Post on 19-Jun-2020
transcript
2016
Annual Activity
Report
Annexes
Directorate General
for Agriculture and
Rural Development
Ref. Ares(2017)2290989 - 04/05/2017
agri_aar_2016_annexes Page 2 of 273
Table of Contents
ANNEX 1: STATEMENT OF THE INTERNAL CONTROL COORDINATOR .............................................................................. 3 ANNEX 2: REPORTING – HUMAN RESOURCES, BETTER REGULATION, INFORMATION MANAGEMENT AND EXTERNAL
COMMUNICATION ........................................................................................................................................................ 4 2.2.1 HUMAN RESOURCE MANAGEMENT ....................................................................................................................... 4 2.2.2 BETTER REGULATION .......................................................................................................................................... 6 2.2.3 INFORMATION MANAGEMENT ASPECTS ................................................................................................................ 13 2.2.4 EXTERNAL COMMUNICATION ACTIVITIES ............................................................................................................... 14 ANNEX 3: DRAFT ANNUAL ACCOUNTS AND FINANCIAL REPORTS ................................................................................ 16 ANNEX 4: MATERIALITY CRITERIA ........................................................................................................................ 40 ANNEX 5: INTERNAL CONTROL TEMPLATE FOR BUDGET IMPLEMENTATION (ICT) .......................................................... 48 ANNEX 6: IMPLEMENTATION THROUGH NATIONAL OR INTERNATIONAL PUBLIC-SECTOR BODIES AND BODIES GOVERNED BY
PRIVATE LAW WITH A PUBLIC SECTOR MISSION (NOT APPLICABLE) ........................................................................................ 53 ANNEX 7: EAMR OF THE UNION DELEGATIONS (NOT APPLICABLE) ............................................................................ 53 ANNEX 8: DECENTRALISED AGENCIES (NOT APPLICABLE) .......................................................................................... 53 ANNEX 9: EVALUATIONS AND OTHER STUDIES FINALISED OR CANCELLED DURING THE YEAR ............................................ 54 ANNEX 10: SPECIFIC ANNEXES RELATED TO "FINANCIAL MANAGEMENT" ..................................................................... 62 ANNEX 11: SPECIFIC ANNEXES RELATED TO "ASSESSMENT OF THE EFFECTIVENESS OF THE INTERNAL CONTROL SYSTEMS" (NOT
APPLICABLE) ...................................................................................................................................................... 200 ANNEX 12: PERFORMANCE TABLES ...................................................................................................................... 201 ANNEX 13: INTERRUPTIONS, REDUCTIONS AND SUSPENSIONS ................................................................................... 259 ANNEX 14: COURT OF AUDITORS' SPECIAL REPORTS ................................................................................................ 263 ANNEX 15: ABBREVIATIONS ............................................................................................................................... 270
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ANNEX 1: Statement of the Internal Control Coordinator
I declare that in accordance with the Commission’s communication on clarification of the
responsibilities of the key actors in the domain of internal audit and internal control in the
Commission1, I have reported my advice and recommendations to the Director-General on the
overall state of internal control in the DG.
I hereby certify that the information provided in Section 2 of the present AAR and in its
annexes is, to the best of my knowledge, accurate and complete.”
28 April 2017
Rudolf MÖGELE Internal Control coordinator
1 Communication to the Commission: Clarification of the responsibilities of the key actors in the domain of
internal audit and internal control in the Commission; SEC(2003)59 of 21.01.2003.
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ANNEX 2: Reporting – Human Resources, Better Regulation, Information Management and External
Communication
2.2.1 Human Resource Management
Objective (mandatory): The DG deploys effectively its resources in support of the delivery of the Commission's priorities and core business, has a
competent and engaged workforce, which is driven by an effective and
gender-balanced management and which can deploy its full potential within supportive and healthy working conditions.
Indicator 1 (mandatory): Percentage of female representation in middle
management Source of data: HR Dashboard
Baseline (01/01/2016)
Target (2019) Latest known results (31/12/2016)
26.5% 35% Targets for each
Directorate-General adopted
by the Commission on 15 July 2015 – SEC(2015)336
30%
Indicator 2 (mandatory): Percentage of staff who feel that the Commission
cares about their well-being2 Source of data: Commission staff survey
Baseline (2014) Target Latest known results (2016)
31% Reach a result above
Commission average (35% in
2014) Target agreed at level of
resource director
Staff survey 2016: 32%
(COM 2016: 35%)
Indicator 3 (mandatory): Staff engagement index Source of data: Commission staff survey
Baseline (2014) Target Latest known results (2016)
67.6% Maintain a result above
Commission average (65% in
2014) Target agreed at level of
resource director
Staff survey 2016: 65%
(COM 2016: 64%)
Indicator: Average vacancy rate of available permanent posts Source: HR Dashboard
Baseline (2015) Target Latest known results (Feb 2016-Jan 2017)
5.6 % Vacancy rate < or =
Commission average (Jan 15-
Dec 15: 5.3 %) Target agreed at level of
resource director
6.4%
(COM: 3.9%)
2 This indicator may be replaced by a fit@work index on which DG HR is currently working.
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Indicator: HR capacity utilisation Definition: Staff time available for allocation to activities after deducting absences
(except annual leaves and flexitime Recuperation) and use of flexible working arrangements from the total number of available working days.
Source: HR Dashboard
Baseline (Dec. 2014-Nov. 2015)
Target Latest known results (May 2015-Aug 2016)
90.3 % Utilisation > or = Commission average
(Dec.14-Nov 15: 90.1 %) Target agreed at level of
resource director
98.8% (COM: 90.1%)
Indicator: Staff satisfaction with:
- job - private/ professional life balance
Source: DG HR staff survey 2013
Baseline
(31/12/2015)
Target Latest known results
(2016)
Job satisfaction: 70.5 %
Life balance: 53.3 %
Equal or better results than Commission average
(target agreed at level of resource director)
COM average: Job
satisfaction: 68.5 %, Life balance: 53.7 %
Job satisfaction: 74% (COM 2016: 76%)
Life balance: 58%
(COM 2016: 57%)
Indicator: Local Overheads
Source: HR Dashboard
Baseline
(23/01/2015)
Target (2016) Latest known results
(2016)
7.8 % Commission average: 7.7 %
(target agreed at level of
resource director)
AGRI: 7.2% Family DGs : 8;1%
COM: 6.4%
Main outputs in 2016:
Description Indicator Target Latest known results
Efficient and effective staff
allocation
vacancy rate = or < to Commission average
just after posts were returned to central
services
June 2016 AGRI: 4.7%
COM: 3.2%
Strategic, forward
planning HR management
posts returned to DG
HR (i.e. staff reduction and staff
redeployment)
within deadlines all payments
according to schedule
Women in
management positions
female representation
rate in middle management
3 appointments in
2016
1 appointment (first
nomination to MM)
A functioning job
market
% of vacant posts
which are published
(excluding posts foreseen for
compulsory mobility)
AD=60% on
31/12/2016
AST=65% on 31/12/2016
SC=60% on 31/12/2016
1st half of 20163:
AD: 52.1%
AST: 69.2% SC: 33.3%
Staff allocation overall job = or < Commission Job satisfaction
3 Due to the limited number of vacancies it was decided to put on hold the monitoring of these targets for
the remaining of the year.
