REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on EAGF expenditure Early Warning System No 1-3/2015
Date: 2015-03-12
Institutions: European Commission
Subjects: EAGF, aid to agriculture, budgetary procedure, financial aid, fruit, leaf vegetable, milk product, single payment scheme













EUR-Lex - 52015DC0134 - EN











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52015DC0134

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on EAGF expenditure Early Warning System No 1-3/2015 /* COM/2015/0134 final/2 */









TABLE
OF CONTENTS
1............ The 2015 EAGF
budgetary procedure. 3
2............ Revenue assigned to
EAGF. 3
3............ Comments on the
provisional implementation of the 2015 EAGF budget 4
4............ Implementation of
revenue assigned to EAGF. 6
5............ Conclusions. 7
 annex 1: annex 2: || The 2015 Budgetary Procedure Provisional consumption of EAGF appropriations up to 31/01/2015 

1.                      
The 2015 EAGF budgetary procedure

The key figures for the European Agricultural
Guarantee Fund (EAGF) at different steps of the budgetary procedure are
summarised in the table presented in Annex 1.
The 2015 EAGF budget was adopted by the
European Parliament on 17 December 2014. The budget included commitment and
payment appropriations amounting to EUR 43 455.8 million and to
EUR 43 447.6 million respectively for agricultural market
measures and direct aids 
The difference between commitment and payment
appropriations is due to the fact, that for certain measures, which are
directly implemented by the Commission, differentiated appropriations are used.
These relate mainly to promotion measures for agricultural products and to
policy strategy and coordination measures for agriculture.

2.                      
Revenue assigned to EAGF

On the basis of the provisions of
Article 43 of Regulation (EU) No 1306/2013 on the financing,
management and monitoring of the common agricultural policy revenue originating
from financial corrections under accounting and conformity clearance decisions,
from irregularities and from the milk levy are designated as revenue assigned
to the financing of EAGF expenditure. According to these provisions, assigned
revenue can be used to cover the financing of any EAGF expenditure. If part of
this revenue is not used within the budget year, then, this part will be
automatically carried forward to the following budget year[1].
The 2015 EAGF
budget included both: the Commission's 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 as well as the carryover of the balance of assigned
revenue left available from the previous budget year. In its proposal for the
2015 EAGF budget appropriations, the Commission took into consideration the
total expected assigned revenue and requested for the 2015 budget a level of
appropriations calculated by deducting the estimated assigned revenue from the
estimated needs.  The Budgetary Authority adopted the EAGF budget taking
account of the expected assigned revenue. 
At the time of establishing the budget for
2015, the Commission’s estimates for the available assigned revenue amounted to
EUR 1 768.6 million. Specifically: 
–              
The assigned revenue expected to be generated in
the course of the 2015 budget year was estimated at
EUR 1 438.6 million. Amounts of EUR 868.6 million and
EUR 165 million were expected from conformity clearance corrections and from
irregularities respectively. The receipts from the milk levy were estimated at
EUR 405 million.
–              
The amount of assigned revenue expected to be
carried over from the budget year 2014 into 2015 was estimated at
EUR 330 million.
In the 2015 budget, the Commission assigned
this initially estimated revenue of EUR 1 768.6 million to the following
schemes: 
–              
EUR 362.4 million was assigned to the
operational funds for producer organisations in fruit and vegetables, 
–              
EUR 106.9 million to the other measures in fruit
and vegetables,
–              
EUR 0.9 million to the storage measures for
skimmed milk powder, 
–              
EUR 2.9 million to the storage measures for
butter and cream,
–              
EUR 50.5 million to the other measures in milk
and milk products, and
–              
EUR 1 245 million to the single
payment scheme. 
For these schemes, the Budgetary Authority eventually
voted appropriations 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 needs of:
–              
EUR 903.9 million was assigned for the
operational funds for producer organisations in fruit and vegetables, 
–              
EUR 107.6 million for the other measures in
fruit and vegetables,
–              
EUR 0.9 million for the storage measures for
skimmed milk powder, 
–              
EUR 2.9 million for the storage measures for
butter and cream,
–              
EUR 50.6 million for the other measures in milk
and milk products, and
–              
EUR 29 587 million for the single
payment scheme. 
In annex 2, which presents the 2015 budget’s
provisional execution for the period to 31 January 2015, the figures of
the budget appropriations at article level for fruit and vegetables, for milk
and milk products and for the decoupled direct aids present voted
appropriations for these articles amounting to EUR 836.2 million, to
EUR 77.1 million and to EUR 37 397 million
respectively, without taking account of the aforementioned assigned revenue.
Including the revenue assigned to these articles, the total appropriations
foreseen in the 2015 budget amount to EUR 1 305.5 million for
fruit and vegetables, EUR 131.4 million for milk and milk products
and to EUR 38 642 million for decoupled direct aids. 

3.                      
Comments on the provisional implementation of
the 2015 EAGF budget

The budget’s provisional implementation for the
period 16 October 2014 to 31 January 2015 is presented in Annex
2. This implementation level is compared to the expenditure profile based on
the indicator, which was established on the basis of the dispositions of
Article 28 of Regulation (EU) No 1306/2013. 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 2015 budget.

3.1.                
Market measures

The uptake of appropriations for interventions
in agricultural markets was lower compared to the level of the budget's voted
appropriations, as determined by the level of the indicator on 31 January 2015,
by EUR 107.5 million. This divergence is the net effect of the
execution patterns primarily in the fruits and vegetables and wine sectors.  

