better resolution imagery, such as aerial photos, when performing data 
test observations. In contrast, others indicated that additional information is rarely 
consulted. 

Main difficulties reported by Member States include the following: 
  Difficulties in understanding of LPIS methodology, as presented in terms of 
complex  ISO  geo-spatial  standards  and  INSPIRE.  On  the  other  hand,  others 
indicate that applying the standard methodology ensured correctness; 

  Interpretation  of  the  technical  specifications,  which  are  only  available  in 

English, is sometimes very difficult; 

  Inconvenient  format  of  geospatial  data  exchange  (GML),  conversion  tools 

for which are not provided by many standard desktop software; 

  Member  States  that  use  specialised  software  for  LPIS  QA  need  to  amend 
functionality  to  align  with  changes  in  methodology,  but  the  majority  of 
respondents  mentioned  that  the  methodology  finally  is  in  place  and  software 
used for the LPIS test reporting  to the Commission (ETS Reporter) works well; 
  One of the major concerns expressed in case studies refers to low resolution of 
imagery provided by the EC (satellite VHR). Thus, there are variations in the 
precision of digitalisation already programmed into the methodology. In order to 
reduce  discrepancies,  Member  States  use  additional  information  (10-15%  of 
cases as reported by Estonia); 

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Analysis of administrative burden arising from the CAP 

  Member  States  with  small  parcels/uneven  terrain  have  higher  level  of 
discrepancy  when  parcels  are  measured  with  VHR.  A  paying  agency 
response  explains:  “Thresholds  are  now  in  percentage,  but  tolerance  for  small 
parcels should be also expressed in minimum area of square meter, currently no 
waiver for classification correctness QE2c”; 

  Methodology  expects  the  drawing  of  reference  parcels  from  scratch. 
Random operator(s)  errors and on the imagery of lower quality become system 
errors – the one commonly mentioned drawback of LPIS QA methodology. 

Alternative uses of imagery and optimisation of roles 
In some cases, imagery is also used to a limited extent for other purposes. 
Seven out of twelve  case  study Member States indicated that the imagery are not 
used for other purposes due to very low image resolution. While five Member States 
report  that  they  use  it  at  limited  extent  for  visual  interpretation  in  LPIS  update, 
especially if territory not covered by the most recent aerial imagery.  

In general, the majority of interviewed authorities considers the current roles and 
responsibilities of the European Commission and Member States for the QA 
for 
framework  as  rather  appropriate.  Nevertheless, 
improvement coming from the case studies include the following:  
  More freedom and flexibility in the selection of sites and test examples. Member 

the  suggestions 

States are best placed to assess the representative case constellations;  

  Some  adaptation  needed  in  terms  of  different  models  suited  to  national  needs 

for LPIS with small parcels and cadastral parcel type. 

for 

things 

Future CAP and opportunities to reduce administrative burdens 
The  LPIS’s  main  functions  are  to  locate,  identify  and  quantify  agricultural  land. 
Member  States  put  significant  financial  resources  into  establishing,  running  and 
updating  their  land  parcel  identification  systems.  Changes  in  regulations  aimed  at 
in  additional 
farmers  sometimes 
simplifying 
administration costs to adapt technology, introduce new control procedure and 
create/update  data  sets  supporting  them.  However,  there  are  no  obligations  in 
place  to  collect  information  on  the  amount  and  structure  of  costs,  which  makes  it 
difficult  to  monitor  their  development.    As  already  discussed  in  Section  2.2.4 
regarding  the  set-up  of  a  framework  for  assessing  LPIS  Cost-Effectiveness,  a 
common  framework  to  identify  the  specific  costs  to  be  collected  may  prove 
beneficial for this purpose. 

resulted 

Moreover,  a  major  difficulty  reported  by  case  study  Member  States  relates 
to  the  high  level  of  accuracy  required  for  surfaces  and  landscape  features 
included  in  the  LPIS.  The  level  of  accuracy  is  considered  excessive.  The  main 
difficulties concern area size, area overlaps, occupancy, and determination of non-
agricultural  area.  This  is  particularly  problematical  in  small  parcels  with  a  high 
share  of  landscape  elements.  This  aspect  is  an  important  cost  driver  for 
administrative  checks  and  requires  a  lot  of  time  in  most  Member  States  when 
updating the LPIS. 

The  implementation  choices  in  CAP  made  by  Member  States  have  a 
significant  influence  on  the  administrative  costs  of  LPIS.  Some  Member 
States made the choice to use only elements of agro-environmental measures and 
landscape  features  of  the  previous  programming  period  as  ecological  focus  areas 

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and,  therefore,  these  administrations  saved  on  the  new  layer  digitalization.  This 
decision was also supported by the assumption that those environmental elements 
are  already 
farmers.  There  were  also  more  ambitious, 
environmentally dedicated approaches by some countries trying to include as many 
different features as possible - those countries run into considerable costs. 

familiar 

the 

to 

A  pan-European  LPIS  could  be  established  throughout  Member  States  aiming  to 
harmonise  the  procedures  and  reduce  administrative  costs.  Most  Member  States’ 
authorities  did  not  identify  clear  overall  benefit  in  such  a  solution.  Nevertheless, 
case  studies  underlined  that  it  is  difficult  to  estimate  any  impacts  without 
insights on the share of roles and responsibilities between Member States and 
the  Commission.  The  overall  stance  towards  a  pan-European  LPIS  was  negative, 
some potential benefits, challenges and other considerations are listed in the table 
below. 

Table 13  

Case study authorities’ reflections on a pan-European LPIS 

Advantages 

Challenges 

Other considerations 

  More  homogeneity  across 
the  EU  in  the  type  of  LPIS 
implementation; 

  Difficulty 

to  address  all 
different  choices  of  Member 
States; 

  Considerable  reduction  of 
costs for Member States, as: 
the  EU  may  take  over  the 
financing  of  the 
imagery 
acquisition. It may also lead 
to  staff  reduction  for  paying 
agencies; 

  Reduced  audit  reviews  and 

subsequent sanctions; 

increased 
  Potential 
efficiency 
in  case  result-
based/  monitoring  approach 
in 
to  harmonise 
payment  practices,  avoid 
difference 
treatment, 
in 
audit/appeals blockages. 

order 

  Standardisation  in  the  type 
of  LPIS  reference  parcels  is 
technically  difficult  or  even 
impossible 
in 
particular,  due  to  different 
systems  and 
agricultural 
landscape patterns; 

exercise, 

  Various 

environmental 
conditions, 
historical 
aspects,  and  agricultural 
practices  would  be  difficult 
to address; 
  Standardisation 

in 
geospatial  terms  will  have 
different  impact  on  Member 
States; 

the 

  Only  one  Member  State 
confirmed  that  they  were 
consulted  on 
topic; 
others  said  that  they  have 
not been consulted so far; 
  Member  States  expressed 
that 
concerns 
between 
responsibilities 
the 
Member  States  and 
Commission  are  unclear  in 
this  solution:  which  costs 
will  be  borne  by  whom  and 
who  will  be  responsible  for 
the update of the EC LPIS.  

States 

  Difficult  to  implement  as  all 
Member 
have 
basically  built  up  their  own 
systems;  
be 
  There  would 
difficulties 
reach 
consensus  between  Member 
States; 

also 

to 

  OTSC  versus  EC  LPIS  –  the 
process  of  checks  will  be 
less effective; 

  Regarding 

ortho-photo 
image,  nowadays  Member 
States  are 
in  charge  of 
acquisition,  each  Member 
State has a different cycle; 
  Communication with farmers 
will be slow and inflexible; 

  Possibly 

slower  decision-

making processes.  

Source: Ecorys based on Case Studies 

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The LPIS QA has led to improvements for LPIS and its updates according to 
case study Member States, although with some differences in the intensity of such 
improvement.  On  the  one  hand,  four  Member  States’  authorities  indicate 
improvements  to  a  limited  extent,  as  the  system  in  place  was  deemed  already 
effective  and  did  not  require  substantial  improvements.  On  the  other  hand,  six 
Member  States  reported  that  improvements  were  observed  to  high  or  very  high 
extent, justifying their opinion by the fact that LPIS QA allowed them to detect and 
analyse the type of errors and to focus on them during regular update through the 
implementation of remedial action plans. 

The  number  of  parcels  updated  during  LPIS  QA  is  rather  low  and  Member  States 
indicated  increasing  the  aerial  imagery  resolution  as  the  major  factor  for  quality 
improvement.  Overall,  LPIS  quality  has  improved  greatly  since  2010,  when 
LPIS QA became mandatory according to interviewed authorities; this is mainly 
due to technological advances in aerial photography such as higher resolution and 
more  frequent  acquisition.  LPIS  QA  only  gives  insight  on  type  and  sources  of 
possible errors.  

A  common  remark  from  several  Member  States  was  that  LPIS  QA  does  not 
require  any  immediate  changes,  and  stable  requirements  should  be 
ensured  in  the  future.  Arguments  supporting  the  current  version  of  LPIS  QA 
include the following: 
  ETS  is  a  useful  instrument  and  an  appropriate  way  to  check  if  the  systems 
works.  It  has  led  to  improvements  of  the  system,  as  the  deviations  are  lower 
year by year; 

  It shows probable weaknesses or distortions, which should be addressed in order 

to improve LPIS quality; 

  It  provides  feedback  on  the  quality  and  main  types  of  errors  in  LPIS,  thanks  to 

quality indicators; 

  The LPIS QA is an effective and low-cost tool to check and assure data quality. 

Nevertheless, along with some specific difficulties reported in the previous section, 
Member States also raised points of attention with respect to guaranteeing accurate 
impression  of  LPIS  quality,  the  number  of  requested  indicators  and  the  limited 
benefit in case of Member States with already low error rates.  

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Analysis of administrative burden arising from the CAP 

4.4   Management and control costs 

Estimated cost of €1.27 bn - €1.44 bn or 

GSAA system  is expected to substantially improve 

74% of total IACS cost 

cost-effectiveness 

Controls in all direct payments are estimated at 

Administrative checks cover about two 

approximately a third of the total IACS costs 

thirds of cost of controls 

Member States needed 6 to 36 months 

Payment Entitlements: €238m - €278m or 14% of 

to implement the new PE systems 

total IACS cost 

Greening: €166m - €186m or 10% of total IACS 

Expected increase in costs due to the 

cost 

2017 greening review 

Red tape from cross-compliance is 

estimated between 0.3% and 4.3% of 

the overall burden 

Cross-compliance: €130m - €152m or 8% of total 

IACS cost 

Rural Development: : €558m - €626m or 32% of 

total IACS cost 

The M10 – Agri-environment schemes in 

particular are causing high personnel 

costs in most Member States 

94 

Management and controls costs, 74% 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Overall,  management  and  control  costs  represent  the  greatest  component  in  the 
total  IACS  costs.  In  fact,  estimated  costs  account  for  74%  of  total  IACS  cost, 
ranging  between  €1.27bn  -  €1.44bn.  Management  and  control  costs  can  be 
approached  from  a  horizontal  angle  distinguishing  between  activities  related  to 
administrative checks vs. on-the-spot checks (OTSC) and a vertical thematic angle 
distinguishing between costs for payment entitlements, greening, cross-compliance, 
IACS-based RDP measures and other controls of direct payments. 

Figure 19  

Breakdown of management and control cost from vertical and horizontal 
perspective  

 1.400

 1.200

 1.000

 800

 600

 400

 200

 -

n
o

i
l
l
i

m
€

Payment
entitlements

Greening

Cross
compliance

other DP related
activities

Rural
development

0%

25%

50%

75%

100%

Administrative controls

On-the-spot checks

s
t
s
o
c

l

o
r
t
n
o
c

d
n
a

t
n
e
m
e
g
a
n
a
M

s
k
c
e
h
c

S
T
O
d
n
a

e
v
i
t
a
r
t
s
i
n
m
d
a

i

f
o

e
r
a
h
S

Source: Ecorys 

From a horizontal perspective, administrative checks are responsible for about two 
thirds  of  the  cost,  while  OTSC  account  for  one  third  of  them.  Vertically,  RDP  IACS 
controls cover about one third of the cost followed by payment entitlements, other 
controls (such as young farmers scheme and basic payment scheme), greening and 
cross-compliance. 

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Analysis of administrative burden arising from the CAP 

Breakdown categories and potential overlaps 

The aforementioned types of costs and IACS components are used to present a breakdown 

of IACS costs. In practice, the administrative control framework that Member States put in 

place to apply the regulations is often applied holistically and may not break down neatly 

into  these  components  and  types  of  costs.  This  means  that  these  categories  are  not 

necessarily mutually exclusive and some overlaps may occur. For instance:  

 The  specific  IACS  components  under  “management  and  controls”  (i.e.  payment 

entitlements, greening, cross-compliance and rural development measures), also entail 

some  :  “set-up  costs”  to  adjust  the  system  to  their  reforms  and  changes  as  well  as 

some “running costs” for their management.  

 This  division  attempts  to  estimate  the  costs  of  controls  under  greening  and  payment 

entitlements  aside  the  total  cost  of  controls.  Since  most  of  the  time  controls  under 

different schemes are combined, this is only an approximate estimate.  

In  the  following  sections  we  first  provide  a  horizontal  assessment  of  cost  drivers 
and  aspects  concerning  controls,  followed  by  a  specific  vertical  focus  on  payment 
entitlements,  greening,  cross-compliance  and  IACS-based  rural  development 
measures. 

4.4.1 Horizontal assessment of cost drivers and aspects concerning controls 

The  horizontal  assessment  of  IACS  management  and  control  costs  focuses  on  the 
distinction  between  administrative  checks  and  on-the-spot  checks  as  well  as 
organisational  and  operational  choices  affecting  the  costs,  a  possible  relation 
between them and error rates and the future of the CAP. 

Cost of management and controls 
Costs  of  management  and  control  related  activities  are  estimated  to  represent 
74%  of  the  total  IACS  cost.  However,  this  share  varies  significantly  among 
Member  States,  ranging  from  almost  50%  to  more  than  90%.103  The  costs  for 
management and control equal about 1.9% of the total aid received. Again, this 
share  varies  a  lot  between  Member  States,  but  also  among  controls  and 
management  linked  to  the  two  different  pillars.  Costs  for  the  management  and 
controls  range  between  0.3%  and  9.7%of  total  aid  received  for  direct  payments, 
and  0.3%  and  12%  for  the  management  and  controls  of  pillar  I  and  pillar  II  (see 
  Table  14).  If  reported  to  the  total  UAA  of  the  Member  States  (regional  UAA  for 
Andalusia,  Bavaria  and  Emilia  Romagna  were  considered),  the  cost  of  controls 
varies  in  the  case  study  sample  between  €0.9  per  ha  up  to  around  €58  per  ha  of 
UAA for all IACS measures. 

There is also a variation of cost shares among the pillars, which is mainly explained 
by  the  number  of  FTEs  employed  on  the  performance  of  controls  (higher  under 
Pillar II), which is obviously linked to the number of applicants and more generally 
to  the  importance  of  the  agricultural  sector  in  each  Member  State.  To  a  lesser 

103 Data on control costs have been collected in the 12 sample Member States. Depending on the case study, data were 
either  provided  by  the  administrations  interviewed  or  come  from  the  DG  AGRI  survey.  In  all  cases,  the  information 
corresponds  to  annual  costs  (latest  data  available  2016  or  2017).  For  Italy,  Germany  and  Spain,  which  have  a 
decentralised  administrative  organisation,  data  considered  are  at  regional  level  (Emilia  Romagna,  Bavaria  and 
Andalusia).  When  only  data  on  the  number  of  FTEs  employed  on  control  were  available,  the  cost  in  euros  was 
estimated  using  Eurostat  data  on  the  yearly  average  labour  costs  for  different  employee’s  categories  (assuming  a 
share of the different employee’s categories in the administrations concerned). 

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Analysis of administrative burden arising from the CAP 

extent,  differences  in  the  cost  of  labour  force  considered  accentuates  the  gap 
between Member States. 

Table 14  

Share of  control  costs  in the amount  of  aid  (direct  payment  and IACS  EAFRD 
measures) 

Direct payments 

Direct payments and IACS EAFRD measures 

Min 

Max 

weighted average 

Median 

0.3% 

9.7% 

1.2% 

1.3% 

0.3% 

12.% 

1.9% 

2.7% 

Source: Case studies and financial reports for EAGF and EAFRD expenditures 

Administrative checks 
Administrative checks need to be performed for all aid applications. They therefore 
present the majority of all controls, also in terms of  costs. On average, 64%  of 
the overall costs for management and controls are linked to  administrative checks. 
The  proportion  of  costs  dedicated  to  administrative  checks  varies  among  Member 
States (see Figure 20) and tends to be higher for larger countries, mainly for Pillar 
II related controls.  

Figure 20 

Distribution  of  the  share  of  administrative  checks  /total  cost  of  controls 
among the 12 Member States 

4 

2 

2 

4 

less than 40%

40% to < 60%

60% to <80%

80% and more

Source: Case studies and DG AGRI survey 

The main cost driver in running administrative checks is the time needed for on-
the-spot  checks. These checks  are necessary mainly when administrative checks 
involve  data  not  included  in  the  integrated  system  or  when  requirements  are  too 
complex  to  be  fully  automated  (e.g.  because  of  exemptions).  They  are  also 
necessary when dealing with anomalies or incomplete claims. 

Examples of necessary manual checks identified in the case studies 

  Check active farmers status; 

  Check eligibility to young farmer scheme; 

  Checks  on  crop  rotation  (for  agri-environment-climate  Measures (AECM))  that  cannot 

always be automated as they depend on specific measure requirements; 

  Check of stocking density for organic farming; 

 

Transfer of PE: supporting documents provided directly by farmers; 

  Dealing with non-agricultural areas and overlaps of land between neighbours. 

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Analysis of administrative burden arising from the CAP 

The  second  current  key  cost  driver  is  investments  in  IT  tools.104  These  are 
mainly  related  to  the  evolution  of  IACS.  In  particular  the  increased  integration  of 
databases,  the  integration  of  IACS-rural  development  measures105,  and  the  initial 
configuration of the necessary administrative checks require significant investments 
in the IT infrastructure. More performant IT systems should however increase cost-
effectiveness  of  administrative  checks  in  the  long  run  by  reducing  the  number  of 
necessary manual checks. 

The  third  key  cost  driver  is  the  complexity  of  the  intervention  logic  (and 
changes  in  regulations  and  requirements  can  lead  to  an  increase  of  both  IT  costs 
and manual checks). 

Figure 21  

Case  study  Member  States  average  ratings  on  cost  drivers  for  administrative 
checks 

Source: Case studies and DG AGRI survey 

On-the-spot checks (OTSCs) 
On-the-spot  checks  account  for  a  smaller  share  of  the  overall  costs  for  controls 
(approx.  36%).  The  paying  agencies  of  the  Member  States  included  in  the  case 
studies  identified  some  of  the  key  cost  drivers  for  OTSC.  Costs  for  IT  tools  stand 
out  as  a  major  cost  driver.  Indeed,  the  development  and  upgrade  of  specific  IT 
systems to assist and monitor OTSC, as well as the development of remote sensing 
are cost intensive. Out of the twelve case study Member States, most have specific 
IT  systems  for  OTSC.  Inspectors  generally  make  use  of  tablets,  which  are  also 
taken into account in the IT costs. However, as IT costs are usually one-off costs, it 
is  not  clear  if  Member  States  discounted  the  costs  for  IT  tools  when  asked  to 
identify  the  key  cost  drivers.  Rather,  the  major  cost  driver  can  be  expected  to  be 
the  labour  costs,  i.e.  the  time  spent  on  visiting  farms  to  perform  the  controls.  In 
addition,  Member  States  identified  the  determination  of  the  sampling  method  and 
difficulties  in  accessing  the  farms  as  cost  drivers.  Member  States  indicating 
challenges  to  determine  the  sampling  method  generally  experience  difficulties  in 
combining  the  criteria  for  different  schemes  to  combine  the  OTSC  for  different 

104 IT tools are included here in order to reflect the existence of the need of new IT or IT updates arising from controls; 

however, IT costs are quantified and assessed under Section 4.2 Set-up. 

105 which used to be under different systems in some Member States, e.g. in France 

98 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

measures.  The  difficulty  in  accessing  farms  is  primarily  related  to  the  specific 
geographical  context  and  structure  of  the  farms  (number  and  distance  of  the 
different parcels) in each MS. 

Figure 22    Case study Member States’ average ratings on cost drivers for OTSC 

Source: Case studies and DG AGRI survey 

The extent to which remote sensing is used, as well as the technologies used for 
remote sensing also have a major impact on the cost of OTSC. In general, physical 
controls  are  more  expensive  than  remote  sensing  controls.  However,  remote 
sensing  cannot  be  used  for  all  types  of  controls.  The  control  of  certain  greening 
requirements  for  instance  implies  visual  controls.  The  cost  of  remote  sensing 
controls  includes  imagery  acquisition,  the  cost  of  which  varies  depending  on  the 
technology  used  (mainly  satellite  or  aerial)  and  the  time  spent  for  image 
interpretation.  The  cost  of  physical  controls  includes  the  cost  of  vehicles,  mobile 
phone/ tablets, and time spent for travelling and during controls. 

Organisational and operational choices affecting costs of controls 
Feedback  provided  by  Member  States  illustrates  that  organisational  choices  are 
primarily  based  on  the  historical  organisation  of  public  administrations  in  each 
Member  State.  This  includes  the  distribution  of  competencies  of  the  different 
geographical  levels,  the  organisation  of  the  services  at  central  level,  the 
representation  of  the  national  or  regional  authorities  in  the  territories,  the  pre-
existing  skills  in  the  different  administrations,  financial  capacities  etc.  Even  in 
Member  States  that  re-organised  to  some  extent  their  services  for  the  overall 
management  of  IACS  to  some  extent,  the  organisation  of  controls  remained  fairly 
stable.  This  is  in  particular  the  case  for  OTSC,  which  require  specific  skills  and 
training of inspectors. Main changes are related to the increased use of technology: 
new  IT  tools  and  increased  automation  of  administrative  checks,  new  IT  tools  to 
assist  and  monitor  OTSC,  use  of  remote  sensing  for  OTSC,  the  use  of  satellite 
imagery  and,  mainly  at  experimental  stage,  use  of  drones  and  geotagging.  The 
available  data  do  not  allow  to  assess  the  impact  of  specific  organisational  choices 
on  the  cost  of  controls,  but  transferability  from  one  Member  State  to  the  other 
seems limited anyway given the above. 