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according to interest and
competences
satisfaction average results in next HR survey
2016: 74% (COM 2016: 76%)
Staff health sick leave rate = or < Commission average for the year
2016
2016 Q1-3: 4.9% (COM: 4.2%)
Implementation of
AGRI's well-being programme
number of events and
initiatives
Maintain or increase
compared to 2015
Increase of
activities: regular lunchtime activities
maintained in addition to the
organisation of Health Days in
May/June and
Career Weeks in October
Management of
administrative budget
Budget execution
(commitments)
> 95% by end of the
year
99.4%
2.2.2 Better Regulation
Objective (mandatory): Prepare new policy initiatives and manage the EU's acquis in line with better regulation practices to ensure that EU policy
objectives are achieved effectively and efficiently.
Indicator 1 (mandatory – monitored by the DGs concerned): Percentage of Impact assessments submitted by DG AGRI to the Regulatory Scrutiny Board
that received a favourable opinion on first submission.
Explanation: The opinion of the RSB will take into account the better regulation
practices followed for new policy initiatives. Gradual improvement of the percentage of positive opinions on first submission is an indicator of progress made by the DG in
applying better regulation practices. Source of data: -
Baseline 2015 Interim Milestone 2016
Target 2020 Latest known results
68% = Commission
average in 2014 NA for DG AGRI (no
Impact assessment
in 2015)
Positive trend
compared to DG's 2014
situation.
Positive trend
compared to DG's 2016
situation.
NA
Indicator 2 (mandatory – monitored by the DGs concerned): Percentage of the DG's primary regulatory acquis covered by retrospective evaluation
findings and Fitness Checks not older than five years.
Explanation: Better Regulation principles foresee that regulatory acquis is evaluated
at regular intervals. As evaluations help to identify any burdens, implementation problems, and the extent to which objectives have been achieved, the availability of
performance feedback is a prerequisite to introduce corrective measures allowing the acquis to stay fit for purpose.
Relevance of Indicator 2: The application of better regulation practices would progressively lead to the stock of legislative acquis covered by regular evaluations to
increase. Source of data: -
Baseline 2015 Interim Milestone 2016
Target 2020 Latest known results
Percentage of the
DG's primary
Positive trend
compared to
Positive trend
compared to
NA
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regulatory acquis covered by
retrospective evaluations and
Fitness Checks not older than five years.
- NA for DG AGRI
baseline interim milestone
Indicator: Common monitoring and evaluation framework for the CAP
towards 2020 Source: DG AGRI task Force on Monitoring and Evaluation
Baseline (2015) Target (2015) Latest known results
(2016)
Common Monitoring and
evaluation Framework in
place. Meetings of the expert group on M&E
(17.3.2015-25.6.2015-12.11.2015) CMEF
discussed in agri management meeting+2
meetings task force M&E Documentation for MS
available.
Comprehensive framework
for the monitoring and
evaluation of the whole CAP in place
- 4 meetings with the expert group on M&E;
- 2 meetings of DG AGRI task force on M&E;
-Starting the compilation of data
2 meetings of the expert
group on Monitoring and
Evaluation (24.05.2016 and 18.11.2016)
Datasets are already
available on the internet.
Indicator: Degree of implementation of the annual evaluation plan Source: Data collected by DG AGRI
Baseline (2015) Target (mid-term) Latest known results (2016)
100 % complete4 100 % of evaluations
completed/launched according to the initially set timetable
The evaluations to be
conducted in a given year are decided at senior management
level, based on the legal and policy requirements and
introduced in a rolling evaluation and studies plan
which is updated yearly.
100 % of evaluations
scheduled for launch were launched; staff working
document for POSEI
evaluation still to be completed.
Indicator: Degree of implementation of the annual studies plan set in the evaluation and studies plan
Source: Data collected by DG AGRI
Baseline (2015) Target (mid-term) Latest known results (2016)
100 %5 100 % of studies
completed/launched according to the initially set timetable
- Number of new studies launched: 6
- Number of studies
completed: 5 The studies to be conducted in
a given year are decided at senior management level,
based on the legal and policy
All planned studies
completed, studies launched6.
4 Following the better regulation guidelines, two evaluations have afterwards been relabelled as studies 5 While all procedures for new studies were launched, for one no contract was attributed 6 See annex 3 for information on studies that were dropped from the studies and evaluation plan.
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requirements and introduced in
a rolling evaluation and studies plan which is updated yearly.
Indicator: Contribution to the Commission Regulatory Fitness initiative
(REFIT) Source: DG AGRI files on simplification
Baseline (2015) Target Latest known results
(year)
Contribution and
exchanges with SecGen on REFIT initiatives. Timely
contribution to the REFIT platform screening
exercise: periodical
contribution to the "assessment fiches"
prepared by SecGen following requests received
by the REFIT Platform
Timely contribution to the
REFIT initiative upon request of the Secretariat
General7
100%
Main outputs in 2016:
Description Indicator Target Latest known results
COORDINATION OF
MONITORING AND EVALUATION OF
THE CAP • Coordination
of a common
monitoring and evaluation
framework for the CAP 2014-2020
• Analysis of results for use in
policy development (indicators, studies,
evaluations)
Coordination of the
internal Task Force on Monitoring and
Evaluation of the CAP
Organisation of 1
meeting per year8
1 meeting held
(11.05.2016) Additional discussions
in regular senior management meeting
Organisation of the meetings of the
expert group on "M&E of the CAP"
Organisation of 2 meetings per year
2 meetings organised. (24.05.2016;
18.11.2016)
EVALUATIONS
Assess the effectiveness,
efficiency and coherence of CAP
(1st and 2nd pillar)
instruments
Establishment of the
DG AGRI pluri-annual evaluation and
studies plan
DG AGRI
evaluation plan established/updat
ed on time for inclusion (as
annex) in the
management plan of year N+1
Evaluation plan
established on time
Evaluation reports,
analytical notes and quality assessments
Ongoing Done
Pilot projects Degree of implementation of EP
Pilot projects and preparatory actions
Number of new pilot projects /
preparatory actions launched:
4 (target for 2016).
