Proposal for a Council Regulation (EC) on Community support for pre-accession measures for agriculture and rural development in the applicant countries of Central and Eastern Europe in the pre-accession period
Date: 1998-03-18
Institutions: European Commission
Subjects: Central and Eastern European countries, EU aid, accession to the European Union, aid to agriculture, rural development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.03.1998 
COM(1998) 153 final 

98/0100(CNS) 

Proposal for a 

COUNCIL REGULATION (EC) 

on Community Support for Pre-Accession  measures for Agriculture and Rural 
Development in the applicant countries of Central and Eastern Europe in the 
Pre-Accession  period. 

(presented by the Commission) 

EXPLANATORY MEMORANDUM 

1.  The  Luxembourg  Council  agreed  on  a  substantial  increase  in  pre-accession  aid  to 
complement  the  PHARE  programme,  Structural  Funds  support  and  support  for 
agriculture  and  rural  development  in the  applicant  countries  of  Central  and  Eastern 
Europe. 

2. 

In accordance with the orientations of Agenda 2000l  and with the conclusions of the 
European  Council  in  Luxembourg, financial aid  provided  for  by  the  structural  and 
agricultural  pre-accession  instruments  will  be  granted  to  Central  and  Eastern 
European  applicant  countries.  This is reflected  in article  1 of the  present  regulation, 
which lists the ten countries concerned. 

3.  Cyprus,  as  set  out  in  the  Luxembourg  conclusions  (§  22),  benefits  from  a  specific 

pre-accession  strategy which corresponds with its present economic situation. 

4. 

5. 

In  the  light  of  future  progress  towards  a  political  solution  of  the  Cyprus  problem 
currently  being  pursued  under  the  aegis  of the  United  Nations  and  in  order  to  take 
account  of  the  economic  situation  then  prevailing  on  the  island,  it  may  become 
appropriate,  as  accession  negotiations  proceed  on  the  basis  of  the  Luxembourg 
conclusions (§ 28), to include Cyprus in the list of beneficiary  countries. 

In  many  of  the  applicant  countries,  agriculture  still  represents  a  major  source  of 
employment.  In general, the institutional  process of privatisation  and  transformation 
in the  agricultural  sector  still  has to  be  completed  and  farm  structures  will  continue 
to  evolve.  Community  pre-accession  aid  for  agriculture  and  rural  development  has 
to  be  decided  in  view  of  the  particular  need  for  adaptation  to  a  rather  complex 
Community  "acquis" in this sector. 

6.  The  framework  for  Community  pre-accession  aid  is  provided  by  a  horizontal  co 
ordination  Regulation.  The  Regulation  concerning  pre-accession  measures  for 
agriculture and rural development  has been drafted  in accordance with the  horizontal 
framework.  Article  235  of  the  Treaty  is  the  relevant  legal  basis  for  these 
indispensable Community measures. 

i 

see part II (the Challenge of Enlargement), section III (a strategy for enlargement) part 2 (reinforcing 
the pre-acceession strategy) and section IV (Cyprus) 

Concentrating on priority needs for agriculture and rural development,  pre-accession 
measures  concern  in  particular  support  for  improving  the  efficiency  of  farms 
(including  producer  groups),  processing  and  distribution,  promotion  of  quality 
products,  veterinary  and  phytosanitary  control, 
its 
reparcelling  and  registration,  water  resource  management,  vocational  training, 
diversification  of economic  activities  in rural areas,  agri-environmental  and  forestry 
measures,  improvement  of  rural  infrastructure  and  rural  villages,  including  the 
maintenance  of  rural  heritage  as  well  as  technical  assistance.  The  list  can  be 
extended in if additional priority needs should emerge. 

land  quality, 

improving 

Community  support  will  be  implemented  in  the  form  of  multiannual  programmes, 
following  the  guidelines  and  principles  for  operational  programmes  under  the  EU 
Structural  Policy.  These  comprise  in particular  the  principles  of  complementarity, 
partnership,  additionality,  the  programming  procedure,  monitoring  and  evaluation. 
Compatibility  with  the  accession  partnership  and  the  national  programme  for  the 
adoption of the "acquis" must be ensured. 

