REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on EAGF expenditure Early Warning System No 6/2013
Date: 2013-07-04
Institutions: European Commission
Subjects: EAGF, EU budget, budgetary procedure, implementation of the budget, revenue

EUROPEAN 
COMMISSION 

Brussels, 4.7.2013  
COM(2013) 504 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on EAGF expenditure 

Early Warning System No 6/2013 

EN 

   EN 

 
 
 
 
  
 
 
TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

The 2013 EAGF budgetary procedure..........................................................................3 

Revenue assigned to EAGF ..........................................................................................3 

Comments on the implementation of the 2013 EAGF budget .....................................4 

Implementation of revenue assigned to EAGF.............................................................6 

Conclusions...................................................................................................................7 

ANNEX 1: 

PROVISIONAL CONSUMPTION OF EAGF APPROPRIATIONS UP TO 30/04/2013 

2 

 
 
1. 

INTRODUCTION 

For the period 16 October 2012 to 30 April 2013, the budget's actual implementation 
level compared to the expenditure profile foreseen by the indicator, established on the 
basis of the dispositions of article 20 of Council Regulation (EC) No 1290/20051, is 
presented in Annex 1. 

2. 

REVENUE ASSIGNED TO EAGF 

On the basis of the rules of Article 34 of Council Regulation (EC) No 1290/2005 on 
the financing of the Common Agricultural Policy revenue originating from financial 
corrections  under  conformity  clearance  decisions,  from  irregularities  and  from  the 
milk levy are designated as revenue assigned to the financing of EAGF expenditure. 
According to these rules, assigned revenue can be used to cover the financing of any 
EAGF expenditure. In the event part of this revenue is not used, then, this part will be 
automatically carried forward to the following budget year.2 

The 2013 EAGF budget included both: the Commissions' latest estimates of the needs 
to  finance  the  expected  expenditure  for  market  measures  and  direct  aids,  and  the 
estimates of the assigned revenue, which was expected to be collected in the course 
of  the  budget  year  concerned  and  the  carryover  of  the  balance  of  assigned  revenue 
left available from the previous budget year. In its proposal for the amount of EAGF 
appropriations for the 2013 budget, the Commission took into consideration the total 
expected  assigned  revenue  and  requested  for  the  DB  2013  a  level  of  appropriations 
calculated  by  deducting  the  estimated  assigned  revenue  from  the  estimated  needs.  
The  Budgetary  Authority  adopted  the  new  EAGF  budget  taking  account  of  the 
expected assigned revenue.  

At the time of establishing the budget for 2013, the Commission’s estimates for the 
available assigned revenue amounted to EUR 1 533 million. Specifically:  

– 

– 

The assigned revenue expected to be generated in the course of the 2013 budget 
year  was  estimated  at  EUR 628 million.  Amounts  of  EUR 389 million  and 
EUR 161 million  were  expected  from  conformity  clearance  corrections  and 
from irregularities respectively. The receipts from the milk levy were estimated 
at EUR 78 million. 

The  amount  of  assigned  revenue  expected  to  be  carried  over  from  the  budget 
year  2012  into  2013  was  estimated  at  EUR 905 million  (including  the 
remaining  balance  of  the  Sugar  Restructuring  Fund  estimated  at  EUR  675 
million). 

In  the  2013  budget,  the  Commission  assigned  this  initially  estimated  revenue  of 
EUR 1 533 million to two schemes. Specifically:  

1 
2 

OJ L 209, 11.8.2005, p.1 

Art 14 of Regulation (EU, EURATOM) No 966/2012 of the European Parliament and of the Council 
on the financial rules applicable to the general budget of the Union determines that internal assigned 
revenue shall be carried over for one year only. Thus, in the interest of sound budgetary management, 
this assigned revenue is in general used first before any voted appropriation of the budget article 
concerned.  

