Explanatory Memorandum to COM(2020)387 - 13th financial report on the European agricultural fund for rural development (eafrd) 2019 financial year

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dossier COM(2020)387 - 13th financial report on the European agricultural fund for rural development (eafrd) 2019 financial year.
source COM(2020)387 EN
date 20-08-2020
EUROPEAN COMMISSION

Contents

1.

Brussels, 20.8.2020


COM(2020) 387 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

13th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
on the EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD)

2019 FINANCIAL YEAR


Table of contents

2.

1. Budget procedure


3.

1.1.Financial framework


4.

1.2.Draft Budget (DB) 2019


5.

1.3.The adoption of the 2019 Budget


6.

1.4.The adoption of the Amending Budgets


7.

2. Management of appropriations


8.

2.1.Management of commitment appropriations


9.

2.1.1.EAFRD rural development programmes


10.

2.1.2.Technical assistance


11.

2.2.Management of payment appropriations


12.

2.2.1.EAFRD rural development programmes


13.

2.2.2.Technical assistance


14.

3. Implementation of the 2019 EAFRD budget


15.

3.1.Implementation of commitment appropriations


16.

3.1.1.EAFRD rural development programmes


17.

3.1.2.Technical assistance


18.

3.2.Implementation of payment appropriations


19.

3.2.1.EAFRD rural development programmes


20.

3.2.2.Technical assistance


21.

3.3.Analysis of expenditure declared by measure


22.

3.4.Implementation of EAFRD programmes


23.

3.4.1.Programming period 2007-2013


24.

3.4.2.Programming period 2014-2020



25.

1. Budget procedure


26.

1.1. Financial framework


Rural development expenditure in 2019 is funded within the multiannual financial framework (MFF) 2014-2020. The financial framework is provided by Council Regulation (EU) No 1311/2013. The allocation for rural development and the allocation for market related expenditure and direct payments after the annual technical adjustment of the MFF are presented in table 1.


Table 1 – Financial framework 2014-2020

HEADING 2.In million EUR; current prices
Sustainable growth: natural resources2014201520162017201820192020
TOTAL49 85764 69264 26260 19160 26760 34460 421
of which :
- Rural Development a), b), c), d), e)
5 298.918 183.718 683.714 371.214 381.014 690.614 709.4
- Market related expenditure and direct aids, a), b), c), d)
43 778.144 189.843 950.244 145.744 162.443 880.343 887.1
a) After net transfer of EUR 351.9 million between EAGF and EAFRD for the financial year 2014 (see note f for details)

b) After net transfer of EUR 51.6 million between EAGF and EAFRD for the financial year 2015 (see note f for details)

c) After net transfer of EUR 28 million between EAGF and EAFRD for the financial years 2014-2020 (see note f for details)

d) After net transfer of EUR 4 313.9 million between EAGF and EAFRD for financial years 2015-2020 (see note f for details)

e) After the reprogramming of the EAFRD allocation of year 2014 following the application of Article 19 of MFF Regulation (EU) No 1311/2013 a total amount of EUR 8 705 million deducted from 2014 commitments was equally distributed to 2015 and 2016 commitments

f) The transfers to rural development (EAFRD) mentioned in notes a) to d) above involve: EUR 4 million transferred annually for the whole period 2014-2020 from the cotton sector (Greece) on the basis of Article 66(1) of Regulation (EU) No 1307/2013, EUR 296.3 million set for the voluntary adjustment transferred for the financial year 2014 (UK) on the basis of Article 10b and 10c(2) of Regulation (EC) No 73/2009, EUR 51.6 million for unspent amounts transferred each year for financial years 2014 and 2015 (SE and DE) on the basis of Articles 136 and 136b of Regulation (EC) No 73/2009 and EUR 4 313.9 million for the reduction of payments and the flexibility between pillars on the basis of Articles 7(2) and 14(1) of Regulation (EU) No 1307/2013


27.

