EUROPEAN COMMISSION Brussels, 20.11.2020 COM(2020) 771 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on EAGF expenditure



Early Warning System No 7-10/2020











Table of Contents 1.The 2020 EAGF budget procedure 2.Revenue assigned to the EAGF 3.Comments on the provisional implementation of the 2020 EAGF budget 3.1. Market measures 3.2. Direct payments 4.Implementation of revenue assigned to the EAGF 5.Conclusions annex 1: Provisional consumption of EAGF appropriations up to 31/08 /2020

1.The 2020 EAGF budget procedure On 27 November 2019, the European Parliament adopted the 2020 general budget of the European Union. The budget included for the European Agricultural Guarantee Fund (EAGF) commitment and payment appropriations amounting to EUR 43 410 million and EUR 43 380 million respectively, for direct payments and market related expenditure. The reason for the different amounts for both types of appropriations is the use of differentiated appropriations for certain measures directly implemented by the Commission. These relate mainly to promotion measures for agricultural products and to policy strategy and coordination measures. 2.Revenue assigned to the EAGF Based on the provisions of Article 43 of Regulation (EU) No 1306/2013, revenue originating from financial corrections under accounting and conformity clearance decisions and irregularities constitutes revenue assigned to the financing of EAGF expenditure. According to these provisions, assigned revenue can cover the financing needs of any EAGF expenditure. Any part of the revenue left unused within the budget year is automatically carried forward to the following budget year . The 2020 EAGF budget includes: ·the Commission's latest estimates of the financing needs for market measures and direct payments, ·the estimates of assigned revenue to be collected in the course of the budget year, ·and the carry-over of the balance of assigned revenue left available from the previous budget year. In its proposal for the 2020 EAGF budget appropriations, the Commission took into consideration the total expected assigned revenue, and requested for the 2020 budget a level of appropriations calculated by deducting the estimated assigned revenue from the estimated needs. The Budgetary Authority adopted the EAGF budget taking account of the expected assigned revenue.

At the time of establishing the 2020 budget, the Commission’s estimates of the available assigned revenue was EUR 1 071 million, composed of: ·assigned revenue expected to be generated during the 2020 budget year, estimated at EUR 719 million (EUR 592 million from conformity clearance corrections and EUR 127 million from irregularities); ·assigned revenue to be carried over from 2019, estimated at EUR 352 million. The Commission assigned this estimated revenue of EUR 1 071 million to the following schemes: ·EUR 150 million to the operational funds for producer organisations in fruit and vegetables, and ·EUR 921 million to the basic payment scheme. The sum of the voted appropriations and the assigned revenue for these schemes corresponds to: ·EUR 849 million for the operational funds for producer organisations in fruit and vegetables, and ·EUR 17 038 million for the basic payment scheme. In the annex, presenting the 2020 budget’s provisional execution, the figures of the budget appropriations at article level for fruit and vegetables and for the decoupled direct payments do not take account of the aforementioned assigned revenue. They present voted appropriations for these articles amounting to EUR 700.5 million and to EUR 34 574 million respectively. Including the revenue assigned to these articles, the total amounts foreseen in the 2020 budget are EUR 850.5 million for fruit and vegetables and EUR 35 495 million for decoupled direct payments. 3.Comments on the provisional implementation of the 2020 EAGF budget The annex to this report presents the budget's provisional implementation for the period 16 October 2019 to 31 August 2020. Comparison is made of the implementation level with the expenditure profile of the Early Warning System (EWS) set up in accordance with Article 28 of Regulation (EU) No 1306/2013. 3.1.Market measures The uptake of appropriations for interventions in agricultural markets was overall EUR 110 million lower than expected using the consumption profile. For budget article 05 02 08 – Fruit and vegetables, the budget implementation, primarily concerning the operational funds for producer organisations, is almost EUR 110 million higher than the expenditure profile. Together with the EUR 150 million assigned revenue taken into account for this article when adopting the 2020 budget , the implementation pattern nearly fits with the historic profile. For budget article 05 02 09 – Products of the wine-growing sector, the expenditure profile takes already into account that the expenditure is concentrated towards the end of the financial year. The expenditure declared so far is EUR 150 million below the profile. The divergence is considered temporary and it is expected that the final expenditure will be close to the budgeted amount, though uncertainties remain on the actual uptake of the flexibilities provided in response to the COVID-19 pandemic . For budget article 05 02 18 – School schemes, the implementation at the end of August 2020 was around EUR 34 million behind the profile. The final expenditure by the end of the financial year is expected to remain somewhat below the budgeted amount, primarily reflecting the practical repercussions encountered due to the COVID-19 pandemic for the implementation of this scheme.