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Outsourcing of controls 
There  is  no  evidence  that  outsourcing  reduces  cost  of  controls.  Information 
also  do  not  imply  that  it  increases  the  costs.  About  half  of  Members  States 
investigated to outsource only OTSC. Two kinds of practices are identified:  
  Countries  decide  to  outsource  only  a  small  part  of  their  controls.  In  one 
Member  State,  for  example,  only  5%  of  remote  sensing  controls  (1300  to 
1400 files)  are  outsourced.  The  Member  State  decided  to  source  these  files  out 
when  remote  sensing  controls  were  performed  for  the  first  time,  as  the  agency 
was lacking the competency to perform the checks; 

  Countries  decide  to  outsource  the  largest  part  of  their  controls.  For 
instance,  one  Member  State  in  the  case  studies  outsources  the  majority  of  its 
OTSC  controls.  The  outsourcing  is  related  to  direct  payments  system  in  less 
favoured areas (LFAs), due to their number and less complicated character.  

The  general  tendency  is  to  outsource  remote  controls,  which  require  sophisticated 
IT  tools.  Some  paying agencies  do  not  have  the  technology  or  skills to  implement 
remote  sensing.  Contrary  to  this,  on  site  visits  are  usually  performed  by  national 
authorities and not outsourced.  In general, small  Member States do  not outsource 
controls because the cost-effectiveness is not clearly given.  

Insights from the Case Studies 

Members States that do not outsource tasks indicated the following main reasons: 

  Cost:  outsourcing  represents  additional  cost  for  the  paying  agency.  According  to 

them,  it  is  more  expensive  to  outsource  than  to  develop  tools  and  set  them  up  by 

themselves. It allows greater flexibility and less cost;  

  Additional  burden:  outsourcing  implies  additional  controls  of  the  external  body  as 

the  paying  agency  has  to  maintain  the  link  to  the  provider  at  all  times,  define  a 

specific contract, control their technology, etc. 

  Legitimacy:  in  some  Member  States,  farmers  would  be  more  reluctant  to  be 

controlled by private organisations than by public authorities. 

Cost drivers of specific requirements 
Environmental  measures,  voluntary  coupled  schemes  or  veterinary  controls  for 
animals are often listed as very specific and thus could potentially cause additional 
costs of controls. The analysis shows that: 
  there  is  no  evidence  that  controls  of  environmental  measures  are  more  cost-

effective for annual or multiannual commitments; 

  veterinary  controls  for  animals  tend  to  be  conducted  separately  from  other 

animal-related controls.  

The  available  case  studies  do  however  not  provide  clear  evidence  that  the 
combination of controls would lead to a reduction of burden. Similarly, the cost data 
available do not allow a comparison between the two options to combine controls or 
to perform them separately. 

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Environmental measures 

Insights from the case studies 

Several  Member  States  reported  that  there  were  no  significant  difference,  because 

commitments are annual or multiannual. In this case, the control management system is 

the same for annual and multiannual measures and the control effort as regards OTSC is 

also  equivalent  (5%  of  claimed  amount).  Nevertheless,  some  highlighted  that  the 

processing  and  assessment  of  control  results  can  involve  more  administrative  work  for  a 

multiannual  requirement  due  to  the  adjustment  on  several  years  (retroactivity),  whereas 

on the other side, a stronger stability for farms benefitting of multiannual requirements is 

expected. 

Voluntary coupled schemes 

The majority of Member States underlines the suitability of IACS rules with VCS measures. 

The  rules  are  similar  to  the  original  ones  adopted  when  the  IACS-system  was  developed 

and  coherence  between  national  register  and  the  OTSC  livestock  is  easily  checked 

(Identification control is similar to  eligibility). IACS  applications can be used all along the 

control process.  

Veterinary controls for animals 

In  practice,  eligibility  and  identification  controls  are  combined  (as  much  as  possible)  in 

several countries where the paying agency operates for identification control by means of 

delegation.  Veterinary  controls  are,  however,  more  often  separated  (1%  sampling,  less 

than the other controls) and performed by specific sanitary agencies. Only Spain resorts to 

private veterinarians in some cases. 

Two  paying  agencies  ensure  complete  combined  controls,  including  veterinary  controls. 

The integration of veterinary skills into the paying agencies is the most suitable option for 

combining  animal  related  controls.  Delegating  eligibility  and  VCS  controls  to  specific 

Veterinary authorities seems to rise some issues about prerogatives. These actors are not 

always  keen  to  endorse  such  kind  of  control  activities.  Inspectorates  provide  veterinary 

assistance that the farmer may need. 

Other identified limits are: 

 

Farm  sample  overlapping  and  differences  in  thresholds.  Another  specific  case  refers 

to mixed herds where the control rates are not reached at the same time for a single 

farm; 

 

Timing and availability of both farmers and controllers; 

  Required  trainings  for  paying  agency  inspectors  to  carry  out  veterinary  checks  (in 

addition to competences on Phytosanitary, remote sensing). 

Relationship between control costs and error rates 
Based  on  the  evidence  collected,  there  is  no  clear  correlation  between  the 
costs of controls and the error rate. A correlation test was made to compare the 
cost  of  controls  and  the  administrative,  OTSC  and  residual  error  rates.  The 
correlation  between  the  cost  of  control  and  the  administrative  error  rates  on  one 
hand  and  the  cost  of  control  and  the  OTSC  error  rate  on  the  other  hand  are  both 
negative.  They  thus  point  into  the  “right”  direction.  However,  none  of  the 

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correlation  values  are  significant.106  In  other  words,  a  higher  spending  on  controls 
does not necessarily ensure that the error rate is reduced. Still, this does not imply 
that the costs of controls have no impact on error rates, but rather that it is not a 
determinant  factor.  Implementation  choices  and  the  total  amount  of  aid 
received (in terms of economies of scale) may have a greater impact.  

No statistical test applied could identify a significant relationship between 
control  rates  and  lower  error  rates  through  years107.  The  only  relationship 
that could be observed (but not statistically tested as data are aggregated), is the 
relationship  between  the  two  rates  at  national  level.  However,  results  differ 
depending  on 
factors 
(implementation  choices,  geographical  or  physical  constraints,  learning  curve  etc.) 
are more determinant than the control rate. 

the  Member  State,  which  underlines 

that  other 

Future CAP and opportunities to reduce administrative burdens 
Although Member States generally agree that mandatory controls are necessary to 
enforce  the  CAP  regulation  and  create  a  culture  of  compliance  (see  figure  below), 
they  also  report  difficulties  in  the  understanding  of  the  EU  legal  framework 
on controls. Some Member States consider the regulation too complex and difficult 
to implement.  

Figure 23  

Extent to which the different mandatory controls are considered necessary to 
enforce the CAP regulation and create a culture of compliance 

Source: Case studies 

The  high  number  of  regulatory  changes  for  a  new  programming  period  reinforces 
difficulties  to  interpret  the  EU  legal  framework.  Once  paying  agencies  adjusted  to 
the  new  rules  and  develop  routine,  they  have  to  implement  changes  again.  As  a 
consequence,  maintaining  consistency  in  the  interpretation  of  the  regulation  is 
challenging. The difficulty in understanding the EU regulation on controls increases 
with the complexity of the schemes. In addition, Member States indicated that they 
consider  the  complexity  of  the  schemes  and  thus  controls  to  have  increased 

106  The  correlation  value  is  between  -1  and  1.  When  the  correlation  is  negative,  it  indicates  that  error  rates  decrease 

when control costs increase. The closer it is to 0, the less significant is the correlation. 

107 Different statistical tests were also carried out to determine if there was a link or not between control rates and lower 
error rates through years. Several statistical methods were used (correlation and regression tests), with variou s time 
lags, to identify a relationship between the control rate and the error rate. 

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Analysis of administrative burden arising from the CAP 

compared  to  the  previous  programming  period.  Some  of  the  most  problematic 
issues identified by Member States are:  
  Greening (with the definition of EFAs and the introduction of specific controls); 
  AECs  (which  imply  numerous  tender  specifications  and  requirements  to  be 

controlled); 

  The status as “active farmer”; and 
  The  management  of  payment  entitlement 

complex, 
administrative procedure as BPS  are linked to  the farm and not the agricultural 
surface).  

transfers 

(very 

Nevertheless,  options  to  adapt  the  regulation  at  national  level  can  increase 
the  complexity  even  further.  This  also  makes  it  more  challenging  to  perform 
controls  (greening  in  particular  as  regards  the  definition  of  EFAs).  Difficulties  to 
interpret and apply the EU regulation also impacts IT systems, as they have to be 
adapted  on  a  continuous  basis.  In  one  case,  it  was  pointed  out  that  the  small 
number  of  skilled  people  able  to  understand  and  translate  the  regulations  and  the 
turnover in the administration are also important limitations. 

Depending  on  the  specific  requirements,  some  schemes  are  easier  to  control  than 
others.  Some  require  OTSC,  such  as  greening  and  AECM.  Other  schemes  require 
controls to take place at specific dates or within short periods of time (e.g. date of 
mowing,  implantation  of  catch  crops,  diversification).  In  addition,  animal-related 
controls  under  the  two  pillars  cannot  be  combined  because  of  different 
requirements in terms of the reference year. This makes the scheduling of controls 
more  challenging.  In  addition,  control  samples  have  to  be  established  considering 
these  constraints.  Moreover,  in  large  Member  States  and  differences  in  climatic 
conditions,  it  is  difficult  to  apply  controls  homogenously  throughout  the  country. 
Finally, some Member States highlighted that the zero-tolerance obligation, i.e. that 
also  very  small  errors  are  not  negligible,  can  be  very  costly,  while  the  benefits  of 
solving small issues are often negligible. 

Adjustments of the control system 
The study should also identify – if possible – alternative approaches to the controls. 
However,  among  the  Member  States  considered,  there  is  no  clear  evidence  for  an 
alternative yet performing way to manage the control of direct payments and area-
based  support  measures.  While  some  indicate  that  there  are  alternatives  worth 
considering,  others  do  not  see  alternatives.  However,  there  is  room  for 
improvements in terms of enhancing methods, simplifying procedures,  the training 
of staff, etc. 

Most of Member States which fully implemented IACS tools and processes, consider 
only  changes  at  the  level  of  the  general  framework  helpful  to  further  improve  the 
performance  and  efficiency  of  the  system.  Indeed,  the  main  cost  drivers  identified 
in the above analysis (the complexity of the schemes and the costs of developing IT 
tools) are not specific to the issue of controls but influence the overall system of the 
CAP.  Some  possible  improvements  have  been  identified  that  could  contribute  to 
reduce the cost of controls, without undermining the various objectives of the CAP. 
These range from the enhanced use of GIS and remote sensing to greater flexibility 
and the avoidance of control duplication. 

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Proposed changes to controls expressed in case studies 

The following suggested changes were proposed by interviewees in the case studies: 

  A  stronger  focus  on  more  structural  commitments  in  order  to  reduce  conditions  and 

criteria,  especially  concerning  environmental  measures  (Area  of  ecological  interest, 

etc.) and possibly merging of conditions, greening, AEC objectives and criteria; 

  Clean-up of conditions (one in/ one out): new technologies that simplify controls could 

increase the cost effectiveness of controls, as long as old, more bureaucratic measures 

and conditions are lifted; 

  Better  use  of  Geographic  Information  System  (GIS)  and  remote  sensing:  Some 

measures such as direct payment could be controlled using RS only. Such an approach 

could  be  widened  to  M13,  M15  and  progressively  to  other  measures  due  to  technical 

progress  and  the  possibility  to  carry  out  monitoring  (i.e.  through  the  acquisition  of  

imagery over a time series). Generally, conditions should always be defined taking into 

account what technology can provide;  

  More flexible calendar: strict deadlines (e.g. 15th of May) can significantly increase the 

burden to implement and perform controls without contributing to the reliability of the 

system;  

  Sampling  methods  and  risk-based  strategy:  the  100%  control  conditions  could  be 

relaxed  to  reduce  costs  (which  would  of  course  also  reduce  the  completeness  of 

controls). Also the OTSC sampling size  could be reduced focusing more on risk-based 

and cost-benefit principles. 

In addition, suggestions were made on possible legal changes to improve combined 
controls between VCS measure controls, cross-compliance and veterinary controls. 
Most  recommendations  are  linked  to  the  necessity  to  adopt  a  more  risk-based 
approach  and  limit  OTSC  by  using  animal  register,  and  are  potentially  already 
possible to implement.  

Proposed legal improvements to controls expressed in case studies 

The following improvements to the existing system were proposed by interviewees in the 

case studies: 

  Complete interfacing and mutual update between livestock system and IACS; 

  Regional  databases  could  be  more  detailed:  improved  traceability  of  sheep  and  goat 

herds; 

  Comprehensive guidance for "animal" controls (as is available for crop areas); 

  Decrease OTSC: checking data bases will be more efficient on time and money; 

  Better coordination between authorities and veterinary; 

  Veterinary checks should be considered in identical sample; 

  Avoiding double checks such as ear-marking made by farmers and administrations.   

The  previous  discussion  illustrates  that  there  is  room  to  improve  the  system  in 
future.  In  particular,  a  greater  and  more  integrated  use  of  IT  tools  could  enhance 
the  efficiency  of  controls  and  reduce  costs  for  Member  States.  Some  of  the 
improvements  and  changes  could  already  be  implemented  with  the  current  tools. 
The  analysis  further  highlights  that  policymakers  need  to  be  reflective  of  the 
operational  consequences  when  developing  the  requirements  of  schemes  and  the 
overall  CAP  structure.  Changes  in  the  legal  context  need  time  to  be  implemented, 
and  it  takes  even  longer  to  adjust  the  control  system  to  the  extent  that  it  works 
efficiently again.  

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Previous results-based methods 
Very few of the Member States in the case studies had considered the use 
of  results-based  measures.  A  region  of  a  Member  States  is  implementing  a 
scheme  for  species-rich  grassland  and  a  pilot  study  to  monitor  specific  zones  for 
greenhouse gas emissions and land coverage thresholds. Early indications are that 
within the existing IACS the determination of the precise area of land  and features 
is  less  relevant.  However,  the  LPIS  is  still  seen  as  a  key  tool  to  access  new  and 
different  layers  of  spatial  data  to  determine  the  success  of  measures  over  time. 
Similarly,  administrative  checks  need  to  be  supplemented  by  cross  checks  to 
external  data  sources  stored  non-spatially.  Costs  are  not  easily  quantified  as  the 
measure covers only 4 500 ha within a total agricultural area of over one million ha 
but  early  indications  are  that  the  measure  requires  a  noticeably  higher  training 
requirement and a significantly higher control effort. 

Another  has  introduced  monitoring  indicators  and  is  developing  a  system,  which 
processes these indicators. Currently data is being extracted and analysed manually 
from a number of distributed databases. The new  system will allow the data to be 
consolidated  and  processed  automatically.  It  is  anticipated  that  this  will  be  more 
costly  overall  but  will  reduce  the  burden  of  data  gathering  for  administrators  and 
farmers  and  improve  its  accuracy.  In  2010,  a  Member  State  introduced  result-
based measures in its nature development schemes. However, this was abandoned 
as  it  was  considered  that  there  were  too  many  factors  influencing  the  result  over 
which the farmer had no influence. The authorities went back to measures based on 
inputs.  In  addition,  they  are  currently  running  a  pilot  on  species  rich  grassland 
where the use of aerial photography as a validation tool is being trialled but there is 
currently little information to confirm whether this will be a success. Feedback from 
those  who  are  trialling  measures  or  were  considering  them  was  that  ambitious 
result-based  measures  are  difficult  to  implement  as  they  require  solid  indicators 
(accuracy,  reliability,  precision,  timeliness  etc.),  which  can  be  difficult to  source  in 
areas  such  as  water  pollution,  carbon  storage,  etc.  Most  need  data  from  external 
sources  that  would  need  to  be  modelled.  There  would  be  less  ability  to  place 
reliance on the LPIS for validation and there may be a need to consider alternative 
models based on the multi-annual nature of the measure rather than validating on 
an annual basis, as is the current norm.  

IACS would need to be expanded to allow the access and cross checking of 
secondary  databases,  which  may  lead  to  increased  complexity  and  costs. 
This  data  may  be  managed  and  controlled  by  other  state  bodies  or  trusted  third 
parties.  Dependent  upon  the  level  and  frequency  that  this  data  may  need  to  be 
crosschecked this is likely to require a more complex and costly IT. There may be 
some  cost  reductions  within  regional  development  schemes  but  overall  Member 
States  will  need  broadly  the  same  IACS  systems  for  direct  payments  and  those 
elements of a results-based scheme that are best managed via IACS plus any new 
elements  required  to  adequately  control  results-based  schemes.    New  solutions 
would  need  to  be  developed  to  adapt  to  new  measures  from  the  old  and  new 
interfaces would need to be developed to relevant external sources of independent 
validation, which may or may not exist in a format required to perform automated 
checks. If this is the case, manual administrative checks and/or physical validation 
in  the  field  would  be  required  to  confirm  results.  The  prospect  of  using  new 

105 

 
 
 
 
 
 
 
 
 
 
 
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technologies  could  reduce  these  costs.  A  Member  State  is  piloting  the  daily 
monitoring  of land parcels  combined  with  the use  of  geotagging.  The  project  aims 
to evaluate and test the possibility to adopt more ambitious monitoring approaches. 
Some  practices  appear  to  be  relevant  for  satellite  monitoring,  such  as  crop 
rotation/diversification,  catch  crops,  permanent  grassland  or  late  mowing.  Other 
practices (use of fertilisers or phytosanitary) appear more difficult to monitor. Some 
tests  are  being  carried  out  in  order  to  estimate  greenhouse  gas  emissions  scores 
instead of measuring each type of practice. 

4.4.2 Payment entitlements  

Payment  entitlements  cover  the  operations  required  to  initiate  the  basic  payment 
scheme (e.g. initial allocation of entitlements, establishing values), run all recurring 
operations  related  with  payment  entitlements  (e.g.  keeping  track  of  updates, 
processing  applications)  and  conduct  the  controls  on  the  basic  payment  scheme 
applications.  

Costs of management and controls linked to payment entitlements 
Overall,  the  estimated  administrative  costs  for  payment  entitlements  range 
between €238m - €278m, accounting for 14% of total IACS at the aggregate (EU) 
level, not including the establishment costs.  

The  analysis  of  administrative  costs  related  to  payment  entitlements  faces  the 
following general constraints: 
  As specified in the above Chapter 3, in four Member States (BG, EE, LT, PL) from 
our case studies, there is no payment entitlements identification and registration 
system (no BPS), thus they are not included in the analysis under this section; 
  The  real  cost  is  more  related  to  the  design  procedure  implicit  in  the  regulatory 

effort, rather than in specific items of expenditure. 

These  elements  hampered  authorities  from  the  case  study  Member  States  to 
provide  the  detailed  administrative  cost  structure  that  would  allow  detailed 
estimates  on  the  administrative  burden.  Furthermore,  no  significant  relationship 
between the timeframe, modalities and administrative burdens of implementing the 
CAP,  declared  by  Member  States,  and  the  grouping  of  Member  States  into  five 
clusters, according to the choices of CAP implementation, was found. Therefore,  it 
is  not  possible  to  make  any  comparisons  between  Member  States 
belonging  to  different  clusters  and  thus  limits  the  possibility  to  identify 
concrete examples of gold-plating.108   

Administrative  issues  differ  among  Member  States,  but  on  the  basis  of  the 
information  provided  by  them,  no  difference  can  be  referred  to  the  different 
implementation of BPS. 

From  the  available  data,  an  extrapolation  based  on  the  number  of  beneficiaries 
provides an estimate that the initial set-up costs range from €250,000 to €500,000 
per  Member  State.  The  average  unit  cost  for  payment  entitlements  (per 
beneficiary) is estimated at approx. €7.8 (including all types of costs). The number 
of  entities  or  authorities  involved  in  the  payment  entitlements  identification  and 

108 European Commission (2016), Mapping and Analysis of the implementation of the CAP. 

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registration  system  varies  depending  on  the  choices  in  terms  of  internal 
convergence and regionalisation models.  

Insights from Case Studies 

The specific reasons that motivated the design of the  payment entitlements identification 

and registration system come for all Member States from historical causes and, for some 

of  them,  also  from  the  division  of  competences  across  different  regional  levels.  For 

example in one Member State, four different types of entities are involved in the payment 

entitlements identification and registration system.   

The timeframe needed to implement the new payment entitlements system ranged 
from 6 to 36 months, with an average of 18 months (standard deviation of 11). In 
some  cases,  these  delays  are  mostly  due  to  the  parcel  register  evolution  and  the 
2015  action  plan.  Furthermore,  because  of  the  convergence  approach,  where 
applied, the historical path of each farmer rights has to be integrated in the system 
and this individual treatment was complex to operationalise in the PE database.  

The  nature  of  the  process  for  a  new  establishment  of  entitlements  in  2015  led  in 
some  cases  to  delays  in  payments  to  farmers  compared  to  payment  profiles  in 
previous  years.  The  main  changes  in  the  management  of  systems  have  been  the 
nature of the first implementation of new entitlements, the need to ensure that the 
entitlements were based on eligible hectares declared in 2015, the management of 
a  new  national  reserve  and  the  need  to  accurately  calculate  entitlement  values. 
Moreover,  the  subsequent  completion  of  several  investigations  by  the  paying 
agencies has led to substantial recalculation processes. 

Member States encountered several key  difficulties in setting up the new payment 
entitlements system. These are mainly related to the  interpretation of  the rules or 
the  complexity  of  choices  made  by  the  Member  States.  In  more  detail,  these 
difficulties are: 
  Obstacles  in  the  assessment  and  technical  definition  of  eligibility  (“active 

farmer”); 

  Challenging political negotiation with regions; 
  Problems in tracing the history of each farmer (pre-2015); and 
  Consolidating these data for the new calculation tool. 

In most of the Member States covered by the case studies, there were no particular 
difficulties  in  establishing  the  IT  module  for  payment  entitlements  registration. 
Instead, existing IT tools were simply adapted. Three countries report some specific 
issues, respectively in (1) integrating needs and functionalities in IT tools after the 
adoption  of  the  regionalisation  model  that  requires  negotiation,  in  (2)  managing 
special  cases  and  situations  that  do  not  allow  a  linear  process  of  analysis  and 
development of computer algorithms and in (3) dealing with the heterogeneity and 
difficult communication between different databases. 

For  Member  States  applying  the  basic  payments  scheme,  payment  entitlement 
management  costs include the allocation of payment  entitlements to  new  entrants 
in  the  system  (new  farmers).  During  this  allocation,  specific  rules  and  conditions 
apply. For instance, newly installed young farmers are given priority in the payment 
entitlements allocation.  

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The  main  costs  to  establish  eligibility  of  young  farmers  and  new  entrants  are 
incurred for the administrative control of the information provided by farmers. In IT 
terms,  this  differentiation  plays  a  minor  role  in  the  preparation  of  the  calculation 
software. Costs are also referred to the complex verification of the requirements for 
eligibility.  