4 pilot projects being prepared: call for
tenders will be published first quarter
2017. Planned pilot project
7 Target updated: REFIT has replaced the ABR + programme. 8 Target updated: there is no need anymore for 2 meetings per year.
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Number of new pilot projects /
preparatory actions
completed: 1 (target for 2016).
completed.
Reviewing the
potential for further
simplification in the CAP
Number of
Commission texts
(Commission proposals to the
legislators; Commission acts,
guidelines) adopted with a view to
simplify.
More than 5
December 2016
7 acts have been
adopted in view of
simplification in 2016: 1 RD (669/2016)
1 DP (141/2016) 5 CMO (3 DA/2 IA)
(public intervention/private
storage, wine, sugar, trade)
Contribution to the Commission
Regulatory Fitness initiative (REFIT)
Timely contribution to the REFIT initiative
including reaction to simplification
requests under the REFIT platform.
90% replies within deadlines
100%
Relations with EU institutions,
national parliaments, other
institutional stakeholders and
civil society,
including the participation in
meetings of the Council, the SCA
and working parties, European
Parliament, COMAGRI and
other committees,
as well as attendance to
trilogues (accompany &
follow-up on the ordinary legislative
procedure).
Questions/requests from other
Institutions, including Parliamentary
Questions, replied to within the deadline
Maintain the present high rate
of replies within deadline.
99% (Totals: Parliamentary
Questions AGRI CF: 483, Parliamentary
Questions AGRI ASOC: 741, Petitions
37, MEP letters to the
Commissioner: 72, Opinions from
National Parliaments: 7)
Participation of the
Commissioner and
DG AGRI's officials in high level meetings
with other EU institutions and
advisory groups (civil dialogue groups)
The Commissioner
represents the
Commission in the most important
meetings
Commissioner’s
participation in 2016:
6 times in EP plenary and 6 in COMAGRI.
DG AGRI's participation in all
plenaries and in all meetings of COMAGRI
EESC: in 2016 the Commissioner did not
attend an EESC
meeting Participation of DG
AGRI in: Section meetings
NAT: 6 Plenary: 3
COR: in 2016 the Commissioner did not
attended a COR
meeting Participation of DG
AGRI in: Section meeting NAT:
5 Plenary: 4
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DG AGRI's
participation in 2016: - Council: 12 times
- SCA: 25 times - WPs: 17 times
- trilogue meetings: 12 (for organics)
DG AGRI participation in pre-GRI: 31
DG AGRI participation
in Civil Dialogue Groups /working
groups/: 61 - FWG 13
- CDG 48
Relations with the
Court of Auditors
Number of overdue
recommendations in RAD9 addressed to
AGRI as chef de file
0 2
(February 2017)
Objective: To provide sound legal services and to ensure correct application and enforcement of the CAP law
Indicator: Proportion of positive opinions from the Legal service in Inter-
service consultations launched by DG AGRI
Source of data: Decide
Baseline (2015)
Target Latest known results (2016)
100% >90 % of consultations Target was fixed taking into account
a minimal margin of manoeuvre for legal disagreements/need to pursuit
proposal for policy issues.
100%
Indicator: Timeliness of treatment of notifications of state aid cases
Source of data:
Baseline (2015) Target Latest known results (2016)
100% 100% Legal requirement
100%
Indicator: Proportion of agreements from the Legal service to proposals
launched by DG AGRI in the context of the infringement procedure Source of data: NIF data base
Baseline (2015) Target Latest known results (2016)
100% 90% of consultation
Procedural requirement
Guidelines on the monthly cycle (04/2013)
100%
Main outputs in 2016:
Description Indicator Target Latest known results
DG AGRI proposals for
Proportion of positive opinions from the LS in
>90 % of consultations
100%
9 RAD ("Recommendations/Actions/Discharge") is a DG BUDG database to monitor the implementation of
European Court of Auditors, Council and European Parliament recommendations.
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legal acts need to comply with
EU legal framework
inter-service consultations launched
by DG AGRI
December 2016
Legal soundness
of DG AGRI positions needs
to be ensured,
and this, in a timely manner
Rapidity of response on
signataires submitted for paraphe on legal
issues and on notes
submitted asking for legal advice
>85 % dealt with
within deadlines laid down in the
vademecum fixing
the rules for legal consultation
December 2016
90.51%
Examination of notified and
alleged State
aids in the agricultural and
forestry sectors
Examination of notified State aid cases within
the statutory deadlines
and timely examination of all other State aid
cases (NN, CP …)
100% of cases to be handled within
the statutory
deadlines if any or foreseen within
the best Practice Code.
100% Legal requirement
Support DG
AGRI by
providing sound legal services
giving advice on the drafting of
legal texts in relation to
antitrust issues in the
agricultural
sector.
Rapidity of response to
consultations of the unit
(by way of e-mails or formally by signataires)
concerning legal questions on antitrust
law in the agricultural sector
90% within the
deadline of 2
working days for signataires
submitted in ARES and 10 working
days for notes and e-mail-
consultations.
