News Agricultural subsidies
Subsidy mafia in Eastern Europe thrives on CAP money
Under the tantalizing title 'The money farmers', The New York Times publishes an article about how rich landowners, with a political background, receive significant amounts of European subsidies in Central and Eastern Europe every year. This is so lucrative that even the Italian mafia gets involved.
The New York Times did research into the distribution of funds from the Common Agricultural Policy (CAP) in Central and Eastern European countries. Hungary, the Czech Republic, Slovakia and Bulgaria, among others, were examined. In total, the study covers 9 countries. Last year the European Union spent €58,82 billion on subsidies for European farmers. Of this, €41,71 billion is intended as direct income support, which means that the agricultural sector accounts for 37% of the budget.
Mafia Practices
Research by the newspaper shows that a small group of politically driven entrepreneurs in these countries have a lot of land, which rakes in enormous amounts of subsidies. An example is the Prime Minister of the Czech Republic. Hungarian President Viktor Orban is said to be guilty of dividing state land (among his relatives and friends). The newspaper writes about mafia practices in Slovakia and Bulgaria when it comes to 'land grabbing'.
The practices are a bit special. Some administrators, such as President Orban, are critical of the Union. At the same time, they receive tens of millions in subsidies. Brussels also reacts frantically when journalists ask for detailed subsidy data. Thanks to the use of all kinds of constructions, it is almost impossible to find out who is the land owner. In addition, the European Union is not generous with the provision of data. Some of the information comes from whistleblowers and former employees of the persons concerned, who now lead an underground existence.
Whistleblowers
One of the whistleblowers is the Hungarian Jozsef Angyan. This former government employee tells the newspaper that President Orban has divided hundreds of hectares around Budapest among his sympathizers. However, it is not the first time that the president has been discredited. Hungarian journalists also investigated Orban's policy.
The Czech Andrej Babis can also be blamed for a lot, the newspaper writes. His agricultural company received almost €2018 million in grant money in 38. His case is not unique. About 80% of the budget goes to 20% of the farmers, the newspaper calculates. This income is used to finance political ambitions, such as Babis's. In Bulgaria it is not much different. The Bulgarian Academy of Science conducted research into European subsidy funds and came to the conclusion that 75% of the budget goes to just 100 companies.
Mafiosi become a farmer
This annual flow of millions creates an agricultural mafia that operates in the countryside. The government, farmers and buyers all operate under the same umbrella. In Bulgaria there is now a lawsuit against this. In Slovakia, the Italian mafia decided to become a farmer itself, as it is so lucrative. Journalist Jan Kuciak, who was investigating this case, was murdered last year along with his girlfriend.
According to the Americans, Europe is closing its eyes to these practices. A report (from 2015) states that the system operates watertight. At the national level, the European Commission does not deal with fraud cases. That's up to the nation. In fact, in Hungary, for example, the law has been amended in such a way that large companies are given more power and are therefore more entitled to subsidy funds. The farmers who protest are taken away from leased land, or they receive less support and additional checks.
Paper issue
On paper, governments are working to fight corruption. For example, Hungary has introduced a subsidy ceiling for large agricultural companies. However, by dividing companies into multiple BVs, and with multiple directors, the ceiling can easily be circumvented. In terms of legislation, Hungary complies with all rules (when it comes to land sales). However, the reality is that the European Parliament has been warned several times about dubious land trade in the country.
As long as the current CAP system is maintained, it is interesting for several large landowners to expand their businesses, according to the journalists. Even without farming the land, profits are made. Abuse of the system is, according to the official response from the European Commission, up to the Member States to tackle. In a country like Hungary itself, it has become a subject that cannot be discussed and is shunned in the media. Anyone who protests will be dealt with harshly. This is how the culture of fear continues to rule.
Niels van der Boom
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