Auditing operation No. 05/05
Management with funds earmarked for the support of the ecological agriculture
The auditing operation was included in the Annual Audit Plan of the Supreme Audit Office (hereinafter referred to as “SAO”) for the year 2005 under No. 05/05. The auditing operation was managed and the audit conclusion drawn up by Mr. Zdeněk Brandt, the Member of the SAO.
The aim of the audit was to examine the management with funds provided from State Budget chapter The Ministry of Agriculture and earmarked for the partial compensation of losses which are the result of farming in ecological way.
The audited period covered the years 1998 to 2003 as well as previous periods in certain cases of relevant connections and the periods up to the conclusion of the audit.
The audited bodies were the Ministry of Agriculture and selected beneficiaries.
The audit detected that there is no reliable register of subsidies, which would record all subsidies provided to farmers from different programmes. The possibility to cumulate subsidies (earmarked for the compensation of losses which are the result of farming in ecological way) does not exclude the creation of profit higher than adequate.
The formation and protection of landscape was supported by subsidies provided to farmers from the programmes of the Ministry of Agriculture as well as from the programmes of the Ministry of the Environment. This meant the risk of overlapping of particular programmes.
The audited programme had not the equal conditions for farmers running their own farms and farmers farming on rented land. The farmers running their own farm had condition to farm on supported land at least five years, the farmers farming on rented land had not this condition.
The criteria for evaluation of ecological agriculture were linked with the size of the ecologically cultivated land and did not take into the consideration the final effect, e.g. the extent of processing of ecological products or the satisfaction of consumers.
The support of the ecological agriculture in the years 1998 to 2003 led to the development of milk and meat production. Their further processing fell behind and ecological production often ended in conventional processing.
The support of the processing of ecological products and business with them was not systematic. This led to low production of bio-food (approx. 0.06 % of total food production in the Czech Republic in comparison to 2 – 3 % in the EU), however the extent of ecologically cultivated land in the Czech Republic exceeds the EU average (approx. 6 % in comparison of 4 % in the EU).
The aiming of bio-production on final consumer was firstly accepted by the “Action plan of the Czech Republic for the development of ecological agriculture until 2010” (adopted by the government resolution No. 236 of 17 March 2004). This includes the support of bio-products processors and producers, informing the consumers and the broadening of bio-food market with the aim of increasing efficiency of production and processing of ecological agriculture production.