According  to  the  Agenda  2000  proposal,  the  annual  resources  available  to  the 
EAGGF "Guarantee" section are equal to 500 MECU at constant  1997 prices.  This 
money  will  be  allocated  to  the  applicant  countries  according  to  objective  criteria. 
Upon accession to the EU, a country will lose its entitlement under this Regulation. 

Proposal for a 

COUNCIL REGULATION (EC) No 
on Community support for pre-accession measures for agriculture and rural 
development  in the applicant countries of Central and Eastern Europe in the 
pre-accession  period 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular 
Article 235 thereof, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament, 

Having regard to the opinion of the Economic and  Social Committee, 

Having regard to the opinion of the Committee of the Regions, 

(1)  Whereas the conclusions of the European Council of  12 and  13 December 
1997 provide for an enhanced pre-accession strategy for the applicant countries of 
Central and Eastern Europe and a specific pre-accession  strategy for Cyprus; 

(2)  Whereas, in the light of future  progress towards a political solution to the 
problem of Cyprus currently being pursued under the aegis of the United Nations and 
in order to take account of the economic situation which will then prevail on the island, 
it may become appropriate, as accession negotiations proceed  on the basis of the 
conclusions of the Luxembourg European Council, to include Cyprus in the list of 
beneficiary  countries and to envisage to this effect  specific modalities for the 
application of the present  regulation; 

(3)  Whereas, however, the conclusions of the European Council provide that the 
aid provided for  in this regulation be granted for the time being to the ten applicant 
countries of Central and Eastern Europe; 

(4)  Whereas the Community has decided to provide special assistance in the form 
of pre-accession  aid for the countries applying for  accession in order to carry out 
action to support the current economic and social reform process in those countries 
and to prepare and facilitate the integration of their economies into the Community 
economy; 

(5)  Whereas assistance from the Community support for pre-accession  measures 
for agriculture and rural development in the applicant countries of Central and Eastern 
Europe in the pre-accession period together with assistance from the Community 
under Council Regulation  .../... on Community support under ISPA in the pre-

u 

accession period1 should be co-ordinated within the framework of the Regulation .../.,. 
on the co-ordination of assistance to the applicant countries within the framework of 
the pre-accession strategy2 and be subject to the conditional provisions of the 
Regulation .../....  on assistance to the applicant countries in the framework of the pre-
accession strategy, and in particular on the establishment of accession partnerships; 

(6)  Whereas the Community pre-accession aid has to be decided in particular to 
resolve priority problems in adapting the economies of the applicant countries in a 
sustainable manner and facilitating the implementation by them of the acquis 
communautaire, focusing in particular on the common agricultural policy; 

(7)  Whereas pre-accession aid for agriculture should follow the priorities of the 
reformed CAP; whereas such aid should be applied to priority areas to be defined for 
each country, such as the improvement of structures for processing agricultural and 
fishery products, distribution, quality control of food as well as veterinary and plant-
health controls and the setting-up of producer groups; whereas it should also be 
possible to finance integrated rural development projects to support local initiatives 
and agri-environmental measures, to improve the efficiency  of farms, to adapt 
infrastructures as well as measures which will accelerate structural reconversion; 

(8)  Whereas, in the agricultural sector, the Community support will be 
implemented in the form of multiannual programmes established in accordance with the 
guidelines and the principles of the operational programmes applied in the framework 
of structural policy in order to facilitate in the applicant countries the implementation 
of the principles and procedures in force; 

(9)  Whereas, in accordance with Regulation (EC) No  .../99 (HCR), assistance can 
only be granted for any measure from one Community financial instrument within a 
given period, subject in the case of the European Investment Bank to its own rules on 
the provision of assistance; 