100%
Management of complaints and
infringement proceedings
Appropriate administrative
treatment of all new complaint cases notified
No more than 5% of non-registered
files
100%
Management of notifications
made under Directive (EU)
2015/1535 on technical
standards
Timeliness of treatment of all new draft
technical received
100% of deadlines to be met
100%
Coordination DG
AGRI's replies to the European
Ombudsman (EO)
Timeliness of delivery of
replies to the EO
100% of SG
accepted deadlines to be
met
100%
Objective: To ensure an effective and efficient planning and programming process and to support the preparation and adoption of agricultural legislation
Indicator: Implementation of the performance culture in DG AGRI Source of data:
Baseline (2015) Target Latest known results
(2016)
Active involvement in
Budget Focused On Results initiative, including
the participation of Commissioner Hogan at
the BFOR conference
Continuous improvement The work on the
performance culture in DG AGRI is now producing
tangible results. Thanks to the work of the
working group on
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Development of an more focused performance
reporting in the AAR Creation of a network of
performance correspondents
performance reporting, the presentation of section 1 of
2015 Annual Activity Report has been improved and
clarifies the links between the DG/policy and the
results on the ground. DG AGRI contributed
actively to the "Budget focused on results"
initiative: preparation of the
regular meetings of the BFOR interservice working
group and the group of Commissioners,
participation of Commissioner Hogan in the
BFOR conference, ongoing contacts with central
services and other DGs to
share information.
Indicator: Timeliness of DG AGRI replies to Inter-service consultations Source of data: Decide
Baseline (2015) Target Latest known results (year)
101 out of 2055 (4.91%)
delayed
Steady reduction
The target is a permanent goal of DG
AGRI
91 out of 2157 (4,22%)
Main outputs in 2016:
Description Indicator Target Latest known results
Implementation of the
Commission
planning and programming
process
Percentage of elements of the Strategic Planning and
Programming (SPP) cycle
delivered on time
100 % 60%10
Delivery rate (adoption by the College):
- CWP - Other Agenda Planning (AP)
proposals
100 % CWP: 0% ( 0 out of 2)
Delegated and implementing act on
greening
(2016/AGRI/016 and 2016/AGRI/017)
scheduled for adoption early 2017.
Agenda Planning: 100%
Number of delays in DG AGRI replies to Interservice
Consultations (ISC)
Steady reduction
4,22%
10 The delivery of 2016-2020 Strategic Plan and 2016 Management Plan was delayed following the late
reception of instructions (choice of the corporate objectives and indicators orienting DGs strategic
planning).
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2.2.3 Information management aspects
Objective (mandatory): Information and knowledge in your DG is shared and reusable by other DGs. Important documents are registered, filed and
retrievable
Indicator (mandatory): Percentage of registered documents that are not filed11 (ratio)
Source of data: Hermes-Ares-Nomcom (HAN)12 statistics
Baseline Target Latest known results
(31/12/2016)
2014: 482 docs = 0.150%
2015: 924 docs = 0.24%
0% 0.20%
Indicator (mandatory): Percentage of HAN files readable/accessible by all units in the DG
Source of data: HAN statistics
Baseline Target Latest known results
(31/12/2016)
2015: 82.58% 75% 58.61%*
Indicator (mandatory): Percentage of HAN files shared with other DGs
Source of data: HAN statistics
Baseline Target Latest known results (31/12/2016)
2015: 0.5% 50% 0.21%**
* This is a decrease from the current situation (in 2015: 82.58% of files were accessible). This decrease reflects the share of audit directorate files of all DG AGRI
files.The upcoming decision of the audit directorate to limit their files visibility was
taken into account when we provided the target on this indicator. ** In line with the principle of sharing information within the Commission, we set a
long-term target of 50% to be achieved in the coming 5 years with a view to improve transparency and avoid duplications in filing at Commission level. As a first
step we will start proposing units to share visibility at the moment of creation of their new files. The analysis of the existing files that could be shared with other
DGs/Commission will be carried out after the expected major reorganisation of DG AGRI as all files will potentially be reattributed.
Main outputs in 2016:
Description Indicator Target Latest known results
Document
management
% of files in NOMCOM
where no documents are filed within the last 12
months from the total number of active files in
AGRI (including
subfiles)13
0% files in NOMCOM
where no documents are filed within the
last 12 months
7.9%
Access to documents
Respect of deadlines in answering requests for
documents
100 % of request for documents answered
within established deadlines
100% (197 requests in Gestdem + ca. 20
from national authorities)
Personal data protection
Notification of identified personal data
processings in DG AGRI
100 % of identified processings included
in the register of the
2016: 100% (34 identified personal
data processings, all
11 Each registered document must be filed in at least one official file of the Chef de file, as required by the
e-Domec policy rules (and by ICS 11 requirements). The indicator is to be measured via reporting tools
available in Ares. 12 Suite of tools designed to implement the e-Domec policy rules. 13 Indicator proposed further to the recommendation included in the IAC Audit report on document
management.
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DPO of which are in the register)
IT
infrastructure, tools and
services
Implementation of the
relevant parts of the Schéma Directeur (ICT
Investment Plan of DG AGRI)
95 % 98%
Servers' availability (averaged over one year)
≥ 99 % >99%
Information Systems
User Satisfaction
(positive assessment)
> 80 % 98%
Number of security breaches
No major security breaches
10, no major ones
2.2.4 External communication activities
Objective (mandatory): Citizens perceive that the EU is working to improve
their lives and engage with the EU. They feel that their concerns are taken
into consideration in European decision making and they know about their rights in the EU.
Indicator: Percentage of EU citizens having a positive image of the EU
Definition: Eurobarometer measures the state of public opinion in the EU Member
States. This global indicator is influenced by many factors, including the work of
other EU institutions and national governments, as well as political and economic factors, not just the communication actions of the Commission. It is relevant as a
proxy for the overall perception of the EU citizens. Positive visibility for the EU is the desirable corporate outcome of Commission communication, even if individual DGs’
actions may only make a small contribution. Source of data: Standard Eurobarometer (DG COMM budget) [monitored by DG
COMM here].
Baseline: November 2014 Target: 2020 Latest known results
(December 2016)
Total "Positive": 39% Neutral: 37 %
Total "Negative": 22%
Positive image of the EU ≥ 50%
Positive: 35% Neutral: 38%
Negative: 25%
(Don't know: 2%)
Specific objective: To build trust within the EU and among all citizens,
farmers and non-farmers, alike. The key issues of food security, climate change and environment protection as well as the maintenance of
sustainable rural areas are consistent features of the messaging and with the Commission's legal requirement to carry out information measures on
the CAP. For the general public, the objective is to raise awareness on the relevance
of EU support to agriculture and rural development through the CAP. For the stakeholders, the objective is to engage with stakeholders (mainly
farmers and other parties in rural areas) in order to further communicate
about the CAP to their constituencies and to the wider public.
