Explanatory Memorandum to COM(2013)712 - Fixing of an adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013 - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)712 - Fixing of an adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013. |
|---|---|
| source | COM(2013)712  |
| date | 16-10-2013 |
The Treaty on the Functioning of the European Union lays down the fundamental rule governing Union financing that the annual budget of the Union must comply with the Multiannual Financial Framework (MFF). With a view to ensuring that the amounts for the financing of the Common Agricultural Policy (CAP) comply with the annual sub-ceilings for market related expenditure and direct payments under heading 2 laid down in the Regulation to be adopted by the Council pursuant to Article 312(2) of the Treaty on the Functioning of the European Union, a financial discipline mechanism has been provided for in Council Regulation (EC) No 73/2009 establishing common rules for direct support schemes for farmers under the common agricultural policy and establishing certain support schemes for farmers[1]. According to this mechanism, an adjustment of direct payments should be determined when the forecasts for direct payments and market related expenditure, taking into account any financial transfers between the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD), indicate that the annual sub-ceiling under heading 2 set out in the Financial Framework will be exceeded.
In drawing up the 2014 Draft Budget, the budgetary estimates for direct payments and market related expenditure showed that the sub-ceiling under heading 2 for financial year 2014, after financial transfers between EAGF and EAFRD, was likely to be exceeded. As a consequence, direct payments should be reduced in order to comply with the ceiling.
On this basis, the Commission presented a proposal for setting the adjustment rate for direct payments in respect of calendar year 2013[2], which had to be adopted by the European Parliament and the Council by 30 June 2013 in accordance with Article 11(1) of Regulation (EC) No 73/2009 as amended by Regulation (EU) No 671/2012 of the European Parliament and of the Council[3]. However, the European Parliament and the Council had not determined that rate by 30 June 2013. Therefore, the Commission has set the rate in the Commission Implementing Regulation (EU) No 964/2013 ([4]), pursuant to Article 18 i of Council Regulation (EC) No 1290/2005 on the financing of the common agricultural policy[5].
Article 18(5) of Regulation (EC) No 1290/2005 gives the possibility to the Commission to propose an adaptation of this rate on the basis of new information in its possession. The Council may adapt the adjustment rate by 1 December 2013. The updated forecasts for market related expenditure and direct payments of the Amending Letter to the 2014 Draft Budget show the need for a different amount of financial discipline. Therefore the adjustment rate should be proposed to be adapted.
Contents
This proposal implements the rules provided for in Article 11 of Council Regulation (EC) No 73/2009 and Article 18 of Council Regulation (EC) No 1290/2005. Prior consultation with the interested parties and the preparation of impact assessment were not needed.
This proposal amends the financial discipline adjustment rate set in Article 1 of Commission Implementing Regulation (EU) No 964/2013 in respect of calendar year 2013.
The calculation of the financial discipline adapted adjustment rate is part of the preparation of Amending Letter to the 2014 Draft Budget in order to comply with the EAGF net ceiling, i.e. the sub-ceiling for market related expenditure and direct payment under Heading 2 for financial year 2014 after financial transfers between EAGF and EAFRD. The EAGF net ceiling for financial year 2014 is calculated based on the same principles as for the Commission Implementing Regulation (EU) No 964/2013. The Amending Letter No 2 to the Draft Budget 2014 includes an amount for the reserve for crises in the agricultural sector (EUR 424.5 million).
The Amending Letter estimates of budget appropriations for direct aids and market related expenditure show the need to reduce the direct payments that can be granted to farmers in respect of calendar year 2013 by EUR 902.9 million, compared to EUR 1 471.4 million established in the Draft Budget. The adapted adjustment rate necessary to respect the ceiling is 2.453658%. It has been calculated according to the same method as in Commission Implementing Regulation (EU) No 964/2013.
The application of this adjustment rate will result in the reduction of the amounts of direct payments for budget lines covering expenditure relating to aid applications submitted by farmers in respect of calendar year 2013 (financial year 2014).