1.2. Draft Budget (DB) 2019


The Draft Budget (DB) 2019 was adopted by the Commission and proposed to the Budgetary Authority on 21 June 2018.

The Draft Budget included EUR 14 679 million in commitment appropriations and EUR 13 122 million in payment appropriations for the European Agricultural Fund for Rural Development (EAFRD) 2014-2020 programming period.


The Council adopted its position on the 2019 Draft Budget on 4 September 2018 and the European Parliament adopted its position on 24 October 2018. The Conciliation Committee had to be convened. The Conciliation Committee did not agree on a joint text within the 21-day time-limit. The European Commission presented a second draft general budget for 2019 on 30 November 2018. The amounts for the EAFRD were not changed as compared with the first Draft Budget. The Council and the European Parliament approved the joint text respectively on 11 December and 12 December 2018.

28.

1.3. The adoption of the 2019 Budget


The 2019 Budget adopted on 12 December 2018 was, as regards the EAFRD, equal to the Commission’s proposal.

29.

Table 2


Adopted Budget 2019
Budget ItemCommitment appropriationsPayment appropriations
(in EUR)(in EUR)
2014-2020
05.046001 (Rural development programmes)14.656.460.13713.100.000.000
05.010404 (Non-operational technical assistance)5.034.0005.034.000
05.046002 (Operational technical assistance)17.115.40016.725.400


30.

1.4. The adoption of the Amending Budgets


None of the 2019 amending budgets concerned the EAFRD.

31.

2. Management of appropriations


32.

2.1. Management of commitment appropriations


33.

2.1.1. EAFRD rural development programmes


As regards commitment appropriations for the EAFRD rural development programmes, the 2019 voted budget amounted to EUR 14 656 million, all related to the 2014-2020 programmes.


34.

Table 3


Management of commitment appropriations in 2019 – EAFRDBudget Item
05.046001
(in EUR)
Appropriations at the beginning of 201914.656.460.137
Appropriations available in 201914.656.460.137
Appropriations used in 201914.656.460.137


35.

2.1.2. Technical assistance


Article 51(1) of Regulation (EU) No 1305/2013 provides that the EAFRD may use up to 0.25% of its annual allocation to finance technical assistance actions at the initiative of the Commission. In the 2019 budget, the initial amount available for this purpose was EUR 5.0 million for non-operational technical assistance and EUR 17.1 million for operational technical assistance.

36.

2.2. Management of payment appropriations


37.

2.2.1. EAFRD rural development programmes


For the rural development programmes 2014-2020, the payment appropriations of the voted budget 2019 amounted to EUR 13 100 million. In addition, the available assigned revenue transferred from the previous year amounted to EUR 12.4 million and the assigned revenue collected during the year, amounted to EUR 25.1 million. The payment appropriations were reinforced with the transfer of EUR 0.5 million from the line “EAFRD 2014-2020 contribution to European Solidarity Corps", EUR 265.6 million with the global transfer and EUR 100 million with the end-of-the year transfer. In addition, the transfer of EUR 961.7 million of assigned revenue from prior to 2014 EAFRD programmes was executed to cover in full the Member States' declarations of expenditure of the third quarter of 2019. An amount of EUR 1.8 million was transferred to the operational technical assistance line. Taking into account all transfers, the total amount of payment appropriations available in 2019 amounted to EUR 14 463.4 million. In total, EUR 13 840.0 million of payment appropriations were used and EUR 623.4 million of assigned revenue were automatically carried over from 2019 to 2020.


38.

Table 4


Management of payment appropriations in 2019
(in EUR)
EAFRD (2014-2020)
Budget Item - 05.046001
Appropriations at the beginning of 201913.100.000.000
Transfer from 'EAFRD 2014-2020 contribution to ESC' line540.000
Transfer to Technical Assistance line of EAFRD 2014-2020-1.800.000
Global transfer265.580.630
End-of-the year transfer100.000.000
Assigned revenue carried over from 201812.400.084
Assigned revenue collected in 201925.056.900
Transfer of Assigned revenue from EAFRD prior to 2014961.659.440
Appropriations available in 201914.463.437.054
Appropriations used in 201913.839.996.951


39.