Indicator: Public awareness of CAP Source: Eurobarometer
Baseline (2015) Target
The Latest Eurobarometer survey (field research October 2015,
results published on 6 January 2016) shows that 94% of
Europeans believe that agriculture and rural areas play an important role for their future (+ 2 percentage points since the
Maintain and if
possible increase
awareness of the CAP
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last survey in 2013) and that 69% have heard about the support that the EU gives farmers through its CAP (+ 5 percentage
points since the last survey in 2013). There is a broad consensus on the key priorities of the CAP and its contribution to the
strategic priorities of the Commission. The next Eurobarometer survey will be conducted in the last
quarter of 2017. The results will be published in first quarter of 2018.
Main outputs in 2016:
Description Indicator Target Latest known results
Main
communication actions:
Media and Web
6 study trips (positive
evaluation feedback), Ag.press e-platform
(maintain members as active users), Europa web
digital transformation
2016 All 6 study trips
organised as scheduled.
Ag.press members maintained at around
800 in 2016.
Europa web digital transformation
ongoing and will continue in 2017
Conferences,
fairs and events
Conference "Cork II" and
Conference "agricultural
markets outlook" (satisfaction feedback from
participants)
September and
December
2016
Both Conferences
successfully
organised. Full reports
Participation at Ag fairs in Berlin, Paris and Torino, EC
Open Days in Brussels
(number of visitors and degree of satisfaction with
the activities proposed)
2016 Participation at the Ag fairs in Berlin and
Paris, EC Open Days
in Brussels but not in Torino as DG SANTE
decided to step down.
Grants Co-financing 15 to 20 "information measures on
the CAP" following the last
call for proposals
May 2016 – April 2017
18 information measures on the CAP
have been co-
financed in 2016 (Grants)
Corporate
communication
Campaign to be conducted
by DG COMM
2016 Conducted by DG
COMM and ongoing
Annual communication spending (based on estimated commitments):
Baseline (2015): Target
(2016):
Total amount spent Total of FTEs working on
external communication
€ 8 000 000 € 4 000 000 € 4.000.000 Of which
€ 2.500.000 for "grants"
and € 1.500.000 for all other
(Direct) actions
21
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ANNEX 3: Draft annual accounts and financial reports
1. Financial reports
1.1 Commitments and payments (tables 1 and 2)
Overall, in 2016, the execution rate of commitment appropriations of DG AGRI remained at the same high level as last year reaching 96.35% in 2016 (97,39% in
2015). The execution rate of payment appropriations has also globally remained
unchanged (96,61% in 2016 compared to 97,59% in 2015). The total amount committed in 2016 amounts to EUR 65.447,2 million and the total amount paid in
2016 amounts to EUR 56.793,9 million.
– With regard to « shared management expenditure » for rural development,
the amount committed in 2016 was EUR 18.650,81 million (EUR 20.121,53 million in 2015), representing 96,80% of the available appropriations. The
amount paid in 2016 was EUR 12.346,05 million (EUR 11.780,7 million in 2015), representing 99,90% of the available appropriations. Both
commitments and payments remain at high levels since the 2007-2013
programming period has reached the end (augmented payments) and the implementation of the 2014-2020 programs is increasing speed.
– For pre-accession aid related to rural development, EUR 112 million was committed in 2016 (118 in 2015) representing 98,51% of the available
appropriations. EUR 339,24 million was paid in 2016 (compared to 201,9 in 2015), representing 99,50 % of the available appropriations.
– With regard to « shared management expenditure » for EAGF, the amount committed in 2016 was EUR 44.221,2 million (44.883,5 in 2015)
representing 96,17% of the available appropriations. The amount paid in
2016 was EUR 44.036,44 million, representing 95,77 % of the available appropriations (compared to 44.883,5 in 2015).
– With regard to « direct management expenditure », the amount committed in 2016 was EUR 73,7 million (89.6 in 2015) representing 88.55% of the
available appropriations. The amount paid was 72,22 million EUR (80,3 in 2015), i.e. 69.39% of the available appropriations.
Expenditure
Commitments Payments
Crédits Exécution Crédits Exécution
Direct expenses 83,280,001.83 73,741,427.96 88.55% 104,078,949.07 72,221,278.42 69.39%
FEAGA 45,982,018,698.06 44,221,202,321.60 96.17% 45,982,018,698.06 44,036,442,654.43 95.77%
shared Mgt
Rural Development 19,268,278,927.14 18,650,817,761.73 96.80% 12,358,725,432.19 12,346,055,292.13 99.90%
shared Mgt
Preadhesion 113,688,652.59 112,000,000.00 98.51% 340,931,451.43 339,242,762.15 99.50%
shared / decentr Mgt
TOTAL 65,447,266,279.62 63,057,761,511.29 96.35% 58,785,754,530.75 56,793,961,987.13 96.61%
agri_aar_2016_annexes Page 17 of 273
1.2 Unused balance of Commitments (table 3)
Circuits RAL
Direct expenses 60,068,243.26
FEAGA 184,759,667.17
shared Mgt
Rural Development 29,622,475,347.17
shared Mgt
Preadhesion 337,693,932.86
shared / decentralised Mgt
TOTAL 30,204,997,190.46
The unused balance on commitments, commonly known as budgetary RAL (Reste A Liquider), was EUR 30.205 million at the end of 2016 (25.281 million in 2015), of
which EUR 29.622,4 million relates to rural development, EUR 337,6 million to pre-accession aid, EUR 184,7 million to EAGF and EUR 60 million to direct management
expenditure.
1.3 Payment time limits (table 6a/b)
As far as payment time limits are concerned, the progress made during last years
remained stable:
For «direct management expenditure » (see table 6a), the average delay remains
stable at 13 days in 2016 (same as in 2015). 45 payments were made beyond the allowed payment time limit (28 payments in 2015), which represents 4,4% of the
total number of payments (2,9% in 2015).
For « rural development » (see table 6b), the level of payment delays remains at a
high level in 2016. 82 payments were made beyond the allowed payment time limit
(against 123 in 2015) which represents 9,6% of the total number of payments. The average delay has decreased at 33 days (38 days in 2015).
agri_aar_2016_annexes Page 18 of 273
1.4 Revenue and income
The total income/revenu recognised for DG AGRI corresponds to EUR 2.913,23
million in 2016, while the amount cashed is EUR 2.871,57 million. At the end of 2016, EUR 41,6 million is therefore still owed to DG AGRI (EUR 110,9 million in
2015).
