52019DC0422

EUROPEAN COMMISSION

Brussels, 25.9.2019

COM(2019) 422 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

12th FINANCIAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

on the EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD)

2018 FINANCIAL YEAR

Table of contents

1.Budget procedure

1.1.Financial framework

1.2.Draft Budget (DB) 2018

1.3.The adoption of the 2018 Budget

1.4.The adoption of the Amending Budgets

2.Management of appropriations

2.1.Management of commitment appropriations

2.1.1.EAFRD rural development programmes

2.1.2.Technical assistance

2.2.Management of payment appropriations

2.2.1.EAFRD rural development programmes

2.2.2.Technical assistance

3.Implementation of the 2018 EAFRD budget

3.1.Implementation of commitment appropriations

3.1.1.EAFRD rural development programmes

3.1.2.Technical assistance

3.2.Implementation of payment appropriations

3.2.1.EAFRD rural development programmes

3.2.2.Technical assistance

3.3.Analysis of expenditure declared by measure

3.4.Implementation of EAFRD programmes

3.4.1.Programming period 2007-2013

3.4.2.Programming period 2014-2020

1. Budget procedure

1.1. Financial framework

Rural development expenditure in 2018 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 resources	2014	2015	2016	2017	2018	2019	2020
TOTAL	49 857	64 692	64 262	60 191	60 267	60 344	60 421
of which :
- Rural Development a), b), c), d), e)	5 299	18 184	18 684	14 371	14 381	14 691	14 709
- Market related expenditure and direct aids, a), b), c), d)	43 778	44 190	43 950	44 146	44 162	43 880	43 887

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

1.2. Draft Budget (DB) 2018

The Draft Budget (DB) 2018 was adopted by the Commission and proposed to the Budgetary Authority on 29 June 2017.

The Draft Budget included EUR 14 372 million in commitment appropriations and EUR 11 848 million in payment appropriations for the European Agricultural Fund for Rural Development (EAFRD) 2014-2020 programming period.

The Council adopted its position on the 2018 Draft Budget on 4 September 2017 and the European Parliament adopted its position on 25 October 2017. The Conciliation Committee had to be convened and the Committee agreed on a joint text within the 21-day time limit. The Council and the European Parliament separately approved the joint text on 30 November 2017.

1.3. The adoption of the 2018 Budget

The 2018 Budget adopted on 30 November 2017 was, as regards the EAFRD, equal to the initial Commission’s proposal.

Table 2

Adopted Budget 2018
Budget Item	Commitment appropriations	Payment appropriations
	(in EUR)	(in EUR)
2014-2020
05.046001 (Rural development programmes)	14 346 899 509	11 822 000 000
05.010404 (Non-operational technical assistance)	4 689 000	4 689 000
05.046002 (Operational technical assistance)	20 770 000	21 037 093

1.4. The adoption of the Amending Budgets

In the Amending Budget No 6, commitment appropriations for technical assistance of EAFRD 2014-2020 were decreased by EUR 0.7 million.

Table 3

Budget 2018 after the Amendments
Budget Item	Commitment appropriations	Payment appropriations
	(in EUR)	(in EUR)
2014-2020
05.046001 (Rural development programmes)	14 346 899 509	11 822 000 000
05.010404 (Non-operational technical assistance)	4 689 000	4 689 000
05.046002 (Operational technical assistance)	20 070 000	21 037 093

2. Management of appropriations

2.1. Management of commitment appropriations

2.1.1. EAFRD rural development programmes

As regards commitment appropriations for the EAFRD rural development programmes, the 2018 voted budget amounted to EUR 14 347 million, all related to the 2014-2020 programmes.

Table 4

Management of commitment appropriations in 2018 – EAFRD	Budget Item 05.046001 (in EUR)
Appropriations at the beginning of 2018	14 346 899 509
Appropriations available in 2018	14 346 899 509
Appropriations used in 2018	14 346 899 509

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 2018 budget, the initial amount available for this purpose was EUR 4.7 million for non-operational technical assistance and EUR 20.8 million for operational technical assistance. The latter was reduced by EUR 0.7 million by the Amending Budget No 6.