(10)  Whereas Community funds should not replace funding available in each 
applicant country and whereas Community assistance constitutes a  financial 
contribution to the completion of projects; 

(11)  Whereas pre-accession aid in the agricultural sector has to be granted in the 
form of a financial contribution from the Guarantee Section of the European 
Agriculture Guidance and Guarantee Fund, Guarantee Section, here in after called 
EAGGF in accordance with the specific financial rules established by Council 
Regulation (EC) No 

(Agricultural Financial Regulation); 

(12)  Whereas the allocation to applicant countries of resources fixed by the budget 
authority in the preamble of this instrument should take full account of national 
prosperity on the basis of gross domestic product, of the agricultural workforce,  of 
utilised agricultural area and, if necessary, of specific territorial particularities; 

(13)  Whereas applicant countries should submit their plans as quickly as possible in 
order to avoid delaying the implementation of the pre-accession measures from 1 
January 2000; 

(14)  Whereas the drawing-up of those programmes, their implementation and the 
follow-up mechanisms should comply with the specific  Structural Fund rules and thus 
facilitate the transfer of the acquis communautaire; 

(15)  Whereas a detailed ex-ante assessment should be carried out before 
Community resources are committed in order to ensure that the programme complies 
with real needs, to permit flexibility in the implementation of Community intervention 
to take account of the relevant information and the first results of the measures, and to 
strengthen the monitoring and ex-post evaluation to ensure the effectiveness  of the 
anticipated impact; 

(16)  Whereas provision should be made for a Monitoring Committee to assist the 
Commission with the follow-up to each programme, 

(17)  Whereas the necessary decisions should be adopted in accordance with the 
procedure laid down in Article 49 of Council Regulation (EC) No 
Structural Funds Regulation) and for specific financial items in accordance with the 
procedure laid down in Article  13 of Regulation (EC) No  .... (Agricultural Financial 
Regulation); 

(General 

(18)  Whereas reports should be submitted to the Council, the Parliament, the 
Economic and Social Committee and the Committee of the Regions on progress 
achieved in the implementation of agricultural pre-accession aid; 

(19)  Whereas, during the transitional period (1 January 1999 to 31 December 2001) 
all reference to the euro should as a general rule be considered as a reference to the 
euro as a monetary unit, in accordance with the second sentence of Article 2, of 
/98 of....  1998; 
Council Regulation (EC) No 

(20)  Whereas the implementation of these measures is likely to contribute to the 
carrying out  of the objectives of the Community and whereas the Treaty does not 
contemplate any powers other than those laid down in Article 235 for the measures in 
question, 

HAS ADOPTED THIS REGULATION: 

TITLE I 
Objectives and types of measures 

Article 1 

Objectives 

1. 

This Regulation establishes the framework  for Community support  for 
sustainable agriculture and sustainable rural development for the pre-accession 
period for the following  applicant countries:  Bulgaria, the Czech Republic, 
Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. 

2. 

Community support shall comply with the conditions laid down in the 
framework  of accession partnerships and shall relate in particular to: 

(a) 

(b) 

solving priority and specific problems for the sustainable adaptation of 
the agricultural  sector and rural areas in the applicant countries, 

contributing to the implementation of the acquis communautaire 
concerning the common agricultural policy and related policies, 

Measures 

Article 2 

1. 

In accordance with the priorities defined  by the applicant countries and in 
accordance with Article 4 (3), support for agriculture and rural development 
may relate to several of the following measures: 

investments in agricultural holdings; 
improving the processing and marketing of agricultural and  fishery 
products; 
improving of the structures for quality, veterinary and plant-health 
controls; 
agricultural production methods designed to protect the environment 
and maintain the countryside; 
development and diversification  of economic activities, providing for 
multiple activities and alternative income; 
setting up farm relief and farm management services; 
setting up producer groups; 
renovation and development of villages and the protection and 
conservation of the rural heritage; 
land improvement and reparcelling; 
establishment and updating of land registers ; 
improvement of vocational training; 
development and improvement of rural  infrastructure; 
water resources management; 
forestry,  including afforestation,  investments in forest  holdings owned 
by private forest  owners and processing and marketing of forestry 
products; 

l-

technical assistance for the measures covered by this Regulation, 
including studies to assist with the preparation and monitoring of the 
programme, information  and publicity campaigns. 

