By Jeremy Smith
BRUSSELS, March 13 (Reuters) - Time is running out for any reluctant European Union governments to come clean about how they classify farmland as economically deprived to get extra subsidies, the EU's agriculture commissioner said on Friday.
Europe's system of less-favoured areas (LFAs), or regions considered as disadvantaged and eligible for higher payouts, has been under fire for years. The plan now is to tighten criteria that may partially redraw the map of its poorest farmland.
More than half the farms in the old EU-15 qualified for LFA subsidies at an annual cost of 2 billion euros ($2.57 billion), half coming from Brussels. But the main problem is data: figures provided by EU governments, mainly from the bloc's 12 newest joiners are sketchy, if available at all, officials say.
"It's a sacred cow and very difficult to touch. Once areas or member states have been designated as vulnerable, they want to maintain this," Mariann Fischer Boel said in an interview.
"We need the information and reasons why these areas are designated as less favoured," she said.
LFA status can be claimed for mountain regions, areas with "specific natural handicaps" and a vague "other" category of zones defined on socio-economic criteria which is the one that is most used by EU countries.
Luxembourg is often used to illustrate the system's shortcomings since its LFA status has not changed since 1975 and around 95 percent of the country is deemed less favoured. It now has the highest per capita income in the European Union, by far.
Fischer Boel said EU governments had been asked to start work on collating and reporting the necessary data so the Commission could start drafting a revised law before the end of 2009, when EU agriculture ministers would then discuss it.
"They (governments) are not obliged by law but if they don't want to cooperate, then we have to take the decision," she said.
"Everyone can see that we have now given time for member states to find out internally how they want to make these calculations. There's no 'free ticket' any more," she said.
SYSTEM UNDER FIRE
Next month, Fischer Boel will issue recommendations for changing the system, focusing on revising criteria for the 'other' category -- used for poor productivity areas at risk of abandonment, regions with high unemployment and low incomes.
Those criteria are expected to include general soil and climate indicators, as well as specific measures of soil-water balances and land slope. The recommendations may also set minimum and maximum parameters to level payments across the EU.
The loudest critic of the system has been the European Court of Auditors, the EU's financial watchdog. In 2003 it detailed widespread financial abuse and called for sweeping changes to end huge differences in subsidy payouts among EU countries.
Since then, the European Commission has worked to improve the system but is also aware of the political sensitivities of changes that might "redraw the map" and effectively dock the overall amount of LFA cash handed out to EU countries.
"We tried two years ago," Fischer Boel said.
"But the information we had on quality of soil -- and that should be one of the criteria -- from different member states, simply did not exist. We have to base our justification on solid ground otherwise it would just be 'best guess'," she said.