29th FINANCIAL REPORT on THE EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND (EAGGF) GUARANTEE SECTION - 1999 FINANCIAL YEAR -
Date: 2000-12-27
Institutions: European Commission
Subjects: EAGGF Guarantee Section, EU financing, activity report, agricultural expenditure, financial year

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 27.12.2000
COM(2000) 882 final

29th FINANCIAL REPORT

on

THE EUROPEAN AGRICULTURAL GUIDANCE

AND GUARANTEE FUND

(EAGGF)

GUARANTEE SECTION

- 1999 FINANCIAL YEAR -

(presented by the Commission)

TABLE OF CONTENTS

SUMMARY........................................................................................................................... 4

1.

1.1.

Community financing of product markets ................................................................. 4

Budget procedure ..................................................................................................... 4

1.1.1.

Preliminary draft budget ........................................................................................... 4

1.1.2.

Letter of amendment................................................................................................. 4

1.1.3. Budget...................................................................................................................... 5

1.1.4. Budget out turn......................................................................................................... 5

1.1.5. Chapter-to-chapter transfers within subsection B1 .................................................... 5

1.1.6.

Supplementary and amending budgets ...................................................................... 6

1.1.7. Request for a non-automatic carryover of appropriations to the 2000 financial year .. 6

1.1.8.

The share of EAGGF Guarantee Section expenditure in the general budget of the
European Union........................................................................................................ 7

1.2.

Breakdown of expenditure by economic type............................................................ 7

1.2.1. Refunds .................................................................................................................... 7

1.2.2.

Intervention .............................................................................................................. 7

1.2.2.1. Compensatory aid................................................................................................... 10

1.2.2.2. Intervention expenditure on storage ........................................................................ 10

1.2.2.3. Withdrawals and related operations ........................................................................ 10

1.2.2.4. Guidance premiums................................................................................................ 10

1.3.

1.4.

2.

2.1.

2.2.

2.3.

2.4.

3.

Breakdown of expenditure by product group .......................................................... 10

Breakdown of expenditure by Member State .......................................................... 11

Cash position and management of appropriations ................................................... 15

Budget.................................................................................................................... 15

Appropriations........................................................................................................ 16

Advance payments.................................................................................................. 16

Reduction of advances ............................................................................................ 16

Anti-fraud measures ............................................................................................... 17

3.1.1.

The integrated administration and control system (IACS) ....................................... 17

3.1.2. Developments in the IACS rules in 1999 ................................................................ 17

3.2.

3.3.

4.

Olive oil control agencies ....................................................................................... 18

Part-financing for tightening controls...................................................................... 18

Clearance of accounts............................................................................................. 18

NOTE TO THE READER ................................................................................................... 20

2

29th FINANCIAL REPORT

on the European agricultural guidance and guarantee fund
(EAGGF) Guarantee Section - 1999 financial year -

TABLE 1

AVERAGE CONVERSION RATES USED FOR 1999

(cf. Annex 16)

EUROPEAN COMMUNITY

1 EUR

B

DK

D

EL

E

F

IRL

I

LUX

NL

A

P

FIN

S

UK

40,335560

7,439393

1,955406

325,175392

166,380128

6,557934

0,787469

1 936,155764

40,330757

2,203658

13,757502

200,474899

5,945171

9,214029

0,686409

3

SUMMARY

of

the 29th FINANCIAL REPORT

on the EAGGF

GUARANTEE SECTION

1.

COMMUNITY FINANCING OF PRODUCT MARKETS

1.1.

Budget procedure

1.1.1.

Preliminary draft budget

It was based on an
The Commission adopted the PDB on 30 April 1998.
appropriations requirement estimated at EUR 40 440 million, i.e. EUR 4 748 million
below the agricultural guideline (EUR 45 188 million).

1.1.2.

Letter of amendment

On 28 October 1998 the Commission adopted a letter of amendment to take account,
firstly, of unfavourable developments on the agricultural markets and, secondly, of
recently adopted agricultural legislation giving rise to a small amount of additional
expenditure.

As a consequence of the unfavourable developments on the agricultural markets,
foreseeable expenditure was up overall by EUR 436 million in relation to the PDB.