The  main  entities  typically  involved  in  assessing  the  eligibility  of  farmers  for  the 
first allocation of payment entitlements are:  
  Farmers:  they  must  testify  their  status  as  active  farmers.  They  have  to  prove 
that  their  principal  business  does  not  consist  of  activities  excluded  by  the 
European regulation;  

  The Ministry  of  Agriculture:  it  outlines  the  necessary  national legislation  and 
administers the PE. The administering includes the establishment of  the farmers 
eligibility,  the  definition  of  the  national  reserve  and  the  attribution  of  payment 
entitlements  through  a  BPS  transfer  or  through  the  reserve  (in  some  Member 
States  it  delegates  the  administration  of  payment  entitlements  to  the  paying 
agency); 

  The administrative control units: they check the applications and run on site 

controls;  

  The paying agencies: they establish eligibility of land for the first allocation of 
payment  entitlements,  the  value  of  payment  entitlements  (including  its 
progression  for  internal  convergence)  and  the  national  reserve  (if  delegated  by 
the Ministry).  

Some  Member  States  utilise  digital  information  from  other  institutions,  such  as 
digital cadastre, area data from regional administrations, economics and tax data of 
farmers from Ministry of Finance and Independent Public Revenue Authority. 

Regarding  the  establishment  of  the  value  of  entitlements  for  first  allocation,  the 
main  difficulties  have  been  the  ex-ante  determination  of  the  eligible  area  and  the 
transition from the previous system to the new one. The latter has been particularly 
complex  for  some  countries  adopting  regionalisation.  In  particular,  some  countries 
refer  to  the  fact  that  in  the  new  system  calculations  and  analyses  are  longer  and 
harder  to  convert  in  IT.  One  Member  State  which  kept  the  existing  entitlements 
reported less problems with the initial allocation. 

Among  the  main  difficulties  in  establishing  the  national  or  regional  reserve,  some 
processes, e.g. the control processes, have been difficult to digitalise. These include 
the  transfer  of  payment  entitlements,  clause  signatures,  and  the  notarial  deed 
verification. The rules for replenishing the national or regional reserve are complex. 
Other  difficulties  are  related  to  capturing  and  validating  additional  land  during  the 
request  period,  to  estimating  the  needed  amount  of  national  or  regional  reserve 
and to performing manual work. Only two Member States identify some cost drivers 
for  establishing  the  national  or  regional  reserve  in  the  payment  entitlements 
system.  These  are  the  complexity  of  regulations  for  the  allocation  of  PEs  from  the 
national or regional reserve and the complexity of regulations and controls for new 
entrants. 

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Future CAP and opportunities to reduce administrative burdens 
It is a widely shared view amongst case study interviewees that the administrative 
procedures linked to PEs need to be simplified. The recommendations range from a 
complete  abolishment  of  the  PE  system  to  more  specific  simplifications.  Others 
suggestions,  relating  to  the  establishment  and  management  of  the  national  or 
regional reserve in the PE identification and the registration system are listed below 
(national or regional level solutions could also be applied to address some of these 
issues): 
  The  withdrawal  of  mandatory  rules  for  the  allocation  of  payment  entitlements 
from the reserve and the related amendment of Regulation (EU) No 1307/2013  
  Leaving  more  autonomy  at  national level in  the  management  of  the  national  or 

regional reserve;  

  The  clarification  of  the  legal  status  of  young  and  new  farmers  and  the 
improvement  in  the  communication  about  the  reserve  to  decrease  farmers’ 
requests and complaints, where these issues occur; 

  The use of the same process and criteria in the first and second pillars as regard 

young farmers. 

There  is  a  call  to  simplify  the  management  of  the  transfer  of  PEs  after  the  first 
allocation. Member States proposed several changes. Those which were mentioned 
the  most  are  (1)  avoiding  controls  on  the  criterion  of  active  farmer,  (2) 
consolidating  all  applications  in  one  single  application  per  beneficiary  or  holding, 
and (3) harmonising entitlement transfer windows at the EU level.  

4.4.3 Greening  

Greening  covers  the  operations  related  to  dealing  with  greening  claims,  such  as 
calculating  and  transferring  the  payments  due  to  beneficiaries  and  conducting 
administrative and on-the-spot checks for greening applications.  

Costs of management and controls linked to greening 
Our  study  estimates  that  costs  for  greening  range  between  €166m  -  €186m, 
accounting  for  10%  of  total  IACS  cost  at  the  aggregate  (EU)  level  (excluding 
set-up costs) and being one of the major cost items of managing and control 
of direct payments.  

Bringing  such  estimates  into  context  depends  also  on  the  definition  of  what  exact 
activities  are  included  in  the  administration  of  a  task  and  how  data  is  being 
collected109.  A  previous  study  by  Alliance  Environment  and  the  Thünen  Institute 
(2017)  for  example  estimated  substantially  lower  administrative  costs  for  Member 
States  linked  to  greening  ranging  from  €27  to  €76  million  for  the  EU28.110  This 
estimate  includes  different  items  also  linked  to  set-up  costs  (assessed  to  be  10-
20% of the total)111112. The same study concludes that management and control 

109 First of all, the capacity to gain insight on the costs of greening may progress over time, along with experience with 
the actual implementation. The second factor is the ‘human factor’. For instance, there is  little to no quantitative 
data  available  on  the  costs  of  greening  for  the  administration.  Therefore,  the  estimates  are  largely  based  on  the 
subjective assumptions of the respondents.   

110 Alliance Environment and the Thünen Institute (2017). Evaluation of the payment for agricultural practices beneficial 

for the climate and environment.  November 2017. 

111  NOTES:  the  terminology  used  in  this  study  slightly  differs  from  the  one  used  in  the  Thünen  study;  In  the  Thünen 
study,  implementation  costs  entail  preparatory  costs,  set-up  costs,  information  costs  and  other  costs;  in  our  study, 
items related to implementation are referred to as set-up costs. 

112 NOTE: the estimates need to be treated however with care, given that they were based on limited data available. 

109 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

costs  of  the  greening  measures  for  public  administrations  correlate 
strongly  with  the  regulated  area.  113  This  is  not  a  surprising  result,  as  these 
costs  (e.g.  costs  for  handling  applications  and  performing  controls)  are  strongly 
linked to the number of farmers situated in the controlled area. However, the share 
of  fixed  costs  involved  in  running the  system  shows  that  running  costs  per  ha  are 
significantly  lower  in  larger  Member  States.  In  a  small  Member  State  within  the 
case  studies,  for  instance,  running  costs  amount  to  €16  per  ha,  whereas 
management  and  control  costs  account  for  only  €0.12  to  €0.60  per  ha  in  most  of 
the larger EU Member States.114 Moreover, according to the same study, there 
may  be  differences  in  costs  due  to  varying  labour  costs  across  Member 
States.  In  particular,  handling  applications  and  conducting  on-the-spot-checks 
require substantial labour costs.  

The  2017  study  from  Alliance  Environment  and  the  Thünen  Institute  identifies  a 
number of additional factors complicating the estimation of cost:  
  a  possible  under-estimation  of  the  additional  costs  of  the  greening  measure,  as 
Member States may experience difficulties to identify cost increases attributed to 
greening; 

  the  difficulty  to  compare  results  between  Member  States  due  to  different  

“business as usual” baselines; 

  difficulties related to the possible reallocation of staff due to the establishment of 

greening measures. 

Insights from Member States  
A study in the Netherlands (2017) 115 estimated the administrative burden of the greening 
measures  for  Dutch  farmers  for  2015.  The  administrative  costs  for  the  PA  could  not  be 

estimated, at least not at the detailed level of greening measures.  

For  Poland,  the  Polish  Supreme  Chamber  of  Control  estimated  the  cost  of  IT  system 

modification  linked  to  the  LPIS  requirement  for  greening  at  €2.26  million.  Those  costs 

include  the  need  to  construct  the  EFA  layers  as  well  as  an  additional  layer  for  the 

permanent grassland requirement. The costs for the on-the-spot-controls of greening were 

estimated  at  €1.92  million.  If  taken  as  a  share  of  the  total  amount  of  direct  payments 

received  by  Poland  (for  2016  PLN21.3  billion,  which  is  roughly  €5.08  billion),  the  total 

costs for system modification amount to 0.05% of the direct payments, the costs for on-

the-spot-controls of greening to 0.04%.  

Sources of administrative costs 
The  main  administrative  costs  related  to  greening  emerging  from  the  case  studies 
are:  
  Adaptation  of  the  administrative  system  and  tools,  for  instance  the 
inclusion  of  the  EFA-layer  and  the  preparation  of  the  greening  sample  for 
control;116  

113 Alliance Environment and the Thünen Institute (2017). Evaluation of the payment for agricultural practices beneficial 

for the climate and environment.  November 2017. 

114 Alliance Environment and the Thünen Institute (2017). Evaluation of the payment for agricultural practices beneficial 

for the climate and environment.  November 2017. 

115 Meulen, H.A.B. van der, A.B. Smit en J.H. Jager, 2017.  Effecten nieuw GLB op inkomens, kosten en administratieve 
lasten;  Gevolgen  van  aanpassing  directe  betalingen  en  invoering  vergroeningseisen.  (Effects  of  the  new  CAP  on 
incomes,  costs  and  administrative  burden;  Consequences  of  changes  in  the  direct  paments  and  introduction  of  the 
Greening Regulation; in Dutch, with English summary).  Wageningen, Wageningen Economic Research, Report 2017-
080 

110 

 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  Activities  to  inform  farmers  on  the  changes  in  the  payment  system,  the 
meaning  of  greening  measures,  the  conditions  for  receiving  both  basic  and 
greening payments and the changes in the administrative tasks to perform;  

  Communication  with  and  assistance  to  farmers  with  questions  about  the 
greening measures, before, during and after fulfilling their administrative tasks;  
  Checks  whether  farmers  comply  with  the  greening  conditions,  both  from  an 
administrative point of view and, for a sample of farms, through control on-the-
spot  including  communication  with  farmers  and,  in  some  cases,  rejecting 
requests  for  greening  payments,  in  a  limited  number  leading  to  appeal  or  legal 
challenge. 

In 2015, the Member States implemented greening requirements for the first time. 
That  being  so,  costs  for  setting  up  (see  also  section  4.2)  and  implementing 
greening  were  perceived  as  particularly  high  in  that  year  by  the  paying  agencies. 
This  perception  may  result  from  the  fact  that  both  competent  authorities  and 
farmers  had  to  become  acquainted  with  the  new  Regulation  and  the 
additional administrative tasks to be performed including rebuilding of IACS as 
well  as  measuring  and  controlling  additional  indicators  like  number  of  crops  and 
EFA-areas per farm.  

Even though hard to be isolated from other control costs for direct payments, 5 out 
of  12  case  studies  indicated  that  greening  results  in  additional  on-the-spot-
control  costs.  This  is  mainly  due  to  the  necessity  to  carry  out  inspections  at 
different times of the year (for seasonality reasons) and requirements that impose 
visual  control  in  case  one  cannot  rely  on  remote  sensing.  Especially,  on-the-spot 
controls  for  EFA  are  considered  a  major  burden  by  a  majority  of  the  Member 
States.  For  instance,  area  verification  and  adjustments  are  difficult  to  check  even 
when using GSAA. 

Given its complexity and thematic link to ambitious policy objectives in the area of 
environmental  protection,  greening  is  also  a  core  area  potentially  affected  by 
“positive”  gold-plating,  meaning  that  additional  burden  is  put  on  administrations 
(and farmers) to achieve specific policy objectives. In one case study for example, 
political actors insisted on more greening activities. 

Costs linked to specific greening areas 
In  their  contributions  to  the  broader  Public  Consultation  from  2015117,  the  various 
stakeholders  consistently  point  to  the  significant  administrative  burden  linked 
particularly  to  one  of  the  greening  areas,  namely  the  Ecological  Focus 
Areas: 
  For  Member  State  administrations  this  seems  to  be  mainly  linked  to  the 
increased  cost  of  complying  with  control  requirements  and  mapping  EFA 
elements in a dedicated LPIS layer (see also section 4.3.2); 

  For farmers this appears to be linked to the correct declaration of EFA (length of 
declaration,  location  and  dimension  accuracy)  and  increased  farm  inspections 
(further elaborated in section 4.5). 

116 NOTE: these costs are estimated as part of setup and running costs. 
117 SWD(2016) 218 final: Review of greening after one year 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                                                                                                                          
 
Analysis of administrative burden arising from the CAP 

From  an  administrative  perspective,  especially  the  different  options  for 
landscape  features  (i.e.  hedges,  wooded  strips,  etc.)  were  indicated  to  be 
demanding118.  

The  number  of  elements  included  in  the  EFA  layer  varies  across  Member 
States  (table  below).  Based  on  the  results  from  the  case  studies,  few  countries 
have  included  three  EFA  elements  or  less,  while  most  Member  States  included  at 
least five elements. Land lying fallow, landscape features and nitrogen fixing crops 
are  quite  commonly  included  in  the  EFA  layer,  followed  by  buffer  strips,  catch 
crops/green cover and short rotation coppice. 

Table 15 

EFA elements per Member State 

EFA elements 

Country/regi
on 

Germany 
(Bavaria) 

Spain 
(Andalusia) 

France 
(Centre) 

Netherlands 

Poland 

Greece 

Italy  (Emilia 
Romagna) 

Sweden 

Malta* 

Bulgaria 

Lithuania 

Estonia 

Total  per  EFA 
element 

g
n
i
y
l

d
n
a
L

w
o

l
l
a
f

x 

x 

x 

x 

x 

x 

x 

x 

8 

e
p
a
c
s
d
n
a
L

s
e
r
u
t
a
e
f

s
e
c
a
r
r
e
T

s
p
i
r
t
s

r
e
f
f
u
B

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

9 

x 

1 

y
r
t
s
e
r
o
f
-
o
r
g
A

x 

x 

x 

s
e
g
d
e

t
s
e
r
o
F

x 

x 

x 

x 

x 

x 

n
o

i
t
a
t
o
r

t
r
o
h
S

e
c
i
p
p
o
c

x 

x 

x 

x 

x 

x 

6 

d
e
t
s
e
r
o
f
f
A

x 

s
a
e
r
a

x 

x 

x 

s
p
o
r
c
h
c
t
a
C

x 

x 

x 

x 

x 

g
n
i
x
i
f
n
e
g
o
r
t
i
N

s
p
o
r
c

x 

x 

x 

x 

x 

x 

x 

x 

x 

x 

4 

6 

9 

l
a
t
o
T

7 

3 

9 

5 

9 

4 

9 

5 

0 

2 

5 

1 

7 

5 

4 

* There is no EFA control layer in Malta as only 14 farmers are subject to greening provisions. The two 

EFA-elements are recorded in a graphical crop layer. 

In  addition,  the  level  of  digitisation  differs  across  Member  States  whereas  case 
studies show a tendency towards digitisation. Out of the assessed sample: 
  Four Member States have digitised EFA elements to a very high extent; 
  Five Member States have digitised EFA elements to a high extent; 
  In  two  Member  States  parcel-types  of  EFA  (land  lying  fallow,  catch  crops, 
nitrogen  fixing  crops,  buffer  strips,  field  margins,  strips  along  forest  edge)  are 
not at all digitised in the layer; and 

  In one Member State, the parcel-types of EFA are digitised to a limited extent. 

118  Furthermore,  the  results  of  the    OPC  indicated  certain  aspects  of  the  Crop  Diversification  (e.g.  changing  it  to  crop 
rotation  rather  than  diversification)  and  Permanent  Grassland  (e.g.  the  5  year  rule,  the  definition)  to  be  very 
complex. 

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Elements  digitised  in  the  EFA  layer  are  usually  (11  out  of  12  cases)  automatically 
shown  in  the  system  to  the  beneficiaries,  and  beneficiaries  can  add  EFAs 
themselves, or with the help of an advisor (in a specific example this needs to be a 
technician).  

Besides, Member States may use alternative means to fulfil the EFA obligations via 
equivalent practices as set out in Annex IX of the direct payments regulation. Three 
Member States indicated to have introduced equivalent practices to EFA. However, 
no  further  details  were  provided  on  the  administrative  burden  arising  from 
equivalent practices.  

As  for  the  other  greening  areas,  namely  crop  diversification  and  permanent 
grassland, case studies did not provide sufficient data on costs.  

Costs specifically linked to farmer support 
In  all  Member  States  present  in  the  sample,  farmers  can  receive  guidance  to 
make  the  best  choices  as  regards  the  implementation  of  EFAs.  This  guidance  is 
provided by: 
  the farm advisory services (FAS); 
  civil  servants  who  work  for  the  Ministry  of  Agriculture  (or  at  one  of  the  local 

offices); or 

  (paid)  independent  private  advisory  services  (a  number  of  which  in  the 

Netherlands is recognised as part of the FAS).119  

Results from the case studies furthermore show that the vast majority of the paying 
agencies in the sample also assists farmers to fill out the application forms and 
to pre-check the forms of farmers before they are submitted to the authorities. 

Future CAP and opportunities to reduce administrative burdens 
A decrease as regards the level of administrative burden was expected by Member 
States represented in the case studies from 2016 onwards. The expected decrease 
by  the  authorities  was  based  on  a  normal  learning  effect  throughout  the 
programming  period.  This  effect  might  however  be  reduced  due  to  some 
adaptations  to  the  regulations  and  the  administrative  procedures  and  tools  based 
on the experiences from 2015. In fact, case studies point to an expected increase 
in  costs  due  to  the  2017  greening  review,  due  to  expected  increased  control 
efforts  (with  benefits  hardly  being  affected  according  to  most  respondents).  In 
addition,  greening  requirements  might  overlap  with  other  components  of  the  CAP 
as well as other policies. 

Impact of the greening review 
Evidence  collected  in  the  case  studies  provides  a  mixed  picture  as  regards  the 
perception  on  the  extent  to  which  the  Greening  review  is  expected  to 
impact  administrative  costs  and  benefits  (see  figure  below),  with  a  tendency 
towards an increase of costs. 

119 Smit, A.B., H. Prins & M.N.A.  Ruijs, (2014).  Inrichting operationeel Bedrijfsadviessysteem  (BAS); Aangepaste opzet 
naar  aanleiding  van  herziening  Gemeenschappelijk  Landbouwbeleid.  Den  Haag,  LEI  Wageningen  UR  (University  & 
Research centre), LEI Rapport 2014-029 (http://edepot.wur.nl/327077 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 24  

Overview of the scoring (number of Member States, n=12) 

Source: Case Studies 

Overall,  the  increased  costs  are  mainly  seen  due  to  the  ban  on  the  use  of  plant 
protection products in EFAs, as it will lead to extra costs for on-the-spot-controls to 
check  compliance  with  the  ban.  Member  States  indicating  that  the  impact  is 
negligible  base  their  assessment  on  the  limited  number  of  farmers  impacted 
or on the fact that only few adjustments have been made.  

As  indicated  in  the  descriptive  chapter  on  greening  (3.2.6),  the  greening  review 
after  one  year  aimed  both  to  simplify  the  greening  scheme  and  to  increase  its 
environmental effectiveness (especially the ban of use of plant protection products 
on productive EFA). The replies collected across the case studies on the higher cost 
should  be  seen  under  this  perspective:  it  is  normal  that  a  ban  of  plant  protection 
products can increase the costs, as administrations will have to adapt their control 
system. 

Streamlining potential with other parts of the CAP and other policies 
Greening  requirements  were  introduced  in  addition  to  cross-compliance  and  agri-
environmental  measures.  This  has  raised  the  question  of  potential  for  better 
streamlining  between  these  policies.  Case  studies  show  that  some  simplifications 
have  already  been  successfully  implemented,  e.g.  some  AEC  measures  have 
become  eligible  as greening measures.  This  has  led to  reduced  administration 
costs to a limited extent, but has benefits for farmers implementing the measures, 
as  they  can  comply  with  greening  requirements  through  the  implementation  of 
AECM.  Cross-compliance  analysis  offers  further  insight  on  GAECs,  whereas,  Rural 
Development  analysis  elaborates  further  on  the  administrative  burden  linked  to 
AECMs. 

Additional suggestions for simplification and streamlining identified by the cases 

  Reduce the number of options; 

 

Less systematic control; 

studies 

  Avoid changing rules during a programming period; 

  Dispensation for small territories to have lower or no greening obligations; 

 

Establish one administrative system for all green architecture; 

  Re-introduction of greening obligations into the cross-compliance regime. 

114 

10%20%20%20%50%40%20%20%0%10%20%30%40%50%60%70%80%90%100%Expected impact on costsExpected impact on benefitsStrong decreaseModerate decreaseNegligible impactModerate increaseStrong increase 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Using EFA/permanent grassland layer to identify similar cross-compliance rules 
Using  the  EFA  or  permanent  grassland  layer  to  identify  similar  cross-
compliance  rules  is  a  realistic  option,  which  based  on  the  case  studies  is 
perceived  by  a  majority  as  a  positive  suggestion.  Any  change  needs  to  be  treated 
however  with  care  as  it  would  once  again  require  (some)  changes  in  the  system. 
The following table lists positive and negative aspects identified across (regions of) 
Member States in the case studies.  

Table 16  

Positive  and  negative  aspects  of  using  EFA/permanent  grassland  layer  to 
identify similar cross-compliance rules 

Positive aspects 

Negative aspects 

  The  EFA  layer  does  not  apply  to  all 
applications  and  does  not  contain  all  EFA 
fixed elements, so it cannot be 100% used for 
checking  cross-compliance.  Besides,  very  few 
EFA  elements  are  also  protected  by  cross-
compliance.  Permanent  grassland  is  also  not 
covered by cross-compliance requirements; 
  Major  differences  between  greening  and 

cross-compliance. 

  EFA  layer  is  currently  used  to  identify 
similar  cross-compliance  rules,  for  instance, 
through  a  landscape  element  layer  and  vice 
versa; 

  There is an overlap between GAEC 7(Retention 
of  Landscape  Features  &  Designated  Habitats 
and  Controlling  Invasive  Species),  4  (Minimum 
Soil Cover) and 1 (Establishment of Buffer strips 
along  Watercourses).  Currently  controls 
for 
GAEC  1  and  7  and  corresponding  criteria  for 
EFAs are carried out at the same time; 

  Before the CAP 2013 reform, cross-compliance 
included  criteria  on  permanent  grassland 
(individual  ratio).  This  point  has  been  removed 
and simplified with the introduction of a regional 
ratio as one of the greening criteria; 

  Layers  in  LPIS  are  already  being  used  for 
verification  of  certain  cross-compliance  rules. 
The results from LPIS are used. 