Other measures may be decided in accordance with the procedure laid down in 
Article 49 of (General Structural Funds Regulation).  The detailed rules for 
implementing this Title shall, if necessary, be adopted  in accordance with the 
same procedure. 

TITLE II 
ASSISTANCE 

Article 3 

Complementarity  and technical  assistance 

1. 

2. 

The Community action shall complement corresponding national actions or 
contribute to these.  It shall be established in close collaboration between the 
Commission, the applicant country, the competent authorities and bodies and 
the economic and social partners at the appropriate level.  Such co-operation 
shall cover preparation, implementation including financing  and appraisal, 
monitoring and evaluation of the measures. 

In the framework  of the technical assistance, the Commission  shall take 
initiatives and measures to ensure that the Community measures supports the 
priority objectives referred  to in Article  1  and bring added value to national 
initiatives. 

Programming 

Article 4 

1.  Rural  development  measures  shall be the  subject  of a plan to  be  drawn  up  at  the 
most  appropriate geographical  level. The plan shall be prepared  by the  competent 
authorities  designated  by  the  applicant  country  and  shall  be  submitted  by  those 
countries  to  the  Commission  after  the  competent  authorities  and  organisations  at 
the appropriate level have been consulted. 

2.  Rural  development  plans shall cover a period of up to  seven years from  1 January 

2000 and subject to the application of Article  1(2), shall include: 

a quantified  description  of the current  situation showing disparities, 
shortcomings and potential for development, the main results of 
previous operations undertaken with Community assistance, the 
financial  resources deployed and the evaluation results available; 
a description of the strategy proposed, its quantified  objectives, the 
rural development priorities selected and the geographical  scope; 

T 

a prior appraisal showing the anticipated  economic,  environmental  and 
social  impact,  including effects  on employment; 
an indicative overall financial table summarising the national,  the 
Community  and, where appropriate, the private financial  resources 
provided  for and corresponding  to each rural development  priority 
adopted  in the context  of the plan, including,  if necessary,  measures 
financed  by the EIB and other international financial instruments; 
an indicative financial  profile  for each year covered  by the  programming 
period for each source contributing to the programme; 
where appropriate,  information  on the need for any studies, training or 
technical  assistance operations relating to the preparation, 
implementation  or adaptation of the measures concerned; 
the names of the competent  authorities and bodies responsible  for 
carrying out the programme, including the paying  agency; 
a definition  of "final beneficiaries",  where this is possible, which may be 
organisations,  or public or private enterprises responsible  for 
conducting the operations.  In cases where public aid is granted by other 
authorities entrusted there with by the applicant  countries, the final 
beneficiaries  shall be the institutions deciding the granting of the public 
aid; 
a description of the measures contemplated  for implementing the plans, 
and in particular aid schemes,  including the points necessary  for 
assessing the rules of competition; 
provisions  ensuring correct implementation  of the programme, 
including monitoring and evaluation and the definition  of  quantified 
indicators for evaluation and the arrangements for controls and 
penalties; 
the results of consultations  and provisions adopted  for  associating 
competent  authorities and bodies as well as appropriate  economic, 
social  and environmental  partners. 

3. 

In their development  plans applicant countries shall ensure that priority is given  to 
measures to improve market efficiency,  quality and health standards and  measures 
to  maintain  jobs  and  creating  new  employment  opportunities  in  rural  areas,  in 
compliance with the provisions on the protection of the environment. 

4.  Unless  otherwise  agreed  with  the  applicant  country,  the  rural  development  plan 
shall  be  submitted  not  later  than  six  months  after  the  entry  into  force  of  this 
Regulation. 