3 

 
 
                                                            
– 

– 

EUR 500 million  was  assigned 
organisations in the fruits and vegetables sector, and 

to 

the  operational  funds  for  producer 

EUR 1 033 million to the single payment scheme.  

to  EUR 267 million  and 

For  these  two  schemes,  the  Budgetary  Authority  eventually  voted  appropriations 
amounting 
in 
accordance with the Commission’s proposal. The sum of the voted appropriations and 
the  assigned  revenue  mentioned  above  corresponds  to  a  total  estimate  of  available 
appropriations  of  EUR 767 million  for 
the  operational  funds  for  producer 
organisations  in  the  fruits  and  vegetables  sector  and  EUR 31 668 million  for  the 
single payment scheme. 

to  EUR  30 635 million  respectively, 

In annex 1, which presents the 2013 budget’s provisional execution for the period to 
30 April 2013, the figures of the budget appropriations at article level for the fruit and 
vegetables  sector  and  for  the  decoupled  direct  aids  present  voted  appropriations  for 
these  two  schemes  amounting  to  EUR 611 million  and  to  EUR 38 076 million 
respectively,  without  taking  account  of  the  aforementioned  assigned  revenue. 
Including  the  revenue  assigned  to  these  sectors,  the  total  appropriations  foreseen  in 
the  2013  budget  amounted  to  EUR 1  111 million  for  fruits  and  vegetables  and  to 
EUR 39 109 million for decoupled direct aids.  

3. 

COMMENTS ON THE PROVISIONAL IMPLEMENTATION OF THE 2013 EAGF BUDGET 

The budget’s provisional implementation level for the period 16 October 2012 to 30 
April 2013  is  presented  in  Annex  1.  This  implementation  level  is  compared  to  the 
expenditure profile based on the indicator, which was established on the basis of the 
dispositions of Article 20 of Council Regulation (EC) No 1290/2005. Below a brief 
commentary  is  presented  for  certain  budget  articles,  showing  the  most  significant 
differences between the actual and the expected level of implementation of the 2013 
budget. 

3.1.  Market measures 

The  uptake  of  appropriations  for  interventions  in  agricultural  markets  was  slightly 
higher compared to the level of the budget's voted appropriations, as determined by 
the level of the indicator on 30 April 2013, by EUR 36.1 million. This divergence is a 
net  effect  of  the  execution  patterns  primarily  in  the  fruits  and  vegetables  and  wine 
sector and in the food programmes.  

3.1.1.  Food programmes (- EUR 88.9 million) 

A  slower  up-take  of  the  appropriations  for  the  Most  Deprived  Persons  scheme  than 
foreseen by the level of the indicator is related to prevailing uncertainty regarding the 
future  of  the  scheme  and  thus  implementation  of  2013  scheme  is  postponed  by  the 
majority of the Member States to later months in the year. Clearly, as 2013 is the last 
year of this scheme, pressure exists on the level of the MS to execute the budget in 
full in 2013; thus, the Commission considers this difference as temporary. 

3.1.2.  Fruit and vegetables (+ EUR 178.6 million in comparison with voted appropriations) 

As  regards  voted  appropriations,  this  implementation  level  is  primarily  due  to  the 
expenditure  for  the  operational  funds  for  producer  organisations  scheme,  which  is 
funded both by the budget’s voted appropriations and by the revenue assigned to this 

4 

 
 
scheme  in  the  2013  budget  (NB:  For  details  please  see  point  2  above).  This 
implementation level is the result of applying the indicator for the period to 30 April 
2013 to the budget’s voted appropriations, which do not include the revenue assigned 
to this sector.  

At this point in time, the Commission considers that the total appropriations available 
for this sector will be sufficient to cover the expenditure expected to be incurred by 
Member States in 2013. 