The income/revenue in 2016 concerning the EAGF and EAFRD funds amounts to EUR 2.853,89 million, of which EUR 2.530,2 million for EAGF and EUR 323,6 million for
EAFRD and EAAGF-O. The additional amount carried-over from previous year is EUR 14,6 ( EUR 1,1 million in 2015).
The budgetary regularised income for EAGF corresponds to a total amount of EUR 2.527,1 million in 2016 (EUR 1.631,6 million in 2015) of assigned revenue under
EAGF linked to milk levies, irregularities, conformity clearance14. An additional amount of EUR 3 million still has to be recovered at year-end.(total income/revenue
related to EAGF amounts to EUR 2.530,2 million)
With regard to the « ageing balance of recovery orders » at 31.12.2016, no significant movement was registered for old recovery orders issued between 1998
and 2004 (-3,8% in 2016; -1,2% in 2014, -0,2% in 2013; -3% in 2012; -5% in 2011).
Annexes :
Table 1 : Commitments
Table 2 : Payments Table 3 : Commitments to be settled
Table 4 : Balance Sheet
Table 5 : Statement of Financial Performance Table 5 Bis: Off Balance Sheet
Table 6 : Average Payment Times Table 7 : Income
Table 8 : Recovery of undue Payments Table 9 : Ageing Balance of Recovery Orders
Table 10 : Waivers of Recovery Orders Table 11 : Negotiated Procedures (excluding Building Contracts)
Table 12 : Summary of Procedures (excluding Building Contracts)
Table 13 : Building Contracts Table 14 : Contracts declared Secret
14 This amount includes EUR 1.593,64 million for income line 6701 (clearance), EUR 118,3 million
for income line 6702 (irregularities), EUR 815 million for income line 6703 (milk).
Outstanding
Chapter Current year RO Carried over RO Total Current Year RO Carried over RO Total balance
1 2 3=1+2 4 5 6=4+5 7=3-6
61 REPAYMENT OF MISCELLANEOUS EXPENDITURE 0.00 4,659,319.52 4,659,319.52 0.00 0.00 0.00 4,659,319.52
65 FINANCIAL CORRECTIONS 7,510,368.55 14,228,992.77 21,739,361.32 2,433,175.15 4,099,537.93 6,532,713.08 15,206,648.24
67
REVENUE CONCERNING THE EUROPEAN
AGRICULTURE GUARANTEE FUND AND THE
EUROPEAN AGRICULTURAL FUND FOR RURAL
DEVELOPMENT
2,853,896,730.39 14,616,889.29 2,868,513,619.68 2,850,361,799.02 14,616,889.29 2,864,978,688.31 21,794,654.25
90 MISCELLANEOUS REVENUE 67,102.12 0.00 67,102.12 67,102.12 0.00 67,102.12 0.00
2,879,733,923.94 33,505,201.58 2,913,239,125.52 2,852,862,076.29 18,716,427.22 2,871,578,503.51 41,660,622.01
TABLE 7 : SITUATION ON REVENUE AND INCOME IN 2016
Revenue and income recognized Revenue and income cashed from
Total DG AGRI
agri_aar_2016_annexes Page 19 of 273
2. Draft annual accounts
2.1 Accounting principles and methods
The annual accounts of DG AGRI have been prepared in accordance with the
generally accepted accounting principles. Estimates have been made, where necessary, in accordance with the methodology agreed upon with the services of the
Accountant of the European Commission.
It should be noted that the balance sheet and economic outturn account of
Directorate General, presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this
Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's
accounts since they are managed centrally by DG Budget, on whose balance sheet and economic outturn account they appear.
Other items not included are:
- the intangible assets (IT software bought externally) or the tangible fixed assets (hardware, technical equipment, office furniture, buildings)
declared/recorded by DG DIGIT and by OIB respectively;
- personnel and management expenses which are managed centrally;
- the appropriation of the net result of the year and of prior years, except for the opening balance in 2005. As the accumulated result of the Commission is
not split amongst the various Directorates-General, the balance sheet presented here is not in equilibrium.
Additionally, the figures included in tables 4 and 5 are, at this date, still subject to
audit by the Court of Auditors. Thus, it is possible that amounts included in these tables may have to be adjusted following this audit.
2.2 Acronyms
EAGF: European Agricultural Guarantee Fund
EAFRD: European Agriculture Fund for Rural Development
EAGGF : European Agricultural Guarantee and Guidance Fund
agri_aar_2016_annexes Page 20 of 273
2.3 Balance Sheet
TABLE 4 : BALANCE SHEET AGRI
BALANCE SHEET 2016 2015
A.I. NON CURRENT ASSETS 4,199,977,973.56 4,744,734,690.82
A.I.1. Intangible Assets 8,726,583.86 6,630,602.17
A.I.5. Non-Current Pre-
Financing 3,491,336,147.23 3,881,631,309.30
A.I.6. Non-Cur Exch Receiv &
Non-Ex Recoverab 699,915,242.47 856,472,779.35
A.II. CURRENT ASSETS 3,465,866,013.22 4,188,751,142.18
A.II.2. Current Pre-Financing 1,458,534,907.86 1,311,961,079.37
A.II.3. Curr Exch Receiv
&Non-Ex Recoverables 2,007,331,105.36 2,876,790,062.81
ASSETS 7,665,843,986.78 8,933,485,833.00
P.I. NON CURRENT LIABILITIES (148,550,431.58) (129,180,308.55)
P.I.2. Non-Current Provisions (148,550,431.58) (129,180,308.55)
P.II. CURRENT LIABILITIES (62,887,820,568.85) (62,533,823,852.65)
P.II.4. Current Payables (12,657,676,460.23) (9,273,761,512.33)
P.II.5. Current Accrued
Charges &Defrd Income (50,230,144,108.62) (53,260,062,340.32)
LIABILITIES (63,036,371,000.43) (62,663,004,161.20)
NET ASSETS (ASSETS less
LIABILITIES) (55,370,527,013.65) (53,729,518,328.20)
P.III.2. Accumulated Surplus / Deficit 173,232,065,358.66 113,738,292,917.78
Non-allocated central (surplus)/deficit* (117,861,538,345.01) (60,008,774,589.58)
TOTAL
Assets
Non-current assets
Non-Current pre-financing: it concerns mainly shared management expenditure but
also indirect management. For shared management it includes 3.170.830.343,44€
which corresponds to the total pre-financing paid in 2014, 2015 and 2016 to Member States for the programming period 2014-2020 (EAFRD) for which the period of
settlement exceeds one year and 4.506.999,91€ from one IPA I program that will be to be recovered from the Member State only after 2017 (since the eligibility period
for this program ends at 31/12/2017). It also includes 306.361.068,41€ advances paid by Member States to beneficiaries and reimbursed from EAFRD and EAGF funds
and 9.637.735,47 € pre-financing paid to third countries for the pre-adhesion instrument for rural development.