Merging GAEC and greening requirements 
There is not a clear indication on the impact of changes in terms of merging  GAEC 
and  greening  requirements.  A  final  judgement  would  depend  on  the  concept 
and  conditions  of  potential  changes.  Nevertheless,  a  number  of  positive  and 
negative elements of such a merging could be identified across case studies. 

Table 17  

Positive and negative aspects of merging GAEC and greening requirements 

Positive aspects 

Negative aspects 

  Merging  could  bring  simplification  due  to 
the  reduced  diversity  and  incompatibility  of 
systems. Even though cost reductions are not 
expected  to be  higher  than  10%,  it  would be 
beneficial for farmers, making the rules easier 
to understand; 
It would reduce the number of controls to 
be  performed,  although  this  will  depend  on 
the  number  and  types  of  requirements  that 
have  to  be  controlled.  Cross-compliance  is 
less costly to control as the percentage of on-
the-spot  controlled  farms  is  lower  for  GAEC 
than for greening.  

 

  The  percentages  of  control  are  different 
for  GAEC  and  greening.  If  both  types  of 
requirements are merged, costs of control will 
be  less  but  only  if  the  control  rate  for 
greening  is  brought  down  to  the  rate  for 
cross-compliance; 

  The  decisive  factor  will  be  the  level  of 
cross-

required.  Greening  and 

detail 
compliance complement each other. 

115 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Moreover,  most  case  studies  highlighted  differences  between  a  low-entry 
scheme and the AECM, which would hamper additional efficiency. However, 
some suggested elements that could help to improve efficiency: 
  potential for simplification of the baseline design; 
  a  more  ambitious  minimum  setting,  which  would  increase  the  level  of  AECM 

requirements and the ease for the control of AECMs.  

Overlaps with other policies 
Overlaps  of  greening  with  other  policies  appear  to  depend  substantially  on  the 
national  setting.  While  about  half  of  the  Member  States  under  investigation  do 
not observe overlaps, the other half did indicate overlaps of greening administrative 
arrangements with other policies. While not specifying details of such overlaps, the 
following areas were mentioned: 
  Natura 2000 (without any further comment); 
  Overlap  of  greening  administrative  arrangements  with  those  of  the  Rural 
Development Plan, mainly afforested areas which can also be categorized as EFA 
elements if established after 2008;  

  Overlap  of  greening  requirements  and  cross-compliance:  the  Birds  Directive 

requirements can also be a part of EFA, especially in the buffer zones; 

  Part  of  the  areas  under  Natura  2000  are  categorised  as  sensitive  permanent 

grassland; 

  Regional  soil  and  water  protection  measures,  which  is  also  a  permanent 

grassland maintenance basic requirement. 

4.4.4 Cross-compliance  

Cross-compliance covers the execution of all compliance checks required under 
GAEC and SMR, as well as the relevant reporting and follow-up. 

Costs of management and controls linked to cross-compliance 
Estimated  costs  for  cross-compliance  range  between  €130  m  -  €152  m, 
accounting for 8% of total IACS cost at the aggregate (EU) level. A previous 
study assessing the administrative burden on farms arising from the CAP120 in 2007 
concluded  that  the  burden  of  red  tape  from  cross-compliance  was  rather 
limited, i.e. between 0.3% and 4.3% of the overall burden. Verket (2011)121 also 
confirms  that  the  additional  costs  of  farmers  for  complying  with  the  SMRs  are  on 
average  low  based  upon  an in-depth  assessment  of  Sweden,  yet  finds  them  to  be 
heterogeneous  between  different  types  of  farms.  Based  on  our  estimates  building 
on  data  from  the  DG  AGRI  Survey  and  comparing  them  with  the  previous 
assessments,  we  conclude  that  cross-compliance  costs  as  a  percentage  of 
direct payments received have decreased.  

120  Directorate-General  for  Agriculture  and  Rural  Development  (DG  AGRI)  (2007).  Study  to  assess  the  administrative 

burden on farms arising from the CAP. https://ec.europa.eu/agriculture/external-studies/burden_en 
cross 

Environmental 

Jordbruks 

(2011). 

Effects 

Verket 

of 

121 

http://www2.jordbruksverket.se/webdav/files/SJV/trycksaker/Pdf_rapporter/ra11_5eng.pdf  

compliance. 

116 

 
 
 
 
 
 
 
 
 
 
 
                                                           
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Table 18  

Cross-compliance cost development 

Costs  as  a  percentage  of 
direct payments 

Costs  in  the  form  of  FTEs 
(FTE/1,000  euro  of  direct 
payments) 

2015 

2017 

  below  0.1%  for  two  Member 

  below 0.1% for three Member 

 

States; 
range  from  0.1%  to  0.3%  in 
six Member States;  

 

States; 
range  from  0.1%  to  0.3%  in 
five Member States;  

  are  estimated  to  be  1.15%  in 

  are  estimated  to  be  0.4%  in 

one Member State. 

one Member State. 

for  six 

  0.02  to  0.07  FTE 
Member States; 
to  0.15  FTE  for  two  Member 
States;  

 

  0.02  to  0.06  FTE  for  seven 

Member States; 
  0.1  to  0.15  FTE 
Member States. 

for  two 

Source: Ecorys based on the information obtained from the DG AGRI Survey  

  0.44  FTE  for  one  Member 

State.122 

Sources of administrative costs 
As  regards  public  authorities,  costs  for  cross-compliance  are  mainly  due  to  the 
specific  OTSCs,  not  already  required  by  underlying  sectorial  legislation.  We 
distinguish between costs incurred from controls of SMR and GAEC. 

Costs incurred from controls of SMRs 
The following key cost items of controls of SMRs as perceived by the Member States 
have been identified based on the case studies:  
  co-ordination  with  sectorial  control  bodies  provided  their  control  results  are 

used for achieving the cross-compliance´ minimum control rate; 

  costs for involving (SMR) experts in the control team, if Member  States opt 

for not using results from sectorial controls123; 
investments; 

 
  animal  identification  (seen  as  a  high  cost),  in  particular  in  areas  where  herd 

size is important; 

  on-the-spot controls; and 
  amortisation of IT applications. 

In addition, the following cost factors are mentioned: 
  veterinary controls, which also require additional equipment to meet bio-security 

requirements; 

  risk analysis, in particular the different risk analyses needed due to a variety of 

regulations.124 

122 NOTE: This calculation is based on the number of FTE involved in the controls, times the cost per FTE (as indicated 
by the Member State). However, it should be noted that the cost per FTE vary per Member State, due to differences 
in labour costs. Also, differences in costs may arise due to differences in the calculation basis; that is in some Member 
States the costs appear to include costs for equipment used, in other Member States the costs per FTE only relate to 
labour costs. To adjust the calculations for this, we have also calculated the number of FTE needed per 1,000 euro of 
direct  payments.  These  costs  are  rough  estimates,  and  merely  indicate  a  range.  It  does  however  show  that  overall 
the administrative costs for cross-compliance may be considered relatively low. 

123  NOTE:  These  are  not  costs  related  to  cross-compliance,  as  these  control  bodies  have  to  be  established  due  to 

sectorial legislation anyhow 

124 NOTE: costs mentioned related to maintaining the relevant regulations and these costs would have occurred also in 

the case that cross-compliance had not been introduced. 

117 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
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Table 19  

Sources of costs from controls of SMRs at Member State level 

Sources of costs mentioned by (regions of) Member States 

Number 
mentioned 
studies 

of 

in 

times 
case 

For coordination of sectoral and cross-compliance controls with regard to SMRs 

Required  correspondence  and  notification/information  of  the  relevant 
results and their integration in the IT-system 

Controls  on  the  subcategory  environment  which  include  a  control  of 
land plots 

Animal  identification,  including  the  additional  equipment  for  bio-
security purposes 

No noteworthy costs 

Personal/running costs 

For farmers for compliance with SMRs 

No  further  obligations  other  than  those  included  in  the  relevant 
legislation 

Differences in control due to stricter national than EU legislation 

Control  pressure  is  considered  to  be  higher  for  breeders  and  on 
aspects related to phyto-sanitary products use 

Evaluation of non-compliance, determination and application of penalties 

On-the-spot  inspections,  including  risk  analysis  for  selection  of 
farmers 

Costs  of  assessing  non-compliance,  determining  and  enforcing 
sanctions 

for  cross-compliance  penalties 

includes  numerous 
The  system 
parameters  stemming  from  the  SMRs  and  GAECs,  where  there  is  a 
continuous need to evaluate and group different non-compliances, like 
reoccurrence  early  warnings,  that  the  paying  agency  also  needs  to 
store  for    three  consecutive  calender  years.  The  matrix  becomes 
difficult  to  oversee  by  the  administrations  and  in  practice,  impossible 
to grasp for the farmers. 

No noteworthy costs 

Outsourcing of laboratory examination of food/soil samples 

Adjustment and maintenance of IT-systems 

Appeals against cross-compliance penalties 

Personal costs and running costs 

Amortisation of IT applications 

Source: Ecorys based on case studies 

1 

1 

2 

2 

3 

1 

1 

5 

1 

1 

1 

1 

1 

1 

2 

1 

Costs of controls  of  cross-compliance  are  strongly integrated in regular controls of 
payments.  Consequently,  it  is  difficult  to  extract  what  share  of  costs  is  related 
purely to cross-compliance controls. An indicative observation shows, however that 
such additional costs appear to require 1.5% of an FTE per year.  

Costs incurred from controls of GAECs 
GAECs  are  requirements  linked  to  environment  not  referred  to  in  the  Unions 
environmental  legislation,  contrary  to  the  SMRs.  The  GAECs  are  to  be  defined  by 
Member States at national or regional level, taking account of the specific local and 
climatic  conditions  of  the  areas  concerned  and  the  farms’  structure.  However, 
despite  their  responsibility  to  define  them,  some  Member  States  still  see  GAEC 
requirements  as  quite  rigid,  stating  that  requirements  not  adapted  to  local 
circumstances still have to be implemented. Sources of costs with respect to GAECs 
are  similar  to  SMRs  covering  key  items  such  as  IT  costs  and  costs  of  OTSCs. 

118 

 
 
 
 
 
 
 
 
 
 
 
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Several  Member  States  simply  state  that  the  main  sources  of  costs  for  GAEC  are 
similar to those for SMR.  Other Member States give more detailed answers, which 
have been summarised in the table below. 

Table 20  

Sources of costs stemming from compliance with GAECs 

Sources of costs mentioned by (regions of) Member States 

Times mentioned 

For sampling selection 

Development  and  updating  of  appropriate  system  plus  employment  of 
relevant staff 

Inflexible rules and conditions from the auditors 

No costs, as all data are stored in IACS 

Technical staff and control management tools 

Combination of risk-based and random sampling 

For control associated with GAECs 

On-the-spot-controls 
GAECS  defined  by  Member  States  in  a  way  125not  adapted  to  local 
circumstances,  hence  one  needs  to  create  a  system  to  record  issues 
that are non-existent 

Personal and running costs 

Field staff, technical staff, control management tools 

Risk-based sampling process 

For sanctioning and evaluation 

Correspondence between auditors and auditees 

Appeals 

Personal and running costs 

Issuing the payment order 

For follow-up after detected non-compliance and sanctioning 

Negligible 

Increased inspection levels /additional on-the-spot-controls 

Personal and running costs 

Source: Case studies 

4 

1 

2 

1 

1 

5 

1 

1 

1 

1 

1 

1 

2 

1 

1 

3 

2 

According to some cases, there are high costs for risk-based and random sampling 
(however,  these  remarks  are  not  confirmed  by  data).  The  main  costs  arise 
through the risk-based sampling process, because establishing the risk profile 
is  relatively  time-consuming.  It  is  estimated  by  one  Member  State  that  1  FTE 
(€150,000  per  year)  could  be  saved  if  risk-based  sampling  was  abandoned,  in 
favour  of  random  sampling.  However,  other  Member  States  do  not  mention  this 
cost  of  risk-based  sampling  as  an  important  item  and  indicate  that  the  GAEC 
sample is selected in the area controls sample. 

Follow-up costs after detecting non-compliance are mainly related to the new 
controls  which  Member  States  in  some  cases  implement  to  check  whether  the 
recommendations provided during the previous control were met.126 Costs of appeal 
are  mentioned  as  well  (according  to  interviewees  there  may  be  high  levels  of 
appeal  against  cross-compliance  penalties).  There  are  also  costs  for  sanctioning 

125 Article 94 of Regulation (EU) No 1306/2013. 
126 If an infringement was of a minor character an early warning is applied, but  there is no legal obligation for Member States to carry-out 
a follow-up control. Similarly, in cases where an administrative penalty was applied, it is not mandatory to perform a follow up on-the-
spot check., however, the beneficiary is attributed a higher risk in the “risk analysis”.  

119 

 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

that  arise  from  issuing  the  payment  order,  which  are  estimated  at  about  €250  by 
one Member State. 

Coordination of controls 
Sectoral  bodies  sometimes  cooperate  to  avoid  duplication  of  efforts.  Such 
cooperation differs however between Member States. For SMRs, the case studies 
suggest an equal split between those countries having a high or very high extent 
of  sectoral  control  bodies  involved  for  cross-compliance  controls,  and  those  which 
do  not  involve  sectoral  control  bodies.  In  four  cases,  the  administration  (paying 
agency) is the sole responsible for the cross-compliance controls of SMRs, hence no 
specific  costs  for  coordination  are  involved.  Cooperation  is  also  not  always  easy, 
given  its  controls  being  very  complex  and  specific.  In  the  Member  States  where 
sectoral  control  bodies  carry  out  controls,  no  major  costs  of  coordination  could  be 
identified.  For GAECs,  the  picture  appears  to  be mixed  with  a  slightly more 
negative  trend  than  for  SMRs,  indicating  less  involvement  of  sectoral  control 
bodies. 

Future CAP and opportunities to reduce administrative burdens 
Following its introduction, cross-compliance was a highly debated subject. The 2007 
assessment  showed  that  farmers  perceive  the  many  checks  related  to  cross-
compliance  as  a  burden.  The  length  taken  for  the  checks  and  the  perceived 
unpredictability  of  unannounced  controls  annoyed  farmers  in  the  Member  States 
studied.127  After  the  health  check,  the  Commission  allowed  advance  notice  for 
OTSCs  (“early  warning  system”  –  renamed  as  mandatory  follow-up  visit)  and  the 
abolition  of  a  reduction  of  payment  for  minor  infringements  a  de  minimis  limit  of 
€100128. Existing sanctioning costs of €250 were estimated in the case studies. This 
estimate  would  imply  that  increasing  the  ‘bagatelle  limit’  could  lead  to  less  costs. 
Previous  and  ongoing  improvements  allow  farmers  to  better  plan  their  activities, 
demanding  less  paperwork  to  solve  small  infringements  and  remove  the  threat  to 
be penalised for trivial infractions. The measure also simplifies the task of national 
administrations.  Yet,  the  European  Court  of  Auditors  pointed  out  in  their  2016 
report129 that despite their similarities, the compulsory GAEC and greening rules are 
checked  under  two  control  systems.  This  may  lead  to  inefficiencies  in  the  control 
systems and an additional administrative burden. 

In  general,  given  the  interlinkage  with  other  policies,  the  cost-effectiveness  and 
thus ‘regulatory fitness’ of cross-compliance require detailed assessment as regards 
to what extent they complement one another and to what extent synergies exist.  

4.4.5 IACS-based rural development measures  

This section covers the management and controls of IACS-based rural development 
measures,  such  as  managing  the  open  calls,  selecting  the  applications,  processing 
the payments etc.  

127  Directorate-General  for  Agriculture  and  Rural  Development  (DG  AGRI)  (2007).  Study  to  assess  the  administrative 

burden on farms arising from the CAP. https://ec.europa.eu/agriculture/external-studies/burden_en 

128  European  Commission  (2011),  Impact  assessment  Common  Agricultural  Policy  towards  2020  Commission  staff 
working  paper.  Annex  8  Simplification  of  the  CAP.  https://ec.europa.eu/agriculture/sites/agriculture/files/policy-
perspectives/impact-assessment/cap-towards-2020/report/annex8_en.pdf 

129  European  Court  of  Auditors  (2016).  Making  cross  compliance  more  effective  and  achieving  simplification 

remains -challenging. https://www.eca.europa.eu/Lists/News/NEWS1610_27/SR_CROSS_COMPLIANCE_EN.pdf 

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Costs of management and controls linked to IACS-based RDP measures 
Estimated costs for IACS-based rural development measures range between €558m 
-  €626m,  accounting  for  32%  of  total  IACS  cost  at  the  aggregate  (EU)  level. 
From  a  very  rough  estimate,  based  on  budget  allocated  to  rural  development 
measures reported in 2016, management and control costs are most frequently in a 
range between 5 and 15% of the amount of payments, but variability per Member 
State  is  much  higher  than  this  range.  The  number  of  FTEs  are  more  frequently  in 
the range of 300-500 per year and per billion Euro of total budget over the 7 years 
of programming. 

According  to  past  reports  of  the  European  Court  of  Auditors130  the  EAFRD  is  one 
of  the  funds  most  prone  to  error  rates,  often  due  to  its  complex  rules  and 
eligibility  conditions.  The  EAFRD  is  a  fund  with  a  relatively  high  administrative 
burden,  if  compared  to  other  EU  co-funded  programmes,  which is in part  inherent 
to  the  specific  type,  size,  variety  and  conditionality  of  its  interventions  and  some 
related  gold-plating131  practices  (see  also  previous  section).  Errors  add  a  further 
layer  of  burdens  and  costs  for  both  beneficiaries  (i.e.  farmers  and  business)  and 
public administrations.  Once such errors  occur,  additional clarifications and further 
exchanges  of  data  are  required.  Administrative  burdens  in  Pillar  II  can 
therefore  be  further  reduced  throughout  its  implementation,  by  improving 
clarity  and  appropriateness  of  information  obligations  across  EAFRD  measures  and 
operational requirements. 

In  our  study,  cost  of  controls  are  found  to  be  higher  for  the  Pillar  II 
measures  than  for  direct  payments.  This  is  also  confirmed  by  the  qualitative 
feedback  provided  in  the  case  studies.  Depending  on  the  requirements  to  be 
inspected,  OTSC  can  require  1  to  3  physical  visits  on  the  same  farm  while  Pillar  I 
controls  can  (at  least)  partially  be  performed  through  remote  sensing.  This  is  not 
surprising given the combination of very specific and often one-off measures. Costs 
are particularly high for the agri-environmental-climate measure. These stem from 
the  complexity  of  some  types  of  operation  and  changing  eligibility  requirements, 
items  to  be  checked  can  be  numerous  and  different  according  to  the  type  of 
commitment  and  require  specific  field  investigation  (late  mowed,  verification  of 
fertiliser / phytosanitary inventory books and storage premises, etc.).  

Insights from the case studies 

According to a study carried out by apaying agency in 2015, on-site visits also tend to take longer for 

Pillar  II  controls  than  for  Pillar  I,  when  they  are  not  combined.  For  instance,  about  70%  of  Pillar  II 

IACS-based controls are combined with Pillar I controls. 

For  animal-related  measures,  in  both  cases  (Pillar  I  and  II),  controls  include 
database  related  checks  and  the  verification  of  the  adequacy  between  recorded 
data  and  animals  present  on  the  farm.  The  main  issue  raised  is  the  fact  that 
additional controls are necessary for LFA because of the requirement to control the 
stocking density in a given year, while controls for the Pillar I depend on data of the 
year before. 

130 Court of Auditors Annual Report (2011), Par. 4.5. 
131 transposition of EU legislation, which goes beyond what is required by that legislation 

121 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Sources of administrative costs 
Analysing  costs  in  terms  of  absolute  numbers  shows  that  particularly  M10  –  agri-
environment schemes are causing high personnel costs in most Member States.  

Figure 25  

Distribution of personnel costs by RDP measures (% share) 

s
t
s
o
c

f
o
e
r
a
h
S

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

MS 1

MS 2

MS 3

MS 4

MS 5

MS 6

MS 7

MS 8

MS 9

Leader

M15 -  Forest environmental and climate services

M14 - Animal welfare

M13 - Payments to areas facing natural or other specific constraints

M12 - Natura 2000

M11 - Support for organic farmining

Source: DG AGRI: Data Collection on Administrative Costs for Programme Management – EAFRD funds – 

January 2018 

NOTE: Costs are those reported by programming authorities to the Commission without adjustment by 

income level and mostly refer to year 2016. 

The overall cost and the distribution of these costs among measures largely reflects 
the importance of each measure in the Member States. The distribution of the effort 
in FTE is roughly in line with these costs. 

Breaking down personnel costs  in terms of activities shows that a  major  source of 
personnel cost is represented by  administrative checks (carried out on 100% of 
applications for support and payment claims), regardless of the measure.  On-the-
spot controls are the second most relevant cost driver (carried out on 5% of the 
beneficiaries). 

122 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Figure 26  

Share of control cost by type of cost and measure  – average of the observed 
countries (%) 

100%

75%

50%

25%

0%

M08

M10

M11

M12

M13

M14

Leader

admin controls

remote sensing

on the spot controls

others

Source: DG AGRI: Data Collection on Administrative Costs for Programme Management – EAFRD funds – 

January 2018 

Differences between Member States 
Differences  between  cost 
items  across  Member  States  can  be  observed. 
Administrative checks remain the most important item, though in some cases 
OTSCs account for roughly the same (or even higher) share of costs. 

Figure 27  

Share  of  control  cost  by  type  of  cost  and  country  –  average  of  the  observed 
measures excluding leader (%) 

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

MS 1

MS 2

MS 3

MS 4

MS 5

MS 6

MS 7

MS 8

MS 9

admin controls

remote sensing

on the spot controls

others

Source: DG AGRI: Data Collection on Administrative Costs for Programme Management – EAFRD funds – 

January 2018 

Remote  sensing  has  an  important  share  of  costs  in  only  two  of  the  assessed 
countries.  In  terms  of  personnel,  the  effort  (FTE  dedicated)  on  remote  sensing  is 
second only to administrative checks (about one tenth of personnel effort dedicated 
to remote sensing), while OTSC are much lower in  one of these Member States and 
roughly of the same amount in the other. These figures, though not conclusive, hint 
that remote sensing can indeed contribute to overall cost reduction. 

123 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Explanatory factors for cost and cost-effectiveness differences 
Differences of costs among regions can be due to a number of reasons: 
  Each region has a different number of measures; 
  Measures within the region can be more or less differentiated (e.g. with respect 

to eligibility conditions, sub-measures and types of operation); 

  The set of measures in different regions may differ by design, with more or less 

complex sets of eligibility conditions. 

