In January 2020, 600 Italian officers
conducted a major raid in Sicily,
arresting 94 alleged members of the notorious Cosa Nostra mafia,
suspected of a multi-million euro fraud.
The legendary Sicilian mafia group is accused of having received more
than 10 million euros of fraudulent subsidies
through the European Union’s Common Agricultural Policy [CAP],
a scheme they managed to pull off by stealing land from local farmers.
From 2012 to the present day,
the suspects falsified ownership of land
using front men.
And this isn't an isolated case.
Stories of land theft undertaken to profit from EU money
have emerged across Europe.
As far as the eye can see, everywhere from here to there,
it all belongs to the Tiborcz family now.
They have 170 hectares.
They got all that, and I got nothing.
And the corruption doesn't end there.
An investigation published by
revealed politicians are selling
or renting state-owned land to cronies,
enabling them to milk the system.
In Felcsút,
the village home to conservative Prime Minister Viktor Orbán,
the mayor and his family control some 1,500 hectares,
while local farmers have been overlooked.
So how are payments designed to stabilize prices
and boost food production
ending up in the hands of violent mafias
and corrupt politicians across the continent?
This is the story of the European Union’s system error.
[System Error]
The European Union’s Common Agricultural Policy
is a subsidies program that was created after World War II
to ramp up food production in countries ravaged by conflict.
Over time, it became a critical foundation
in creating the modern European Union.
Today, the 28-country bloc pays out roughly $65 billion
in farm subsidies every year.
After the Second World War, people were starving,
they suffered under hunger,
and one of the key projects of the European Union
at that time in the 50s was to increase the production of food.
The purpose of this policy was to increase productivity,
to raise the incomes of the rural population,
of the agricultural producers of this,
and to ensure that there was a sufficient supply of food.
But in the early 1990s, something changed.
The CAP was adjusted so that subsidies were no longer
based on the amount of food produced
but on the size of the land that was owned.
Mafia members would rent land for 36 euros a hectare
and could claim between 800 and 1,300 euros a hectare in subsidies.
Even super wealthy landowners
like the Queen of England and a Saudi prince
were suddenly collecting EU cash.
The agriculture policy at the EU level has a number of problems.
The way the funds are allocated is obviously at a national level,
even if there is quite a lot of red tape at the European level,
but the national agencies are the ones where
normally you find the corruption.
But even before mafias had begun exploiting the system,
another problem was already taking root.
In 2004, several former Soviet countries entered the EU
and became eligible for subsidies.
But in these former communist countries,
the land was not owned by farmers themselves
but by the state.
What happened with the fall of the Iron Curtain then
was the governments of these countries owned all the land,
they owned all the capital.
That was a communist ideal
that the government would own all the means of production, including land,
equipment, machines, capital and so on.
So one of the issues was,
how do we go about changing that and privatizing.
The way they did it was by renting or auctioning off land
to people with close ties to the government.
So have you ever wondered where all these oligarchs come from?
These were the smart guys who went around,
and they bought up all of these certificates.
And so you end up with a small number of oligarchs
owning large amounts of farmland.
Then they will be eligible to get certain subsidies
from the European Union.
Hungary’s Prime Minister, Viktor Orbán,
auctioned off state-owned land to close friends and allies,
who raked in millions.
Mr. Orbán has created a purely state agency
with his people who are loyal to him.
And of course, they make sure that access to land
and access to direct payments are only granted to those people
who are also loyal to the Hungarian prime minister.
And in the Czech Republic, Andrej Babiš,
the serving prime minister of the country
and a billionaire with an agriculture business empire
that received millions’ worth of farming subsidies,
currently faces a legal battle over alleged conflicts of interest
in how he wielded political influence
over the allocation of the funds.
The Czech prime minister is one of the biggest landowners,
not only in the Czech Republic but all over the European Union.
And he has received, for example, in 2017, at least 65 million euros.
That money was also used not only for agriculture
but also to support his entry to politics.
And the money that was generated by his companies
also helped him to buy the media in Czech Republic.
Mr. Babiš is using money
earmarked for the development of the Czech Republic
and its citizens for the benefit of his own companies,
and he’s thus stealing our children’s future.
When farmers complained about this corruption,
they were intimidated into silence by local officials.
A few days after the offer went public,
the mayor of Felcsút showed me from his car
all the land that would be his.
And he advised me not to apply.
It’s 80 percent of the subsidies
in the hands of roughly 20 percent.
But nevertheless, even here,
the commission makes it very difficult
to have proper, transparent overview.
Who is actually the final beneficiary?
CAP funds support approximately 7 million beneficiaries,
but records of who exactly the benefactors are
is only partially available—
a murky system that leaves many wondering
where subsidies really end up.
One thing is clear:
the people with the most land get most of the cash,
meaning CAP is actually harming small farms
by favoring the biggest farming conglomerates.
If the main purpose of the Common Agricultural Policy today
is to support agricultural incomes,
then it looks strange indeed that it mostly benefits farms
or corporations that don’t have an income problem.
That is a problem in the justification,
and there are regular attempts to reduce that.
Meanwhile, EU policymakers are currently attempting to negotiate
the next round of CAP funds.
Stamping out corruption
as well as making agriculture more sustainable and eco-friendly
are top priorities.
But talks have already broken down once,
and transparency will remain an issue.
We need a change in the regulation.
The commission has now, in the last audit report,
has clearly stated that there is conflict of interest.
So there would be an opportunity for the commission to act
and to change this regulation, to finally say, “OK,
if the money ends up in the pocket of Mr. Babiš,
we would suspend the payments.”
But that step hasn’t happened.