+ Cereals (+EUR 1 007 million)

a drop in world prices led to increased requirements for export refunds and public
storage;

+

-

Sugar (+ EUR 236 million)
export refunds rose following a drop in world prices;

Sheepmeat and goatmeat (- EUR 255 million)
rise in the average price on the Community market;

- Milk and milk products (- EUR 237 million)

lower marketed milk production;

-

Beef (- EUR 221 million)
less demand for premiums for male bovines, partly offset by an increase in
refunds.

4

The additional requirements arising from recently adopted agricultural legislation
amounted to EUR 77 million, including EUR 49 million for the Council's decision on
the price proposals.

The requirements identified in the letter of amendment thus amounted to EUR 40 953
million, exceeding the PDB by EUR 513 million. EUR 105 million had been entered
in Chapter B0-40 (Provisions).

1.1.3.

Budget

On 24 November consultations were held between the Council and Parliament on the
basis of the proposals put forward by the Commission on that date, with the following
result.

The letter of amendment was adopted but the proposed increase of EUR 513 million
was offset by targeted reductions of an equivalent amount in the cereals sector. These
reductions were possible thanks to savings from a substantial increase in world
cereals prices after the letter of amendment had been drawn up.

The appropriations for agri-environmental measures were increased by EUR
20 million (entered in the reserve: Chapter B0-40) by taking that amount from the
allocation for depreciation of cereals stocks.

EUR 80 million was transferred to Chapter B0-40 from fruit and vegetables and milk
products.

The appropriations adopted by Parliament's President on 17 December 1998 for the
EAGGF Guarantee Section amounted to EUR 40 440 million (including
EUR 205 million in Chapter B0-40).

1.1.4.

Budget outturn

The uptake of EAGGF Guarantee Section appropriations for 1999 was EUR 39 540.8
million, i.e. 97.8% of the budget allocation under heading B1. Expenditure was
EUR 899.2 million below the initial appropriations.

The above expenditure includes the reduction in advance payments (reductions in
monthly reimbursements) to the Member States decided by the Commission. It was
2% higher than the EUR 38 748 million in 1998.

1.1.5. Chapter-to-chapter transfers within subsection B1

In the course of 1999 there were only two transfers between chapters within the
EAGGF Guarantee Section.

The first was transfer No 46/99, proposed to the budgetary authority after the summer
break. It was needed to boost the following chapters:

B1-14 - Fibre plants and silkworms
B1-22 - Sheepmeat and goatmeat
B1-23 - Pigmeat, eggs and poultrymeat

(+ EUR 60 million)
(+ EUR 120 million)
(+ EUR 50 million).

The appropriations concerned totalled EUR 230 million, or 0.6% of EAGGF
Guarantee Section appropriations.

5

The second transfer, No 73/99, involving a total of EUR 339.3 million, was proposed
to the budgetary authority during December 1999,
the
implementation of expenditure in the course of the year. It was needed to increase
appropriations in the following two chapters in particular:

taking account of

B1-11 - Sugar
B1-31 - Food programmes

(+ EUR 180 million)
(+ EUR 55 million).

The additional requirements in the other sectors were not so large.

1.1.6.

Supplementary and amending budgets

The financial rules allow a proposal to be made to the budgetary authority for changes
to the original budget by means of supplementary and amending budgets (SABs).
This possibility was used in 1999 when the Commission, in agreement with the two
arms of the budgetary authority, proposed supplementary and amending budget
No 4/99, reducing EAGGF Guarantee Section appropriations by EUR 200 million in
order to top up other parts of the budget. The margin between the budget
appropriation and the foreseeable year-end outturn made it possible to transfer this
amount without affecting the financing of agricultural expenditure by the EAGGF
Guarantee Section. The supplementary and amending budget made it possible to
finance, inter alia, some measures to assist the reconstruction of Kosovo.

At the trialogue meeting of 7 September before the adoption of supplementary and
amending budget 4/99, the Commission also suggested to the two arms of the
budgetary authority that there could be a supplementary and amending budget
No 5/99 to cover additional requirements, by transferring a further EUR 202 million
from the EAGGF Guarantee Section.

1.1.7.