The  complexity  of  measures  is  the  primary  reason  for  higher  costs  of 
controls.  Especially  the  number  of  eligibility  conditions  add  to  this  complexity,  as 
each  requires  additional  information  and  controls.  The  costs  for  controls  of 
measures supporting areas facing natural or other specific constraints are relatively 
low.  Here,  only  the  area’s  location  needs  to  be  checked.  The  costs  of  controls  for 
measures  supporting  ecological  agriculture,  such  as  the  AECM,  are  much  higher. 
Numerous  specific  checks  that  lead  to  higher  costs  for  performing  the  control 
activities are required. 

It  is  reported  that  the  most  costly  activities  for  the  administration  are 
performed under measures related to cross-compliance and environmental 
payments. In multi-annual measures, the requirements can be numerous and very 
specific, and in this case, the cost increases. Some measures need several visits to 
be  controlled,  and  some  territories,  like  mountain  regions,  are  more  difficult  to 
control.  This  has  an  impact  on  the  cost  of  controls.  Among  individual  measures, 
e.g.  measure  10,  the  high  level  of  flexibility  given  to  the  local  level  and  the  large 
number  of  types  of  operation  proposed  generate  an  higher  administrative  burden 
compared  to  other  measures,  as  there  are  a  lot  of  specifications  to  take  into 
account and thus a lot of control items. 

In addition to measure design and to the number of measures, the following factors 
are relevant to determine administrative costs: 
  Different regional contexts and the special territorial features of each specific 
area,  with  higher  heterogeneity  or  location  in  remote  areas  leading  to  higher 
costs of implementation; 

  Degree  of  integration  of  additional  regional  parameters  and  local  legislation 

with the IACS; 

  Requirement  for  different  control  rates  (depending  on  measures  and 

regions) and equipment needed by inspectors for certain measures;  

  Small extra costs related to laboratory samples examination when needed; 
  Need  to  conduct  a  supplementary  public  procurement  procedure  for  some 

of the measures;  

  Link  and  consistency  with  the  baseline,  which  also  stems  from  national 

legislative procedures; 

  Commitments  including  dates  or  a  seasonality  constraints,  that  impose  to 
perform  controls  in  a  certain  period,  which  generates  complexity  (AECM, 
greening); 

  Priority  systems  in  the  selection  (measure  10)  or  after  the  aid  processing 
(measure  11),  which  generates  costs  as  many  applicants  do  not  fit  with  the 
eligibility criteria. 

124 

 
 
 
 
 
 
 
 
 
 
 
 
 
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Cost development and linkages to error rates 

Comparison with previous period 
Changes  of  costs  between  programming  periods  depend  on  a  large  number  of 
factors,  from  regulatory  aspects  to  implementation  decisions  on  the  national  and 
regional  level.  It  is  thus  hard  to  give  an  overall  assessment  whether  costs  have 
increased or decreased. Anecdotal evidence suggests that cost did not decrease. 

One  (regional)  paying  agency  estimated  a cost  increase of  some  20%.  The  distribution  of costs  (for 

measures  10,  11  and  13)  provides  an  indication  of  the  order  of  magnitude  also  to  be  expected  in 

Insights from the case studies 

other regions/Member States:  

  Specifications (transposition of EC requirements, setting up of selection criteria when they apply, 

etc.) (4-8%); 

  Management  of  the  open  calls  (publication,  reception  of  application,  provision  of  information, 

responses to farmer requests, etc.) (4-8%); 

  Selection  of  applications  (applications  ranking  when  applied,  communication  and  appeals,  etc.) 

(40-45%); 

  Payments (management of payments, refunds, controversies, etc.) (40-45%). 

Linkages between administrative burden and error rates 
The relationship between error rates and administrative burden is not clear 
due  to  limited  information  available.  In  general,  control  rates  have  not  increased 
(are  constant  everywhere),  while  error  rates,  reported  only  in  a  couple  of  country 
cases, are mostly stable or in some cases decreasing. In one region, the error rate 
is increasing, but remains at a comparatively very low level. 

Insights from the case studies 

An  example  of  an  action  plan  to  reduce  error  rates  had  been  reported  for  Spain.  The  error 

rates decreased from 4.93 to 2.7% in 5 years (and much more from 2011 onwards), not only due to 

an  increased  number  of  controls,  but  also  because  of  the  implementation  of  an  action  plan,  which 

included measures to improve the quality of the system of controls (such as training of public servant 

and beneficiaries, improved reports and documents, guidance, IT tool improvements, revision of the 

sanction  system,  etc.).  Precise  costs  are  not  available,  but  the  measures  listed  are  likely  to  bring 

some relevant administrative costs. 

Suitability of IACS for rural development measures 
In  general,  the  IACS  framework  is  reported  to  be  suitable  for  area-based  rural 
development  measures  and  no  major  specific  problem  has  been  detected 
on this regard. Moreover, there are no major differences in the way Member States 
manage IACS in relation to rural development measures compared to the way they 
manage  the  system  for  direct  payments  (Pillar  I).  In  some  cases,  the  responsible 
bodies  are  the  same  in  both  situations.  In  other  cases,  the  distribution  of 
responsibilities  is  more  complex.  This  has  implications  for  the  total  administrative 
burden for design and implementation, or at least for the cost distribution (but the 
effects are not necessarily linked to the IACS per se - some examples follow). 

125 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

In one Member State, the responsibility of IACS measure controls is shared between the national and 

regional level boards. No significant increase in control activity (and hence burden) is observed, since 

Insights from the case studies 

the measures are IACS based. 

Another  Member  State  adopted  a  new  model  for  AECM  payments  in  2015,  the  so-called  collective 

approach.  Before  2015,  payments  were  granted  to 

individual 

farmers,  endorsing  certain 

commitments,  to  compensate  them  for  all  or  part  of  the  additional  costs  and  income  foregone 

resulting  from  the  commitments  made.  That  model  led  to  a  low  share  of  participation  on  high 

productive  soils,  as  the  AECM  payment  was  insufficient  to  compensate  the  higher  compliance  costs 

(manly due to higher income forgone, so lower profitability of participation) of these soils. In the new 

model, AECM-payments are now awarded to regional cooperatives of farmers (the collectives) instead 

of  individual  farmers.  The  agri-environmental-climate  commitments  are  specifically  focused  on  the 

conservation  of  species  of  the  Birds  and  Habitat  Directive  and  only  farmers  in  habitats  that  are 

favourable  for  certain  species  can  apply  for  AECM  payments.  In  this  model,  the  collective  is  the 

beneficiary and acts as an intermediary between the  paying agency and the farmers. The payments 

are  maximised  according  to  the  highest  compensation  rate  allowed  (based  on  cost  incurred  and 

income  foregone)  and  fixed  based  on  the  agreement  between  the  cooperatives  and  the  regional 

government. 

In  a  third  example,  of  a  regionally  organised  country  the  administrations  involved  are  the  same  for 

procedures and management of IACS in Pillar I: the regional governmental body and paying agency 

for  CAP  measures.  Public  officers  of  the  territorial  delegations  carry  out  controls:  the  same  control 

team  carries  out  controls  for  both  the  Pillar  I  and  rural  development  programmes,  hence  control 

procedures are not outsourced for RD measures. Cross-compliance controls are carried out by another 

department.  

The  organisations  involved  in  the  implementation  of  IACS  based  RDP  measures  for  a  Member  State 

implementing measures 10, 11 and 13 are:  

  Regional Councils. They have been designated as EAFRD managing authorities for the 2014-2020 

period (on the previous programs, the managing authority was the State and there was only one 

national rural development program). They are in charge of the writing of the RDPs, the steering 

and coordination of all actors involved in the implementation, and the monitoring and evaluation of 

measures.  As  regards  the    implementation  of  IACS  based  RDP  measures,  Regional  Councils  are 

responsible for launching the call for projects, the selection of agri-environmental schemes and the 

establishment  of  requirements  specifications  (updated  yearly  as  for  measures  10  and  11).  They 

are also involved in the configuration of regional parameters for measures 10 and 11 in the IACS .  

  Decentralised State services. These are in charge of processing applications (once farmers have 

applied online), administrative checks and on-the-spot controls returns. DRAAF The Decentralised 

State  services  are  involved  in  the  design  and  implementation  of  national  framework  schemes  . 

They  also  participate  in  regional  committees  for  the  selection  of  agri-environmental  and  climate 

projects and contribute with regional councils to the setting of regional parameters in the IACS.  

  The payment agency is responsible for on-the-spot controls on second pillar area-based measures 

(IACS based RDP measures). 

These  different  models  reflect  different  ways  of  adapting  to  the  implementation  of 
RDP  measures  based  on  existing  institutional  design  and  responsibility.  Based  on 

126 

 
 
 
 
 
 
 
 
 
 
  
 
 
 
Analysis of administrative burden arising from the CAP 

the information available so far, it is not yet possible to give a judgement about the 
different performances and the role of IACS.  

Usability  of  IACS  and  LPIS  to  check  commitments  and  room  for  cost 
reductions 
The  extent  to  which  IACS  and  LPIS  are  useful  to  check  commitments  under  RDPs 
also  in  the  coming  programming  period  depends  on  how  Member  States  will 
choose  their  future  programmes  and  to  what  extent  the  measures  would 
be area-based. 

In general, the ability to better check commitments at lower costs depends on the 
future quality and availability of information supplementing the LPIS, e.g. new data 
layers  and  better  monitoring  through  Copernicus  Sentinels’  data  to  provide  more 
frequent images, thus allowing more frequent analysis across time periods. In this 
respect,  evidence  from  the  experience  carried  out  until  now  strongly  depends  on 
the  starting  point.  Concerning  digitalisation  of  processes,  responses  in  the  case 
studies are divided between two main positions: 
  Those  countries  in  which  digitalisation  was  already  advanced,  where  the 

new system has brought little effect; 

  Those countries where the system is new, in which costs are higher but also 

value added from the new system are more often recognised . 

There  are  diverging  opinions  about  the  extent  to  which  satellite  based 
information  can  improve  the  quality  of  checks  and  reduce,  to  a  relatively 
high extent, costs of monitoring Rural Development commitments.  

Insights from the case studies 

A Member State using satellite based information to a high extend, indicated that they can decrease 

costs.  However,  the  views  of  paying  agencies  in  other  Member  States  show  that,  on  the  one  hand 

side,  geo-tagged  pictures  could  be  improved  to  make  it  possible  to  identify  crops  (with  current  IT 

tools,  it  is  not  always  possible  to  identify  crops  according  to  the  period  and  the  type  of  crops). 

Therefore, the requirements should be adapted to the quality of the geo-spatial pictures.  

Two  Member  States  identified  no  cost  savings  due  to  the  fragmented  agrarian  structure  and  high 

levels  of  cloud  coverage.  As a  result,  a  dual  system  of  controls  that  still  includes  traditional  on-the-

spot controls would still be required in addition to any controls managed via Sentinels satellites. Other 

Member  States  identified  technical  issues,such  as  new  technologies/satellites  not  being  able  to 

measure things that move, such as cattle.  

In  addition,  new  technologies  require  appropriate  legislation  changes  ensuring  their  consistent  use. 

One  paying  agency  is  expecting  to  use  drones  in  the  future  to  carry  out  more  controls,  but  do  not 

expect to have any efficiency improvement/saving from this solution. 

Methods  to  overcome  lack  of  controllability  of  certain  environmentally 
valuable commitments 
Overall, the controllability and verifiability of measures is duly discussed and taken 
into  account  when  designing  the  schemes.  Therefore,  there  is  often  no  clear 
evidence  of  explicit  problems  of  rejection  of  measures  due  to  non-
verifiability or non-controllability (but such information is hidden in the details 
of the process). 

127 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Insights from the case studies 

In several cases , it is explicitly stated by local experts that there were no commitments that were not 

accepted  because  they  were  considered  non-controllable.  On  the  contrary,  one  paying  agency  gave 

examples of types of operations that have been discarded due to controllability issues. These are: 

  An  AECM  type  of  operation  on  permanent  grassland  for  the  protection  of  ground  breeding  birds 

was  proposed,  that  would  oblige  farmers  to  start  mowing  from  the  centre  of  the  plot  and  spiral 

outwards; 

  A  minimum  animal  stock  per  area  was  suggested.  However,  too  much  effort  was  required  to 

perform the physical checks of animal stocking density; 

  For  the  mountainous  region,  a  payment  for  areas  with  natural  constraints  dependent  on  animal 

stocks was considered (maintenance of alpine pastures). 

In order to overcome this issue, additional simplification and flexibility would 
be  essential;  more  complex  requirements  can  only  be  implemented  if  control 
requirements  are  reduced.  Indeed,  this  highlights  the  point  of  the  risk  that 
Member  States  only  design  measures  that  can  be  easily  checked  rather 
than  those  that  result  in  the  greatest  benefit.  However,  given  the  current 
(local  and  EU)  legislative  framework,  it  does  not  seem  possible  to  overcome  this 
issue. 

4.5  Administrative burden: farmers’ perspective  

About 2% of the total of aid received 

Not perceive a substantial increase since 

previous programming period 

Compliance cost of higher relevance than administrative 

GSAA is considered as a useful 

burden 

tool 

Admin burden higher when several applications necessary (Pillar II) 

This section considers the administrative burden borne by farmers. It identifies the 
key  aspects  adding  administrative  burden  for  farmers  and  provides  estimates  for 
the  burden  in  terms  of  time  spend  and  costs  for  farmers.  The  section  further 
provides qualitative information on the perceptions of  farmers on specific schemes 
and tools and suggests possible improvements for the future.  

Farmers’  perspectives  on  administrative  burden  were  collected  through  semi-
structured  interviews  of  122  farmers  distributed  more  or  less  evenly  over  the 
12 Member  States  selected  for  the  case  studies.  The  sample  is  reflective  of  the 
diversity  of  the  agricultural  sector  in  the  EU.  It  covers  farmers  with  various 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

characteristics,  including  different  farm  sizes  and  participation  in  different  support 
schemes.  

4.5.1 Farmers’ understanding of the definition of administrative burden 

People  might  have  a  different  opinion  on  what  the  term  "administrative  burden" 
entails.  Interviewers  therefore  asked  farmers  about  their  understanding  of  the 
term.  Most  interviewed  farmers  understand  administrative  burden  as  various 
obligatory,  recurrent  tasks  as well  as the time needed for their  execution. 
Such  tasks  may  include  registration  of  agricultural  practices  (e.g.  for  use  of 
phytosanitary  products  or  animal  registration)  or  completing  an  aid  application. 
However,  many  farmers  refer  to  any  type  of  paperwork,  bureaucratic  process,  or 
office  work  as  administrative  burden.  Some  interviewees  also  identified  CAP 
penalties  as  part  of  administrative  burden.  None  of  the  interviewed  farmers 
confused administrative burden with compliance costs or any other unrelated types 
of costs. 

In Member States with a longer CAP tradition, farmers generally perceive such CAP-
related tasks as ‘part of the job’. In contrast, some farmers, mostly from the newer 
Member  States  (EU13),  are  not  fully  aware  of  CAP  processes  and  the  workload 
these  entail.  Furthermore,  when  administrative  tasks  are  ‘outsourced’  to  private 
companies,  cooperatives  or  other  associations,  farmers  often  have  no  clear 
perception of the associated administrative burden.  

Among interviewed farmers, there are some aspects of administrative systems that 
appear to cause confusion: 
  As  national  authorities  administer  CAP  payments,  some  farmers  do  not 

make a distinction between EU and local administrative requirements; 

  Where  tasks  linked  to  the  CAP  resemble  other  administrative  tasks, 
farmers  do  not  always  distinguish  between  CAP-related  administration  (e.g. 
completing  an  annual  declaration  for  CAP  payment  purposes)  and  other 
administrative  requirements  and  constraints  (e.g.  to  comply  with  other  EU 
directives,  or  to  apply  for  technical  programs  linked  to  an  agri-environment 
measure, etc.); 

  With unclear separations between EU rules and national implementation 
choices,  one-in-ten of interviewed farmers stated that they did not understand 
all  CAP  payment  rules,  including  the  distinction  between  EU  and  national-level 
rules  implemented  by  local  administrations.  For  example,  in  transmission  or 
creation  cases,  both  national  and  EU  administrative  requirements  must  be 
fulfilled;  first,  to  establish  clearly  that  the  farmer  owns  or  rents  the  parcels 
(national level) and, second, to record them in the CAP digital system (EU level). 
In  this  kind  of  situation,  each  step  creates  an  administrative  burden  that  may 
not be clearly separated in the mind of the farmer. 

Interviewers  discussed  administrative  burden  with  farmers  in  detail  to  avoid  any 
confusion and clearly distinguish burden stemming from CAP related activities from 
other activities. This ensures that results from the interviews are comparable across 
farmers and countries.  

Where  part  of  the  time  was  clearly  allocated  for  different  purposes  (e.g.  checking 
the  regulation  on  phytosanitary),  it  has  been  deducted  from  the  time  spent  on 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

administrative  burden  for  IACS  aid  (only  4  cases).  Other  than  this,  we  took  the 
option  to  keep  all  the  data,  including  extreme  value  as  it  gives  an  information  on 
farmers’ perception even when it seems overestimated. 

4.5.2 Sources of administrative burden 

A  distinction  can  be  made  between  costs  for  farmers  related  to  administrative 
activities and compliance costs.  Only the former will be considered in this analysis 
and was therefore discussed during interviews.  

Farmers  identified  several  administrative  tasks  which  are  linked  to  the  CAP  aid, 
ranging  from  filling  in  forms,  to  double-checking  information  and  time  spent  on 
official controls. Across the interviews, five main activities were identified: 
1)  The filling in of aid applications, either online, on paper, or in an administration 

office; 

2)  The  collection  of  important  documents,  to  keep  an  oversight  and  have 

documents ready if controls occur; 

3)  Checks  of  data,  i.e.  the  comparison  of  data  from  IACS  with  data  from  the 

farmers’ own records;  

4)  Measurement  of  land  to  provide  correct  information  in  the  applications,  an 

activity that is less frequent but usually very time-intensive;  

5)  Modifications to land areas in IACS, which may involve the redrawing of parcels 

and can be time consuming.  

Generally, farmers do not spontaneously include activities related to controls (such 
as collection of documentation, attending the controls) as part of the administrative 
tasks  related  to  aid  management.  However,  even  if  they  are  no  regular  activities, 
the  preparation  for  and  participation  in  controls  can  represent  a  significant 
administrative burden on farmers. 

Many  farmers  rely  on  external  support  for  the  aid  application  and  management. 
Support can be provided by cooperatives, associations, banks, or other entities and 
might  shift  the  administrative  burden  in  terms  of  time  spent  from  farmers  to  the 
external  support.  The  analysis  therefore  also  differentiates  between  costs  for 
internal activities and external services.  

4.5.3 Estimates of time spent on CAP related administrative tasks 

Overall time spent on CAP related administrative tasks 
For  the  whole  interviewed  sample  of  farmers,  the  median  time  spent  on  CAP-
related  administrative  tasks  is  15  hours  per  year.  This  includes  all  the  time 
the  farmer,  potential  family  members  or  paid  workers  spend  on  administrative 
tasks.  However,  the  time  farmers  report  varies  significantly.  The  minimum  of 
declared  time  ranges  of  0.5-5  hours  per  year  to  a  maximum  range  of  260-
350 hours.  The  median  time  per  Member  State  ranges  from  4  hours  in  Spain  to 
30 hours in Germany, Lithuania and Italy (see figure below). 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Figure 28:  

Median number of hours spent in administrative tasks 

*Bavaria (DE), Emilia Romagna (IT), Andalusia (ES) 

Source: Farmer interviews 

Several  factors  might  explain  the  variation  in  the  time  farmers  spend  on 
administrative tasks. For example, farmers owning larger farms (measured in UAA) 
tend to face greater administrative burden in terms of hours spent. In addition, the 
time  farmers  spend  on  administrative  tasks  also  increases  with  the  number  of 
schemes under which they receive aid (see Figure 29), as the overall complexity of 
the  application  process  increases.  Farmers  receiving  aid  under  one  scheme  spend 
on average 14 hours on administrative tasks, while this number increases to about 
40  hours  for  farmers  receiving  aid  under  five  schemes.  The  help  of  external 
consultants does not appear to have an effect on the administrative burden 
on farmers in terms of time spent.  

Figure 29  

Relationship between the time spent on administrative tasks and the number 
of schemes 

400

)
s
r
u
o
h
(

t
n
e
p
s

e
m
T

i

300

200

100

0

1

2

3

4

5

6

7

8

Number of Schemes 

Source: Farmer interviews 

131 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

In  the  interviews,  farmers  provided  additional  factors  that  could  influence  the 
overall time spent on CAP related administrative tasks: 
  Applications  related  to  Pillar  II  measures  are  generally  considered  more 

complicated and time consuming than for Pillar I measures; 

  Gathering  and  preparing  documentation  can  be  very  time  consuming  for  some 

farmers, particularly documentation on animal health and crop protection;  

  Specific  regulatory  requirements,  including  the  registration  of  fertilisers  or  crop 

protection practices, can require significant work;  

  Checking the accuracy of pre-filled aid application forms, including verifying field 

measurement, is reported by some farmers as taking a lot of time; 

  Submission  of  applications  can  be  time  consuming  if  farmers  need  to  travel 

repeatedly to local administrative offices. 

Breakdown of the time spent on CAP related administrative tasks 
The  time  spent  on  the  five  main  activities  related  to  the  aid  administration 
ranges  on  average  between  5  and  11  hours.  Filling-in  applications  is  less  time-
consuming,  whereas  the  time  associated  to  land  measurement  is  the  highest.  As 
regards  aid  application,  in  Estonia,  France,  Greece,  Malta,  the  Netherlands,  Spain 
and  Sweden  only  one  application  is  submitted  for  all  schemes.  In  other  Member 
States, different applications have to be fulfilled each year, usually, one application 
for direct payments and one application for each Pillar II measure.  

Overall, the checking of data and activities linked to the modification of land areas 
takes up almost half of the time farmers spend on the aid management (see figure 
below).  With  approx.  13%,  filling  in  the  aid  applications  accounts  for  the  smallest 
share of time farmers spend on administrative activities linked to the CAP.132  

Figure 30  

Breakdown of time (number of hours) spent on the main activities related to 
aid management 

Source: Farmer interviews 

In  most  cases,  the  time  spent  on  controls  varies  between  one  or  two  hours  to 
half a day, depending on the type of control. Animal controls, Pillar II controls and 
cross-compliance  controls  are  mentioned  as  being  the  most  time  consuming. 
Particularly  for  animal  controls  and  cross-compliance,  the  time  required  for 

132 Note that it was not always possible in interviews to clearly differentiate between the five tasks. Thus, there might be 
some  overlaps  between  the  five  main  activities  and  they  are  not  completely  mutually  exclusive.  Consequently,  the 
shares presented in Figure 23 should be treated with caution and present estimates. 