5.  On  the  basis  of  each  applicant  country's  plan,  a  Programme  for  Rural 
Development  shall  be  approved  by  the  Commission  in  accordance  with  the 
procedure  laid  down  in  Article  49  of  (General  Rural  Development  Regulation) 
within  six  months  of  submission  of  the  plan,  on  condition  that  all  the  relevant 
information  is available.  In particular the Commission  shall  appraise  the  proposed 
plan to determine whether it is consistent  with this Regulation. 

6.  The programme may, if necessary,  be revised and amended as a result: 

°? 

of socio-economic development, relevant new information  and the 
results observed from the implementation of the actions concerned, 
including the results of monitoring and evaluation, 
in view of actions taken in the framework  of the accession  partnership 
and the national programme for the adoption of the acquis 
communautaire, 
of the need to adjust  the amounts of aid available, in particular as a 
result of the accession to the Community of certain applicant  countries 
referred  to in Article 1(1), taking into account  the effectiveness  and 
results of pre-accession measures. 

Ex-ante  appraisal, monitoring  and  evaluation 

Article 5 

1 

2. 

In order to assess their effectiveness,  support for rural development  measures 
shall be subject to prior and mid-term appraisal, on-going monitoring and ex-
post evaluation designed to appraise the success and impact with respect to the 
defined  objectives. 

The Commission and the applicant country shall monitor the implementation of 
the programme. 
Such monitoring shall be carried out by way of jointly agreed procedures. 
Monitoring  shall be carried out by reference to specific physical  environmental 
and financial  indicators agreed and established  beforehand. 

Applicant  countries shall submit annual progress reports to the Commission not 
later than the end of the first six months of the following year, which shall 
contain at least the information  referred  to in Article 36 of (General  Structural 
Funds Regulation). 

3. 

A monitoring committee shall be established for each Rural Development 
Programme in compliance with Article 34 of (General Structural Funds 
Regulation). 

Compatibility 

Article 6 

Measures granted  Community support  shall comply with the commitments adopted in 
the accession partnership and shall be consistent with the principles of the national 
programme for  the adoption of the acquis communautaire. 

Measures financed under this Regulation shall comply with the provisions of the 
Europe Agreements, including the provisions implementing those agreements with 
regard to  State aids. 

yOo 

TITLE III 
FINANCIAL PROVISIONS 

Article 7 

Resources 

1. 

The Community financial  contribution to the carrying-out of the rural 
development  programme shall be financed  by the EAGGF GuaranteeSection in 
the form of advances, part-financing  and financing in accordance with the 
principles laid down in Articles 28 and 29 of (General  Structural Funds 
Regulation). 

Payments of financial  assistance may take the form of advances for  programme 
implementation  and of payments against expenditure incurred. 

2. 

The financial allocation to each applicant country for pre-accession  aid  financed 
by the EAGGF Guarantee Section shall be based on objective criteria such as: 

farming  population, 
agricultural area, 
gross domestic product (GDP) in purchasing power, 
specific territorial  situation 

3. 

For the period referred  to in Article 4(2), up to 2% of the annual allocation of 
funds  may be devoted to financing the measures taken on the initiative of the 
Commission for preliminary studies, exchange visits, evaluations and controls. 

Article 8 

Rate of Community  contribution 

1 

The Community contribution may amount to up to 75% of the total eligible 
public expenditure. 

For measures referred  to in the last indent of Article 2(1) and Article 7(3), the 
Community contribution to financing may amount to up to  100% of the total 
eligible cost. 

2. 

For revenue generating investments, public aid may amount to up to 50% of 
the total eligible cost of which the EAGGF contribution may amount to up to 
75%.  In any case the contribution from the EAGGF shall comply with the 
ceilings on rates of aid and cumulation laid down for  State aid. 

3. 

The financial  support and the payments shall be expressed in euros. 

y 

Financial  control 

Article 9 

1. 

The financial  support shall comply with the principles laid down in Regulation 
(EC) No ... (Agricultural Financial Regulation). 