Request for a non-automatic carryover of appropriations to the 2000 financial year

At the beginning of 2000 the Commission proposed to the Budgetary Authority a
non-automatic carryover of appropriations from 1999. The Commission can propose
the non-automatic carryover of appropriations not committed at the end of the
financial year when the appropriations entered in the relevant budget headings for the
following year do not cover requirements.

The Commission asked for appropriations to be carried over to cover the additional
requirement in the 2000 financial year arising from the late payment by Italy of the
first annual instalment of agri-monetary aid in 1999 (EUR 130 million). The 2000
budget provided only for the payment of the second instalment, worth EUR
101 million. Since the first instalment was paid late, it is likely that the second
instalment will also be paid later than planned, i.e. during 2001. The requested
carryover will therefore amount to EUR 29 million.

The Commission also requested the carryover of approximately EUR 4 million for
control measures in the context of food aid to Russia. These measures, which involve
the monitoring, inspection, evaluation and audit for the quantities mobilised during
1999, had to be continued in 2000 to ensure that the operation ran smoothly. Since the
2000 budget did not provide for any appropriations in this connection, a carryover
had to be proposed.

6

1.1.8.

The share of EAGGF Guarantee Section expenditure in the general budget of the
European Union

The share of EAGGF Guarantee Section expenditure in the general European Union
budget for 1999 was 49.9% (see Figures 1A and 1B), differing little from previous
years.

1.2.

Breakdown of expenditure by economic type

Out of total expenditure in 1999 of EUR 39 540.8 million, export refunds accounted
for EUR 5 572.8 million (14.1%) and intervention for EUR 33 968.0 million (85.9%)
(details in Annex 5). In the previous year (1998 budget), export refunds absorbed
EUR 4 826.4 million (12.5%) and intervention EUR 33 921.8 million (87.5%) out of
a total of EUR 38 748.1 million.

1.2.1.

Refunds (Annex 5)

The fall in refund expenditure noted for a number of years was arrested.

1.2.2.

Intervention (Annex 6)

Intervention within the meaning of Article 3(1) of Regulation (EEC) No 729/70,
which accounted for spending of EUR 33 968.0 million in 1999, includes not only
storage aid (EUR 1 568.3 million in 1999, i.e. 4.6% of total intervention expenditure)
and withdrawals (EUR 346.2 million, i.e. 1.0%), but also and above all compensatory
aid (EUR 31 923.8 million, i.e. 94.0%) and guidance premiums (EUR 154.3 million,
i.e. 0.5%) (see Annex 6).

7

TR END OF EAG GF G U AR ANTEE SECTION EXPENDI TU R E

GRAPH 1A

50000

45000

40000

35000

30000

25000

20000

15000

10000

5000

0
1990

GU ID ELIN E

EX P EN D ITU E W ITHIN G U ID ELIN E

TO TA L EX P EN D ITU R E EA GG F - G ( 1)

1991

1992

1993

1994

1995

1996

1997

1998

1999

(1) Since 1993 all expenditure has been financed within the guideline.
This does not include expenditure from non-automatic carryovers.

8

GRA P H 1B
TREND OF EAGGF GUARANTEE SECTION EXPENDITURE IN RELATION TO TOTAL EC
EXPENDITURE

100000

90000

80000

70000

60000

50000

40000

30000

20000

10000

0

58%

58%

53%

54%

55%

52%

50%

46%

49%

50%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

TOTA L EXP ENDITURE

EA GGF GUA RA NTEE EXPENDITURE %

9

1.2.2.1. Compensatory aid

Compensatory aid remained the most important form of intervention (Annex 7).

It includes aid granted for production (per hectare aid, male bovine and suckler cow
premiums, all introduced or increased under the CAP reform), processing, marketing
and set-aside, plus income aid.

1.2.2.2. Intervention expenditure on storage

Storage expenditure (Annex 6) amounted to EUR 1 568.3 million i.e. 4.6% of total
intervention spending (1994: 4.4%, 1995: 1.3%, 1996: 4.3%, 1997: 4.6% and 1998:
5.2%). This form of intervention covers both private and public storage costs
(breakdown of expenditure in Annex 10a).

Of the EUR 1 568.3 million spent on storage overall, private storage expenditure
accounted for EUR 562.2 million and public storage expenditure for EUR 1 006.2
million.