2.2.2. Technical assistance


As regards the EAFRD technical assistance at the initiative of the Commission, total payment appropriations in the 2019 budget amounted to EUR 21.8 million. EUR 1.8 million were transferred from the EAFRD 2014-2020 programmes line to cover the payment needs. The final payment appropriations was EUR 23.6 million.

40.

3. Implementation of the 2019 EAFRD budget


41.

3.1. Implementation of commitment appropriations


42.

3.1.1. EAFRD rural development programmes


The total amount of commitment appropriations available in the 2019 budget for the EAFRD programmes 2014-2020 (EUR 14 656.5 million) was committed.

Table 5 shows, per Member State, the allocation established by Regulation (EU) No 1305/2013 as last amended by Regulation (EU) 2019/288 1 and the amounts committed in 2019.

43.

Table 5


Regulation (EU) No 1305/2013 (as amended) vs. amounts committed by the end of 2019
Budget item: 05.046001(in EUR)
MSRegulation (EU) No 1305/2013Amounts committed in 2019
2019 Allocation
(a)(b)
BE102.912.713102.912.713
BG339.523.306339.523.306
CZ323.242.050323.242.050
DK152.367.537152.367.537
DE1.397.914.6581.397.914.658
EE127.277.180127.277.180
IE312.764.355312.764.355
GR700.043.071700.043.071
ES1.183.448.7181.183.448.718
FR1.984.761.7291.984.761.729
HR282.342.500282.342.500
IT1.498.573.7991.498.573.799
CY18.889.10818.889.108
LV159.374.589159.374.589
LT247.213.599247.213.599
LU14.464.07414.464.074
HU487.402.356487.402.356
MT13.876.50413.876.504
NL148.107.797148.107.797
AT565.713.368565.713.368
PL1.189.103.9871.189.103.987
PT581.637.133581.637.133
RO1.141.925.6041.141.925.604
SI120.384.760120.384.760
SK214.844.203214.844.203
FI343.198.337343.198.337
SE249.710.989249.710.989
UK755.442.113755.442.113
Total14.656.460.13714.656.460.137


44.

3.1.2. Technical assistance


For the programming period 2014-2020, the amount of commitment appropriations for operational technical assistance in the budget 2019 was EUR 17.1 million. Table 6 shows the consumption of the commitment appropriations available for operational technical assistance in 2019. The most important part relates to the European Network for Rural Development.

45.

Table 6


Operational technical assistance – Implementation of commitment appropriations
Budget Item: 05.046002(in EUR)
DescriptionAmount committed
European Network for Rural Development4.980.794
Information technology*3.111.799
European Innovation Partnership2.736.732
European Evaluation Network1.975.414
Corporate Communication1.380.000
Technical Advisory Platform for Financial Instruments500.000
Organic agriculture database433.295
Audit and Controls644.735
Total15.762.767
* Including BCO (Broadband Competence Offices)


46.

3.2. Implementation of payment appropriations


47.

3.2.1. EAFRD rural development programmes


For the programming period 2014-2020, EUR 13 840.0 million of the payment appropriations were implemented out of EUR 14 463.4 million available. Table 7 shows the breakdown of payments made in 2019 by declaration period:


48.

Table 7


Payments 2019 for EAFRD rural development programmes (in EUR)2007-20132014-2020
Pre-financing 2014-2020 2-2.714.793
Reimbursement of payment claims prior to Q4 2018-134.874
Reimbursement of payment claims Q4 2018-5.755.256.476
Reimbursement of payment claims Q1 2019-2.754.299.275
Reimbursement of payment claims Q2 2019-2.741.814.776
Reimbursement of payment claims Q3 2019-2.585.776.756
Closure payments 2007-2013257.692.857-
Total 2019257.692.85713.839.996.951


The monthly consumption of payment appropriations during the year (January to December 2019) is shown in the graph below.


49.

