EUROPEAN COMMISSION Brussels, 20.8.2020 COM(2020) 387 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 13th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD)



2019 FINANCIAL YEAR



Table of contents 1.Budget procedure 1.1.Financial framework 1.2.Draft Budget (DB) 2019 1.3.The adoption of the 2019 Budget 1.4.The adoption of the Amending Budgets 2.Management of appropriations 2.1.Management of commitment appropriations 2.1.1.EAFRD rural development programmes 2.1.2.Technical assistance 2.2.Management of payment appropriations 2.2.1.EAFRD rural development programmes 2.2.2.Technical assistance 3.Implementation of the 2019 EAFRD budget 3.1.Implementation of commitment appropriations 3.1.1.EAFRD rural development programmes 3.1.2.Technical assistance 3.2.Implementation of payment appropriations 3.2.1.EAFRD rural development programmes

3.2.2.Technical assistance 3.3.Analysis of expenditure declared by measure 3.4.Implementation of EAFRD programmes 3.4.1.Programming period 2007-2013 3.4.2.Programming period 2014-2020 1. Budget procedure 1.1. Financial framework Rural development expenditure in 2019 is funded within the multiannual financial framework (MFF) 2014-2020. The financial framework is provided by Council Regulation (EU) No 1311/2013. The allocation for rural development and the allocation for market related expenditure and direct payments after the annual technical adjustment of the MFF are presented in table 1. Table 1 – Financial framework 2014-2020 HEADING 2. In million EUR; current prices Sustainable growth: natural resources 2014 2015 2016 2017 2018 2019 2020 TOTAL 49 857 64 692 64 262 60 191 60 267 60 344 60 421 of which : - Rural Development a), b), c), d), e) 5 298.9 18 183.7 18 683.7 14 371.2 14 381.0 14 690.6 14 709.4 - Market related expenditure and direct aids, a), b), c), d) 43 778.1 44 189.8 43 950.2 44 145.7 44 162.4 43 880.3 43 887.1 a) After net transfer of EUR 351.9 million between EAGF and EAFRD for the financial year 2014 (see note f for details) b) After net transfer of EUR 51.6 million between EAGF and EAFRD for the financial year 2015 (see note f for details) c) After net transfer of EUR 28 million between EAGF and EAFRD for the financial years 2014-2020 (see note f for details) d) After net transfer of EUR 4 313.9 million between EAGF and EAFRD for financial years 2015-2020 (see note f for details) e) After the reprogramming of the EAFRD allocation of year 2014 following the application of Article 19 of MFF Regulation (EU) No 1311/2013 a total amount of EUR 8 705 million deducted from 2014 commitments was equally distributed to 2015 and 2016 commitments f) The transfers to rural development (EAFRD) mentioned in notes a) to d) above involve: EUR 4 million transferred annually for the whole period 2014-2020 from the cotton sector (Greece) on the basis of Article 66(1) of Regulation (EU) No 1307/2013, EUR 296.3 million set for the voluntary adjustment transferred for the financial year 2014 (UK) on the basis of Article 10b and 10c(2) of Regulation (EC) No 73/2009, EUR 51.6 million for unspent amounts transferred each year for financial years 2014 and 2015 (SE and DE) on the basis of Articles 136 and 136b of Regulation (EC) No 73/2009 and EUR 4 313.9 million for the reduction of payments and the flexibility between pillars on the basis of Articles 7(2) and 14(1) of Regulation (EU) No 1307/2013

1.2. Draft Budget (DB) 2019 The Draft Budget (DB) 2019 was adopted by the Commission and proposed to the Budgetary Authority on 21 June 2018. The Draft Budget included EUR 14 679 million in commitment appropriations and EUR 13 122 million in payment appropriations for the European Agricultural Fund for Rural Development (EAFRD) 2014-2020 programming period.



The Council adopted its position on the 2019 Draft Budget on 4 September 2018 and the European Parliament adopted its position on 24 October 2018. The Conciliation Committee had to be convened. The Conciliation Committee did not agree on a joint text within the 21-day time-limit. The European Commission presented a second draft general budget for 2019 on 30 November 2018. The amounts for the EAFRD were not changed as compared with the first Draft Budget. The Council and the European Parliament approved the joint text respectively on 11 December and 12 December 2018. 1.3. The adoption of the 2019 Budget The 2019 Budget adopted on 12 December 2018 was, as regards the EAFRD, equal to the Commission’s proposal. Table 2 Adopted Budget 2019 Budget Item Commitment appropriations Payment appropriations (in EUR) (in EUR) 2014-2020 05.046001 (Rural development programmes) 14.656.460.137 13.100.000.000 05.010404 (Non-operational technical assistance) 5.034.000 5.034.000 05.046002 (Operational technical assistance) 17.115.400 16.725.400 1.4. The adoption of the Amending Budgets None of the 2019 amending budgets concerned the EAFRD. 2. Management of appropriations 2.1. Management of commitment appropriations 2.1.1. EAFRD rural development programmes As regards commitment appropriations for the EAFRD rural development programmes, the 2019 voted budget amounted to EUR 14 656 million, all related to the 2014-2020 programmes.