132 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

preparation, which mainly consists of gathering the relevant information, is greater 
than the time spent on the control itself (one to two days of preparation for half a 
day of control). 

Typically,  farm  owners  have  the  main  responsibility  for  aid-related  administrative 
tasks; from the interviewed sample, farm owners account for 83% of the total 
time  dedicated  to  aid  administration  (ranging  from  47%  in  Lithuania  to  100% 
in  Malta  and  Sweden).  The  most  frequently  mentioned  activities  carried  out  by 
farmers  are  filling-in  aid  applications,  followed  by  land  measurement.  Other 
activities  include  gathering  and  checking  documents,  checking  data  (areas  and 
crops) and modifying areas. 

4.5.4 Estimates of financial costs of administrative burden for farmers 

Using  the  information  of  the  interviews,  it  was  also  possible  to  monetise  the 
administrative  burden  for  the  farmers  of  the  sample.  The  analysis  differentiates 
between  
 

internal costs, that is the value of the time spent by farmers, their families and 
employees on administrative tasks; and  

  external costs, i.e. costs for externalised services.  

To  estimate  the  internal  costs,  Eurostat  data  on  the  hourly  labour  cost  (hourly 
earnings plus non-wage labour costs and 25% overhead) for skilled agricultural and 
fishery  workers  were  used.  These  values  were  multiplied  with  the  amount  of  time 
indicated  by  farmers  in  the  survey  (see  above).  During  the  interviews,  farmers 
were  asked  to  estimate  their  external  costs  in  local  currency.  To  allow  for 
comparison, the costs were then transformed into Euro.   

Total costs for CAP related administrative tasks 
The total estimated cost of administrative burden ranges from €12.5 in Malta to 
€10,308  in  Germany133  per  year.  Overall,  the  median  total  costs  are  €236  per 
farmer  and  year.  The  highest  median  values  per  country  are  observed  in  Sweden 
and Italy. The lowest median costs are found in Spain and Malta (see figure below). 
This estimate combines internal costs (i.e. the monetised time spent by the farmer, 
their family and employees) and external costs (i.e. costs for externalised services). 
For three quarters of the sample, the estimated total administrative burden is less 
than €1,000. For 90% of the sample it is below €2,000. Excluding extreme values, 
the average cost related to aid administration is about €220. 

133  In  this  case,  the  cost  mainly  come  from  external  services,  and  it  is  possible  that  it  includes  other  services  than  just  the  aid 

management. 

133 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 31:  

Median amount of costs related to IACS aid in € 

€

n

i

n
e
d
r
u
b
e
v
i
t
a
r
t
s
n
m
d
A

i

i

1000

900

800

700

600

500

400

300

200

100

0

Median of 12 MS 

SE

IT*

DE*

LT

PL

FR

NL

EL

EE

BG MT

ES*

*Bavaria (DE), Emilia Romagna (IT), Andalusia (ES) 

Source: Farmers interviews 

As  a  proportion  of  total  farm  costs,  the  median  cost  share  for  CAP-related 
administrative burden is estimated at about 0.4%. For about 85% of all interviewed 
farmers, administrative burden stemming from the CAP accounts  for less than 2% 
of  total  farm  costs.  Comparing  across  Member  State,  the  median  administrative 
burden cost share varies from 0.05% in the Netherlands to 0.7% in Lithuania. 

Figure 32  

Distribution  of  observations  for  the  ratio  administrative  burden  /  total  costs 
(%) 

80%

60%

40%

20%

0%

Source: Farmer ’interviews 

As  a  proportion  of  total  CAP  aid  received,  the  median  cost  of  administrative 
burden  is  estimated  at  2%.  For  around  54%  of  interviewed  farmers,  the  cost  of 
administrative burden represents less than 2% of the total aid received. It is below 
4%  for  more  than  two  thirds  of  all  farmers.  Situations  where  the  cost  of 
administrative  burden  represents  more  than  10%  of  the  total  aid  received  arise 
mostly  where  farmers  declare  significant  own  time  for  aid  administration  in 
combination  with  recourse  to  external  support  and  limited  aid  received  (i.e.  less 
than a few thousand euros). 

134 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Across  countries,  the  median  of  the  ratio  of  the  cost  of  administrative  to  total  aid 
received varies from 0.3% in Spain to 5.7% in Estonia. Both France and Spain have 
significantly lower median values for the ratio of administrative burden costs to aid 
received  than  is  observed  in  other  Member  States.  In  France,  the  relatively  low 
amount of time spent on administrative tasks for aid applications  can be attributed 
to electronic aid application systems that are quick to complete, while received aid 
amounts  are  relatively  high.  In  Spain,  it  is  related  to  the  fact  that  farmers  often 
receive assistance from their banks for no additional cost (or the cost is included in 
the general fees paid to the bank). 

Figure 33  

Distribution  of  observations  for  the  ratio  administrative burden  / total  of aid 
received (%) 

60%

50%

40%

30%

20%

10%

0%

Less than
2%

2% to 4% 4% to 6% 6% to 8% 8% to
10%

10% to
12%

12% to
14%

14% to
16%

16% to
18%

More
than 18%

Source Farmer interviews 

Adding  these  costs  to  the  administrative  costs  of  administrations  means  a  rough 
total in the range of 5-6% of administrative burden of the CAP. It needs to be noted 
however  that  such  an  aggregation  has  to  be  treated  with  care  given  that  the 
farmers survey is not based on a representative sample, focuses on administrative 
burden  and  not  compliance  costs  and  captures  overall  costs  and  not  only  those 
emerging from IACS-related measures. 

Breakdown of money spend for CAP related administrative tasks 
For  the  internal  administrative  tasks  carried  out  by  the  farm  owner,  family 
members,  employees,  costs  of  administrative  burden  range  between  €8  and 
€7,308, with a median of €178. For about 80% of the farmers, the estimated cost 
is  under  €750.  Lower  internal  costs  typically  arise  when  administrative  tasks  are 
‘outsourced’ to an external provider and, consequently, the farmer (or other people 
working on the farm) has little involvement in the aid administration. As described 
before,  the  burden  in  terms  of  hours  spent  on  administrative  tasks  is  greater  for 
large farms and farms which receive aid under several schemes. This translates into 
higher  internal  administrative  burden  in  absolute  terms,  but  not  necessarily  as  a 
share of aid received.  

Within the sample, 43% of the farmers use paid external support for aid-related 
administrative  tasks.  This  support  is  frequently  provided  by  cooperatives  or 

135 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

professional  organisations  and,  to  a  lesser  extent,  by  banks  or  other  service 
providers.  Often,  such  services  are  covered  through  membership  fees  of 
cooperatives  or included as part  of bank charges. Use of  external support appears 
more prevalent in Italy, Spain and Sweden, where aid applications are rarely done 
internally.  In  Bulgaria,  Greece,  Lithuania  and  Poland,  more  than  half  of  the 
interviewees use external support. While external support is used by less than 30% 
of interviewed farmers in Malta, France, the Netherlands, Germany and Estonia. 

The  highest  observed  costs  of  administrative  burden  are  usually  found  for  among 
farmers  that  make  use  of  external  services  provision,  though  costs  of  external 
services  probably  also  cover  services  other  than  aid  administration.  External 
support  costs,  vary considerably within the sample and range from €4 on average 
in Bulgaria to €6,500 in Lithuania.134 Among those farmers using external support, 
half pay less than €620 and 72% less than €2,000. Where high costs are observed, 
these may be due to additional services, such as administrative support for control, 
accounting or bank services, beyond support provided for the CAP aid applications.  

Specific  cases  of  high  administrative  costs  are  associated  to  various  changes 
to parcels and aid systems: 
  Parcel-related  changes  include  creation  of  new  parcels,  transfer  of  parcel 
ownership,  or  other  changes  affecting  parcel  registrations.  For  the  latter,  while 
digitalisation  of  registration  systems  can  generate  time  savings  for  routine 
activities,  it  can  require  more  effort  when  implementation  of  new  or  revised 
registration software is required; 

  Changes in compliance rules can create additional administrative costs. This is a 
reason for some farmers to ask for consistent rules at least throughout a specific 
programming period; 

A  particular  irritant  for  many  farmers  arises  when  they  are  required  to  repeat  or 
resupply  information  that  has  already  been  provided;  for  example,  filling  in  new 
forms information that has been previously supplied or re-drawing parcels limits. In 
Member States with a highly digitised systems, complaints tend to focus on parcel 
limit  issues,  whereas  for  Member  States  with  “paper-based”  systems,  complaints 
about fulfilling in forms are more frequent. 

4.5.5 Farmers’ perspectives on specific tools and instruments 

Farmers’ perspective on LPIS 
Although  LPIS  is  free  of  charge  and  free  applications  are  provided  by  national 
authorities in some Member States, many related applications and programmes are 
supplied  on  a  commercial  basis.  From  the  limited  information  collected  from 
farmers,  the  medium  cost  for  such  applications  is  estimated  at  around  €600-€700 
per year. 

Within  the  sample  of  interviewees  who  responded  to  the  question,  a  majority  of 
farmers  indicate  that  LPIS  contributes  to  a  reduction  of  administrative 
burden.  Nearly  two-thirds  indicates  (‘agree’  or  ‘strongly  agree’)  that  LPIS  saves 
time and/or simplifies their administrative tasks. 

134 A higher number of respondents indicated they use outsourcing for a variety of tasks in Lithuania.  

136 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

Figure 34  

Perceived benefits of LPIS 

Source: Farmer interviews 

However,  farmers  do  not  appear  to  utilise  the  transferability  of  the  information  as 
much  as  possible.  Only  one  third  of  the  farmers  using  LPIS  indicate  that  they  use 
the  information  from  the  system  for  other  digital  or  manual  farm  management 
applications  and  tools.  Where  this  is  done,  LPIS  data  is  usually  used  for  technical 
management  of  parcels  (rotation  and  history,  fertilisation  management,  rearing 
management,  etc.).  Here,  farmers  appear  to  rely  on  software  provided  by  private 
companies or professional organisations. 

Technical challenges relating to the use of LPIS mentioned by interviewees include, 
for example, difficulties in transferring data from one tool to another or the need to 
duplicate  work.  Some  farmers  indicated  that  they  prefer  “the  old  way”  in  order  to 
avoid “mistakes”.135 Several farmers said that they do not use LPIS because other 
services (banks or cooperative) do it for them.  

Farmers’ perspective on GSAA 
Within  the  sample  of  interviewees  responding  to  the  question,  two-thirds  of 
farmers  consider  that  the  GSAA  is  a  useful  tool.  In  Member  States  where  it 
has  been  operating  for  several  years  (France,  Spain,  Germany,  Greece,  Estonia), 
farmers  have  a  very  positive  opinion  of  GSAA.  In  Member  States  where  use  of 
GSAA  is  more  recent,  not  widespread,  or  where  it  is  implemented  exclusively  by 
administrations  (Poland,  Malta,  Lithuania,  Bulgaria,  the  Netherlands),  views  on  its 
usefulness are more divided.  

Among  farmers  using  the  GSAA,  there  is  a  close  to  even  split  between  those 
submitting their aid application autonomously and those using external support. In 
France, Germany and the Netherlands, most farmers indicate that they do not have 
specific difficulties with GSAA and do not need external support. In these countries, 
when  external  support  is  used  it  is  usually  for  a  final  check  to  make  sure  that  no 
mistakes have been made. Sometimes, administrations provide free  support but it 
is  not  always  available  to  all  farms  (e.g.  support  is  reserved  to  old  farmers  or 

135  In  several  interviews,  farmers  expressed  their  mistrust  in  digital  tools:  less  control  than  with  ‘paper  method’,  fear 
that  in  the  medium-  long  term,  farm  history  will  not  be  saved  (with  the  paper  note  book,  all  past  practices  and 
decisions are simply recorded and stored, with the digital data, no one knows how much time present hardware and 
software will be in use).  

137 

0%10%20%30%40%50%60%70%80%90%100%The system of identification of parcels simplifiesadministrative tasksThe system of identification of parcels saves timeThe system of identification of parcels is useful forgeneral management of the farmThe implementation of the system of identificationof parcels is positive overallStrongly disagreeDisagreeNeither agree nor disagreeAgreeStrongly agree 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

smallest farms). In Malta and Bulgaria, administrations provided almost systematic 
support  for  farmers  to  make  their  aid  applications.  In  Italy,  applicants  are  always 
helped by agricultural advisors, while aid applications in Spain are always made by 
an external service provider, either a cooperative or bank, with the cost included in 
the  membership  fees  or  bank  charges.  Generally,  farmers  with  limited  computer 
skills  will  often  prefer  to  use  external  support  to  submit  their  applications,  as  will 
farmers that want to be sure of the conformity of their applications. 

Among  interviewees  that  stated  an  opinion,  two-thirds  of  farmers  consider  that 
GSAA  is  ‘user  friendly’.  In  Member  States  were  the  tool  is  widely  used,  farmers 
recognise  that  improvements  have  been  made  since  the  first  implementation  of 
GSAA and the use of computer forms is preferred to paper applications.  

Farmers  with  a  negative  opinion,  tend  to  underline  that  the  application  is  not 
intuitive  to  use  and  could  be  improved,  thereby  reducing  learning  times. 
Furthermore farmers often pointed out that the usefulness of GSAA is hampered by 
their limited computer skills and, accordingly, their needs for training and support, 
other  farmers  point  to  internet  connections  that  make  use  of  the  technology  very 
slow,  in  particular  when  approaching  the  deadline  for  submitting  the  application. 
Some farmers also mentioned as a ‘technical problem’ the fact that further filling in 
of  applications  can  be  blocked  when  a  small  error  is  detected.  Also,  a  few 
respondents  consider  it  difficult  to  obtain  assistance  from  the  administration  when 
needed. Finally, some farmers consider that having information in a paper form is a 
safer back-up than digital storage. 

One specific source of dissatisfaction arises when, in some cases, satellite pictures 
give  different  results  for  field  calculations,  which  requires  reinvestigation  by 
authorities and farmers and adds to the administrative burden. 

Opinions  on  the  impact  of  GSAA  on  farm  productivity  and  on  the  suitability  of  the 
system  for  all  farmers  are  mixed.  Interviewed  farmers  largely  have  a  positive 
opinion on the GSAA compared to the paper system, with the main advantage that 
GSAA  saves  time,  in  particular  due  to  pre-filled  information,  and  due  to  the 
reactivity  of  the  system  when  changes  or  updates  have  to  be  made.  Many 
interviewed farmers also mentioned that GSAA limits the risk of error in relation to 
warning systems. Some respondents also point to time savings from reduced travel 
needs, while some think that it allows payment to be made more quickly. A further 
advantage  comes  from  the  possibility  for  several  persons  to  work  on  the  forms, 
while the availability of historical data is also appreciated. 

Farmers’ perspective on greening 
Findings  from  the  interviews  indicate  that  administrative  burden  related  to 
greening  mostly  stems  from  compliance  with  requirements  and  declaring 
EFAs,  rather  than  from  submitting  an  aid  application.  Almost  all  farmers  that 
benefit  from  exemptions  indicate  that  submitting  the  aid  application  for  greening 
did not result in a higher administrative burden, as it forms part of the application 
for direct payment and is automatically informed through the areas declaration.  

138 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Around 55% of interviewed farmers subject to greening obligations do not identify 
additional  administrative  tasks  related  to  their  greening  payment.  Among  them, 
many report that is not possible to isolate an extra-cost, as submission is included 
in  the  annual  aid  application  and  data  (crop,  surfaces)  are  also  used  for  direct 
payment calculation. The remaining 45% tend to identify additional tasks linked to 
compliance with greening requirements rather than to the aid application itself. 

The  main  compliance  requirements  mentioned  by  interviewed  farmers  include 
maintaining  permanent  grassland  and  creating  ecological  focus  areas;  i.e. 
compliance  with  rules  on  prohibitions  of  phytosanitary  products  and  fertilisers, 
sowing and ploughing dates in areas declared as EFAs, in particular for catch crops. 
Tasks linked to creating an EFA tend to imply a heavy workload in the first year of 
implementation  of  the  system  but  become  more  systematic  and  less  burdensome 
thereafter.  

Beyond  compliance  requirements,  the  main  administrative  task  mentioned  by 
farmers  is  the  measurement  and  declaration  of  areas  corresponding  to  EFAs.  The 
complexity  of  this  task depends  on  the  agricultural  system;  for  example,  breeding 
farms  with  important  permanent  grassland  seem  to  have  less  difficulty  to  comply 
with  greening  requirements  and  thus,  a  more  limited  administrative  burden.  In 
some  cases,  during  the  first  year  of  implementation  of  greening,  farmers  were 
provided with training (usually for a half-day) by the administration. 

Overall,  greening  is  seen  as  a  quite  complex  scheme,  particularly  as  concerns  the 
definition  and  rules  applying  for  EFAs.  However,  criticisms  of  greening  mainly 
relate  to  the  scheme  definition  rather  than  to  the  associated  administrative 
burden.  The  objective  of  the  measure  is  not  always  well  understood  and  its 
environmental  value  added  is  sometimes  questioned.  Moreover,  the  calculation  of 
the financial amount corresponding to the greening payment is not well known. In 
terms of compliance, requirements for sowing or ploughing dates are considered as 
being  too  rigid,  as  well  as  conditions  on  pesticides  and  fertilizers  use.  In  some 
cases,  to  be  sure  to  reach  the  5%  criteria,  greening  requirements  led  farmers  to 
dedicate land to EFAs, by converting it to set-aside. 

Concerning  aid  administration  itself,  the  level  of  accuracy  required  for  the 
declaration  of  EFAs  has  been  mentioned  as  an  issue,  with  the  introduction  of  a 
tolerance  threshold  perceived  as  a  good  option.  Numerous  farmers  also  ask  for  a 
stability  of  the  scheme  across  the  programming  period;  for  example,  changes 
(increase) to the percentage of EFAs generates additional work for farmers needing 
to identify new possibilities on their farms. 

Farmers’ perspective on penalties 
Findings from the interviews indicate that most farmers consider that penalties 
are  too  high,  as  mistakes  are  mostly  involuntary  and  linked  to  the  complexity  of 
the  system.  Only  half  of  farmers  indicate  that  they  know  precisely  how  their 
payments  are  calculated;  although  the  rate  varies  between  Member  States,  from 
20%  in  France  to  over  70%  in  Italy  and  Germany.  Among  reasons  for  lack  of 
understanding are: errors in national digital system for payments, the complexity of 
certain  situations  (addition  of  many  measures  to  be  paid  and  the  fact  that  no 

139 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

detailed  information  is  communicated  when  payments  are  made),  and  overlaps  of 
two or more application years.  

Only  a  third  of  interviewees  stated  that  they  are  informed  about  their  payment 
calculation by an official letter. For interviewees stating that they understand their 
payment  calculation,  common  information  sources  are  advisors,  information 
leaflets,  explanations  given  by  state  agency,  specialised  press,  calculation  given 
when declaration is made, legal documentation and Internet.  

Similarly,  only  one  third  of  interviewees  understand  how  penalties  are 
calculated,  mostly  because 
face  such  a  situation. 
they  never  had 
Notwithstanding  this  limitation,  although  not  contesting  the  principle  of  penalties, 
most  farmers  think  that  penalties  are  too  heavy  and  that  punishment  is 
disproportionate to mistakes. Only 22% of interviewed farmers agree that sanctions 
are proportionate. 

to 

Figure 35  

Opinions on penalties 

Source: Farmer interviews 

Farmers  criticise  that  compliance  rules  are  very  complex  and  lead  to  involuntary 
mistakes in declaration or implementation. 61% of farmers declare that they agree 
or  strongly  agree  with  the  statement  that  sanctions  often  result  from  mistakes 
related  to  the  complexity  of  the  system.  Especially  procedures  for  the  delimitation 
of  parcel  are  often  seen  as  problematic,  as  different  field  measurement  tools  may 
provide  different  results.  This  is  seen  as  an  automatic  source  of  dispute  and  an 
issue for which farmers would like to see a legal threshold of tolerance. 

Finally,  farmers  think  that  penalties’  system  is  very  dissuasive  and  limit  frauds 
(59% of farmers).  They also state that the system can cause stress if farmers are 
not sure if they complied with all the rules and fear that an involuntary mistake will 
make them lose a significant amount of aid. 

140 

0%10%20%30%40%50%60%70%80%90%100%Sanctions are proportionate to the faultThe penalties system is fairFrauds remain common despite the system ofsanctionsThe motives of sanctions are clear for targetedfarmersThe new "yellow card" system  is a good thingReductions and penalties are commonThe penalty system is dissuasiveSanctions often result from mistakes related to thecomplexity of the systemStrongly disagreeDisagreeNeither agree nor disagreeAgreeStrongly agree 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Changes in administrative burden by 2013 CAP reform 
Findings from the interviews indicate that only a minority of farmers think that 
the administrative burden has decreased since 2015, with new rules and new 
requirements  (greening,  cross-compliance)  contributing  to  a  greater  burden  in 
many cases. Overall, a large majority of farmers indicate that there has either been 
no change or an increase in administrative burden. However, as shown in the figure 
below,  there  is  substantial  variation  in  the  balance  of  responses  across  Member 
States. 

Table 21:  

Answers to the question “How has the administrative burden related to direct 
payments and IACS-based rural development measures evolved since 2015?” 

Source: Farmer interviews 

The main elements that are considered to have increased the administrative burden 
on farmers are: 
  New  rules  and  requirements,  both  in  general  and  in  particular  for  greening, 
cross-compliance  and  insurance  applications:  it  takes  time  for  the  new  rules  to 
be  assimilated  by  the  administration  and  then  by  farmers;  new  rules  are 
perceived  as  creating  increased  complexity,  especially  when  the  administration 
itself does not seem to fully understand them; 

  More  paperwork, despite the development  of IT tools as more documents are 

required for administrative checks and OTSC; 

  Delays in payments; 
  Increased  quantity  and  accuracy  of  data  requirements;  in  particular  for 

land measurement. 

Conversely,  where  farmers  identify  improvements,  they  link  these  to  enhanced 
online application systems.  

141 

0%10%20%30%40%50%60%70%80%90%100%ELSEBGMTEEFRNLES*LTDE*PLIT*Less BurdensomeNo changeMore Burdensome 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

4.5.6 Future CAP and opportunities to reduce administrative burdens 

The  analysis  shows  that  on  average  the  administrative  burden  for  farmers,  in 
terms of time spent and costs, remain at reasonable levels. However, there are 
specific  situations  where  they  can  be  disproportionately  high  compared  to  the 
amount of aid received. More specifically, the system is efficient when:  
  The farming system is simple;  
  Parcels boundaries do not raise issues (e.g. overlaps with neighbours, difficulties 
to  precisely  identify  the  limits  due  to  specific  landscape  characteristics, 
fragmented parcels, etc.);  

  The farm benefits from a limited number of CAP measures, especially under the 

Pillar II; 

  There is no change to declare; and 
  The relationship with the administration is good.  