2.2. Management of payment appropriations

2.2.1. EAFRD rural development programmes

For the rural development programmes 2014-2020, the payment appropriations of the voted budget 2018 amounted to EUR 11 822 million. In addition, the available assigned revenue transferred from the previous year amounted to EUR 18.1 million and the assigned revenue collected during the year, amounted to EUR 12.4 million. The payment appropriations were reinforced with the transfer of (a) EUR 4 million from the line of the technical assistance, (b) EUR 150 million with the global transfer and (c) EUR 64 million with the end-of-the year transfer. In addition, the transfer of EUR 119.0 million of assigned revenue from EAFRD 2007-2013 was executed to cover in full the Member States' declarations of expenditure of the third quarter of 2018. Taking into account all transfers, the total amount of payment appropriations available in 2018 amounted to EUR 12 189.5 million. In total, EUR 12 173.5 million of payment appropriations were used and EUR 12.4 million of assigned revenue were automatically carried over from 2018 to 2019.

Table 5

Management of payment appropriations in 2018
(in EUR)

EAFRD (2014-2020)
Budget Item - 05.046001
Appropriations at the beginning of 2018	11 822 000 000
Transfer from TA line of EAFRD 2014-2020	4 000 000
Global transfer	150 000 000
End-of-the year transfer	64 000 000
Assigned revenue carried over from 2017	18 098 156
Assigned revenue collected in 2018	12 400 084
Transfer of Assigned revenue from EAFRD 2007-2013	119 046 270
Appropriations available in 2018	12 189 544 509
Appropriations used in 2018	12 173 540 691

2.2.2. Technical assistance

As regards the EAFRD technical assistance, total payment appropriations in the 2018 budget amounted to EUR 25.7 million. EUR 4.0 million were transferred to the EAFRD 2014-2020 programmes line to cover in full the Member States’ declarations of expenditure of the third quarter of 2018. The final payment appropriations was EUR 21.7 million.

3. Implementation of the 2018 EAFRD budget

3.1. Implementation of commitment appropriations

3.1.1. EAFRD rural development programmes

The total amount of commitment appropriations available in the 2018 budget for the EAFRD programmes 2014-2020 (EUR 14 346.9 million) was committed.

Table 6 shows, per Member State, the allocation established by Regulation (EU) No 1305/2013 as last amended by Commission Delegated Regulation (EU) 2019/71 and the amounts committed in 2018.

Table 6

Regulation (EU) No 1305/2013 (as amended) vs. amounts committed by the end of 2018
Budget item: 05.046001		(in EUR)
MS	Regulation (EU) No 1305/2013	Amounts committed in 2018
	2018 Allocation
	(a)	(b)
BE	97 066 202	97 066 202
BG	339 966 052	339 966 052
CZ	343 033 490	343 033 490
DK	153 125 142	153 125 142
DE	1 400 926 899	1 400 926 899
EE	125 552 583	125 552 583
IE	312 891 690	312 891 690
GR	701 719 722	701 719 722
ES	1 184 419 678	1 184 419 678
FR	1 668 304 328	1 668 304 328
HR	282 342 500	282 342 500
IT	1 495 583 530	1 495 583 530
CY	18 892 389	18 892 389
LV	157 236 528	157 236 528
LT	230 472 391	230 472 391
LU	14 415 051	14 415 051
HU	488 027 342	488 027 342
MT	13 893 023	13 893 023
NL	118 225 747	118 225 747
AT	564 084 777	564 084 777
PL	1 190 589 130	1 190 589 130
PT	580 721 241	580 721 241
RO	1 184 725 381	1 184 725 381
SI	120 033 142	120 033 142
SK	215 106 447	215 106 447
FI	341 593 485	341 593 485
SE	249 552 108	249 552 108
UK	754 399 511	754 399 511
Total	14 346 899 509	14 346 899 509

3.1.2. Technical assistance

For the programming period 2014-2020, the amount of commitment appropriations for operational technical assistance in the budget 2018 was EUR 20.8 million. This line was reduced by EUR 0.7 million in the Amending Budget No 6. Table 7 shows the consumption of the commitment appropriations available for operational technical assistance in 2018. The most important part relates to the European Network for Rural Development as well as the Technical Advisory Platform for Financial Instruments.

