12. EUROPEAN AGRICULTURAL GUIDANCE AND
GUARANTEE FUND: GUARANTEE SECTION
(23984)
14096/02
COM(02) 594
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Thirty-first Financial Report concerning the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section 2001 financial year.
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Legal base: |
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Document originated: | 4 November 2002
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Deposited in Parliament: | 19 November 2002
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Department: | Environment, Food and Rural Affairs
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Basis of consideration: | EM of 29 November 2002
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Previous Committee Report: | None
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To be discussed in Council: | Shortly
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Committee's assessment: | Politically important
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Committee's decision: | Cleared
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Background
12.1 Council Regulation (EEC) No. 729/70[47]
on the financing of the Common Agricultural Policy requires the
Commission to submit each year a financial report on the administration
of the Guarantee Section of the European Guidance and Guarantee
Fund (EAGGF) during the preceding financial year. This is the
thirty-first such report, and covers the 2001 financial year,
which ran from 16 October 2000 to 15 October 2001.
The Commission report
12.2 Like the most recent reports, it comprises a short
written summary, together with certain key tables. More detailed
material which, prior to the 1995 report, had also been
included is now contained in a separate Commission working
document.
12.3 The work of the EAGGF is described under the following
seven main headings:
(1) Budget procedure;
(2) Cash position and management of appropriations;
(3) Analysis of budget implementation;
(4) Control measures;
(5) Clearance of accounts;
(6) Relationship with the European Parliament and the Court
of Auditors of the European Communities; and
(7) Basic rules governing the Guarantee Section, and amendments
made in 2001.
12.4 On budget procedure, the report notes that
the Berlin European Council on 24-25 March 1999 concluded with
the Agenda 2000 package, which introduced annual sub-ceilings
for CAP expenditure for the period 2000-2006, covering traditional
market expenditure (subhead 1a) and rural development expenditure
(subhead 1b); that the Resolution on budgetary discipline entered
into force on 1 October 2000; and that a new Interinstitutional
Agreement on budgetary discipline and improvement of the budgetary
procedure was adopted. It also observes that the financial ceilings
and the budgetary procedure incorporating these conclusions formally
provide for the Commission to present a letter of amendment to
the Preliminary Draft Budget in the autumn for the following year,
so that the budget estimates reflect the most recent developments.
12.5 The report then details the various steps following
the preliminary draft budget for 2001, which was drawn up by the
Commission in May 2000. The appropriations proposed for the Guarantee
Section of the EAGGF totalled 44,100 million, with 39,605
million for sub-head (a) and 4,495 million for subhead (b).
It also notes that, after interventions by the Council and then
the European Parliament, and the letter of amendment adopted by
the Commission itself in October 2000, the final budget for the
Guarantee Section adopted on 14 December 2000 totalled 38,802
million for subhead (a) and 4,495 million for subhead (b).
The latter figure equals the relevant budget ceiling, whereas
the former is 1,232 million below the ceiling. After allowing
for 500 million entered into the reserve to cover variations
in the euro/dollar exchange rate, the overall sum for 2001 totalled
just under 43,797 million. However, in February 2001, a
supplementary and amending budget was completed which incorporated
971 million of additional costs resulting from market support
measures for beef related to BSE. After a deduction of 245
million to reflect exchange rate revisions, this led to a net
increase in appropriations of 726 million.
12.6 On the cash position and management of appropriations,
the report notes that the budgetary authority approved four transfers
of appropriations between chapters of the EAGGF Guarantee Section
in 2001. There were no non-automatic carry-overs from 2000 to
2001, but, for the 2001 financial year, the budgetary authority
allowed the non-automatic carry-over of 99 million from
2001 to 2002.
12.7 The Commission's analysis of budget implementation
shows that total market expenditure under the Guarantee Section
in 2001 was 37,719 million, 2,315 million below the
agreed sub-ceiling and 1,809 million less than the appropriations
available. This sum is split between two broad categories
export refunds (which accounted for 3,401 million) and what
is known as intervention expenditure, but which consists of such
diverse elements as direct aid, storage, withdrawals, and other
intervention expenditure, and which accounted for the remaining
34,287 million.
12.8 As regards the detailed breakdown, about 80% of
total intervention expenditure was direct aid to producers, with
the remainder going on market support measures. Expenditure on
intervention storage rose from 951 million to 1,060
million; that on withdrawals amounted to 2,732 million,
and that on other intervention to 3,064 million. With the
exception of beef and veal, there were falls in public stocks
in every sector, but, during the year, their book value rose from
885 million to 984 million. In sectoral terms, expenditure
on arable crops at 17,405 million remained by far the most
significant, followed by beef at 6,054 million, olive oil
at 2,524 million, and milk at 1,907 million.
12.9 Expenditure on rural development and accompanying
measures under sub-heading 1 (b) totalled 4,363 million,
131 million below the sub-ceiling and the available appropriations.
12.10 In the section dealing with control measures,
the report refers briefly to the work carried out in connection
with the Integrated Administration and Control System (IACS),
olive oil agencies, and the part-financing of tighter controls
by Member States arising out of new Community obligations.
12.11 The Report notes that, during the 2001 financial
year, the Commission adopted four clearance of accounts
decisions, resulting in a recovery of 807 million from Member
States.
12.12 On relations with the European Parliament,
the Report notes that, together with the Council, the Parliament
forms the Community's budgetary authority, and is one of the Commission's
most important partners. It says that in 2001, EAGGF staff took
part in the dialogue established between the Commission and the
Parliament, and that, following debates in the Parliament, the
2002 budget was adopted by its President.
12.13 As regards the Court of Auditors, whose
purpose is to audit the Community accounts, the Report notes that
the Court produced during 2001 an annual report for the 2000 financial
year, and six special reports[48]
relating to various aspects of CAP expenditure.
12.14 On the basic rules governing the EAGGF Guarantee
Section, the Report lists all the base regulations.
The Government's view
12.15 In his Explanatory Memorandum of 29 November 2002,
the Parliamentary Under-Secretary of State at the Department for
Environment, Food and Rural Affairs (Lord Whitty) points out that
this document is simply a report, which he says has no new policy
implications. He expects it to be considered by the Council "shortly".
Conclusion
12.16 Since the document is an essentially factual
report on earlier expenditure, produced for the information of
the Council, we are clearing it. Nevertheless, it does touch upon
a number of important issues, and we therefore think it right
as in previous years to draw it to the attention
of the House.
47 OJ
No. L 94, 27.4.70, p.218. Back
48 Covering
the integrated administration and control system (IACS); the milk
quotas scheme; export refunds; refunds for potato starch and
cereal starch production and on aid for potato starch; financial
control of the structural funds; and the financing of measures
taken as a result of BSE. Back
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