It can become more burdensome for farmers when:  
  Parcels limits are complicated or when they change;  
  The farming system is complex; 
  The farm benefits from various aid schemes; 
  The farm is small; 
  The relationship with the paying agency has deteriorated. 

There  are  opportunities  during  the  development  and  implementation  of  the  future 
CAP to address some of the administrative burden issues identified from the survey 
of farmers and wider study: 

Tailoring Solutions to Farmers’ Needs 
Administrative  burden  depends  on  several  factors,  and  there  is  not  one  solution 
which  will  reduce  the  burden  for  all  farmers.  Rather,  a  tailored  approach  is 
necessary which is reflective of the differences  across farmers, farm holdings, and 
types of administrations.  

Dependent  on  the  Member  State  or  region  this  could  require  authorities  to 
undertake or refresh segmentation analysis of the beneficiaries so that solutions 
can be tailored to their needs. This could be performed  on the basis of the size  of 
the  holdings,  the  complexity  of  holdings  (livestock,  arable,  permanent  crops, 
mixed),  the  number  and  the  types  of  schemes  as  well  as  the  payment  value.  The 
analysis has highlighted that all of these factors affect the administrative burden for 
farmers. In addition, solutions will vary for beneficiaries, more exactly for  
  those  making  direct  electronic  applications  (including  those  using  technological 

aids or farm software for other parts of their business),  

  those  using  agents  or  other  intermediary  bodies  to  submit  their  claims 

electronically, and  

  those  who  need  assistance  to  submit  their  claims  or  submit  them  on  paper 

forms.  

142 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

The analysis identified several key areas of considerations for Member States: 
  There is a significant variation in the levels of electronic uptake between Member 
States. In some instances all key transactions are managed electronically, whilst 
in other cases take up is extremely low (less than 1%). Supporting the farming 
population sufficiently could require structural and infrastructure improvements, 
such as improving the access to broadband services in remote rural areas;  

  The  cost  for  this  external  support  is  a  major  variable  that  need  to  be  factored 
into  the  solutions  Member  States  provide.  We  found  that  costs  ranges  from  an 
average  of  €4  to  €6  500  between  the  Member  States  surveyed.  Half  of  the 
farmers pay less than €620 for this service, but costs were more than 10 times 
higher for individual cases. The variability observed is mainly due to the scope of 
the  support  contract  concerned.  Member  States  will  need  to  reflect  whether 
beneficiaries will perform tasks themselves or if they opt for options to outsource 
administrative tasks; 

  The  level  of  local  physical  support  for  farmers  in  managing  transactions  and 
applications  can  act  as  a  disincentive  to  using  electronic  tools.  For  instance, 
some  Member  States  provide  “Front  Office”  facilities  to  farmers.  While  these 
offices  present  an  easy  access-point  for  farmers  to  receive  or  communicate 
information,  they  can  also  present  an  obstacle  to  the  development  of  more 
advances online tools; 

filling 

include  support  on 

Each  solution  should  have  a  tailored  advice  and  support  service  to  farmers 
in  applications,  regulatory  and 
which  should 
interpretational  guidance  and  mapping  changes.  Member  States  will  need  to 
recognise  that  some  of  the  opportunities  presented  by  technology  such  as  fewer 
physical  OTSC  may  reduce  the  opportunities  for  farmers  to  have  face  to  face 
dialogue  on  rule interpretation  and  other  issues.  Training  and  support  will need  to 
be enhanced for those  with limited computer skills to encourage greater electronic 
enablement  and  use  of  innovations  such  as  GSAA.  Technology  also  allows  new 
opportunities to reach and educate, such as interactive on-line tools and videos.  

Use of Technology Enhancements 
For those farmers and beneficiaries that have direct or indirect access to electronic 
services,  there  are  a  range  of  measures  that  should  be  encouraged  and  used  to 
reduce the administrative burden for farmers:  

GSAA 
GSAA provides several attractive features for farmers, including on-line crosschecks 
with  paying  agency  databases  and  instant  anomaly  warnings.  These  features  can 
help  to  reduce  mistakes  in  declarations.  It  also  reduces  the  number  of  errors  and 
checks paying agencies need to perform between receipt of the application and the 
payment.  Therefore,  GSAA  has  the  potential  to  speed  up  the  whole  payments 
process.  GSAA could also  reduce travel time and allows several people to work on 
one application or to update data.  

143 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Sentinel and other remote inspection and monitoring tools 
Physical OTSC and other controls add burden  on farmers who need to  be present. 
In  the  future,  a  greater  share  of  controls  could  be  performed  remotely.  In-person 
inspections  could  then  focus  on  specific  anomalies  rather  than  more  general  and 
comprehensive checks. This in turn would reduce the burden for farmers and most 
likely also for authorities.  

The move to a monitoring approach however and the frequency with which Member 
States  receive,  interpret  and  update  changes  in  land  use  will  make  changes  in 
control  data  on  farms  far  more  dynamic  than  some  farmers  are  familiar.  Member 
States  will  need  to  train  and  support  farmers  in  the  consequence  of  the  move  to 
monitoring  systems  and  clarify  the  obligations  for  farmers  to  minimise  any 
administrative burden in the transition period. 

Geo-tagging 
Geo-tagging provides for an effective means to reduce the burden on farmers 
from  physical  controls.  It  allows  to  clarify  eligibility  anomalies  under  controlled 
conditions  without  the  need  for  a  field  inspection.  It  is  also  a  value-added 
supplementary route to provide secondary information for certain crops or schemes 
such as details of seed labels. However, its use is not without challenges. Technical 
capacity needs to be stepped up to provide an authoritative set of images that can 
be  used  to  assure  the  accuracy  of  control  or  declared  areas.  This  may  limit  its 
usefulness  in  some  Member  States  where  technology  skills  are  not  yet  sufficiently 
developed. Again, Member States and paying agencies will need to invest time and 
effort to provide help and support so that benefits can be realised.  

Integrated farm technology 
Member  States  and  paying  agencies  collect  and  maintain  a  significant  amount  of 
spatial  and  other  data  which  they  primarily  use  for  control  and  monitoring 
purposes. The amount of data is likely to increase in future as monitoring systems 
will be embedded and new schemes established. These data have the potential to 
provide added value to farmers if made available. For example, in areas such 
as precision farming these data could help farmers obtain information they may be 
unable to source by other means or only at significant cost. 

Some  farmers  expressed  frustration  that  while  control  data  are  available,  it  is 
often too difficult to transfer these to other applications. For instance, only a 
third  of  LPIS  users  use  the  system  to  feed  other  digital  applications  used  in  farm 
management (or manual management tools). Others were able to access software 
solutions which make use of LPIS data to manage parcels (e.g. rotation and history, 
fertilisation management, rearing management, etc.). These tools are developed by 
private  companies  or  national  professional  organisations.  The  limited  information 
collected  from  farmers  show  that  the  medium  cost  of  these  services  is  around 
€600-€700  per  year.  In  some  Member  States,  free  applications  are  provided  by 
national authorities. 

To  maximise  the  potential  benefits  for  farmers,  Member  States  should  seek 
opportunities  to  provide  access  to  data  where  possible.  They  should  work  with 
farmers, third parties and commercial companies to ensure that farmers can obtain 

144 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

and integrate these data into wider farm management solutions as cost-effectively 
as possible. 

Procedural and Administrative Enhancements 
The  forthcoming  reforms  introduce  the  potential  to  reduce  the  administrative 
burden  on  farmers.  These  opportunities  can  arise  either  from  the  new  regulations 
itself,  or  from  Member  States  adapting  their  national  procedures  and  policies.  The 
national  approach  will  become  even  more  important.  The  move  towards  national 
Strategic Plans places greater responsibility on Member States to define appropriate 
monitoring,  control  and  administrative  systems  and  processes.  The  Strategic  Plan 
requirement  also  obliges  Member  States  to  explicitly  identify  the  steps  and 
measures  they  aim  to  take  to  simplify  the  rules  and  to  reduce  administrative 
burden  for  beneficiaries.  The  following  sections  explore  options  how  to  further 
enhance the procedural aspects. 

Preventive approach 
There  has  been  a  move  from  a  detective  control  approach  to  more  preventative 
control  approach.  Farmers  are  encouraged  and  assisted  to  get  their  applications 
right before submission or adhere to control deadlines. This approach needs further 
development to help farmers avoid penalties and delays.  

The  study  found  that  several  Member  States  adopted  an  approach  where  farmers 
were  encouraged  or  required  to  update  and  confirm  key  data  on  an  on-going 
basis.  This  reduces  the  amount  of  anomalies  found  and  the  effort  required  to 
manage  these.  As  control  data  gets  updated  more  frequently,  the  level  of  in-year 
change  will  increase.  This  further  emphasises  the  benefits  for  farmers  who  will  be 
able  to  access  and  manage  their  holding  data on  an  on-going  basis  rather  than in 
the relatively short timeframe of applications.  

Member States have established alert systems to notify farmers by e-mail or text 
when they have deadlines approaching if farmers did not demonstrate compliance. 
For  instance,  one  Member  State  contacts  farmers  two  weeks  before  a  mowing 
deadline  to  remind  them,  using  spatial  information  to  locate  the  areas  concerned. 
The  stated  aim  of  the  Member  state  is  to  expand  this  feature  to  crop  group 
identification and to explore other potential uses, including the detection of nitrogen 
fixing crops and cultivated fallow land. 

Payment Transparency 
Farmers  interviewed  appear  to  have  a  limited  understanding  on  the  level  of 
penalties  and  their  rationale.  In  addition,  the  overall  calculation  of  the  value  of 
payments was also not fully clear to many farmers. Calculations are often complex 
and  require  clear  explanation.  An  overall  Direct  Payment  can  be  composed  of 
several elements from different schemes, each with their own penalty calculations. 
Rates of aid and entitlement values dynamically changed each year in a number of 
instances.  Elements  of  this  (such  as  a  greater  application  of  the  use  of  payment 
capping  and  redistribution  of  funds)  will  persist  in  future.  Member  states  should 
ensure that their technical solutions and approaches allow easy access for farmers 
and  that  that  calculations  and  any  penalties  are  clearly  explained  and  easily 
understood.  

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Simplification of Proposals and Applications for Funds 
Both  the  interviews  with  farmers  and  the  study  identified  opportunities  to  reduce 
administrative  burden  for  farmers  by  simplifying  proposals  and  applications  for 
funds: 

Farmers identified the application for IACS Rural Development Measures as 
the  most  burdensome.  In  particular,  the  process  to  initially  access  and  have 
multi-annual measures and commitments approved account for around 80% of the 
total administrative burden measured. Member States should target this as an area 
for simplification in their Strategic Plans.  

Member  States  that  integrated  annual  IACS  aid  and  payment  claims  into  a  single 
application  process  showed  greater  efficiency  and  administrative  benefits  for 
farmers.  Member  States  should  seek  opportunities  to  minimise  the  amount  of 
duplication  that  farmers  have  to  undertake  when  making  their  applications  and 
claims. 

Regulatory Enhancements 
Similar  to  procedural  enhancements,  the  analysis  points  towards  regulatory 
enhancements that could reduce the administrative burden for farmers.  

Stability of Rules and Transitional Measures 
Farmers provided clear feedback that there was a greater burden upon them as 
a  consequence  of  the  frequent  changes  of  the  rules  of  the  CAP.  The 
interviewed farmers also note that the rules are regularly adjusted throughout each 
programming period. This may be due to regulatory changes, but could also result 
from  clearer  or  revised  interpretations  of  requirements  by  Member  States. 
Nevertheless, changing rules after few months or few years of implementation are 
a  cost  driver  and  increase  the  administrative  burden  for  farmers.  The  objective 
should  be  to  keep  the  regulatory  framework  as  stable  as  possible  through  the 
programming period and to reflect on the potential additional administrative burden 
of changes if these are necessary. 

Transitional  measures  could  help  to  reduce  the  administrative  burden  for 
farmers.  Farmers  often  suffer  from  a  (in  their  view  rushed)  implementation  of 
major  regulatory  changes  within  short  timeframes.    This  results  in  imperfect  or 
delayed  IT  solutions,  incorrect  or  delayed  payments.  The  introduction  of  the 
forthcoming changes involve significant scheme changes and a change in approach, 
where  Strategic  Plans  delegate  more  competences  to  Member  States.  These 
changes  should  be  introduced  over  a  timeframe  providing  administrators  and 
farmers  with  sufficient  time  to  prepare.  Suitable  transitional  measures  should  be 
put in place to ensure that farmers continue to get legitimate access to payments in 
the meantime. 

Clarity of Regulatory Changes 
The  study  highlighted  issues  where  different  CAP  measures  might  be 
overlapping  or  incoherent  (e.g.  AEC  measure,  greening  and  cross-compliance). 
This creates a risk for double funding, increases “grey zones” and raises confusion 
among farmers and beneficiaries. Avoiding these overlaps and inconsistencies could 
enhance clarity and reduce administrative burden. The reforms propose a modified 

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approach  to  the  current  regime  where  cross-compliance  and  elements  of  greening 
are  combined  under  “conditionality”.  In  addition,  a  new  ECO-scheme  is introduced 
to  be  tailored  by  each  Member  State  and  the  IACS-related  Rural  Development 
Measures  are  largely  retained.  There  is  a  risk  that  these  arrangements  will 
perpetuate  or  even  increase  the  described  issues  for  farmers.  It  is  important  that 
farmers are provided with clear opportunities and obligations to ensure this risk is 
avoided. 

Farmers  criticised  that  the  stacking  of  different  rules  related  to  CAP  instruments 
and  the  lack  of  transparency  in  controls  increase  complexity  and  the  risk  for 
penalties. Many of the responses in the interviews indicate that the burden related 
to  Greening  is  considered  to  be  disproportionate  to  its  environmental  impacts. 
Specific  reference  is  made  to  the  definition  of  Permanent  Grassland  and  the 
Ecological  Focus  Areas.  Farmers  expressed  their  opinion  on  opportunities  for 
simplification.  They  ask  for  more  flexibility  when  implementing  environmental 
measures  and  in  a  more  results-based  approach,  which  has  the  potential  of  being 
more effective. 

Regulatory Simplifications and Tolerances 
The  study  identified  simplification  opportunities  to  reduce  the  administrative 
burden  on  farmers  whilst  taking  a  proportionate  view  of  overall  risk  to  EU  funds. 
These include:  
  The introduction of de minimis levels of up to 100 m2 per ineligible feature;  
  Enhanced use of permitted tolerances around the levels of precision required; 
  Further  development  of  the  use  of  the  “yellow  card”  system,  a  more 

proportionate and simpler penalty regime; 

  Potential  aid  threshold  below  which  requirements  for  farmers  controls  are 

simplified.  

Farmers  expressed  concerns  that  complex,  incomplete  or  ambiguous  national 
legislation can lead to inefficiencies and confusion. This translates in significant time 
losses to interpret and understand requirements and can lead to higher error rates. 
Opportunities to address these issues include the following: 
  A discretionary timing and of payment claim deadlines and penalties at Member 

State level, rather than centrally legislated; 

  A  more  flexible  scheme  calendar:  strict  deadlines  can  significantly  increase  the 
burden to implement and perform controls without contributing to the reliability 
of the system; 

  Greater use of flat rates within Rural Development Measures through flat rates; 
  Greater  reliance  upon  or  use  of  national  or  private  certification  organisation  by 
Member  States  either  to  access  confirmation  of  eligibility,  such  as  organic 
schemes,  or  as  alternatives  to  inspection  where  these  bodies  perform  similar 
assurance checks for their own purposes. 

Impact of Proposed Regulatory Changes on Administrative Burden on Farmers 
Elements  of  the  proposed  regulatory  changes  have  the  potential  to  have  a 
significant impact on the administrative burden placed on farmers in the future: 
  The  potential  for  Member  States  not  to  use  payments  entitlements.  This  could 
greatly reduce the administrative burden for farmers who have to manage their 
entitlements and have to report entitlement transfers to other farmers; 

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 Several proposals could increase administrative burden, such as rules on “genuine 
farmers”  and  the  proposals  for  payment  reductions.  This  would  translate  into 
additional  proof  of  eligibility  or  the  manual  reduction  of  payments  based  on 
complex criteria. 

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5  Conclusions and recommendations  

Considerable efforts to simplify the CAP have been made over the past decades and 
will  continue  in  the  years  to  come.  These  have  included  policy  level  initiatives 
through  the  amendments  made  as  part  of  the  Omnibus  Regulation  in  2018.  At  a 
technical  level,  Member  States  are  also  working  together  to  share  best  practice 
experiences  and  identify  opportunities  for  simplification  and  modernisation;  for 
example,  through  the  CAP  “Learning  Network”  or  regular  conferences  such  as 
“Panta  Rhei”  for  IT.  The  application  of  ICT  solutions  and  the  use  of  advanced  GIS 
tools offer great potential for simplifying CAP systems and procedures and, thereby, 
reducing the administrative burden for both administrations (Managing and Paying 
Agencies)  and  beneficiaries.  Administrative  burden  will  also  be  affected  by  the 
introduction of new interventions as well as the move towards a more results-based 
policy. Similarly, the increased flexibility and responsibility given to Member States 
will  have  implications  for  the  future  costs  of  managing  and  controlling  CAP 
expenditures. 

The  following  sections  provide  the  key  findings  from  this  study  including  their 
implications for future policy as well as the overall conclusions 

5.1  Key findings and implications for future policy 

Overall,  94%  of  expenditures  under  the  European  Agricultural  Guarantee  Fund 
(EAGF)  and  53%  of  expenditures  under  the  European  Agricultural  Fund  for  Rural 
Development  (EAFRD)  are  subject  to  IACS  system  and  cross-compliance  controls. 
For  Member  States’  competent  authorities,  total  annual  administrative  costs  of 
IACS are estimated at between €1.7bn and €1.9bn, corresponding to 3% – 3.3% of 
the CAP budget or 3.5% - 3.9% of IACS managed CAP budget.  Compared to other 
funds,  the  administrative  cost  of  CAP  is  below  the  overall  rate  for  European 
Structural  and  Investment  Funds  (ESIF),  which  are  estimated  at  4%  of  the  public 
expenditures.  It  is  also  below  the  administrative  costs  of  the  EU,  which  represent 
around  6%  of  the  total  EU  budget.  Within  this  amount,  14%  is  attributed  to 
annualised  set-up  costs136,  12%  to  running  costs,  and  74%  to  management  and 
control costs. 

For the EU as a whole, the average annual cost of IACS administration is estimated 
at €10 per hectare of Utilised Agricultural Area, with a range across Member States 
from  €2  to  €200  per  hectare.  Administrative  costs  per  hectare  of  UAA  are 
particularly high for small MS. 

When  compared  to  the  previous  programming  period,  and  excluding  set-up  costs, 
IACS-related  administrative  costs  are  estimated  to  have  increased  by  one  third; 
with a range at the level of Member States from an increase of 15% to as much as 
60%. 

136 Corresponding to total cumulative set-up costs over a seven-year period divided by seven. 

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Within management and control costs, the main cost items are staff costs related to 
rural  development  (~  32%  of  the  total  costs),  payment  entitlements  (~14%), 
greening (~ 10%) and cross-compliance (~ 8%). Case study findings suggest that 
administrative  checks  represent  about  two-thirds  of  control  costs  (excluding  IT 
costs), primarily due to time spent on manual checks (see Figure below). 

Figure 36  

Breakdown of IACS related costs borne by national administrations 

Control  costs  are  higher  for  Pillar  II  measures  and  environmental  schemes  than 
direct  payments.  Although  previous  studies  have  suggested  that  Greening  is  a 
major driver of higher administrative costs (set-up, management and control), the 
present  study  could  not  separately  identify  administrative  costs  for  Greening,  as 
these  tend  to  be  incorporated  in  the  administrative  costs  for  direct  payments  and 
overall  investments.  For  cross-compliance,  the  main  sources  of  costs  of  Statutory 
Management Requirements are: personnel costs, IT investments, and risk analysis. 
For GAEC, the main cost sources are on-the-spot-controls and risk-based sampling. 

Implications for future policy 

Robust and more comprehensive monitoring and assessment of IACS administrative costs 

would be facilitated through establishing an agreed set of comparable data metrics and a 

baseline  calculation  of  administrative  costs  for  each  Member  State/paying  agency.  This 

would facilitate better reporting and evaluation of cost changes resulting from future policy 

and  implementation  reforms,  which  could  be  measures  against  the  established  baseline 

cost estimates. 

Improved  measurement  of  time-related  costs  of  IACS  administrative  tasks  and  activities 

would  support  more  robust  and  accurate  assessment  of  IACS  administrative  costs,  while 

providing  administrations  with  improved  information  on  the  staffing  needs  and  costs  of 

different administrative tasks. To this end, administrations could be encouraged to develop 

monitoring  frameworks  to  keep  track  (over  an  extended  period)  of  the  time  spent  for 

different administrative tasks. 

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Undertaking an ex ante assessment of the task requirements – i.e. new tasks and changes 

to  existing  tasks  –  for  implementing  changes  resulting  from  legislative  reforms  could 

support better assessment of their cost impact, and help to identify areas where new rules 

impose  significant  additional  administrative  burden,  and  where  it  may  be  appropriate  to 

assess options that could deliver a better balance  between costs and benefits  of changes 

to legislation. 

Institutional arrangements from Member States (centralised operational model with 
a  single  paying  agency  or  regional  model)  have  a  significant  impact  on  the 
administrative  costs  of  IACS.  To  the  extent  that  a  decentralised  model  inhibits 
economies of scale or raises transaction costs (e.g. through less cost-effective and 
more  burdensome  administrative  structures  and  processes)  it  can  introduce 
additional overhead costs. 

Choices over information technology solutions and systems architecture are another 
area  with  an  important  bearing  on  administrative  costs.  When  faced  by  major 
reforms,  both  the  level  of  integration  and  the  modernity  of  IT  systems  affect  the 
speed and cost of development and adaptation of administrative systems. Member 
States covered by the study reported development cycles of between one and four 
years,  with  an  average  of  three  years  for  implementing  changes  to  meet  the 
requirement of the CAP reforms. Using packaged solutions can have the advantage 
of  sharing  the  costs  of  development,  reducing  and  simplifying  integration 
development and testing costs. However, there is a risk in exposing administration 
to  high  costs  and  managerial  challenges  by introducing  major  changes  to  IT  when 
CAP reforms are being discussed.  

Implications for future policy 

MS should be encouraged to share best practice around system development lifecycles and 

innovative  approaches  that  have  the  potential  to  speed  up  IT  delivery  times  and  reduce 

administrative burdens. Member States should carefully assess the impacts of IT changes 

with respect to major regulatory change. Panta Rhei is an appropriate forum for this. 

