National Audit Office of Lithuania recommends rationalization of assistance provision to farmers

"In the current situation with the increasing lack of funds it is essential to rationalize the provision of assistance to farmers," - said Rasa Budbergytė, head of the National Audit Office summing up the NAO audit report. "Maximum support should be provided to those farmers who modernize their farms, acquire new machinery and perform duties stipulated in the legislation. If these compensations are reduced, the risk will arise that the planned works will not be implemented, and as a consequence the agriculture will suffer losses". However, Ms Budbergytė added that some of the assistance funds may be saved and allocated to those areas where there is a shortage of funds.

The NAO detected that in the previous year the State allocated LTL 143 million to assistance to farmers, which amounted to 88 per cent of the required funds from the State. In the opinion of the auditors, it is really possible to economize the State assistance in some areas while transferring it to insufficiently financed areas.

The NAO also recommended to amend compensation procedure for insurance contributions, since it is not reliable enough. Following the procedure, which was valid in 2008, the decision on allocation of such assistance was made by insurance companies, which directly receive assistance funds. Last year they received almost LTL 19.5 million. The NAO detected that often insurance contracts related to property de facto or property belonging to leasing companies were concluded, without documents supporting the property ownership; contracts indicated larger amounts of the insured livestock than declared by stockbreeders. The National Paying Agency paying assistance under certificates on demand for funds submitted by insurance companies is not able to ensure the accuracy of the data of the insured property, legality of compensation allocation and fairness of calculation of funds.

Full report is available in Lithuanian:
Organization of Assistance to Agriculture