Table 3 Management of commitment appropriations in 2019 – EAFRD Budget Item 05.046001 (in EUR) Appropriations at the beginning of 2019 14.656.460.137 Appropriations available in 2019 14.656.460.137 Appropriations used in 2019 14.656.460.137 2.1.2. Technical assistance Article 51(1) of Regulation (EU) No 1305/2013 provides that the EAFRD may use up to 0.25% of its annual allocation to finance technical assistance actions at the initiative of the Commission. In the 2019 budget, the initial amount available for this purpose was EUR 5.0 million for non-operational technical assistance and EUR 17.1 million for operational technical assistance. 2.2. Management of payment appropriations 2.2.1. EAFRD rural development programmes For the rural development programmes 2014-2020, the payment appropriations of the voted budget 2019 amounted to EUR 13 100 million. In addition, the available assigned revenue transferred from the previous year amounted to EUR 12.4 million and the assigned revenue collected during the year, amounted to EUR 25.1 million. The payment appropriations were reinforced with the transfer of EUR 0.5 million from the line “EAFRD 2014-2020 contribution to European Solidarity Corps", EUR 265.6 million with the global transfer and EUR 100 million with the end-of-the year transfer. In addition, the transfer of EUR 961.7 million of assigned revenue from prior to 2014 EAFRD programmes was executed to cover in full the Member States' declarations of expenditure of the third quarter of 2019. An amount of EUR 1.8 million was transferred to the operational technical assistance line. Taking into account all transfers, the total amount of payment appropriations available in 2019 amounted to EUR 14 463.4 million. In total, EUR 13 840.0 million of payment appropriations were used and EUR 623.4 million of assigned revenue were automatically carried over from 2019 to 2020.



Table 4 Management of payment appropriations in 2019 (in EUR) EAFRD (2014-2020) Budget Item - 05.046001 Appropriations at the beginning of 2019 13.100.000.000 Transfer from "EAFRD 2014-2020 contribution to ESC" line 540.000 Transfer to Technical Assistance line of EAFRD 2014-2020 -1.800.000 Global transfer 265.580.630 End-of-the year transfer 100.000.000 Assigned revenue carried over from 2018 12.400.084 Assigned revenue collected in 2019 25.056.900 Transfer of Assigned revenue from EAFRD prior to 2014 961.659.440 Appropriations available in 2019 14.463.437.054 Appropriations used in 2019 13.839.996.951 2.2.2. Technical assistance As regards the EAFRD technical assistance at the initiative of the Commission, total payment appropriations in the 2019 budget amounted to EUR 21.8 million. EUR 1.8 million were transferred from the EAFRD 2014-2020 programmes line to cover the payment needs. The final payment appropriations was EUR 23.6 million. 3. Implementation of the 2019 EAFRD budget 3.1. Implementation of commitment appropriations 3.1.1. EAFRD rural development programmes The total amount of commitment appropriations available in the 2019 budget for the EAFRD programmes 2014-2020 (EUR 14 656.5 million) was committed.

Table 5 shows, per Member State, the allocation established by Regulation (EU) No 1305/2013 as last amended by Regulation (EU) 2019/288 and the amounts committed in 2019. Table 5 Regulation (EU) No 1305/2013 (as amended) vs. amounts committed by the end of 2019 Budget item: 05.046001 (in EUR) MS Regulation (EU) No 1305/2013 Amounts committed in 2019 2019 Allocation (a) (b) BE 102.912.713 102.912.713 BG 339.523.306 339.523.306 CZ 323.242.050 323.242.050 DK 152.367.537 152.367.537 DE 1.397.914.658 1.397.914.658 EE 127.277.180 127.277.180 IE 312.764.355 312.764.355 GR 700.043.071 700.043.071 ES 1.183.448.718 1.183.448.718 FR 1.984.761.729 1.984.761.729 HR 282.342.500 282.342.500 IT 1.498.573.799 1.498.573.799 CY 18.889.108 18.889.108 LV 159.374.589 159.374.589 LT 247.213.599 247.213.599 LU 14.464.074 14.464.074 HU 487.402.356 487.402.356 MT 13.876.504 13.876.504 NL 148.107.797 148.107.797 AT 565.713.368 565.713.368 PL 1.189.103.987 1.189.103.987 PT 581.637.133 581.637.133 RO 1.141.925.604 1.141.925.604 SI 120.384.760 120.384.760 SK 214.844.203 214.844.203 FI 343.198.337 343.198.337 SE 249.710.989 249.710.989 UK 755.442.113 755.442.113 Total 14.656.460.137 14.656.460.137