Private storage aid was paid mainly in the sugar sector (EUR 342.8 million) but costs
in this sector are covered by storage levies on sugar manufacturers (see Annex 13).
Sugar was followed by milk products (EUR 114.4 million), pigmeat (EUR 45.9
million) and wine-growing products/alcohol (EUR 41.3 million).

1.2.2.3. Withdrawals and related operations

Withdrawals and related operations (EUR 346.2 million) concern only a few sectors:
wine-growing products (distillation) (EUR 247.7 million), fruit and vegetables
(EUR 90.6 million) and fishery products (EUR 7.9 million). Their share of
intervention spending was 1.0%, down from 1.2% in 1998.

1.2.2.4. Guidance premiums

Guidance premiums (EUR 154.3 million) are granted only in a few sectors: tobacco
(EUR 93.7 million), fruit and vegetables (EUR 29.7 million), other measures for
livestock products (EUR 16.4 million), wine-growing products (EUR 9.0 million) and
milk products (EUR 5.6 million). In 1999 they accounted for 0.5% of all intervention,
as against 0.4% in 1998.

1.3.

Breakdown of expenditure by product group (Annexes 4 and 21b)

Expenditure on crop products (Chapters 10 to 18), was 0.8% lower than the
budgetary appropriations. However, underlying this relatively small divergence were
opposing trends. Expenditure on fibre plants and sugar overshot the appropriations,
mainly because of the drop in world prices, but fell short of appropriations for "other
products". In the case of olive oil, the low outturn is due to payment delays and the
reduction of the advance payments to Greece. In the fruit and vegetable sector,
fewer withdrawals (cauliflowers, peaches, oranges, apples) and lower expenditure on
aid for bananas explains the under-utilisation of appropriations. Savings in the wine
sector resulted from the healthy market situation and the poor uptake of the grubbing
programmes. Lastly, expenditure on tobacco fell short of appropriations because of a
change in the rules governing the payment schedule for premiums.

10

Savings of around EUR 226 million were recorded for livestock products (Chapters
20 to 26). An upturn in beef and veal consumption produced some savings.
However, additional expenditure was required on sheepmeat and pigmeat because
prices on the Community market
than expected.
Expenditure on milk fell to the lowest level since the beginning of the 1980s, thanks
to revenue of EUR 498 million from the additional levy, which covered higher-than-
expected expenditure on disposal and storage measures.

in both sectors were lower

Less was also spent (EUR 216.6 million) on additional measures (Chapters 30
to 39). Slightly less than half the saving came from additional revenue from the
clearance of accounts. Lastly, turning to agrimonetary aid, the United Kingdom
only partially used its entitlement and Italy paid out aid late.

Expenditure on accompanying measures (Chapter 50) almost equalled the
appropriations.

Overall, budget appropriations were under-implemented by EUR 899.2 million, i.e.
approximately 2.2%. It is worth noting that almost half of the difference (EUR 432
million) can be attributed to the reduction in the advances paid to the Member States.
Figure 2 gives the share of other sectors in the breakdown.

1.4.

Breakdown of expenditure by Member State (Figure 3)

With EUR 9 348.3 million, i.e. more than 23% of spending, France remains the
principal recipient of EAGGF Guarantee Section payments, followed far behind by
Germany (EUR 5 727.7 million), Spain (EUR 5 231.1 million), Italy (EUR 4 656.4
million) and the United Kingdom (EUR 3 922.2 million) .

In their fifth year since accession (fourth financial year in which they received all
payments), Austria received EUR 839 million (EUR 843 million in 1998), Finland
EUR 559.7 million (EUR 576 million in 1998) and Sweden EUR 734.8 million (EUR
770 million in 1998).

Annex 2b breaks down expenditure by chapter and Member State (summarising
Annex 2) and Annex 21a shows the trend since 1984 (amounts and shares).