The study finds that establishing an IT module for registering payment entitlements 
did not pose any particular difficulties for Member States, which were often able to 
adapt  existing  IT  systems.  The  main  sources  of  difficulties  have  come  from  the 
initial  allocation  of  entitlements  and  the  ex-ante  determination  of  eligible  area. 
Some Member States also struggled with the technical definition and assessment of 
eligibility  of  active  farmers,  young  farmers  and  new  entrants,  as  well  as  the 
validation of land for the national reserve.  

The study finds that a variety of set-up factors affect the cost structure of Member 
States, ranging from geographic considerations (e.g. mountainous areas), historical 
factors  (e.g.  continuity  of  funding),  structural  conditions  (e.g.  regionalisation), 
technological  advancements  (e.g.  adoption  of  GSAA)  to  political  ambitions  (e.g. 
environmental  conditions).  Particularly  the  latter  combined  with  flexibility  in  the 
interpretation of legal prescriptions, fears of auditors and lack of alignment between 
stakeholders lead to what is often interpreted as gold-plating. Concrete examples of 
gold-plating could however not be quantified in this study as it is often the outcome 
of  intentional  choices  with  expected  benefits  (and  can  as  such  not  be  declared 

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“unnecessary”) or overcompensated by other implementation decisions. A particular 
role therein plays the adoption of technologies (including technological uptake). 

Excluding  compliance  cost  related  to  the  implementation  of  CAP  measures,  the 
estimated  burden  of  CAP  administrative  requirements  for  farmers  corresponds  to 
about 2% of total of aid received. Contrary to administrations, most farmers do not 
report  a  substantial  increase  in  their  administrative  burden  due  to  the  rules  and 
new  requirements  (greening,  cross-compliance)  introduced  by  the  CAP  2013 
reform.  For  farmers,  compliance  with  greening  regulation  generates  greater  costs 
than  the  administrative  burden  from  submitting  their  aid  applications.  In  those 
Member States with experience of GSAA, the system is considered as a useful tool 
for  farmers  that  provides  time  savings  compared  to  a  paper  system.  The 
administrative  burden  for  farms  is  higher  when  several  applications  need  to  be 
made, particularly where Pillar II applications are involved, and when the farm has 
complex  land  plots  requiring  extra  effort  to  check  and/or  modify  pre-filled  land 
areas.  

The  study  finds  that  changes  aimed  at  simplifying  obligations  on  farmers  can 
sometimes  lead  to  additional  administration  costs  for  Member  States  needing  to 
adapt  IT  systems  (e.g.  yellow  card).  For  the  administration,  the  retrospective 
element  is  considered  particularly  difficult  to  implement.  Also,  Member  States 
indicate  the  they  frequently  find  it  necessary  to  initiate  developments  of  their  IT 
systems based on assumptions made in advance of regulations being agreed, which 
can necessitate subsequent adaptation causing implementation delays. 

Implications for future policy 

Continued engagement with and among Member States is important to identify cost-efficient 

approaches  for  implementing  CAP  regulations  and  reforms.  Consideration  should  also  be 

given  to  the  length  of  development  cycles  for  the  IACS  IT  system,  and  the  IACS  annual 

cycle, to ensure that IT systems can be developed and/or adapted in time to meet the entry 

into force of new legislative provisions.  

Both  administrations  and  farmers  view  the  LPIS  as  an  important  tool  for  reducing 
administrative burden. LPIS quality has improved greatly since its inception, mostly 
due  to  technological  advances  in  aerial  photography  such  as  higher  resolution 
images and more frequent acquisition. Similarly, the LPIS QA  is seen as a positive 
influence  on  overall  quality  and  accuracy.  Of  the  LPIS  models  in  use,  the 
Agricultural  Parcel  (single  crop)  and  the  Farmer’s  Block  are  regarded  as  the  most 
effective for administrative checks due to the tighter delineation of eligible land and 
the  direct  link  to  a  particular  beneficiary.  However,  in  terms  of  administrative 
maintenance  cost  and  efficiency,  the  Physical  Block  system  is  more  stable,  with 
faster and cheaper update requirements. 

The GSAA system can substantially improve cost-effectiveness at national/regional 
level,  bringing  benefits  in  terms  of  time  saving  and  better  information  quality, 
providing stable information at farm and land parcel level. The cost savings due to 
GSAA  vary  between  Member  States  depending  on  the  timing  of  its  introduction. 
Compared to Member States with GSAA in place for several years, costs of controls 
are  about  50%  higher  in  Member  States  that  have  only  recently  implemented 
GSAA.  Given  that  the  majority  of  Member  States  are  recent  adopter,  the  full 

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benefits  of  GSAA  are  not  yet  visible.  Nevertheless,  there  appears  to  be  a  general 
consensus  that  GSAA  reduces  errors  in  aid  applications,  increases  the  uptake  of 
electronic  applications,  reduces  digitisation  costs,  and  reduces  administrative  and 
on-the-spot controls.  

Practical  use,  together  with  pilots  and  evaluations,  has  shown  the  impact  of 
Sentinel  monitoring  systems  in  reducing  administrative  burden,  including:  the 
potential  to  simplify  the  annual  claims  process, 
increased  accuracy  and 
simplification  of  farmers’  aid  application,  with  the  opportunity  to  replace  on-the-
spot checks, which are required to cover 5%137 of applications”. The introduction of 
Sentinel  monitoring  poses  some  challenges:  monitoring  via  satellites  may  require 
significant  additional  specialised  labour;  Sentinel  is  unlikely  to  fully  replace  other 
forms  of  imagery  used  to  accurately  validate  parcel  boundaries  and  features, 
particularly parcels of less than 0.5 ha, which could create additional administrative 
costs.  Sentinel  is  most  likely  to  be  cost-effective  for  Member  States  with  large 
numbers of farmers and corresponding high volumes of checks. 

Spatial  software  tools  used  in  tandem  with  Sentinel  imagery  use  probability 
assessments  where  land  changes  are  flagged  as  potential  anomalies  often  using 
“traffic  light”  coding.  The  higher  the  level  of  probability  required  then  the  greater 
the number of potential anomalies that may require follow up or investigation. This 
in turn can drive up administrative costs and burdens for both administrations and 
farmers. 

Implications for future policy 

To  derive  the  benefits  of  monitoring  and  investment  in  spatial  software  tools,  probability 

levels  for  the  investigation  of  anomalies  by  field  visits  or  other  means  should  be  set  at 

proportionate levels between the cost-effectiveness of the control and providing assurance 

to the fund 

Geotagging  technology is  seen  as  a  promising  addition to  the  tools  for  spatial  and 
technical  monitoring,  providing  an  effective  means  to  monitor  areas  that  are  not 
fully covered by imagery and for validating crop types and features, while providing 
administrative savings for farmers. However, challenges exist, such as the technical 
skill  needed  by  farmers,  and  ensuring  that  technology  applications  are  tamper-
proof.  Benefits  arising  from  the  use  of  drones  are  seen  to  be  more  marginal,  with 
their  most  realistic  use  being  for  targeted  campaigns  on  specific  areas  where 
physical  access  is  difficult  for  traditional  on-the-spot  controls.  Drones  are 
considered  less  cost-effective  than  other  technologies  (e.g.  geotagging,  Sentinel, 
robotics)  and  they  face  legal  and  privacy  limitations.  Robots  can  be  usefully 
deployed to check calculations and evaluate applications; a robot can handle a daily 
workload of 6 employees evaluating more than 400 applications. 

Implications for future policy 
Member States should examine the cost-benefit opportunities presented through 
the  integration  and  optimisation  of  new  technologies  in  the  administration  and 
control systems. 

137 Lower control rates are permissible in certain circumstances - in accordance with Article 36 of Regulations 809/2014 

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To  incorporate  results-based  RD  schemes,  IACSs  need  to  be  expanded  to  enable 
access  and  cross-checking  of  secondary  databases,  which  may  be  managed  by 
other state bodies. This requires developing new solutions fitting to new measures, 
and  providing  new  interfaces  to  external  data  sources  required  for  independent 
validation,  which  may  not  be  available  in  a  format  suitable  for  performing 
automated checks. Where this is not possible, manual administrative checks and/or 
physical  validation  in  the  field  will  still  be  required  to  confirm  results.  Feedback 
from  organisations  that  have  trialled  result-based  approaches  or  are  considering 
them  indicates  that  implementation  of  ambitious  result-based  schemes  may  be 
difficult.  In  particular,  results-based  measurement  requires  solid  indicators 
(accuracy,  reliability,  precision,  timeliness  etc.)  that  can  be  difficult  obtain  for 
aspects such as water pollution, carbon storage, etc.  

Implications for future policy 

When designing CAP strategic plans, Member States should be encouraged to take account 

of  the  technical  and 

information  requirements 

for  monitoring  of  results-based 

interventions, including estimation of the associated administrative costs. These estimated 

costs  should  be  included  in  the  overall  assessment  of  the  cost  effectiveness  of  proposed 

interventions.  

The  study  included  a  wider  survey  of  Member  States  that  was  conducted  in 
September 2018. The survey revealed high levels of uncertainty about the possible 
administrative burden of the CAP post 2020. The following  points were highlighted 
by the survey: 
  System  development  and  set-up  of  new  systems  will  most  likely  continue  to 
place  an  important  burden  to  administrations.  There  are  concerns  over  high 
development  costs  necessary  to  establish  adequate  monitoring  systems,  which 
are  likely  to  be  additional  rather  than  replacement  systems.  There  is  also 
concern about the costs of transition from old to new rules and control systems; 
  The CAP post 2020 is expected to lead to additional data collection requirements 
for information that is not currently being captured; for example, data collection 
will  be  required  for  the  set-up  of  Farm  Sustainability  Tool  for  Nutrients  or  Eco-
Schemes; 

  Accompanying  the  proposed  new  conditionality  requirements,  several  Member 
States  anticipate  a  shift  in  the  balance  of  administrative  costs  away  from 
Greening  towards  cross-compliance,  with  GAEC  taking  up  slightly  more  of  the 
administrative  burden  than  SMR.  In  addition,  if  current  exemptions  on  controls 
for  small  holdings  are  abandoned,  this  would  significantly  increase  the  costs  of 
controls of the new conditionality requirements for recipients of direct payments 
and  rural  development  measures,  which  would  cover  a  greater  number  of 
farmers. 

  The  proposals  covering  payment  reductions  and  “genuine  farmers”  could  create 
additional  administrative  burdens,  particularly  due  to  taking  into  account 
salaries,  labour  costs  and  incomes  in  the  implementation  of  these  provisions. 
Collating  and  maintaining  a  database  of  individual  salary  and  labour  cost 
calculations could be administratively burdensome for some MS; 

  There are concerns that the inclusion of conditionality rules and eco-schemes will 

potentially increase compliance costs for farmers.  

154 

 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Overall,  Member  State  recommendations  concerning  opportunities  to  reduce 
administrative burden are consistent with the approach envisaged for the CAP post 
2020; for example, greater use of monitoring techniques and other technologies to 
allow a reduction of traditional inspections. For policy evaluation and environmental 
monitoring, the proposal for the CAP post 2020 includes possibilities  for the re-use 
the information managed in the IACS system.  

5.2  Overall conclusions 

This  study  offers  the  first  attempt  to  measure  and  gather  evidence  on  the  costs 
related  to  the  implementation  of  IACS  following  the  CAP  2013  reform.  There  are 
four key lessons learned from this analysis: 
  Overall,  the  CAP  2013  reform  led  to  an  increase  of  the  administrative 
burden on administrations (managing authorities and paying agencies). 
This  has  however,  helped  to  avoid  a  significant  increase  of  the  burden 
on beneficiaries. For the administrations, the total annual administrative costs 
of  IACS are estimated to represent around 3% of the CAP budget. For farmers, 
the  share  of  the  administrative  burden  (without  compliance  costs)  corresponds 
to about 2% internal costs and 3% if including external costs out of the total aid 
received. Adding up all administrative cost estimates would lead to a rough total 
in the range of 5-6% of administrative burden of the CAP. It needs to be noted 
however  that  such  an  aggregation  has  to  be  treated  with  care  given  that  the 
farmers  survey  is  not  based  on  a  representative  sample,  focuses  on 
administrative  burden  and  not  compliance  costs  and  captures  overall  costs  and 
not only those emerging from IACS-related measures; 

  There is considerable variation in the costs between Member States. The 
cost  drivers  can  vary  depending  on  governance  structures  and  scale  (territory 
covered); 

  Increased  automation,  digitalisation,  and  the  use  of  new  technologies  for 
management  and  controls  of  the  CAP  are  not  only  expected  to  create 
benefits  for  the  future  but  have  proven  to  do  so  already.  The  use  of 
digitisation,  GSAA  or  LPIS  is  shown  to  be  a  key  factor  in  mitigating  a  further 
increase  in  administration  costs.  Nevertheless,  there  are  concerns  that  the  CAP 
post 2020 might not decrease the burden for administration and farmers; 

is 

  Finally,  the  study  reveals  that  there 

limited  availability  and 
to  CAP 
inconsistency  of  data  on  administrative  costs  related 
implementation.  The  reduction  of  the  administrative  burden  of  the  CAP  has 
been a priority for many years and one would expect a good knowledge base on 
the  topic.  The  EC  has  already  taken  actions  to  collect  information  on  a  regular 
basis,  particularly  through  the  annual  survey  on  costs  of  controls.  This  survey, 
however, focuses only on the costs of measures and does not collect evidence on 
the drivers of these costs.  

155 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Four main recommendations are drawn from these lessons: 

Member States should consider the administrative cost implications of CAP 
post  2020  interventions.  Administrative  costs  assessment  should  be  integrated 
in  Member  States’  CAP  strategic  plans.  According  to  article  95(1)  of  the  proposed 
Regulation138,  each  CAP  strategic  plans  should  include  “a  description  of  the 
elements  related  to  simplification  and  reduced  administrative  burden  for  final 
beneficiaries.”  The  results 
from  the  present  study  demonstrate  that  the 
administrative  burden  of  final  beneficiaries  is  interconnected  to  the  administrative 
costs  of  the  competent  authorities.  It  is  thus  recommended  to  consider  both  the 
public  sector  and  the  final  beneficiaries  in  this  section  of  the  CAP  strategic  plans. 
The  section  should  also  describe  the  strategy  proposed  to  collect  evidence  on  the 
evolution of the two costs over time. 

Member  States  should  seize  the  opportunity  offered  by  the  proposed  CAP 
reforms  to  reduce  the  administrative  burden  on  farmers.  In  the  short  term, 
the  EC  should  encourage  knowledge  exchange  and  capacity  building  to  support 
Member  States’  efforts  to  reduce  the  administrative  burden  of  the  CAP.  Areas 
where Member States could work to enhance support and engagement with farmers 
could include: 
  Undertaking  or  refreshing  segmentation  analysis  of  their  beneficiaries  so  that 
solutions  can  be  tailored  to  their  needs  (e.g.  segmented  by  size  of  holding, 
complexity or level of technical enablement); 

  Offering  tailored  advice  and  support  service  to  farmers,  which  should  include 
support  for  filling  in  applications,  regulatory  and  interpretational  guidance,  and 
mapping changes; 

  Supporting beneficiaries (and their agents) with guidance around more proactive 
management and resolution of anomalies and the interaction between data from 
monitoring  and  their  geo-spatial  aid  applications.  They  may  also  need  to  be 
trained/guided  in  the  use  of  geotagging  where  systems  allow  this  type  of 
submission;  

  Using  opportunities  to  provide  open  access  to  data,  where  possible.  Member 
States  should  work  with  farmers,  third  parties  and  commercial  companies  to 
ensure  that  farmers  can  obtain  and  integrate  these  data  into  wider  farm 
management solutions as cost-effectively as possible; 

  Moving  from  a  detective  to  a  more  preventative  control  approach.  Before 
submission,  farmers  should  be  assisted  to  correctly  complete  their  applications 
by  encouraging  or  requiring  them  to  update  and  confirm  key  data  on  an  on-
going basis rather than just at the time of application; 

  Establishing alert systems (e.g. email or text messaging) to notify farmers when 
deadlines are approaching, and farmers have yet to demonstrate compliance; 
  Ensuring that technical solutions and approaches are easy for farmers to access 
and that payment calculations and any penalties are clearly explained and easily 
understood; 

138COM(2018)  392  final  -    Proposal  for  a  REGULATION  OF  THE  EUROPEAN  PARLIAMENT  AND  OF  THE  COUNCIL  establishing 
rules on support for strategic plans to be drawn up by Member States under the Common agricultural policy (CAP Strategic Plans) 
and financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development 
(EAFRD)  and  repealing  Regulation  (EU)  No  1305/2013  of  the  European  Parliament  and  of  the  Council  and  Regulation  (EU)  No 
1307/2013 of the European Parliament and of the Council 

156 

 
 
 
 
 
 
 
 
 
 
                                                           
Analysis of administrative burden arising from the CAP 

  Using  opportunities  to  minimise  duplication  of  activities  and  information 

provision by farmers when making applications and claims. 

The use of technology should be  encouraged  as it has  a positive influence 
on the mitigation and/or reduction of the administrative costs. In particular, 
the  adoption  of  innovations  related  to  Sentinel,  geotagging  and  spatial  software 
capable  of  automatically  interpreting  land  use  and  landscape  features  should  be 
supported.  Further  development  and  enhancement  of  the  GSAA  also  has  the 
potential to reduce administrative burden.  

Using  new  technologies  allows  a  move  from  a  traditional  IACS  approach  of 
sequential  compliance  control  followed  by  penalties  to  continuous  monitoring  that 
can proactively provide warnings at application stage and throughout the season to 
prevent unintended non-compliance. 

The  combination  of  Sentinel  satellite  imagery,  spatial  software  capable  of  analysis 
and  assessing  the  eligibility  of  features  and  land  uses  based  upon  probability 
assessments  and  geotagged  photography  under  controlled  conditions  together 
present the opportunity to minimise the need for traditional on-the-spot controls: 
  The  move  to  monitoring  introduces  significant  cultural  and  business  process 
change  for  administrations  especially  during  the  transition  from  the  use  of 
imagery updates provided cyclically over a period of up to three years (which will 
need  to  continue  in  tandem  for  boundaries  and  other  areas  of  eligibility)  to 
provide  continuous  monitoring.  This  is  likely  to  produce  short-term  spikes  in 
activity which will need to be managed and will require a different approach once 
this transition has been achieved. 

Those  Member  States  that  have  systems  designed  to  allow  or  to  require 
beneficiaries  to  update  details  of  their  holding  on  a  continuous  basis  are  likely  to 
have a smoother transition and less cultural change to manage than those systems 
that  deal  with  most  changes  as  part  of  annual  aid  application  submissions.  Key 
areas  for  consideration  in  establishing  and  agreeing  national  strategic  plans  and 
guidelines for Member States will be: 
  Ensuring  that  there  is  an  appropriate  agreement  of  residual  risk.  Audit  control 
expectations  or  fear  of  financial  corrections  could  negate  the  benefits  from 
investments needed to establish and maintain these systems; 

  Tailoring  of  solutions  to  meet  the  specific  needs  of  Member  State  and  the 
interventions  they  chose  to  implement.  Each  Member  State  will  have  different 
geographical  and  climatic  conditions  that  will  influence  environmental,  cross-
compliance  and  rural  development  measures.  IT  solutions  that  are  capable  of 
easily identifying, capturing and maintaining spatial and non-spatial data sources 
tailored  to  specific  local  needs  are  likely  to  be  well  placed  to  support  future 
requirements. 

157 

 
 
 
 
 
 
 
 
 
 
 
 
 
Analysis of administrative burden arising from the CAP 

Finally, the EC could  consider establishing a  reporting  system to track the 
evolution of CAP administrative costs. As the proposed reform for the CAP post 
2020  introduces  more  flexibility  in  Member  States’  implementation  choices,  it  is 
urgent  to  initiate  the  development  of  such  a  framework  to  avoid  inconsistent  cost 
recording  approaches.  The  methodology  implemented  in  this  study,  including  the 
new  LPIS  Cost-Effectiveness  Framework,  provides  a  basis  for  the  establishment  of 
such a recording system.  

As  part  of  the  study  a  cost  framework  was  developed  for  use  in  those  Member 
States  participating  in  case  studies  to  seek  to  identify  specific  costs  and  areas  of 
administrative  burden.  It  became  clear  that  Member  States  had  no  standard 
method of identifying their costs and rarely detailed costs at a disaggregated level. 
If  there  is  an  ambition  for  meaningful  recording  of  administrative  burden  going 
forward  Member  States  should  be  able  to  use  and  report  using  a  common 
framework. Such a framework could have the following elements: 
  Build upon and adapt the cost and cost effectiveness models used in the study; 
  The  ability  to  separately  identify  development  costs  from  running  costs  at  an 

aggregated and disaggregated level;  

  Be able to track benefits and savings over time, for instance reductions in costs 

of administrative and on-the-spot checks; 

  The ability to model estimated costs  of change as well as account for the actual 

costs of implementation; 

  Be capable of identifying aggregate costs by Member State and costs per region 

with an agreed method of apportionment of centralised costs; 

  Have an agreed methodology that allows the apportionment of costs where they 
are  not  easily  itemised.  Likely  metrics  could  include  headcount  with  a  common 
method of apportioning direct and indirect numbers and costs e.g.: 
o  Fully dedicated to IACS work; (e.g. LPIS digitiser, caseworker); 
o  Partially dedicated to IACS work; (e.g. Co-ordination or senior paying agency 

and policy management roles); 

o  Overheads (e.g. Finance, HR, IT support and maintenance etc.); 
  Metrics could also include units of work. For instance, the following: 

o  average time spent per type of control; 
o  the number of checks and transactions performed per application period; 
o  average  transaction  times  (e.g.  entitlement  transfer,  land  transfer,  aid 

application). 

The model should come with a comprehensive user and support guide. It would be 
sensible  to  work  with  some  willing  Member  States  in  the  development  phase  to 
identify  and  resolve  implementation  issues.  There  is  also  the  potential  to  build  on 
the  work  done  in  this  study  to  develop  a  standardised  model  to  quantify  the 
administrative burden and the impact of simplification of farmers and beneficiaries. 
This  could  be  used  to  support  contributions  by  Member  States  towards  regulatory 
obligations  in  Strategic  Plans  going  forward.  Both  should  be  capable  of  being 
adapted  for  use  for  other  non-IACS  areas  of  CAP  expenditure  where  there  was  an 
identified beneficial use. 

158 

 
 
 
 
 
 
 
 
 
 
 
 
 
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doi: 10.2762/521652 

ISBN: 978-92-79-98021-3