3.1.1.          
Fruit and vegetables (+ EUR 17 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 and other measures in fruit and
vegetables, which are funded both by the budget’s voted appropriations and by
the revenue assigned to this scheme in the 2015 budget (NB: For details please
see point 2 above). This implementation level is the result of applying the
indicator for the period to 31 January 2015 to the budget’s voted
appropriations, which do not include the revenue assigned to this sector. 
A footnote * in the provisional execution table
in annex 2 shows what the situation would be, had the indicator, as of 31
January 2015, been applied to the total appropriations, which are expected to
be available in order to fund this article. As it is pointed out in point 2
above, the total funding expected to be available for this article is composed
of the budget’s voted appropriations of EUR 836.2 million and of the revenue
assigned to this article which is estimated at EUR 469.3 million. Therefore,
had the indicator been applied to the total funding of EUR 1 305.5 million
expected to be available for this article, then, an under-execution of - EUR 63
million would appear. 
This is the effect of slower uptake of all the
schemes funded by this article. It needs to be noted that the pace of the
uptake of budgetary appropriations for the crisis measures could not be
reliably estimated, and is likely to diverge from a 3-year average consumption
profile which is the basis for the indicator for this article. At this point in time, this situation is considered
to be temporary and the execution of this article is closely monitored by the
responsible Commission services. 

3.1.2.          
Products of the wine-growing sector (- EUR 130.8
million)

This under-execution is due to the slower
rhythm of payments made by the Member States compared to the expenditure
profile of the established indicator for the national wine programmes. At this
point in time, this situation is considered to be temporary.  

3.2.                
Direct aids 

The uptake of appropriations for direct aids
compared to the level of the indicator on 31 January 2015 was higher by
EUR 650.8 million. 

3.2.1.          
Decoupled direct aids
(+EUR 691.7 million in comparison with voted appropriations)

As regards voted appropriations, this
implementation level is primarily due to the expenditure for the single payment
scheme, which is funded both by the budget’s voted appropriations and by the
revenue assigned to this scheme in the 2015 budget (NB: For details please see
point 2 above). This implementation level is the result of applying the
indicator for the period to 31 January 2015 to the budget’s voted
appropriations, which do not include the revenue assigned to this article.  
A footnote * in the provisional execution table
in annex 2 shows which would be the situation had the indicator, as at 31
January 2015, 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 37 397 million and of the revenue assigned to decoupled
direct aids which is estimated to amount to EUR 1 245 million.
Therefore, had the indicator been applied to the total funding of
EUR 38 642 million expected to be available for decoupled direct
aids, then, the under-execution of - EUR 488.8 million would appear. 
This divergence in the level of implementation
of the budget for decoupled direct aids results mainly from accelerated
payments for the single payments scheme in the first two months of the year (as
compared to similar period in three previous years) and a temporary
deceleration in the month of January. Judging from Member States' forecast
execution is bound to regain speed in the coming months. 
The Commission expects, at this point in time,
that available appropriations and assigned revenue would be sufficient to cover
the funding needs for this article. 

3.2.2.          
Other direct aids (- EUR 40.9 million)

This under-implementation of voted
appropriations for other direct aids as compared to the expenditure profile of
the established indicator on 31 January 2015 is mainly the effect of the slower
payment rhythm for specific support under article 68 – coupled direct aids. At
this point in time, this situation is considered to be temporary. 

3.3.                
Audit of agricultural expenditure (- EUR 16.9 million)

In addition to direct expenditure for
monitoring and preventive measures and expenditure for financial corrections in
favour of the Member States amounting in total to EUR 26.8 million, the 2015
budget included estimates of EUR 60.5 million for payments concerning
settlement of disputes. When establishing the expenditure profile for the
settlement of disputes, in absence of established past execution profile, it
was assumed that Member States would pay these amounts evenly over the year.
However, as of 31 January 2015, Member States have not made any such payments
yet. As a consequence, an under-execution in relation to the level of the
indicator resulted for this chapter of the 2015 budget. At this point in time,
this situation is considered to be temporary and a full execution of the budget
is expected.  

4.                      
Implementation of revenue assigned to EAGF

The table in
Annex 2 shows that assigned revenue amounting to EUR 995.6 million
was collected as of 31 January 2015. Specifically:
–              
the revenue from corrections based on accounting
and conformity clearance decisions amounted to EUR 179 million with
significant amounts still expected by the end of the budget year;
–              
the revenue from irregularities amounted to
EUR 68 million with additional amounts also expected by the end of
the budget year, and 
–              
at this point in time, the entire revenue from
the milk levy has been collected and it amounts to approximately
EUR 407.3 million;
Finally, the amount of assigned revenue
eventually carried over from 2014 into 2015 amounted to
EUR 341.3 million. 
Therefore, the amount of assigned revenue
available for financing EAGF expenditure, on 31 January 2015, amounts to
EUR 995.6 million with additional significant amounts of freshly
collected assigned revenue from accounting and conformity clearance decisions
and irregularities expected by the end of the budget year.

5.                      
Conclusions

The provisional execution of the 2015 EAGF
budget's appropriations, for the period up to 31 January 2015, shows that
monthly reimbursements to Member States exceeded the expenditure profile for
budget execution based on the indicator, by approximately
EUR 526.5 million. 
Assigned revenue amounting to
EUR 995.6 million is already available and additional amounts are
still expected to be collected in 2015. At this point in time, the Commission
considers that the amount of assigned revenue which will be available by the
end of the year will be sufficient to cover the funding for certain fruit and
vegetables and milk and milk products items, as well as for the single payment
scheme as originally expected when the 2015 budget was established.
[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.