11

GRA P H 2A
B R E AK D OW N OF E AGGF GU AR AN T E E S E C T ION
E X P E N D IT U R E B Y P R OD U C T GR OU P
(Euro million f or 1998 f inanc ial y ear)

OTHER PRODUCTS
2286,5

OTHER MEA SURES
2788,1

A RA BLE CROPS
17865,9

PIGMEA T, EGGS,
POULTRY MEA T: 432,8

SHEEPMEA T A ND
GOA TMEA T
1894,3

BEEF
4578,6

MILK PRODUCTS 2510,1

TOBA CCO: 911,1

WINE: 614,6

FRUITS A ND
V EGETA BLES: 1454,1

OLIV E OIL
2091,8

SUGA R
2112,8

T otal: 39540,8 M io Euro

12

/

o
r
u
E
U
C
E
o
M

i

GRAPH 2B
BREAKDOWN OF EXPENDITURE BY MEMBER STATE

1998 EUR 15 = 38748 Mio ECU

1999 EUR 15 = 39540 Mio Euro

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

CE*

10.000,0

9.000,0

8.000,0

7.000,0

6.000,0

5.000,0

4.000,0

3.000,0

2.000,0

1.000,0

0,0

* direct payments

13

GRAPH 3
BREAKDOWN OF EXPENDITURE BY MEMBER STATES

S 2%

UK 10%

CE* 0%

FIN 1%

P 2%

B 3%

DK 3%

A 2%

NL 3%

L 0%

12%

IRL 4%

*) direct payments

F 24%

D 15%

EL 6%

E 13%

14

2.

CASH POSITION AND MANAGEMENT OF APPROPRIATIONS

2.1.

Budget

The 1999 budget, adopted on 17 December 1998, provided appropriations of
EUR 40 940 million for the EAGGF Guarantee Section, including ECU 205 million
entered in Chapter B0-40 (Provisions) and ECU 500 million entered as monetary
reserve.

Supplementary and amending budget No 4/99, adopted on 16 September 1999, took
EUR 200 million from the appropriations of the EAGGF Guarantee Section to top up
other parts of the budget. EUR 105 million of the amount thus transferred were taken
from Chapter B0-40 (Provisions), and EUR 95 million from Chapter B1-37
(Clearance of previous years' accounts).

Supplementary and amending budget No 5/99, adopted on 18 November 1999, took
EUR 202 million from the appropriations of the EAGGF Guarantee Section to top up
other parts of the budget. EUR 100 million was taken from Chapter B0-40
(Provisions), EUR 30 million from Chapter B1-12 (Olive oil), EUR 30 million from
Chapter B1-15 (Fruit and vegetables) and EUR 42 million from Chapter B1-21 (Beef
and veal).

15

2.2.

Appropriations

The situation as regards appropriations was as follows (in EUR million):

Appropriations
1999 budget

Non-automatic
carryovers from
1998 to 1999

Total
appropriations

Automatic
carryovers
from 1998 to
1999

40 940.0

400.0

41 340.0

15.6

-500 0

-200.0

-202.0

-

0.0

0.0

-500.0

-200.0

-202.0

-

-

-

40 038.0

400.0

40 438.0

15.6

A.
Initial budget/
carryovers(1)

Monetary reserve

SAB No 4/99

SAB No 5/99

Available
appropriations/
carryovers

B.
Commitments

39 540.8

335.5

39 876.3

Decommitments

-

-

-

Payments

39 435.5

335.5

39 771.0

Automatic carryovers to
2000

C.
Non-automatic
carryovers to 2000

D.
Lapsed appropriations

105.3

33.1

0.0

0.0

105.3

33.1

464.1

64.5

528.6

-

-1.7

9 3

0.0

-

4.5

(1)

Including the appropriations allocated to Chapter B0-40 and the monetary reserve.

2.3.

Advance payments

The Commission adopted 13 decisions granting advances in 1999, 12 of normal type
and an additional one to adjust advances granted to total spending for the year.

2.4.

Reduction of advances

Under Article 13 of Council Decision 94/729/EC on budgetary discipline, which
authorises the Commission to reduce or provisionally suspend monthly advances to
Member States if declarations of expenditure or information submitted by them do not
enable it to establish that the commitment of funds is in line with Community rules, the
Commission reduced advances by - EUR 462.3 million. Corrections were made for the
following reasons:

16

• failure to collect the additional milk levy in the 1997/98 and 1998/99 marketing years,

in particular by Spain, Greece and Italy (- EUR 337.1 million),

• shortcomings in the application of the integrated system by Greece and Portugal and in

the implementation of checks by Greece (- EUR 110.97 million),

• expenditure made beyond regulatory ceilings and cut-off dates (- EUR 15.98 million),

• refund of additional milk levy amounts for 1994/95, 1995/96 and 1996/97 already
collected by the EAGGF on the occasion of reductions in advances in previous years
(+ ECU 2.1 million),

• other corrections of various accounting errors (-EUR 0.37 million).

