COMMISSION REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on EAGGF Guarantee Section expenditure Early warning system No 9/2000

CONTENTS

1. Overall outturn in monthly expenditure

2. Provisional utilisation of appropriations

3. Comments

1. Overall outturn in monthly expenditure

The following tables show the overall outturn in monthly expenditure in relation to the expenditure profile. This situation corresponds to expenditure incurred by the Member States from 16 October 1999 to 31 July 2000.

1.1. Subheading 1a: Traditional EAGGF Guarantee Section expenditure and veterinary expenditure

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1.2. Subheading 1b: Rural development and accompanying measures

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3. Comments

The uptake of appropriations under heading 1 of the budget for September 2000 (Member States' expenditure from 16 October 1999 to 31 July 2000) is EUR 35 560 million, i.e. 86.7 % of appropriations.

3.1. The uptake of appropriations for subheading 1a

Expenditure is almost exactly at the level of the indicator for subheading 1a (traditional EAGGF Guarantee Section expenditure and veterinary expenditure).

The indicator was overrun in the following sectors:

- arable crops (+ EUR 209 million), because of the across-the-board reduction in appropriations by the budgetary authority when the budget was adopted;

- beef and veal (+ EUR 138 million) with higher expenditure on measures involving the slaughter and destruction of livestock in the United Kingdom as part of the campaign to eradicate BSE, premiums (in particular owing to the across-the-board cut in appropriations) and public storage;

- other measures (+ EUR 54 million), owing to higher payments for agri-monetary aid.

Utilisation was below the indicator in the following sectors:

- fruit and vegetables (- EUR 168 million) owing mainly to lower payments for processed fruit and vegetables (especially the processing of citrus fruit) and for fresh fruit and vegetables (especially bananas and the operational fund for producers' organisations);

- milk and milk products (- EUR 141 million) owing to the higher profit on sales of skimmed-milk powder from public storage (higher earnings on sales, and no buying in);

- tobacco (- EUR 84 million) owing to lower expenditure on premiums by Italy (possibly delayed payment);

- olive oil (- EUR 43 million) owing to the delay in relation to earlier years in adopting the Regulation authorising payment of the balance of production aid.

In terms of the utilisation of appropriations by the end of the year, the Commission estimates that expenditure to be allocated to subheading 1a will be as in the budget. According to the expenditure forecasts sent by the Member States, the level of expenditure by the Member States up to the end of September (utilisation of European budget appropriations at the end of November) will be slightly below the indicator. In view of the extra savings due to revenue from the additional milk levy, the appropriations entered in the budget for 2000 should be adequate to cover expenditure to be reimbursed to the Member States and the amount to transfer to the monetary reserve (some EUR 200 to 300 million).

3.2. The uptake of appropriations for subheading 1b

Expenditure is EUR 1 681 million below the indicator for subheading 1b (rural development and accompanying measures).

This is due to the fact that most of the new programmes for 2000-06 have not yet been adopted by the Commission. The Commission can charge to the budget only the expenditure under the former accompanying measures and the other expenditure on rural development for which the new programmes have been adopted.

The Member States' forecasts for the end of the year indicate that the requirement will be considerably below the appropriations entered in the budget. It is likely, therefore, that a large sum will remain unused at the end of the year, because of delays in getting the programmes started.

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As usual, the ninth report, drawn up over the summer break, describes the budget situation only briefly. The Commission will give a more detailed assessment in report No 10/2000.