The Commission  shall implement expenditure under this Regulation in 
accordance with the Financial Regulation applicable to the general budget of 
the European  Community on the basis of the financing memorandum to be 
drawn up between the Commission and the applicant  country. 

2. 

3. 

The Commission  shall adopt the methods for managing the programme, the 
provisions for monitoring and checking its execution, the systems for 
preventing and checking irregularities and the procedures for  recovering 
amounts unduly paid. These measures shall be adopted as a prerequisite to the 
approval of the programme as referred  to in Article 4(6). 

Without prejudice to checks carried out by beneficiary  countries, the 
Commission  and the Court of Auditors may, through their own agents or duly 
authorised  representatives, carry out on-the-spot technical or financial audits, 
including sample checks and financial  audits. 

Reduction,  suspension  and cancellation  of aid 

Article 10 

1. 

2. 

3. 

If the implementation of a measure does not appear to justify  any part of the 
finance  allocated to it, the Commission  shall carry out an appropriate 
examination  of the case, in particular by requesting the applicant country or the 
authorities designated by it to implement the measure to make their comments 
within a specified  period. 

Following that examination, the Commission may reduce or suspend the aid for 
the measure concerned  if the examination confirms the existence of an 
irregularity or of an important modification  which affects  the nature or the 
conditions of implementation of the measure and for which Commission 
approval was not  obtained. 

Any amount recovered by way of overpayment  shall be transferred  to the 
Commission. The amounts not transferred  shall be subject to interest on arrears 
in accordance with the provisions of the financial  Regulation. 

^Z 

Article  11 

* 

The Commission  shall allocate the available resources to the applicant countries for the 
implementation  of Article 7(2).  Within three months of the adoption of this 
Regulation, the Commission shall communicate its decisions to each applicant country 
on the indicative financial  allocation for  seven years. 

TITLE IV 
IMPLEMENTING  RULES 

Article 12 

1. 

2. 

The Commission  shall adopt detailed rules for the implementation of this 
Regulation in accordance with the procedure laid down in Article 49 of 
Regulation (EC) No  .... (General  Structural Funds Regulation). 

The Commission  shall adopt the detailed financial  rules in accordance with the 
procedure laid down in Article  13 of Regulation (EC) No ....(Agricultural 
Financial Regulation).  They shall relate, in particular, to appropriate provisions 
to ensure compliance with budgetary discipline. 

TITLE V 
OTHER PROVISIONS 

Article 13 

Reports 

Every two years the Commission shall present a report on the Community support 
granted under this Regulation to the European Parliament, to the Council, the 
Economic and Social Committee and to the Committee of the Regions. 

In such reports the Commission shall outline in particular the progress made towards 
achieving the objectives set out in Article 1. 

TITLE VI 
FINAL PROVISIONS 

Article 14 

Information  and Publicity 

1. 

The programmes set out in Article 4(5) shall be the subject of appropriate 
publicity in the applicant countries. 

2. 

The publicity shall entail in particular: 

10 

1 

informing potential beneficiaries and professional organisations of the 
assistance available, 
informing the general public of the Community's role in relation to the 
aid. 

The proposals contemplated and the measures adopted to that end shall be 
communicated to the Commission. 

Article 15 

Upon accession to the European Community countries shall lose entitlement to 
support under this Regulation. 
The Commission shall reallocate the available resources among the other beneficiaries. 

Entry into force 

Article 16 

This Regulation shall enter into force on the day following its publication in the Official 
Journal of the European Communities. 

It shall apply from  1  January 2000 . 

This Regulation shall be binding in its entirety and directly applicable in all Member 
States 

Done at Brussels, on 

Council 

For the 

il 

slln 

FINANCIAL  STATEMENT 

(fiche/97/....doc)l 

DATE:  .7.71997 

BUDGET HEADING : 

EAGGF-Guarantee 

APPROPRIATIONS  : 

ECU million 

2. 
applicant  countries  of Central  and Eastern  Europe  in the pre-accession period. 