3.

ANTI-FRAUD MEASURES

3.1.1.

The integrated administration and control system (IACS)

The integrated administration and control system (IACS) was introduced at the time of
the 1992 CAP reform to provide effective instruments for coping with the greater
danger of irregularities and fraud as a result of the increasing number of direct
payments.

The IACS mainly consists of alphanumeric systems for identifying animals and arable
land, making it possible to carry out computerised cross-checks, thus preventing farmers
from, for example, applying more than once for aid for the same plot of land and/or
animal. The IACS provides for proportional penalties which can even entail rejection of
an application.

The IACS covers arable crops, set-aside land, areas under forage, rice, grain legumes,
premiums for animals and the direct payments now introduced for milk quotas.

The Directorate-General for Agriculture monitored the introduction of the IACS by
carrying out many visits to assist and inspect operations in the Member States. Its
clearance of accounts departments continue to carry out checks in the fifteen Member
States and scrutinise the working of the system.

3.1.2. Developments in the IACS rules in 1999

Regulation (EEC) No 3887/92 was amended by Regulations (EC) Nos 1678/98 and
2801/1999. The main purpose of these Regulations was to introduce some requirements
relating to checks on animals and areas, to lay down detailed rules arising from the
reform of the common agricultural policy, to allow Member States to adopt national
rules on electronic transmission of aid applications under the integrated system and to
lay down rules for the transfer of holdings.

In 1999 the Commission also proposed changes to basic Council Regulation (EEC)
No 3508/92, which have been adopted by Council Regulation (EC) No 1593/2000 of
17 July 2000. This regulation aims to extend the IACS to include the new legislation
adopted as a result of Agenda 2000, and to improve certain aspects of the system.

17

3.2.

Olive oil control agencies

The four olive oil control agencies, in Italy, Greece, Spain and Portugal, carried out
their work in the 1998/99 marketing year in line with the programmes of activity and
forward estimates approved by the authorities of
the Member States and the
Commission. On the whole, however, Member States did not adequately follow up the
agencies' proposals on penalties.

3.3.

Part-financing for tightening controls

The Community contributes towards the expenditure incurred by the Member States in
implementing new action programmes, arising out of new Community obligations,
aimed at improving the structure and effectiveness of checks on EAGGF Guarantee
Section expenditure.

This third year of application confirms the importance that Member States attach to
setting up new inspection arrangements. The majority of programmes concerned the
identification and registration of bovine animals. The Community’s
financial
contribution for 1999 was fixed at ECU 15 000 000. Denmark, Sweden and the United
Kingdom did not submit programmes for part-financing in 1999.

4.

CLEARANCE OF ACCOUNTS

The Commission adopted six EAGGF Guarantee Section clearance of accounts
decisions during the 1999 financial year. Firstly, Decisions 1999/187/EC and
1999/596/EC, adopted on 3 February and 28 July 1999 respectively, concerned the
clearance of accounts for the 1995 financial year. The two decisions together covered a
financial correction of EUR 557 million.

Decision 1999/327/EC, adopted on 18 May 1999, made a financial correction of EUR
38.2 million for the 1998 financial year.

Three further clearance of accounts decisions were adopted under the new clearance
exercise, namely Decisions 1999/186/EC, 1999/350/EC and 1999/603/EC, dated
10 March, 28 May and 4 September 1999, respectively, involving a total financial
correction of EUR 205.7 million.