A footnote * in the provisional execution table in annex 1 shows what the situation 
would  be,  had  the  indicator,  as  of  30  April  2013,  been  applied  to  the  total 
appropriations, which are expected to be available in order to fund this sector. As it is 
pointed out in point 2 above, the total funding expected to be available for this sector 
is  composed  of  the  budget’s  voted  appropriations  of  EUR  611  million  and  of  the 
revenue assigned to this sector which is estimated at EUR 500 million. Therefore, had 
the indicator been applied to the total funding of EUR 1 111 million expected to be 
available  for  this  sector,  then,  an  insignificant  under-execution  of  EUR  5.7  million 
would appear.  

3.1.3.  Products of the wine-growing sector (- EUR 33.7 million) 

A  slow-down  in  the  take-up  of  available  appropriations  for  the  wine  sector  results 
from slower that in the past execution of the wine envelopes in some of the Member 
States,  while  the  indicator  is  based  on  the  historical  average  payment  rhythm. 
Nevertheless, in view of historically high execution for this sector as well as taking 
into  account  the  flexibility  of  the  Member  States  to  re-programme  measures  and 
expenditure within their national programmes, the Commission at this point in time 
considers 
the 
temporary  but  continues 
implementation for this scheme.  

this  difference 

to  closely 

follow 

3.2. 

Direct aids  

The uptake of appropriations for direct aids compared to the level of the indicator on 
30 April 2013 was higher by EUR 1 186.3 million.  

3.2.1.  Decoupled  direct  aids  (+EUR  1 091.6  million 

in  comparison  with  voted 

appropriations) 

As regards voted appropriations, the single payment scheme (SPS) presents an over-
execution which results from applying the indicator for the period to 30 April 2013 to 
the  budget's voted  appropriations  which do not include the revenue assigned to this 
sector. The implementation of the decoupled direct aids (SPS and SAPS) on 30 April 
2013 is at level equal to the situation in April 2012. Member States have already paid 
till  now  approximately  98%  and  97.4%  of  the  estimated  needs  in  the  budget 
respectively for SPS and SAPS3.  

A footnote * in the provisional execution table in annex 1 shows which would be the 
situation  had  the  indicator,  as  at  30  April  2013,  been  applied  to  the  total 
appropriations  which  are  expected  to  be  available  in  order  to  fund  decoupled  direct 
aids. As it is pointed out in point 2 above, the total funding expected to be available 
for  decoupled  direct  aids  is  composed  of  the  budget’s  voted  appropriations  of  EUR 

3  

The level of implementation for decoupled direct aid is calculated as a percentage of the budgeted 
needs, including for the SPS the amount of the assigned revenue. 

5 

 
 
                                                            
38 076  million  and  of  the  revenue  assigned  to  decoupled  direct  aids  which  is 
estimated to amount to EUR 1 033 million. Therefore, had the indicator been applied 
to  the  total  funding  of  EUR  39 109  million  expected  to  be  available  for  decoupled 
direct  aids,  then,  the  observed  over-execution  would  amount  to  EUR  87.2  million. 
This  difference  results  from  the  construction  of  the  indicator  for  SAPS  (based  on 
2012  rhythm  of  payment  but  taking  into  account  actual  payments  for  the  first  two 
months of the year) which amounts to 96.4%, as compared to actual execution till 30 
April 2013 of 97.4%.  

Taking this into account the Commission expects at this point in time, that this over-
execution in decoupled direct aids can be considered temporary and that the available 
appropriations  and  assigned  revenue  are  sufficient  to  cover  the  actual  execution  for 
this article. The Commission continues to closely follow the situation in this sector. 

3.2.2.  Other direct aids (+EUR 95.1 million) 

A  faster  uptake  of  the  voted  appropriations  for  other  direct  aids  is  a  net  effect  of  a 
faster rhythm of payments compared to the level of the indicator on 30 April 2013 for 
certain  schemes,  especially  for  the  suckler  cow  premium.  The  Commission,  at  this 
point  in  time  considers  that  this  may  be  a  timing  difference,  however  it  is  closely 
following  the  implementation  situation  for  this  scheme  as  for  the  other  decoupled 
direct aids.   