Table 7

Technical assistance – Implementation of commitment appropriations
Budget Item: 05.046002	(in EUR)
Description	Amount committed
European Network for Rural Development	4 629 652
Technical Advisory Platform for Financial Instruments	4 523 225
Information technology*	2 979 178
European Innovation Partnership	2 730 006
Corporate Communication	2 140 000
European Evaluation Network	1 900 113
Organic agriculture database	432 796
Audit and Controls	249 774
LOGO Protection	50 000
Total	19 634 744
* Including BCO (Broadband Competence Offices)

3.2. Implementation of payment appropriations

3.2.1. EAFRD rural development programmes

For the programming period 2014-2020, EUR 12 173.5 million of the payment appropriations were implemented out of EUR 12 189.5 million available. Table 8 shows the breakdown of payments made in 2018 by declaration period:

Table 8

Payments 2018 for EAFRD rural development programmes (in million EUR)	2007-2013	2014-2020

Pre-financing 2014-2020	-	19.5
Reimbursement of payment claims prior to Q4 2017	-	6.3
Reimbursement of payment claims Q4 2017	-	4 460.8
Reimbursement of payment claims Q1 2018	-	2 616.1
Reimbursement of payment claims Q2 2018	-	2 402.3
Reimbursement of payment claims Q3 2018	-	2 668.6
Closure or positive payments 2007-2013	271.9	-
Total 2018	271.9	12 173.5

The monthly consumption of payment appropriations during the year (January to December 2018) is shown in the graph below.

Graph 1

The breakdown per Member State and per declaration period of the amounts paid by the Commission in budget year 2018 is shown in tables 9a and 9b.

Table 9a: EAFRD 2007-2013

Payments effectively made between 01/01/2018 and 31/12/2018
EAFRD 2007-2013 - Budget item 05.040501 (in EUR)
MS	Positive payments, mainly following the judgements of Court of Justice	Closure	Total
BE		5 792 053	5 792 053
BG			0
CZ			0
DK			0
DE			0
EE			0
IE			0
GR			0
ES		15 034 161	15 034 161
FR	47 107 564		47 107 564
IT		203 941 787	203 941 787
CY			0
LV			0
LT			0
LU			0
HU	53 488		53 488
MT			0
NL			0
AT			0
PL			0
PT			0
RO			0
SI			0
SK			0
FI			0
SE			0
UK			0
Total	47 161 052	224 768 001	271 929 053

Table 9b: EAFRD 2014-2020

Payments effectively made between 01/01/2018 and 31/12/2018
EAFRD 2014-2020 - Budget item 05.046001							(in EUR)
MS	Pre-financing	Prior to Q4 2017	Q4 2017	Q1 2018	Q2 2018	Q3 2018	Total
BE			14 769 727	15 140 622	25 364 796	13 820 384	69 095 529
BG			23 123 216	51 560 230	90 811 734	40 188 138	205 683 318
CZ			51 401 899	99 910 206	121 404 790	51 930 327	324 647 223
DK			25 150 543	23 743 732	24 203 641	16 589 239	89 687 155
DE			518 178 026	282 762 184	166 020 708	150 707 971	1 117 668 890
EE			26 393 744	62 414 101	21 516 515	17 779 705	128 104 065
IE		9 957	140 312 902	37 845 485	30 944 655	109 596 149	318 709 149
GR			379 215 655	54 885 586	53 542 080	92 301 511	579 944 832
ES			416 008 619	96 475 713	187 940 300	199 301 454	899 726 086
FR	16 198 977		796 540 026	373 403 181	173 535 226	365 371 103	1 725 048 512
HR			28 786 041	34 672 812	97 924 640	44 766 900	206 150 392
IT			165429 113	257 078 670	263 057 102	360 192 154	1 045 757 040
CY		28 200	4 935 917	958 689	1 518 427	7 088 938	14 530 171
LV			100 480 707	34 413 859	23 541 015	34 228 519	192 664 101
LT	1 502 340		92 618 423	49 513 684	40 021 563	35 815 191	219 471 201
LU			4 472 366	5 509 319	1591 621	2 957 429	14 530 735
HU			126 974 681	78 165 237	78 248 639	102 540 987	385 929 544
MT			1 664 858	773 245	404 825	6 548 266	9 391 195
NL	1 800 000		14 461 718	48 496 359	3 301 137	12 613 164	80 672 378
AT			297 250 603	42 654 465	129 876 825	43 022 265	512 804 158
PL			188 299 185	290 179 630	284 299 863	181 791 044	944 569 722
PT		440 121	298 337 459	95 012 944	65 110 741	44 132 058	503 033 323
RO		5 775 526	291 226 430	322 544 208	206 914 475	319 691 776	1 146 152 415
SI			32 016 502	14 193 563	52 304 883	12 428 401	110 943 349
SK			55 560 398	43 342 784	53 662 898	47 630 789	200 196 868
FI			139 384 686	24 270 973	60 320 920	127 811 352	351 787 931
SE			126 607 330	25 820 902	19 873 752	23 340 897	195 642 880
UK			101 215 145	150 380 307	125 030 443	204 372 633	580 998 528
Total	19 501 317	6 253 804	4 460 815 920	2 616 122 689	2 402 288 216	2 668 558 745	12 173 540 691

Table 10 compares, for each Member State, the EAFRD 2014-2020 payments made in 2018 with the payments in 2017. Overll, the payments increased by 10% compared to year 2017 (EUR 12.2 billion vs. EUR 11.1 billion).