The other work carried out during 1999 mainly concerned the following areas:

–

–

–

–

–

the continued clearance of accounts for 1996, 1997 and 1998, including drafting
the summary report (doc. VI/10529/99),

discussions with all Member States on the outcome of the inspection visits for the
financial years covered by Article 5(2)(c) of Regulation (EEC) No 729/70,

participation in the work of Parliament's Committee on Budgetary Control in
connection with discharge of the 1993, 1994 and 1995 budgets,

the Court of Auditors' opinion on the clearance decision for 1995,

the Court of Auditors' statement of assurance on expenditure in 1998,

18

–

–

–

–

–

preparation and implementation of inspection visits for the purposes of clearance
of the accounts of the 1998 and 1999 financial years or the 24 months preceding
official transmission of the letter of observation,

amendment of Regulation (EEC) No 3508/92 establishing an integrated
administration and control system for certain Community aid schemes,

monitoring the implementation in the Member States of
information system (GIS) for olive cultivation and winegrowing,

the geographical

inspection visits to the applicant countries under SAPARD and the pre-accession
screening,

active participation in the Conciliation Body's investigation of Member States'
appeals in connection with the clearance of accounts for 1995, 1996 and 1998.

********

annexes

The
http://europa.eu.int/comm/dg06/fin/finrep99/index_en.htm.

available

report

this

are

to

on

the

following website:

A working document detailing the EAGGF Guarantee Section's activities in the 1999
financial year is available in French, English and German.

19

NOTE TO THE READER

1.

The budget nomenclature is changed each year to take account of developments in
the common agricultural policy and its financing. Thus in 1994 some expenditure
was not booked in the same chapter as in 1993:

Cereals

Rice

Olive oil

Oilseeds

Protein crops

Dried fodder

Pulses

Set-aside

1993

Chapter 10 -
Cereals and rice

Chapter 10 -
Cereals and rice

Chapter 12 -
Oils and fats

Chapter 12 -
Oils and fats

Chapter 13 -
Protein crops

Chapter 13 -
Protein crops

Chapter 15 -
Fruit and vegetables

Chapter 40 -
Set-aside

1994

Chapter 10 -
Arable crops

Chapter 18 -
Other crop products

Chapter 12 -
Olive oil

Chapter 10 -
Arable crops

Chapter 10 -
Arable crops

Chapter 13 -
Dried fodder
and pulses

Chapter 13 -
Dried fodder
and pulses

Chapter 10 -
Arable crops

The result was a change in the way expenditure is grouped in the following summary
tables (Annexes 3, 4, 8 and 25b).

In order to ensure that comparisons with past data are not distorted, i.e. to avoid
cases where there is a large difference in the amount of expenditure from one year to
the next in a given sector simply as a result of a change of grouping, the following
principle is followed:

–

–

the most recent nomenclature is used (1999 in this report),

the aggregates for previous years are recalculated in accordance with this
nomenclature.

This means, however, that some subtotals in this report differ from those found in
reports published in previous years. For example:

1990 expenditure under Chapter 10 (Cereals and rice) amounted to ECU 3 884.6
million (Annex 3 to the Twenty-third Financial Report, page 145). This is "real"
in accordance with the
expenditure -

in the accounting sense of the term -

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nomenclature applicable in 1990, which grouped expenditure in a different way from
the current nomenclature.

To make comparisons possible, 1990 expenditure under Chapter 10 (Arable crops)
when recalculated comes to ECU 7 834.5 million in this report (Annex 3).

This figure was obtained as follows:

1990 expenditure under old Chapter 10 (Cereals and rice)

- 1990 expenditure on rice

+ 1990 expenditure on oilseeds

+ 1990 expenditure on protein crops

- 1990 expenditure on dried fodder

+ 1990 expenditure on set-aside

3 884.6

- 85.1

+ 3 477.0

+ 834.8

- 298.0

+ 21.2

------------

New total for 1990 expenditure under Chapter 10 (Arable crops)

7 834.5

No important changes have been made to the budget nomenclature for 1999. The
changes are mainly intended to improve budget transparency.

To that end and in order to show clearly the charging of amounts recovered, penalties
and interest collected, securities impounded and amounts withheld by the Member
States for Community budget contributions to court expenses incurred with a view to
recovering amounts unduly paid, a suitable structure now exists within each chapter in
question.

2.

Totals or subtotals of expenditure in the tables in the annexes sometimes differ by
EUR 0.1 million from the amount obtained arithmetically by adding the lines or
columns. This difference is due to rounding up and down. The totals are generally
expressed in EUR million while the calculations are done using amounts in euro.

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