Graph 1



The breakdown per Member State and per declaration period of the amounts paid by the Commission in budget year 2019 is shown in tables 8a and 8b.

50.

Table 8a: EAFRD 2007-2013


Payments effectively made between 01/01/2019 and 31/12/2019
EAFRD 2007-2013 - Budget item 05.040501 (in EUR)
MSClosure
BE
BG97.225.956
CZ
DK
DE
EE
IE
GR
ES
FR160.466.901
IT
CY
LV
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
Total257.692.857


51.

Table 8b: EAFRD 2014-2020


Payments effectively made between 01/01/2019 and 31/12/2019
EAFRD 2014-2020 - Budget item 05.046001(in EUR)
MSPre-financingPrior to Q4 2018Q4 2018Q1 2019Q2 2019Q3 2019Total
BE0017.334.2549.482.57433.218.28518.837.31678.872.428
BG0055.344.91177.499.583107.997.27867.792.991308.634.763
CZ0052.848.870204.165.51186.450.81450.362.856393.828.050
DK0042.034.17025.776.71825.047.4348.208.342101.066.664
DE00596.910.906291.497.999208.933.806176.253.5921.273.596.303
EE0023.539.05965.082.47612.226.79524.060.415124.908.745
IE00157.269.17630.982.56339.397.30496.373.396324.022.439
GR00275.111.06434.505.40746.860.55554.936.575411.413.602
ES00527.423.244148.716.407278.660.313210.819.8061.165.619.770
FR2.703.99301.042.261.975457.277.445301.119.386260.160.7762.063.523.575
HR0074.467.76873.992.80198.848.10352.326.860299.635.531
IT00689.961.184221.751.805237.813.915299.554.2161.449.081.121
CY008.867.4282.616.5792.550.3006.918.51820.952.824
LV0096.634.49246.651.36326.091.99237.097.820206.475.667
LT10.800073.287.93349.310.14234.191.23324.451.057181.251.164
LU005.119.1565.653.4052.121.6821.587.35114.481.595
HU00184.133.619133.238.82997.309.05896.688.026511.369.533
MT0011.087.890620.8654.054.6633.666.52919.429.947
NL0013.721.30553.369.1416.469.47916.838.57990.398.504
AT00304.858.44242.762.776141.825.32948.725.218538.171.765
PL00341.817.663278.763.628241.914.834229.788.8591.092.284.985
PT00315.985.38289.332.03055.471.63062.260.191523.049.233
RO00323.746.321136.212.495224.930.153282.184.080967.073.048
SI0134.87434.717.32514.449.32547.516.25723.279.066120.096.847
SK0056.642.46437.855.99665.152.78049.710.435209.361.675
FI00140.089.24726.542.16659.579.240124.962.860351.173.513
SE00134.063.08433.824.47132.298.53226.112.103226.298.189
UK00155.978.145162.364.775223.763.628231.818.923773.925.472
Total2.714.793134.8745.755.256.4762.754.299.2752.741.814.7762.585.776.75613.839.996.951


Table 9 compares, for each Member State, the EAFRD 2014-2020 payments made in 2019 with the payments in 2018. Overall, the payments increased by 14% compared to year 2018 (EUR 13.8 billion vs. EUR 12.2 billion).


52.