Table 10

Payments made to Member States - Comparison 2018 vs 2017 - EAFRD 2014-2020							(in EUR)

MS	2017			2018			Difference 2018 vs. 2017
	Interim payments	Pre-financing	Total	Interim payments	Pre-financing	Total	(in EUR)	(in %)
BE	37 131 717	0	37 131 717	69 095 529		69 095 529	31 963 812	86.08%
BG	194 514 062	0	194 514 062	205 683 318		205 683 318	11 169 256	5.74%
CZ	259 351 803	0	259 351 803	324 647 223		324 647 223	65 295 420	25.18%
DK	99 878 000	0	99 878 000	89 687 155		89 687 155	-10 190 845	-10.20%
DE	950 952 706	0	950 952 706	1 117 668 890		1 117 668 890	166 716 185	17.53%
EE	99 413 291	0	99 413 291	128 104 065		128 104 065	28 690 774	28.86%
IE	254 572 032	0	254 572 032	318 709 149		318 709 149	64 137 117	25.19%
GR	708 045 934	0	708 045 934	579 944 832		579 944 832	-128 101 102	-18.09%
ES	702 633 093	0	702 633 093	899 726 086		899 726 086	197 092 993	28.05%
FR	1 753 707 994	0	1 753 707 994	1 708 849 535	16 198 977	1 725 048 512	-28 659 482	-1.63%
HR	150 173 479	0	150 173 479	206 150 392		206 150 392	55 976 914	37.27%
IT	790 272 508	0	790 272 508	1 045 757 040		1 045 757 040	255 484 533	32.33%
CY	14 573 450	0	14 573 450	14 530 171		14 530 171	-43 279	-0.30%
LV	162 496 969	0	162 496 969	192 664 101		192 664 101	30 167 132	18.56%
LT	253 974 006	0	253 974 006	217 968 861	1 502 340	219 471 201	-34 502 805	-13.59%
LU	8 863 575	0	8 863 575	14 530 735		14 530 735	5 667 160	63.94%
HU	196 592 509	0	196 592 509	385 929 544		385 929 544	189 337 035	96.31%
MT	2 170 973	0	2 170 973	9 391 195		9 391 195	7 220 222	332.58%
NL	57 613 814	0	57 613 814	78 872 378	1 800 000	80 672 378	23 058 564	40.02%
AT	478 470 408	0	478 470 408	512 804 158		512 804 158	34 333 750	7.18%
PL	573 604 590	0	573 604 590	944 569 722		944 569 722	370 965 133	64.67%
PT	524 233 177	0	524 233 177	503 033 323		503 033 323	-21 199 854	-4.04%
RO	1 569 168 715	0	1 569 168 715	1 146 152 415		1 146 152 415	-423 016 301	-26.96%
SI	80 253 608	0	80 253 608	110 943 349		110 943 349	30 689 741	38.24%
SK	167 863 196	0	167 863 196	200 196 868		200 196 868	32 333 673	19.26%
FI	319 207 655	0	319 207 655	351 787 931		351 787 931	32 580 276	10.21%
SE	104 276 200	0	104 276 200	195 642 880		195 642 880	91 366 680	87.62%
UK	537 774 629	0	537 774 629	580 998 528		580 998 528	43 223 899	8.04%
Total	11 051 784 091	0	11 051 784 091	12 154 039 375	19 501 317	12 173 540 691	1 121 756 600	10.15%

3.2.2. Technical assistance

For the programming period 2014-2020, the amount for payment appropriations for the operational technical assistance was EUR 21.0 million. A part of these appropriations (EUR 4.0 million) was transferred to cover payment needs in relation to rural development programmes under EAFRD 2014-2020.

Table 11 hereafter presents the payments grouped by main activities. The most important part relates to the European Network for Rural Development.

Table 11

Technical assistance – Implementation of payment appropriations
Budget Item: 05.046002	(in EUR)
Description	Amount paid
European Network for Rural Development	3 914 519
Information technology*	2 822 364
European Innovation Partnership	2 468 602
Technical Advisory Platform for Financial Instruments	1 800 000
European Evaluation Network	1 589 121
Audit and Controls	410 785
Organic agriculture database	135 317
LOGO protection	40 000
Total	13 180 708

* Including Broadband Competence Offices

3.3. Analysis of expenditure declared by measure

Table 12 shows the payment claims declared by Member States and by measure for rural development in 2018 (4th quarter of 2017 to 3rd quarter of 2018), 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 2018 concentrated mainly in Measure 13 (Payments to areas facing natural or other specific constraints), Measure 04 (Investments in physical assets) and in Measure 10 (Agri-environment-climate).

Table 12

EAFRD declared expenditure 2018 (Q4 2017-Q3 2018) & Total cumulative expenditure (Q4 2014 to Q3 2018)
compared with Financial Plans - EAFRD 2014-2020
		Declared expenditure 2018 (Q4 2017 to Q3 2018)		Cumulative declared expenditure (Q4 2014 to Q3 2018)		Financial Plans 2014-2020
EAFRD Measure		(million EUR)	(%)	(million EUR)	(%)	(million EUR)	(%)
Measure 01	Knowledge transfer and information actions	83.8	0.7%	157.1	0.5%	1 093.9	1.1%
Measure 02	Advisory services, farm management and farm relief services	20.0	0.2%	47.3	0.1%	675.6	0.7%
Measure 03	Quality schemes for agricultural products and foodstuffs	23.7	0.2%	52.5	0.2%	378.7	0.4%
Measure 04	Investments in physical assets	2 354.1	19.4%	5 165.5	15.5%	22 748.9	22.7%
Measure 05	Restoring agricultural production potential damaged by natural disasters and catastrophic events and introduction of appropriate prevention actions	48.9	0.4%	160.5	0.5%	920.9	0.9%
Measure 06	Farm and business development	750.3	6.2%	2 027.7	6.1%	6 929.4	6.9%
Measure 07	Basic services and village renewal in rural areas	691.8	5.7%	1 380.6	4.1%	6 809.6	6.8%
Measure 08	Investments in forest area development and improvement of the viability of forests	354.8	2.9%	1 024.8	3.1%	4 470.3	4.5%
Measure 09	Setting-up of producer groups and organisations	16.0	0.1%	49.4	0.1%	307.0	0.3%
Measure 10	Agri-environment-climate	2 234.6	18.4%	7 359.9	22.1%	16 481.3	16.5%
Measure 11	Organic farming	1 147.1	9.4%	2 886.4	8.7%	7 046.2	7.0%
Measure 12	Natura 2000 and Water Framework Directive payments	82.8	0.7%	248.3	0.7%	582.8	0.6%
Measure 13	Payments to areas facing natural or other specific constraints	2 727.8	22.4%	9 261.5	27.8%	16 510.9	16.5%
Measure 14	Animal Welfare	323.3	2.7%	842.6	2.5%	1 727.9	1.7%
Measure 15	Forest environmental and climate services and forest conservation	11.4	0.1%	31.5	0.1%	222.6	0.2%
Measure 16	Co-operation	78.4	0.6%	139.0	0.4%	1 753.1	1.8%
Measure 17	Risk management	343.5	2.8%	525.8	1.6%	1 638.0	1.6%
Measure 18	Financing of complementary national direct payments for Croatia	-0.1	0.0%	108.4	0.3%	111.9	0.1%
Measure 19	Support for LEADER local development — community-led local development (CLLD)	579.2	4.8%	996.3	3.0%	7 003.6	7.0%
Measure 20	Technical assistance Member States	223.9	1.8%	515.6	1.5%	2 158.4	2.2%
Measure 113	Early retirement	64.2	0.5%	359.3	1.1%	507.6	0.5%
Measure 131	Meeting standards based on Community legislation	0.0	0.0%	0.0	0.0%	0.0	0.0%
Measure 341	Skills acquisition, animation and implementation	0.0	0.0%	0.4	0.0%	0.6	0.0%
Grand total		12 159.6	100.0%	33 340.7	100.0%	100 079.1	100.0%

*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.

3.4. Implementation of EAFRD programmes

3.4.1. Programming period 2007-2013

Graph 2 presents the absorption rate of rural development programmes 2007-2013 per Member State: payments from the beginning of the programming period till 31 December 2018, including closure payments for the programmes that have already been closed by this date, compared to the total 2007-2013 allocation.

Until the end of 2018, the amount decommitted summed up to EUR 1 974 million.

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 2018 that are reimbursed in financial year 2019 compared to the total 2014-2020 allocation.

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