The EU money for supporting the development of agriculture is being used mainly by large companies. Small and medium-enterprises (SMEs) are not getting enough of the financing despite being the target group for the support, the independent Czech Supreme Audit Office (NKU) said in a press release on June 4.

NKU investigated the EU’s Programme for Development of Rural Areas 2014-2020. Subsidies were aimed at strengthening research, development and innovation in agriculture and to help SMEs. “Out of CZK3.8bn (€148mn), in total CZK2.8bn was transferred to a support of agriculture products-processing. Most of the subsidies went to big food processing companies,” NKU spokesman Vaclav Kesner said.

The conditions were also more favourable in this sector than in the others. A negligible part of the money -- around 1% -- went to innovation. Most of the projects under the programme ended up being used to finance machinery equipment purchase or construction.

“It is a bit weird given the fact that the support for science and research is one of the main reasons for these subsidies,” said Kesner.

NKU also criticised the commissions, which are evaluating the projects. The process of evaluation is opaque and the same commission which rejects a project also serves as an appeal body.

Another problem is a low interest of SMEs in the projects, which are either too complicated or don’t meet their demands. Distribution of the funds is moving slowly: by the end of 2017, only five projects for CZK186mn had been approved.

Agriculture ministry denies any wrongdoing and said that the programme, “is one of the best when it comes to drawing the funds.” It says that buying equipment and machinery is crucial to transfer the research into practice. And that the co-operation with research institutions is more suitable for larger companies.

The fact is that some projects are clearly helping people serving also in politics or public administration. The president of Agriculture Chamber got CZK35.5mn for his company. Another big recipient is well-known concern Agrofert, which was owned until February 2017 by the current caretaker and populist PM Andrej Babis (Ano).

Babis, who is under investigation for fraud relating to EU funds. transferred the company into a trust fund, but it is clear that Babis has the profit from it. And some parts of the concern got the biggest possible amount (CZK75mn) to innovate the production of cheese or for ‘optimization and innovation of the jointing and packing process of poultry’. Kostelecke uzeniny subsidiary for innovation of technology for production of thermally treated meat products got only by CZK5mn less.