Table 9


Payments made to Member States - Comparison 2019 vs 2018 - EAFRD 2014-2020(in EUR)
MS20182019Difference 2019 vs. 2018
Interim paymentsPre-financingTotalInterim paymentsPre-financingTotal(in EUR)(in %)
BE69.095.52969.095.52978.872.428078.872.4289.776.89914,15%
BG205.683.318205.683.318308.634.7630308.634.763102.951.44550,05%
CZ324.647.223324.647.223393.828.0500393.828.05069.180.82721,31%
DK89.687.15589.687.155101.066.6640101.066.66411.379.50912,69%
DE1.117.668.8901.117.668.8901.273.596.30301.273.596.303155.927.41313,95%
EE128.104.065128.104.065124.908.7450124.908.745-3.195.320-2,49%
IE318.709.149318.709.149324.022.4390324.022.4395.313.2901,67%
GR579.944.832579.944.832411.413.6020411.413.602-168.531.230-29,06%
ES899.726.086899.726.0861.165.619.77001.165.619.770265.893.68429,55%
FR1.708.849.53516.198.9771.725.048.5122.060.819.5822.703.9932.063.523.575338.475.06319,62%
HR206.150.392206.150.392299.635.5310299.635.53193.485.13945,35%
IT1.045.757.0401.045.757.0401.449.081.12101.449.081.121403.324.08138,57%
CY14.530.17114.530.17120.952.824020.952.8246.422.65344,20%
LV192.664.101192.664.101206.475.6670206.475.66713.811.5667,17%
LT217.968.8611.502.340219.471.201181.240.36410.800181.251.164-38.220.037-17,41%
LU14.530.73514.530.73514.481.595014.481.595-49.140-0,34%
HU385.929.544385.929.544511.369.5330511.369.533125.439.98832,50%
MT9.391.1959.391.19519.429.947019.429.94710.038.752106,90%
NL78.872.3781.800.00080.672.37890.398.504090.398.5049.726.12612,06%
AT512.804.158512.804.158538.171.7650538.171.76525.367.6074,95%
PL944.569.722944.569.7221.092.284.98501.092.284.985147.715.26215,64%
PT503.033.323503.033.323523.049.2330523.049.23320.015.9093,98%
RO1.146.152.4151.146.152.415967.073.0480967.073.048-179.079.366-15,62%
SI110.943.349110.943.349120.096.8470120.096.8479.153.4988,25%
SK200.196.868200.196.868209.361.6750209.361.6759.164.8064,58%
FI351.787.931351.787.931351.173.5130351.173.513-614.418-0,17%
SE195.642.880195.642.880226.298.1890226.298.18930.655.30915,67%
UK580.998.528580.998.528773.925.4720773.925.472192.926.94433,21%
Total12.154.039.37519.501.31712.173.540.69113.837.282.1572.714.79313.839.996.9511.666.456.25913,69%


53.

3.2.2. Technical assistance


For the programming period 2014-2020, the amount for payment appropriations available for the operational technical assistance was EUR 18.5 million. The original amount of EUR 16.7 million in the Budget 2019 has been reinforced by EUR 1.8 million transferred from the rural development programmes under EAFRD 2014-2020 line. The final implementation amounted to EUR 17.0 million.

Table 10 hereafter presents the payments grouped by main activities. The most important part relates to the European Network for Rural Development.


54.

Table 10


Technical assistance – Implementation of payment appropriations
Budget Item: 05.046002(in EUR)
DescriptionAmount paid
European Network for Rural Development4.237.354
Information technology*3.001.302
Technical Advisory Platform for Financial Instruments3.064.333
European Innovation Partnership2.648.305
European Evaluation Network1.428.387
Corporate Communication1.000.000
LIFE Programme840.847
Audit and Controls632.480
Organic agriculture database139.108
LOGO protection50.000
Total17.042.118

* Including Broadband Competence Offices


55.

3.3. Analysis of expenditure declared by measure


Table 11 shows the payment claims declared by Member State and by measure for rural development in 2019 (4th quarter of 2018 to 3rd quarter of 2019), the cumulative declared expenditure from the beginning of the programming period and also the financial plan of EAFRD 2014-2020 programmes.

The expenditure for EAFRD 2014-2020 in 2019 concentrated mainly in Measure 04 (Investments in physical assets), in Measure 13 (Payments to areas facing natural or other specific constraints) and in Measure 10 (Agri-environment-climate).


56.

