7 EUROPEAN AGRICULTURAL GUIDANCE AND
GUARANTEE FUND: GUARANTEE SECTION
(25055)
14800/03
COM(03)680
| Thirty-second Financial Statement concerning the European Agricultural Guidance and Guarantee Fund (EAGGF) Guarantee Section - 2002 financial year.
|
| Legal base | — |
| Document originated | 12 November 2003
|
| Deposited in Parliament |
19 November 2003 |
| Department | Environment, Food and Rural Affairs
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| Basis of consideration |
EM of 1 December 2003 |
| Previous Committee Report |
None |
| To be discussed in Council
| Shortly |
| Committee's assessment | Politically important
|
| Committee's decision | Cleared
|
Background
7.1 Council Regulation (EEC) No. 729/70[17]
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-second such report, and covers the 2002 financial year,
which ran from 16 October 2001 to 15 October 2002.
The Commission report
7.2 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.
7.3 The work of the EAGGF is described under
the following seven main headings:
1 Budget procedure;
2 Cash position and management of appropriations;
3 Implementation of the budget;
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.
7.4 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 Inter-institutional
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.
7.5 The report then details the various
steps following the preliminary draft budget for 2002, which was
drawn up by the Commission in May 2001. The appropriations proposed
for the Guarantee Section of the EAGGF totalled 46,222 million,
with 41,627 million for sub-head (a) and 4,595 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 2001, the final adopted budget
for the Guarantee Section totalled 39,660 million for subhead
(a) and 4,595 million for subhead (b). The latter figure equals
the relevant budget ceiling, whereas the former is 2,332 million
below it. Excluding 250 million entered into the reserve to
cover variations in the euro/dollar exchange rate, the overall
sum for 2002 totalled 44,255 million.
7.6 On the cash position and management
of appropriations, the report notes that the budgetary authority
approved one transfer of appropriations between chapters of the
EAGGF Guarantee Section in 2002. There was an automatic carry-over
of €231 million from 2002, and the budgetary authority decided
upon the non-automatic carry-over of 84 million from 2002 to
2003.
7.7 The Commission's analysis of budget
implementation shows that total market expenditure under the
Guarantee Section in 2002 was 38,867 million, 3,125 million below
the agreed sub-ceiling and 793 million less than the appropriations
available. This sum is split between two broad categories export
refunds (which accounted for 3,432 million) and what is known
as intervention expenditure, but which consists of such diverse
elements as direct aid (€28,801 million), storage (€1,163
million), and other intervention-related expenditure (€3,479
million), and which accounted for the balance. In sectoral terms,
expenditure on arable crops at 18,590 million remained by far
the most significant, followed by beef at €7,072 million,
milk at 2,360 million and olive oil at 2,329 million. Overall
expenditure on plant products exceeded appropriations, but this
was more than offset by under-spends on animal products and veterinary
and plant health.
7.8 Expenditure on rural development and
accompanying measures under sub-heading 1 (b) totalled 4,349 million,
345 million below the sub-ceiling and the available appropriations.
7.9 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.
7.10 The report notes that, during the 2002
financial year, the Commission adopted six clearance of accounts
decisions, resulting in a recovery of 301 million from Member
States.
7.11 On relations with the European Parliament,
the report notes that, together with the Council, the Parliament
forms the Communitys budgetary authority, and is one of the Commission's
most important partners. It says that in 2002, EAGGF staff took
part in the dialogue established between the Commission and the
Parliament, and that, following debates in the Parliament, the
2003 budget was adopted by its President.
7.12 As regards the Court of Auditors,
whose purpose is to audit the Community accounts, the report notes
that the Court produced during 2002 an annual report for the 2001
financial year, and three special reports[18]
relating to various aspects of CAP expenditure.
7.13 On the basic rules governing the
EAGGF Guarantee Section, the report lists all the base regulations.
The Government's view
7.14 In his Explanatory Memorandum of 1
December 2003, 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 retrospective report,
which he says has no new policy implications. He expects it to
be considered by the Council shortly.
Conclusion
7.15 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.
17 OJNo.L94,27.4.70,p.218. Back
18
Covering the financial management of the common market organisation
in the banana sector, the Community's oilseeds support scheme,
and extensification and payment schemes for beef and veal. Back
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