3.3. 

Audit of agricultural expenditure 

3.3.1.  Accounting clearance of previous years’ accounts (+EUR 78.0 million) 

Until  30  April  2013,  Member  States  have  not  declared  any  clearance  of  accounts 
corrections as no accounting clearance decision has been taken by the Commission. 
The current implementation level results from the level of the corresponding indicator 
as of 30 April 2013.  

It should be pointed out that the Commission, in its Amending Letter for 2013, had 
proposed corrections amounting to – EUR 56 million, based on the average execution 
of  previous  years  as  such  corrections  are  not  predictable.  In  the  new  Draft  Budget 
drawn up in November, following the failure in the first conciliation, this amount was 
increased to – EUR 100 million. In the end, following the conciliation of 5 December 
2012,  the  Budgetary  Authority  adopted  the  2013  budget  in  which  this  amount  was 
finally set at – EUR 200 million. 

At this point in time the Commission considers that the expected corrections from its 
accounting clearance decisions and from the non-respect of aid payments' deadlines 
by the Member States would not be sufficient to cover the higher amount of – EUR 
200 million. The Commission would need to eventually cover the resulting shortfall 
of negative budget appropriations by transferring positive budget appropriations from 
other items in order to close this budget item in 2013. 

4. 

IMPLEMENTATION OF REVENUE ASSIGNED TO EAGF 

The table in Annex 1 shows that assigned revenue amounting to EUR 553.5 million 
was collected as of 30 April 2013. Specifically: 

6 

 
 
– 

– 

– 

the  revenue  from  corrections  based  on  conformity  clearance  decisions 
amounted to EUR 379.2 million with some additional amounts still expected by 
the end of the budget year; 

the  revenue  from  irregularities  amounted  to  approximately  EUR 95.5 million 
with additional amounts also expected by the end of the budget year, and  

at this point in time, most of the revenue from the milk levy has been collected 
and it amounts to approximately EUR 78.8 million; 

Finally, the amount of assigned revenue eventually carried over from 2012 into 2013 
amounted  to  EUR 1 245.6 million  including  the  balance  of  approximately  EUR  755 
million in the temporary Sugar Restructuring Fund after all due payments under the 
Fund  were  made.  This  amount  is  significantly  higher  than  the  initially  estimated 
amount of EUR 905 million. 

Therefore, 
the  amount  of  assigned  revenue  available  for  financing  EAGF 
expenditure, on 30 April 2013, amounts to EUR 1 799.1 million. At this point in time, 
the  Commission  estimates  that  the  amount  of  assigned  revenue  still  to  be  collected 
would  amount  to  EUR 74.5 million  (estimated  assigned  revenue  to  be  generated  in 
the  2013  budget  of  EUR 628 million  of  which  EUR 553.5 million  has  been 
collected). 

5. 

CONCLUSIONS 

The provisional execution of the 2013 EAGF budget's appropriations, for the period 
up to 30 April 2013, shows that monthly reimbursements to Member States exceeded 
the expenditure profile for budget execution based on the indicator, by approximately 
EUR 1 287.9 million. This was mostly due to the general authorisation granted by the 
Commission  to  pay  advances  of  direct  aids  as  of  16  October  2012  which  led  to  a 
faster  payment  rhythm  for  these  aids.  This  rhythm  is  expected  to  slow  down  as  the 
payment deadline of 30 June 2013 for these aids approaches. 

Assigned  revenue  amounting  to  EUR 1 799.1  million  is  already  available,  and  an 
amount of EUR 74.5 million is still expected to be collected in 2013. At this point in 
time, the Commission expects that the amount of assigned revenue which is available 
as  well  the  one  which  will  become  available,  in  the  course  of  the  year,  will  be 
sufficient to cover the funding of the operational funds for producer organisations and 
of  the  single  payment  scheme  as  originally  expected  when  the  2013  budget  was 
established  and  any  over-execution  on  other  lines  such  as  accounting  clearance  of 
accounts.