TITLE  : Community  support  for pre-accession measures for Agriculture  and Rural Development  in the 

LEGAL BASIS : Article  235 of the Treaty  constituting the European Union. 

AIMS  : Pre-accession aids in the applicant  countries in order to support the current  economic and 
4. 
social reform  process and facilitate the  integration  of their economies with the Community  economy  in the 
Agriculture  and Rural Development  areas 

D. 

FINANCIAL LMPLICATIONS 

FINANCIAL 
YEAR 2000 

FINANCIAL 
YEAR 2001 

FINANCIAL 
YEAR 2002 

5.0- 

5.1 

EXPENDITURE 
-  (EAGGF-G) 
- NATIONAL  AUTHORITIES 
- OTHER 

REVENUE 
- OWN RESOURCES OF THE  EC 
(LEVIES/CUSTOMS  DUTIES) 

- NATIONAL 

5.0.1 
5.1.1 

ESTIMATED  EXPENDITURE 
ESTIMATED  REVENUE 

520 

520 

520 

2003 

520 

2004 

520 

2005 

2 nor, 

520 

520 

METHOD OF CALCULATION  :In the communication on the financial framework for the period 2000-2006. 

5.2 
the Commission proposes to allow an amount  of 520 million Euros (constant  prices  1999) for this instrument. 
The Commission  also proposes that  pre-accession  aids will be a sub heading of heading  1 (agricultural 
expenditure). 

6.0 

6.1 

6.2 

6.3 

CAN THE PROJECT BE FINANCED FROM APPROPRIATIONS ENTERED IN THE 
RELEVANT CHAPTER OF THE  CURRENT BUDGET ? 

YES / NO 

CAN THE PROJECT BE FINANCED BY TRANSFER BETWEEN CHAPTERS OF THE  CURRENT 
BUDGET ? 

YES / NO 

WILL A SUPPLEMENTARY  BUDGET BE NECESSARY ? 

WILL FUTURE BUDGET APPROPRIATIONS BE NECESSARY 

YES / NO 

YES / NO 

OBSERVATIONS 

*< 

FINANCIAL  STATEMENT 

1.  TITLE OF OPERATION: 

Proposal  for  a  Council  Regulation  on  Community  support  for  pre-accession 
measures for agriculture and rural development in the applicant countries of central 
and eastern Europe in the pre-accession period 

2.  BUDGET HEADING INVOLVED: 

Bl 

LEGAL BASIS: 

Article 235 of the Treaty establishing the  European Community 

4.  DESCRIPTION OF OPERATION: 

4.1  General objective 

Pre-accession  aid  for  agriculture  and  rural  development  in  the 
applicant  countries  in  order  to  assist  their  efforts  at  economic  and  social 
reform  and  to  make  it  easier  for  their  economies  to be  integrated  into  the 
Community economy 

4.2 

Period covered and arrangements for renewal 

- 3-

/\<o 

The measure covers the period 2000-06; it will be re-examined by 

the Council belote 31 J2.20C& 

5.  CLASSIRCATTQ^QFEXPe^BmjRB: 

Non-compulsory expenditure (NCE), non-differenriated appropriations (NDAs) 

4  TYPE OF EXPENDITURE: 

Subsidy to part-finance rural development programmes, with other funding from tins 
pubh'c and privée sectors in the applicant countries 

7.  FINANCIAL IMPACT: 

7.1  Method of calculating total cost of opeafeai 

In Agenda 2000, the Commission proposes introducing ECU 500m 
of pre-accession aid for agricultural development in the applicant countries 
annually from 2000  onwards.  This  proposal  should  lead  in  1999  to  the 
inclusion in the financial perspective for 2000^06 of ECU  520m per year at 
constant 1999 prices (500m indexed by 2% annually from 1997 to 1999). 