3.1.2. Technical assistance For the programming period 2014-2020, the amount of commitment appropriations for operational technical assistance in the budget 2019 was EUR 17.1 million. Table 6 shows the consumption of the commitment appropriations available for operational technical assistance in 2019. The most important part relates to the European Network for Rural Development. Table 6 Operational technical assistance – Implementation of commitment appropriations Budget Item: 05.046002 (in EUR) Description Amount committed European Network for Rural Development 4.980.794 Information technology* 3.111.799 European Innovation Partnership 2.736.732 European Evaluation Network 1.975.414 Corporate Communication 1.380.000 Technical Advisory Platform for Financial Instruments 500.000 Organic agriculture database 433.295 Audit and Controls 644.735 Total 15.762.767 * Including BCO (Broadband Competence Offices) 3.2. Implementation of payment appropriations 3.2.1. EAFRD rural development programmes For the programming period 2014-2020, EUR 13 840.0 million of the payment appropriations were implemented out of EUR 14 463.4 million available. Table 7 shows the breakdown of payments made in 2019 by declaration period:

Table 7 Payments 2019 for EAFRD rural development programmes (in EUR) 2007-2013 2014-2020 Pre-financing 2014-2020 - 2.714.793 Reimbursement of payment claims prior to Q4 2018 - 134.874 Reimbursement of payment claims Q4 2018 - 5.755.256.476 Reimbursement of payment claims Q1 2019 - 2.754.299.275 Reimbursement of payment claims Q2 2019 - 2.741.814.776 Reimbursement of payment claims Q3 2019 - 2.585.776.756 Closure payments 2007-2013 257.692.857 - Total 2019 257.692.857 13.839.996.951 The monthly consumption of payment appropriations during the year (January to December 2019) is shown in the graph below. Graph 1

The breakdown per Member State and per declaration period of the amounts paid by the Commission in budget year 2019 is shown in tables 8a and 8b.

Table 8a: EAFRD 2007-2013 Payments effectively made between 01/01/2019 and 31/12/2019 EAFRD 2007-2013 - Budget item 05.040501 (in EUR) MS Closure BE BG 97.225.956 CZ DK DE EE IE GR ES FR 160.466.901 IT CY LV LT LU HU MT NL AT PL PT RO SI SK FI SE UK Total 257.692.857

Table 8b: EAFRD 2014-2020 Payments effectively made between 01/01/2019 and 31/12/2019 EAFRD 2014-2020 - Budget item 05.046001 (in EUR) MS Pre-financing Prior to Q4 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Total BE 0 0 17.334.254 9.482.574 33.218.285 18.837.316 78.872.428 BG 0 0 55.344.911 77.499.583 107.997.278 67.792.991 308.634.763 CZ 0 0 52.848.870 204.165.511 86.450.814 50.362.856 393.828.050 DK 0 0 42.034.170 25.776.718 25.047.434 8.208.342 101.066.664 DE 0 0 596.910.906 291.497.999 208.933.806 176.253.592 1.273.596.303 EE 0 0 23.539.059 65.082.476 12.226.795 24.060.415 124.908.745 IE 0 0 157.269.176 30.982.563 39.397.304 96.373.396 324.022.439 GR 0 0 275.111.064 34.505.407 46.860.555 54.936.575 411.413.602 ES 0 0 527.423.244 148.716.407 278.660.313 210.819.806 1.165.619.770 FR 2.703.993 0 1.042.261.975 457.277.445 301.119.386 260.160.776 2.063.523.575 HR 0 0 74.467.768 73.992.801 98.848.103 52.326.860 299.635.531 IT 0 0 689.961.184 221.751.805 237.813.915 299.554.216 1.449.081.121 CY 0 0 8.867.428 2.616.579 2.550.300 6.918.518 20.952.824 LV 0 0 96.634.492 46.651.363 26.091.992 37.097.820 206.475.667 LT 10.800 0 73.287.933 49.310.142 34.191.233 24.451.057 181.251.164 LU 0 0 5.119.156 5.653.405 2.121.682 1.587.351 14.481.595 HU 0 0 184.133.619 133.238.829 97.309.058 96.688.026 511.369.533 MT 0 0 11.087.890 620.865 4.054.663 3.666.529 19.429.947 NL 0 0 13.721.305 53.369.141 6.469.479 16.838.579 90.398.504 AT 0 0 304.858.442 42.762.776 141.825.329 48.725.218 538.171.765 PL 0 0 341.817.663 278.763.628 241.914.834 229.788.859 1.092.284.985 PT 0 0 315.985.382 89.332.030 55.471.630 62.260.191 523.049.233 RO 0 0 323.746.321 136.212.495 224.930.153 282.184.080 967.073.048 SI 0 134.874 34.717.325 14.449.325 47.516.257 23.279.066 120.096.847 SK 0 0 56.642.464 37.855.996 65.152.780 49.710.435 209.361.675 FI 0 0 140.089.247 26.542.166 59.579.240 124.962.860 351.173.513 SE 0 0 134.063.084 33.824.471 32.298.532 26.112.103 226.298.189 UK 0 0 155.978.145 162.364.775 223.763.628 231.818.923 773.925.472 Total 2.714.793 134.874 5.755.256.476 2.754.299.275 2.741.814.776 2.585.776.756 13.839.996.951

