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Certain non-governmental organisations in agriculture have enjoyed privileges for years

22/07/2019 Drukāt šo rakstu

The most influential non-governmental organisations in the agricultural sector enjoy special privileges in terms of financing allocated from the state budget that is not characteristic to the non-governmental sector in the country as a whole.

It creates a notion of a relatively closed club that operates solely on its own interest, thus excluding the involvement of large sections of the community. During the audit, the State Audit Office concluded that the cooperation between the Ministry of Agriculture and agricultural non-governmental organisations was not open and transparent. The auditors did not get an idea either, ​​in whose interests decisions were taken ultimately – the industry or individual NGOs or their representatives.

In total, the Ministry of Agriculture allocates more than 10 million euros per year from the state budget and EU funds to the non-governmental sector, including for the implementation of various projects.

The Ministry of Agriculture is the only one that allocates a certain amount of funding from the state budget for the operation and capacity building of non-governmental organisations totalling to half a million euros per year to provide cooperation with the Ministry for implementation of various projects and strengthening administrative capacity.

During the audit, the State Audit Office wished to find out why the financing procedure for agricultural NGOs differed from other sectors and whether cooperation between the Ministry and non-governmental organisations in the drafting of agricultural policies and legislation was open and transparent.

“Knowing how difficult raising funding for their operations is for non-governmental organisations, it seems peculiar to have a historically established closed club in the same Ministry of Agriculture, where a handful of significant players decide on their own funding from the state budget and distribution of money to other projects. In the meantime, neither the public nor other NGOs know how exactly the industry-relevant decisions are made, and the money allocated to sectoral organisations is distributed exactly. The Ministry of Agriculture must ensure the openness necessary for the full involvement of civic society in the development of a democratic state, including the agricultural sector,” explains Auditor General Elita Krūmiņa.

“Knowing how difficult raising funding for their operations is for non-governmental organisations, it seems peculiar to have a historically established closed club in the same Ministry of Agriculture, where a handful of significant players decide on their own funding from the state budget and distribution of money to other projects. In the meantime, neither the public nor other NGOs know how exactly the industry-relevant decisions are made, and the money allocated to sectoral organisations is distributed exactly. The Ministry of Agriculture must ensure the openness necessary for the full involvement of civic society in the development of a democratic state, including the agricultural sector,” explains Auditor General Elita Krūmiņa.

Tender-based allocation of funding was discontinued in 2010, and funding allocated to NGOs represented in the Advisory Council is not linked to their specific objectives and performance. This results in a situation where certain NGOs are guaranteed public funding year after year regardless of the contribution and quality of the contribution, which in some cases accounts for most or almost all of their funding (from 6.6% to 97.4% of the total revenue of those organisations). There are also no conditions or restrictions on the activities that can be funded by allowing associations to use the funding at their discretion, such as souvenirs, end-of-year events, and public relations services.

There is no organised open competition for membership in the Advisory Council, and the membership therein is not limited in time. The Minister of Agriculture determines which organisations are included in the Advisory Council. The Advisory Council reviews issues of major importance to the sector, including deciding on strategic projects. It is known that the Advisory Council has decided on the principles for granting national and EU funding for emergencies of 60 million euros from 2015 to 2019, but the minutes of the Council meetings and related materials have never been published.

The Advisory Council has been delegated the task of deciding on further progress of strategic projects, that is, EU-funded large-scale investment projects with eligible costs of up to 10 million euros, since 2017. The audit found that seven projects were considered in such a manner, of which two were supported as strategic projects. At the same time, the State Audit Office concluded that the process and methodology of evaluating the strategic projects of the Advisory Council were unclear. One of the supported projects was initially rejected during the voting, but it was still approved at the suggestion of the Minister for Agriculture within a month.

The procedure for drafting legislation in the Ministry with the participation of non-governmental organisations is also non-transparent. Applying various forms of cooperation and not documenting discussions and arguments in most cases make it impossible to trace the progress of proposals made by non-governmental organisations and the justifications for the decisions made by the Ministry of Agriculture.

The State Audit Office concludes in its audit that the still disorganised lobbying regulations in the country prevent access to open information about the influence of various interest groups on essential decisions. In Latvia, this issue has been topical for ten years, but the law regulating lobbying has not been adopted yet. In the opinion of the State Audit Office, this would help to identify which interests all engaged farmers’ NGOs represent. One should note that several Latvian agricultural non-governmental organisations in cooperation with EU institutions are recognised as lobbying organisations.

After the audit, the State Audit Office recommends the Ministry of Agriculture to take steps to ensure open co-operation based on the principle of equality in the process of policy and legislation drafting, as well as to ensure financing procedure of non-governmental organisations compliant with good governance principles by determining deliverables and performance evaluation.

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