7.2 

Itemised breakdown of cost 

The financial impact of the various eligible measures provided for in 
Article  2  of  the  draft  Regulation  will  be  the  outcome  of  the 
planning/programming process  at the  level  of  each region/Member  State. 
The Commission will decide, on the basis of the criteria laid down in Article 
7(2) of the draft Regulation, how the funding is to be shared out among the 
applicant countries. 

- 4-

si* 

7.3 

Schedule of commitment appropriations/payment appropriations 

Since the appropriations  are non-differentiated  the foreseeable  cost 
of the measure for the EAGGF Guarantee Section over the period envisaged 
is as follows in current ecus: 

Year. 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

£OJm 

530 

540 

550 

560 

570 

590 

600 

8  F R A UD PREVENTION MEASURES: 

Article  9 of the draft  Regulation  deals with financial control. It provides  in particular 

that: 

Financial  control  will  be  in  accordance  with  the  general  rules 

applicable to the EAGGF Guarantee Section. 

Under the partnership  with  each  applicant  country  the  Commission 
will  adopt  a  financial  memorandum  concerning  programme  management 
methods, systems for detecting and preventing irregularities and procedures 
for  recovering  amounts  paid  out  without justification.  Rural  development 
programmes cannot be approved until such measures have been adopted. 

9.  ELEMENTS OF COST-EFFECTIVENESS  ANALYSIS 

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9.1 

Specific  objectives and target population 

Article  1 of the draft Regulation lays down the following objectives: 

a) 

Solving  specific  priority  problems 

involved 

in 

adapting the applicant countries' agriculture and rural areas 

b) 

Helping  to implement the acquis communautaire  in 

the field of agricultural policy in those countries. 

Since  the  specific  quantifiable  objectives  are  the  fruit  of  the 
planning/programming  process  at  national/regional  level  in  the  applicant 
countries no concrete information is available at this stage. 

The  10 applicant  countries covered by the draft  Regulation  have a 
total  population  of  105.1  million,  with  the  active  agricultural  population 
totalling 9.5 million. 

9.2 

Grounds for the operation 

The  impact  study  carried  out  by  the  Commission  with  a view  to 
enlargement  in  connection  with  Agenda  2000  shows  the  difficulty  of 
integrating  most  of  these  countries'  agricultural  sectors,  because  of  the 
weakness  of their agricultural  structures  and the price differentials  for the 
principal products. It also concludes that it is to be expected that their food-
processing  industries  will  experience  considerable  problems  in  adjusting 
when they are integrated into the single market, particularly in sectors where 
prices of basic products will rise and in countries where the primary sector is 
weak. This has led the Commission to propose aid for the development  of 
their  agricultural  and processing  structures,  and  for  rural  development,  in 
order  to  prepare  them  gradually  for  full  integration  into  the  agricultural 
common market 

9.3  Monitoring and evaluation of the operation 

Article 5 of the draft Regulation makes it compulsory to carry out ex 
ante appraisals and mid-term reviews; it also provides for the results to be 
monitored on the basis of annual reports on the movement of indicators of 
physical  and  financial  performance  and  for  ex  post  evaluation  of  the 
programme's  impact  compared  with  the  results  expected.  The  actual 

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monitoring  and evaluation procedures  are governed by the provisions  laid 
down in the regulation on general provisions for the implementation of the 
Structural Funds. 

10  ADMINISTRATIVE EXPENDITURE; 

It  is  not  possible  at  this  stage  to  evaluate  the  administrative  burden  which  the 
implementation of this Regulation will represent for the Commission, and therefore 
to know whether additional resources will be required. 

However, actual mobilisation of necessary administrative resources will depend on 
the  Commission's  annual  decision  on  the  allocation  of  resources,  taking  into 
account  the  number of  staff  and  additional  amounts  authorised  by  the budgetary 
authority. 

7-

1t? 

ISSN 0254-1475 

COM(98) 153 final 

DOCUMENTS 

EN 

11  06  01  03 

Catalogue number  : CB-CO-98-180-EN-C 

ISBN 92-78-32367-5 

Office  for Official  Publications of the European Communities 

L-2985 Luxembourg