Table 9 compares, for each Member State, the EAFRD 2014-2020 payments made in 2019 with the payments in 2018. Overall, the payments increased by 14% compared to year 2018 (EUR 13.8 billion vs. EUR 12.2 billion). Table 9 Payments made to Member States - Comparison 2019 vs 2018 - EAFRD 2014-2020 (in EUR) MS 2018 2019 Difference 2019 vs. 2018 Interim payments Pre-financing Total Interim payments Pre-financing Total (in EUR) (in %) BE 69.095.529 69.095.529 78.872.428 0 78.872.428 9.776.899 14,15% BG 205.683.318 205.683.318 308.634.763 0 308.634.763 102.951.445 50,05% CZ 324.647.223 324.647.223 393.828.050 0 393.828.050 69.180.827 21,31% DK 89.687.155 89.687.155 101.066.664 0 101.066.664 11.379.509 12,69% DE 1.117.668.890 1.117.668.890 1.273.596.303 0 1.273.596.303 155.927.413 13,95% EE 128.104.065 128.104.065 124.908.745 0 124.908.745 -3.195.320 -2,49% IE 318.709.149 318.709.149 324.022.439 0 324.022.439 5.313.290 1,67% GR 579.944.832 579.944.832 411.413.602 0 411.413.602 -168.531.230 -29,06% ES 899.726.086 899.726.086 1.165.619.770 0 1.165.619.770 265.893.684 29,55% FR 1.708.849.535 16.198.977 1.725.048.512 2.060.819.582 2.703.993 2.063.523.575 338.475.063 19,62% HR 206.150.392 206.150.392 299.635.531 0 299.635.531 93.485.139 45,35% IT 1.045.757.040 1.045.757.040 1.449.081.121 0 1.449.081.121 403.324.081 38,57% CY 14.530.171 14.530.171 20.952.824 0 20.952.824 6.422.653 44,20% LV 192.664.101 192.664.101 206.475.667 0 206.475.667 13.811.566 7,17% LT 217.968.861 1.502.340 219.471.201 181.240.364 10.800 181.251.164 -38.220.037 -17,41% LU 14.530.735 14.530.735 14.481.595 0 14.481.595 -49.140 -0,34% HU 385.929.544 385.929.544 511.369.533 0 511.369.533 125.439.988 32,50% MT 9.391.195 9.391.195 19.429.947 0 19.429.947 10.038.752 106,90% NL 78.872.378 1.800.000 80.672.378 90.398.504 0 90.398.504 9.726.126 12,06% AT 512.804.158 512.804.158 538.171.765 0 538.171.765 25.367.607 4,95% PL 944.569.722 944.569.722 1.092.284.985 0 1.092.284.985 147.715.262 15,64% PT 503.033.323 503.033.323 523.049.233 0 523.049.233 20.015.909 3,98% RO 1.146.152.415 1.146.152.415 967.073.048 0 967.073.048 -179.079.366 -15,62% SI 110.943.349 110.943.349 120.096.847 0 120.096.847 9.153.498 8,25% SK 200.196.868 200.196.868 209.361.675 0 209.361.675 9.164.806 4,58% FI 351.787.931 351.787.931 351.173.513 0 351.173.513 -614.418 -0,17% SE 195.642.880 195.642.880 226.298.189 0 226.298.189 30.655.309 15,67% UK 580.998.528 580.998.528 773.925.472 0 773.925.472 192.926.944 33,21% Total 12.154.039.375 19.501.317 12.173.540.691 13.837.282.157 2.714.793 13.839.996.951 1.666.456.259 13,69%



3.2.2. Technical assistance For the programming period 2014-2020, the amount for payment appropriations available for the operational technical assistance was EUR 18.5 million. The original amount of EUR 16.7 million in the Budget 2019 has been reinforced by EUR 1.8 million transferred from the rural development programmes under EAFRD 2014-2020 line. The final implementation amounted to EUR 17.0 million. Table 10 hereafter presents the payments grouped by main activities. The most important part relates to the European Network for Rural Development.