EU authorities have failed to properly check whether farmers, including organic growers, correctly spend billions of euros each year in subsidies, the European Union's financial watchdog has said.
The EU made it a priority in its radical 2003 farm reform to promote agri-environment projects, such as conversion to organic farming, prevention of soil erosion and reduction of fertiliser use.
Nearly 13.5 billion euros in EU cash is earmarked for AE projects during the EU's 2000-2006 budget period.
But the European Commission, the EU's executive arm, has not always checked that this money was being properly spent, compounding already poor controls in a number of EU member states, the European Court of Auditors said in a special report.
"The audit found that the commission has not sufficiently verified the correct functioning of AE control systems in the member states," the court said in a statement.
"The Commission, Council (of EU ministers) and ( European) Parliament should consider how to take into account the principle that if a measure cannot be adequately checked, it should not be the subject of public payment," it said.
Part of the problem was that checking up on AE projects on the ground often posed particular technical difficulties and was more of a drain on resources. In these cases, the commission could not always be sure that rules were being obeyed, it said.
Organic farming was one area where commission checks had been particularly lax, the report said.
Under EU law, each farmer who wishes to market products as organic must be inspected at least once a year. EU governments must send a report on these inspections back to Brussels but not all were doing so, the report found.
The few national reports that arrived back were " incomplete, late and inaccurate", it said.
The 2003 reform introduced the idea of cross-compliance, making farmers comply with a raft of EU environmental laws to receive farm subsidies.
EU governments are obliged to include AE projects in national rural development plans, which they must then submit to Brussels for the Commission to approve. So far, Austria, Germany and Finland have been spending the most EU cash in this area.