7 

 
 
PROVISIONAL CONSUMPTION OF THE EAGF APPROPRIATIONS

A nnex 1

S it ua t io n t o  t he  3 0 / 0 4 / 2 0 13
in EUR millio n

Appropriations
Budget  (***)

Consumption
from
November to
April

Ut ilisation

Consumption prof ile
as at  April

Gap between
implement at ion and
indicat or

EUR mio
A

EUR mio
B

%
C=B/A

%
D

EUR mio
E=D*A

%
F=C-D

EUR mio
G=B-E

05 01

05 02
05 02 01
05 02 02
05 02 03
05 02 04
05 02 05
05 02 06
05 02 07
05 02 08
05 02 09
05 02 10
05 02 11
05 02 12
05 02 13
05 02 14
05 02 15

05 03

05 03 01

05 03 02
05 03 03

05 04

05 07

05 08

11 01
11 02
17 01

17 04

Exp end it ur e
(1) ADM INISTRATIVE EXPENDITURE FOR EAGF
05010401
T o t al  0 5  0 1 A d mi nist r at ive exp end i t ur e f o r  EA GF
INTERVENTIONS IN AGRICULTURAL M ARKETS
Cereals
Rice
Refunds on non-Annex 1 products
Food programmes
Sugar
Olive oil
Text ile plants
Fruits and veget ables (estimat ed 500 M io EUR f rom assigned revenue)(*)(****)
Products of the wine-growing sector
Promot ion
Ot her plant  product s/ measures
M ilk and milk product s
Beef and veal
Sheepmeat  and goatmeat
Pigmeat, eggs and poultry, bee-keeping and other animal products
T o t al  0 5  0 2  I nt er vent io ns i n ag r icult ur al  mar ket s ( excl ud ing  0 5  0
DIRECT AIDS
Decoupled direct aids (est imated 1033 M io EUR credits coming from assigned 
revenue)(*)(****)
Ot her direct aids
Addit ional amounts of aid
T o t al  0 5  0 3  D ir ect  ai d s
OTHER EXPENDITURE
05040114 Rural development f inanced by t he EAGGF-Guarantee Section-
Programming period 2000-2006
05040302 Plant  and animal genet ic resources-Completion of  earlier measures
05070106 Accounting clearance of previous years' accounts
(3) 05070107 Conformity clearance of previous years' accounts
Ot her lines (05070102 and 050702)
POLICY STRATEGY AND COORDINATION OF THE AGRICULTURE AND 
RURAL DEVELOPM ENT POLICY AREA (excl. 050810 to 050812)
(1) (2) Only 11010408 EAGF Non-operat ional technical assistance
(1) (2) FISHERIES M ARKETS (only 11020101 and 11020301)
(1) (2) ADM INISTRATIVE EXPENDITURE OF 'HEALTH AND CONSUM ER
PROTECTION' POLICY AREA
17010401, 17010405, 17010407 and 17010431
(1) (2) FOOD AND FEED SAFETY, ANIM AL HEALTH, ANIM AL WELFARE AND
PLANT  HEALTH 170401 to 170407 (excl. 17040102, 17040303 and 170406)
T o t al  Exp end i t ur e  ( exclud i ng  0 5 0 2   17)

8.9

8 .9

0.2
p.m.
8.0
500.1
0.1
62.1
20.0
611.0
1 071.6
61.0
233.0
83.2
7.1
p.m.
114.0
2   771.4

1.5

1. 5

0.1
0.0
3.4
11.2
-0.1
36.8
9.2
403.9
344.1
27.5
157.6
44.4
5.2
0.0
41.5
1 0 8 4 . 8