agri_aar_2016_annexes Page 21 of 273
Non-Current exchange receivables and non-exchange recoverable: it concerns not yet executed clearance decisions under shared management (632.832.496€ for
EAGF and 67.082.746€ for EAFRD). The period of settlement exceeds one year.
Current assets
Current pre-financing: the amounts have remained at the same level during 2016
and 2015. This is due to the clearing of most of the open pre-financing for the majority of the programs of the 2007-2013 period (EAFRD) –the clearing was
presented as "estimated" in 2015 and it actually took place in 2016. An amount of 794.992.987,23€ from this item relates to shared management (pre-financing that
should be recuperated from the Member-States related to the 2007-2013 programs) and indirect management expenditure. The amount of 658,289,583.47€ concerns
FEI and advances paid by Member States to beneficiaries and reimbursed from EAFRD and EAGF funds that should be used by the final beneficiaries within 2017.
The remaining 5,252,337.16€ concerns open pre-financing from direct management
contracts.
Non-Exchange receivables: EUR 2.007,33 million are owed to DG AGRI by Member
States (99%) and third countries (1%). The amount owed by Member States concerns non-exchange transactions; it includes mostly amounts to be recovered
under EAGF, EAFRD and EAGGF Guidance section, TRDI and Sapard (financing period 2000-2006) for irregularities committed by final beneficiaries and detected by
the Member States (for EUR 1.972,05 million); a value reduction of EUR 959,02 million has been applied to these receivables. It also includes the short term amount
of the not yet executed clearance decisions under EAGF and EAFRD of EUR 967.2
million and various amounts receivables/adjustments of EUR 270,7 million.
Liabilities
Non-current liabilities
Long-term provisions: this amount mainly relates to the estimate of potential future
expenses resulting from court cases awaiting judgement.
Current liabilities
Accounts payable: this item concerns amounts payable to private firms and to Members States. 99% of accounts payable relates to amounts payable to Member
States under EAGF, EAGGF Guidance section (2000-2006) and EAFRD. It includes
amounts already requested by Member States but not yet paid.
Accrued charges: this item includes an estimate of the amounts which Member
States and other beneficiaries are entitled to claim (accrued charges).
The total short-term liabilities remain roughly the same as in 2015.
agri_aar_2016_annexes Page 22 of 273
2.4 Economic Outturn Account
TABLE 5 : STATEMENT OF FINANCIAL PERFORMANCE AGRI
STATEMENT OF FINANCIAL PERFORMANCE 2016 2015
II.1 REVENUES -€1,923,198,107 -€2,263,635,779
II.1.1. NON-EXCHANGE REVENUES -€1,925,659,159 -€2,264,173,040
II.1.1.5. RECOVERY OF EXPENSES -€1,758,705,086 -€1,399,221,822
II.1.1.6. OTHER NON-EXCHANGE REVENUES -€166,954,073 -€864,951,217
II.1.2. EXCHANGE REVENUES €2,461,052 €537,260
II.1.2.1. FINANCIAL INCOME -€58,931 -€2,061,802
II.1.2.2. OTHER EXCHANGE REVENUE €2,519,982 €2,599,063
II.2. EXPENSES €57,394,698,801 €61,757,408,220
II.2. EXPENSES €57,394,698,801 €61,757,408,220
II.2.10.OTHER EXPENSES €51,416,752 €133,772,680
II.2.1. EXP IMPLEM BY MEMBER STATES (SHARED) €57,137,834,449 €61,435,265,052
II.2.2. EXP IMPLEM BY COMMISS&EX.AGENC. (DM) €32,301,048 €33,302,818
II.2.4. EXP IMPL BY 3RD CNTR & INT ORG (IM) €165,281,630 €92,970,097
II.2.6. STAFF AND PENSION COSTS -€416,396 -€1,054,713
II.2.8. FINANCE COSTS €8,281,319 €63,152,286
STATEMENT OF FINANCIAL PERFORMANCE €55,471,500,694 €59,493,772,441
Surplus/Deficit from activities
Exchange and Non-Exchange Revenue
Almost all of the revenue result from non-exchange transactions, which amounts to
EUR 1.925,66 million; it corresponds to recovery of expenses due to - irregularities (EUR 97,92 million) or - financial and conformity clearance decisions (EUR 1.660,34
million) and some other corrections for previous financial years of EUR 0,43 million. The revenue from other non-exchange transactions amounts up to EUR 166,95
million and corresponds mainly to restoring to profit old provisions for bad or doubtful debts that have been previously made but are no longer required. The
decrease compared to last year is due to the withdrawal of the milk quotas and consequently the agricultural milk levies.
Expenses:
99,5% of the expenses relate to shared management expenditure comprising EAGF, EAFRD, EAGGF Guidance section, SAPARD and IPARD:
Under the heading "II.2.1 "Expenses implemented by MS" the EAGF amount corresponds to EUR 44.147.7 million;
The amount for SAPARD-EAGGF Guidance section 2000-2006 and EAFRD under shared management corresponds to EUR 12.990,08 million.
agri_aar_2016_annexes Page 23 of 273
Annex 3 Financial Reports - DG AGRI - Financial Year 2016
Table 1 : Commitments
Table 2 : Payments
Table 3 : Commitments to be settled
Table 4 : Balance Sheet
Table 5 : Statement of Financial Performance
Table 5 Bis: Off Balance Sheet
Table 6 : Average Payment Times
Table 7 : Income
Table 8 : Recovery of undue Payments
Table 9 : Ageing Balance of Recovery Orders
Table 10 : Waivers of Recovery Orders
Table 11 : Negotiated Procedures (excluding Building Contracts)
Table 12 : Summary of Procedures (excluding Building Contracts)
Table 13 : Building Contracts
Table 14 : Contracts declared Secret
agri_aar_2016_annexes Page 24 of 273
TABLE 1: OUTTURN ON COMMITMENT APPROPRIATIONS IN 2016 (in Mio €)
Commitment appropriations
authorised
Commitments made
%
1 2 3=2/1
Title 05 Agriculture and rural development
05 05 01 Administrative expenditure of the 'Agriculture and rural development' policy area
22,65678419 18,721376 82,63 %
05 02 Improving the competitiveness of the agricultural sector through interventions in agricultural markets
3254,519775 3135,7958 96,35 %
05 03 Direct payments aimed at contributing to farm incomes, limiting farm income variability and meeting environment and climate objectives
42626,22344 40984,1314 96,15 %
05 04 Rural development 19293,81999 18675,9392 96,80 %
05 05 Instrument for Pre-accession Assistance - Agriculture and rural development
113,6886526 112 98,51 %
05 06 International aspects of the 'Agriculture and rural development' policy area
4,404518 4,40354171 99,98 %
05 07 Audit of agricultural expenditure financed by the European Agricultural Guarantee Fund (EAGF)
102,329 102,323671 99,99 %
05 08 Policy strategy and coordination of the 'Agriculture and rural development' policy area
27,40350282 24,4464491 89,21 %
05 09 Horizon 2020 - Research and innovation related to agriculture
2,22061955 0 0,00 %
Total Title 05 65447,26628 63057,7615 96,35%
Total DG AGRI 65447,26628 63057,7615 96,35 %
* Commitment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous commitment appropriations for the period (e.g. internal and external assigned revenue).
0, %
20, %
40, %
60, %
80, %
100, %
120, %
% Outturn on commitment appropriations
agri_aar_2016_annexes Page 25 of 273
TABLE 2: OUTTURN ON PAYMENT APPROPRIATIONS IN 2016 (in Mio €)
Chapter Payment
appropriations authorised *
Payments made
%
1 2 3=2/1
Title 05 Agriculture and rural development
05 05 01 Administrative expenditure of the 'Agriculture and rural development' policy area
32,6769346 20,73815554 63,46 %
05 02 Improving the competitiveness of the agricultural sector through interventions in agricultural markets
3258,57992 3127,902558 95,99 %
05 03 Direct payments aimed at contributing to farm incomes, limiting farm income variability and meeting environment and climate objectives
42626,22344 40808,72809 95,74 %
05 04 Rural development 12381,59477 12364,99864 99,87 %
05 05 Instrument for Pre-accession Assistance - Agriculture and rural development
340,9314514 339,2427622 99,50 %
05 06 International aspects of the 'Agriculture and rural development' policy area
4,404518 4,40354171 99,98 %
05 07 Audit of agricultural expenditure financed by the European Agricultural Guarantee Fund (EAGF)
102,329 102,323671 99,99 %
05 08 Policy strategy and coordination of the 'Agriculture and rural development' policy area
36,79388008 25,62456823 69,64 %
05 09 Horizon 2020 - Research and innovation related to agriculture
2,22061955 0 0,00 %
Total Title 05 58785,75453 56793,96199 96,61%
Total DG AGRI 58785,75453 56793,96199 96,61 %
* Payment appropriations authorised include, in addition to the budget voted by the legislative authority, appropriations carried over from the previous exercise, budget amendments as well as miscellaneous payment appropriations for the period (e.g. internal and external assigned revenue).
0, %
20, %
40, %
60, %
80, %
100, %
120, %
="% Outturn on payment appropriations"
agri_aar_2016_annexes Page 26 of 273
Table 1-2: Execution 2016
Expenditure
Commitments
Payments
Circuits RAL
Crédits Exécution Crédits Exécution
Direct expenses 83.280.001,83 73.741.427,96 88,55% 104.078.949,07 72.221.278,42 68,04% Direct expenses 60.068.243,26
FEAGA 45.982.018.698,06 44.221.202.321,60 96,17% 45.982.018.698,06 44.036.442.654,43 95,77% FEAGA 184.759.667,17
shared Mgt shared Mgt
Rural Development 19.268.278.927,14 18.650.817.761,73 96,80% 12.358.725.432,19 12.346.055.292,13 99,90% Rural Development 29.622.475.347,17
shared Mgt shared Mgt
Preadhésion 113.688.652,59 112.000.000,00 98,51% 340.931.451,43 339.242.762,15 99,50% Preadhesion 337.693.932,86
shared / decentralised Mgt
shared / decentralised Mgt
TOTAL 65.447.266.279,62 63.057.761.511,29 96,35% 58.785.754.230,75 56.793.961.987,13 96,61% TOTAL 30.204.997.190,46
agri_aar_2016_annexes Page 27 of 273
TABLE 3 : BREAKDOWN OF COMMITMENTS TO BE SETTLED AT 31/12/2016 (in Mio €)
2016 Commitments to be settled Commitments to be
settled from
Total of commitments to be settled at end
Total of commitments to be settled at end
Chapter Commitments 2016 Payments 2016 RAL 2016
% to be settled
financial years previous to 2016
of financial year 2016(incl corrections)
of financial year 2015 (incl. corrections)
1 2 3=1-2 4=1-2/1 5 6=3+5 7
Title 05 : Agriculture and rural development
05 05 01 Administrative expenditure of the 'Agriculture and rural development' policy area
18,64455231 11,56 7,08207117 37,98 % 0,00 7,08 10,02
05 02
Improving the competitiveness of the agricultural sector through interventions in agricultural markets
3265,717758 3256,36 9,35631209 0,29 % 0,00 9,36 1,63
05 03
Direct payments aimed at contributing to farm incomes, limiting farm income variability and meeting environment and climate objectives
42741,37755 42565,97 175,4033551 0,41 % 0,00 175,40 0,00
05 04 Rural development 18676,98828 513,57 18163,42294 97,25 % 11.472,90 29.636,32 24641,10
05 05 Instrument for Pre-accession Assistance - Agriculture and rural development
112 0,00 112 100,00 % 225,69 337,69 584,06
05 06 International aspects of the 'