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Agriculture in the EU — financing, managing and monitoring rules

Agriculture in the EU — financing, managing and monitoring rules

 

SUMMARY OF:

Regulation (EU) No 1306/2013 on the financing, management and monitoring of the common agricultural policy

WHAT IS THE AIM OF THE REGULATION?

One of the basic acts of the EU’s common agricultural policy (CAP), this regulation lays down rules for financing, management and monitoring under the 2 main CAP funds.

The regulation has been amended several times, most recently by Regulation (EU) 2017/2393.

KEY POINTS

Scope

This regulation sets out rules covering:

  • the financing of expenditure under the CAP, including expenditure on rural development;
  • the farm advisory system;
  • the management and control systems to be put in place by EU countries;
  • the cross-compliance system;
  • clearance of accounts.

Funds financing the CAP

Governance structure

  • Both funds are operated in shared management between the EU and EU countries.
  • Paying agencies.
    • Departments or bodies of the EU countries.
    • They are responsible for the management and control of expenditure.
    • An accredited paying agency must comply with rules set out by the European Commission.
  • Certification bodies.
    • Public or private body designated by an EU country.
    • They provide an opinion, drawn up under internationally accepted audit standards, on the completeness, accuracy and veracity of the annual accounts of the paying agency, on the functioning of its internal control system and on the legality and regularity of expenditure for which reimbursement has been requested from the Commission.

Financial management

The regulation sets out rules for the financial management of both funds, including:

  • for the EAGF:
    • financing of expenditure — including the budget ceiling, procedure for payments
    • budget discipline — including a monthly early warning and monitoring system;
  • for the EAFRD:
    • financing of rural development programmes — including financial contributions to from EAFRD and budgetary commitments
    • financial contribution to rural development programmes — including prefinancing arrangements and interim payments;
  • means for the Commission to ensure expenditure has been effected according to EU rules — including the power to reduce and suspend payments.

Clearance of accounts

  • On-the-spot Commission checks in EU countries, including to establish:
    • that administrative practices respect EU law;
    • that the required supporting documents exist and that they correlate with the operations financed by the funds;
    • that the terms under which the operations were financed by the EAGF or the EAFRD were fulfilled and checked;
    • the accreditation of paying agencies.
  • Clearance of accounts procedure — the Commission adopts an implementing act containing its decision on the completeness, accuracy and veracity of the annual accounts submitted by accredited paying agencies.
  • Conformity clearance — where expenditure does not conform to applicable EU and national law, the Commission will determine the amount to be excluded from EU financing.
  • Irregularities — where an undue payment has been made following an irregularity or negligence, EU countries must request recovery of the payment from the beneficiary within 18 months along with a report stating that an irregularity has taken place.

Controls

  • To ensure that support is correctly allocated to beneficiaries, EU countries are required to set up efficient control systems. For certain payments, EU countries have to operate a system for the management and control of payments to farmers, the Integrated Administration and Control System.
  • Control requirements will be lowered in regions where previous checks have shown good results, and increased in regions where there are problems.
  • Scrutiny of transactions. The regulation sets out specific rules on the scrutiny of the commercial documents of those entities receiving or making payments relating directly or indirectly to the system of financing by the EAGF (or their representatives) to check whether transactions forming part of the system have actually been carried out and have been executed correctly.

Penalties

The regulation provides that, in addition to the non-payment or withdrawal of a payment, EU countries have to impose administrative penalties on beneficiaries who do not meet eligibility requirements, obligations or commitments.

Cross-compliance

  • All direct payments, certain rural development payments and certain vine payments are linked to compliance with a number of minimum legal requirements relating to:
    • the environment
    • climate change
    • agricultural conditions of land
    • human, animal and plant health standards, and
    • animal welfare.

Farm advisory system

To advise beneficiaries on land management and farm management, EU countries must establish a farm advisory system.

The systems covers a number of elements, including:

  • agricultural practices beneficial for the climate, the environment and the maintenance of the agricultural area;
  • measures at farm level required in rural development programmes for farm modernisation, competitiveness building, sectoral integration, innovation and market orientation, as well as for the promotion of entrepreneurship;
  • ensuring that advisors are suitably qualified and trained.

Common rules

The regulation also sets a number of common rules covering issues such as:

  • the information submitted to the Commission by EU countries and the use thereof;
  • the use of the euro and the exchange rate employed;
  • the establishment of a monitoring and evaluation framework to measure the CAP’s performance;
  • the requirement for transparency of all beneficiaries with the exception of those farms which are eligible for the small farmers scheme.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 1 January 2014.

BACKGROUND

For further information see:

MAIN DOCUMENT

Regulation (EU) No 1306/2013 of the European Parliament and of the Council of 17 December 2013 on the financing, management and monitoring of the common agricultural policy and repealing Council Regulations (EEC) No 352/78, (EC) No 165/94, (EC) No 2799/98, (EC) No 814/2000, (EC) No 1290/2005 and (EC) No 485/2008 (OJ L 347, 20.12.2013, pp. 549-607)

Successive amendments to Regulation (EU) No 1306/2013 have been incorporated into the original document. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, pp. 487-548)

See consolidated version.

Regulation (EU) No 1307/2013 of the European Parliament and of the Council t of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, pp. 608–670)

See consolidated version.

Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ L 347, 20.12.2013, pp. 671-854)

See consolidated version

Commission Delegated Regulation (EU) No 640/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system and conditions for refusal or withdrawal of payments and administrative penalties applicable to direct payments, rural development support and cross compliance (OJ L 181, 20.6.2014, pp. 48-73)

See consolidated version.

Commission Implementing Regulation (EU) No 809/2014 of 17 July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to the integrated administration and control system, rural development measures and cross compliance (OJ L 227, 31.7.2014, pp. 69-124)

See consolidated version.

Commission Delegated Regulation (EU) No 906/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to public intervention expenditure (OJ L 255, 28.8.2014, pp. 1-17)

See consolidated version.

Commission Delegated Regulation (EU) No 907/2014 of 11 March 2014 supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, securities and use of euro (OJ L 255, 28.8.2014, pp. 18-58)

See consolidated version.

Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to paying agencies and other bodies, financial management, clearance of accounts, rules on checks, securities and transparency (OJ L 255, 28.8.2014, pp. 59-124)

See consolidated version.

last update 16.04.2019

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