17.0 %

30.3 %

2.7

-13.3 %

17.0   %

3 0 .3   %

2 . 7

- 13 . 3  %

62.9 %

69.8 %

0.1

-6.9 %

42.2 %
2.2 %
-83.7 %
59.2 %
46.0 %
66.1 %
32.1 %
45.1 %
67.6 %
53.4 %
72.7 %

64.3 %
20.0 %
49.5 %
63.2 %
61.0 %
36.9 %
35.3 %
57.4 %
67.8 %
57.4 %
53.3 %

5.1
100.1
0.0
39.3
12.2
225.3
377.8
35.0
158.1
47.8
3.8

-22.1 %
-17.8 %
-133.1 %
-4.0 %
-14.9 %
29.2 %
-3.1 %
-12.3 %
-0.2 %
-4.0 %
19.3 %

36.4 %
3 9 .1  %

38.6 %
3 7.8   %

44.0
1 0 4 8 . 7

-2.2 %
1. 3  %

-1.2

- 1.2

0.0

-1.8
-88.9
-0.1
-2.5
-3.0
178.6
-33.7
-7.5
-0.5
-3.4
1.4

-2.5
3 6 . 1

38 076.0

38 115.5

100.1 %

97.2 % 37 023.9

2.9 %

2 854.9
1.0
4 0  9 3 1.9

2 271.5
0.1
4 0  3 8 7. 2

79.6 %
11.0 %
9 8 .7  %

76.2 %
57.2 %

2 176.4
0.6
9 5.8   % 3 9  2 0 0 .8

3.3 %
-46.2 %
2 . 9  %

1 091.6

95.1
-0.5
1 18 6 .3

p.m.

p.m.
-200.0
108.3
6.8
27.3

0.7
26.5
2.7

-0.7

0.0
0.0
108.3
4.6
18.1

0.0
26.4
1.3

0.0 %
100.0 %
67.1 %
66.3 %

0.0 %
99.6 %
47.0 %

39.0 %
100.0 %
63.2 %
83.4 %

100.0 %
100.0 %
58.8 %

-78.0
108.3
4.3
22.8

0.7
26.5
1.6

-39.0 %
0.0 %
3.9 %
-17.1 %

-100.0 %
-0.4 %
-11.8 %

272.0

211.9

77.9 %

79.8 %

217.0

-1.9 %

78.0
0.0
0.3
-4.7

-0.7
-0.1
-0.3

-5.1

4 3  9 56 . 5

4 1 8 4 3 . 2

9 5.2   %

9 2 .3   % 4 0   555.4

2 . 9  %

1 2 8 7.9

A ssi g ned   R evenue

t aken  int o
acco unt   in  t he
b ud g et

6 7 0 1

6 7 0 2
6 7 0 3

Clearance of  European Agricultural Guarantee Fund account s — Assigned 
revenue
European Agricult ural Guarant ee Fund irregularities — Assigned revenue
Superlevy f rom milk producers — Assigned revenue
Assigned revenue carried over f rom 2012 (including t he remaining balance of
t he Sugar Rest ructuring Fund)
T o t al  R evenue

389.0

161.0
78.0
905.0

379.2

95.5
78.8
1 245.6

1 53 3 .0

1  79 9 .1

(*) For information only: expendit ure against  original appropriations and 
estimat ed assigned revenue

05 02 08

05 03 01

Fruits and veget ables (incl. est imated assigned revenue of  500 M io EUR)(****)
Decoupled direct aids (including estimat ed assigned revenue of  1033 M io 
EUR)(****)

1 111.0

403.9

36.4 %

36.9 %

409.6

39 109.0

38 115.5

97.5 %

97.2 % 38 028.3

-0.5 %

0.2 %

-5.7

87.2

(**) Budget year = 16.10.2012 to 15.10.2013 but  direct expendit ure possible unt il 31.12.2013
(***) It concerns the commitment s
(****) Including use of  assigned revenues carried over f rom t he previous year

(1) Chapt er not exclusively EAGF
(2) Chapter out side t it le 05 but  included in EAGF
(3) Used only for cases in which M ember St at es are benef iciaries

8