MEPs seek to tackle Orbán and Babiš over EU farm funds

Hungarian Prime Minister Viktor Orbán and Czech Prime Minister Andrej Babiš are in the European Parliament’s crosshairs as lawmakers are pushing to use a high-tech data tool to root out longstanding misallocation of EU farm funds.

A lack of transparency and corruption in EU farm spending, the biggest single plank of the bloc’s regular budget, are being raised as core problems in the run-up to next week’s endgame of negotiations over the €270 billion budget of the new five-year Common Agricultural Policy (CAP).

The Parliament wants to expand the use of a data-mining tool called ARACHNE to keep a closer check on where CAP funds end up. But the parliamentarians face severe opposition in next week’s talks. The 27 EU countries, as represented in the Council of the European Union, argue against the tool being mandatory in the next CAP, preferring a voluntary approach, where the tool is merely available to countries if they want to use it.

For Ulrike Müller, one of the Parliament’s three main CAP negotiators, that is not good enough. “The Parliament wants to do something against Babiš and Orbán,” she told POLITICO in an interview.

Projects in Hungary and the Czech Republic, along with some in Slovakia and Italy, have triggered major concern about the allocation of agricultural funds. Hungary featured proinently in a 2019 New York Times exposé about EU farm subsidies enriching politically connected kingpins. A European Commission probe into Czech Prime Minister Babiš found he is still pulling the strings of his agriculture empire Agrofert, a big recipient of EU farm funds. Hungary says reports of misspending are biased and politically motivated, while Babiš repeatedly insists he has done nothing wrong.

The European Commission’s ARACHNE system is already used for EU subsidy programs in regional policy — on a voluntary basis. Müller’s proposal would see it included in the CAP for direct payments.

An EU Parliament insider said that the likes of Babiš and Orbán “would not be thrilled” if the use of the tool was made mandatory by Brussels in line with the Parliament’s wishes, but said that the main reason countries are opposing this is because of concerns the tool is simply not sufficiently developed yet.

Müller, the main rapporteur for the CAP file on financing and monitoring, is also concerned about the administrative burden this could create for national authorities. “We don’t want to control each small farmer with the system, which would create a lot of administrative burden,” she said. It is easier to use the technology to track cohesion funds because they tend to be fewer and bulkier payments.

EU countries have already signaled they would only be open to using such a system provided the onus is on beneficiaries to provide the data to them, and it is not mandatory.

The proposal is also bogged down in technical difficulties. “The Commission is not ready to adopt this for all CAP payments now,” Müller said.

However, a European Commission spokesperson replied that the institution is pushing for the tool to be mandatory for governments to deploy in the next CAP. “The Commission is encouraging member states to use ARACHNE as it is useful for checking conflict of interest, fraud and irregularities but it takes time for all member states to harness the full potential of this tool,” the spokesperson said.

European People’s Party MEP Norbert Lins, the chair of the agriculture committee, said: “This system could help indeed to bring the corruption more under control. ” He said that the Parliament’s position as a whole is also to make this mandatory but that he could also understand doubts as to whether it is fit for purpose in the CAP.

According to the European Commission spokesperson, the EU executive will “ensure its obligation” to get the tool up and running for all EU governments to use in the new CAP starting 2023. Brussels also insists that the so-called error rate of funds being misused “remains at a very low level.”

Despite doubts about ARACHNE, the next farm policy does look likely to take a small step toward a more transparent system. Negotiators have agreed to increase the transparency of who is getting farm subsidies by obliging beneficiaries to disclose what broader legal entities they belong to. This could in theory reveal if a corrupt politician secretly controls a swathe of EU farmland, but is still a step short of full transparency about the original owner of every hectare of subsidized land. There is likely to be an attempt by the Parliament to ensure full transparency about CAP recipients during the negotiations next week, the EU Parliament insider said.

The spokesperson confirmed that the European Commission will start collecting and publishing information that governments collect about the legal entities receiving CAP payments.

Müller said: “We have really a huge success, because the information on the groups of beneficiaries will be published.” The Commission is not, however, planning to publish the information ARACHNE tool picks up, but could offer the Parliament a report in 2025 on how well it is working.

Gabriela Galindo contributed reporting.

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