Poland may need to repay €150 million in farm subsidies

An audit for 2005-2006 showed irregularities in establishing areas eligible for EU farm aid through the use of satellite imaging. Over the 2005-2006 period, EU funds for agricultural and regional development amounted to around zł.26.4 billion, according to Ministry of Agriculture figures.

"We are not talking about corruption, we are talking about administrative flaws," the anonymous official said.

The commission may tell a member state to repay up to 50 percent of farm aid funds, "depending on the gravity of the problem," the official said.

The EC will make a final decision on the fine in early 2009 after meeting with Polish officials in December. If Poland has to repay the money, the cost would be bourne by next year's budget.

Over 40 percent of the EU's annual budget of about €120 (zł.401) billion is spent on farm subsidies or rural development projects.

Between May 1, 2004 - the date Poland joined the EU - and the end of 2007, the Polish Ministry of Finance reported €24.9 (zł.83.3) million in EU funding irregularities. Of this, €1.76 (zł.5.88) million involved funding for agriculture. (Reuters)