Table 11


EAFRD declared expenditure 2019 (Q4 2018-Q3 2019) & Total cumulative expenditure (Q4 2014 to Q3 2019*)
compared with Financial Plans - EAFRD 2014-2020
Declared expenditure 2019 (Q4 2018 to Q3 2019)Cumulative declared expenditure (Q4 2014 to Q3 2019)Financial Plans 2014-2020
EAFRD Measure(million EUR)(%)(million EUR)(%)(million EUR)(%)
Measure 01Knowledge transfer and information actions93,40,7%250,50,5%973,61,0%
Measure 02Advisory services, farm management and farm relief services39,70,3%87,10,2%606,10,6%
Measure 03Quality schemes for agricultural products and foodstuffs37,10,3%98,70,2%368,60,4%
Measure 04Investments in physical assets2.801,020,2%7.966,716,9%22.860,822,8%
Measure 05Restoring agricultural production potential damaged by natural disasters and catastrophic events and introduction of appropriate prevention actions75,20,5%235,80,5%807,50,8%
Measure 06Farm and business development813,55,9%2.838,86,0%6.701,16,7%
Measure 07Basic services and village renewal in rural areas1.022,77,4%2.403,25,1%6.893,56,9%
Measure 08Investments in forest area development and improvement of the viability of forests411,43,0%1.436,03,0%4.257,44,3%
Measure 09Setting-up of producer groups and organisations24,00,2%73,40,2%266,40,3%
Measure 10Agri-environment-climate2.483,117,9%9.841,720,9%16.443,416,4%
Measure 11Organic farming1.321,19,5%4.207,68,9%7.451,37,4%
Measure 12Natura 2000 and Water Framework Directive payments92,60,7%340,90,7%606,60,6%
Measure 13Payments to areas facing natural or other specific constraints2.654,519,2%11.916,025,3%16.732,216,7%
Measure 14Animal Welfare309,82,2%1.152,42,4%1.809,11,8%
Measure 15Forest environmental and climate services and forest conservation15,10,1%46,60,1%240,00,2%
Measure 16Co-operation107,10,8%246,10,5%1.676,41,7%
Measure 17Risk management358,62,6%884,41,9%1.613,01,6%
Measure 18Financing of complementary national direct payments for Croatia-0,10,0%108,20,2%111,90,1%
Measure 19Support for LEADER local development — community-led local development (CLLD)857,06,2%1.851,43,9%7.011,47,0%
Measure 20Technical assistance Member States278,72,0%794,31,7%2.155,02,2%
Measure 113Early retirement42,90,3%402,20,9%493,80,5%
Measure 131Meeting standards based on Community legislation0,00,0%0,00,0%0,00,0%
Measure 341Skills acquisition, animation and implementation0,10,0%0,50,0%0,60,0%
Grand total13.838,4100,0%47.182,5100,0%100.079,5100,0%


*Member States declare their expenditure quarterly. However, for year n, Q4 declarations are submitted in January of year n+1. Consequently, the corresponding reimbursements by the Commission to the Member States in year n go from Q4 of year n-1 until Q3 of year n.


57.

3.4. Implementation of EAFRD programmes


58.

3.4.1. Programming period 2007-2013


Graph 2 presents the final absorption rate of rural development programmes 2007-2013 per Member State. The EU average reached 97%.

59.

3.4.2. Programming period 2014-2020


Graph 3 presents the absorption rate of rural development programmes 2014-2020 per Member State: payments from the beginning of the programming period including payments made for the 4th quarter of 2019 that are reimbursed in financial year 2020 compared to the total 2014-2020 allocation.

In 2019 the level of consumption for the first time resulted in the decommitment of EUR 16.5 million.

Overall, the implementation of the EAFRD 2014-2020 rural development programmes reached by end 2019 on average an absorption rate of 56%. Programmes are generally well on track in terms of implementation, with the variation in the averages per Member State illustrated in graph 3 below.


(1) Regulation (EU) 2019/288 of the European Parliament and of the Council of 13 February 2019 amending Regulations (EU) N° 1305/2013 and (EU) N° 1307/2013 as regards certain rules on direct payments and support for rural development in respect of the years 2019 and 2020
(2) The pre-financing paid in financial year 2019 concerns only pre-financing for the additional amounts transferred from direct payments to rural development