France tries to limit EU farm aid repayment bill

Brussels/Paris | Reuters — France said Wednesday it would negotiate to limit a European Commission claim over unduly paid farm subsidies that could potentially lead to a 1.8 billion-euro bill for the French government.

The Commission has already ordered France, the European Union’s largest agricultural producer and main beneficiary of the bloc’s farm aid, to repay this year 406 million euros (C$604 million) of past subsidies following decisions announced in December and March.

But it is still investigating the extent to which payments to French farmers were excessive in relation to farmland declarations for the 2008-2012 period.

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“If we consider all these procedures together we can potentially get to a figure largely above 406 million,” EC spokesman Roger Waite told Reuters. “The final amount of this correction is not determined at this stage.”

Commission figures imply that for 2014 and 2015, France could need to pay back a total of 1.8 billion euros due to misinterpretation of the Land Parcel Identification System used to quantify the farmland eligible for subsidies.

The Commission spokesman said it was too early to comment on figures as official calculations were likely to take time, but France’s agriculture minister said the EU executive had overstated the scale of the problem.

“Firstly, there is the 400 million-euro penalty that we accept. But I not do agree with what the Commission is claiming regarding the other subsidies,” Stephane Le Foll told Reuters.

“We are working to make adjustments and show that the contested (farmland) area has been exaggerated.”

Whereas a Commission sample had indicated a five per cent discrepancy between actual farmland area and what was declared by France, initial checks by the French authorities suggested this difference was only 0.5 per cent, Le Foll said.

France was updating its farmland survey as part of its dialogue with the Commission over improving its subsidy payments, he said, adding he hoped to conclude the negotiations before the autumn.

The 406 million-euro repayment bill that France has accepted would be financed from the central government budget, he said.

The Commission says it has to force the repayment of subsidies that breach EU rules to protect taxpayers.

France gets some eight billion euros a year in direct farm subsidy payments.

Reporting for Reuters by Barbara Lewis in Brussels and Gus Trompiz in Paris; additional reporting by Sybille de La Hamaide in Paris.

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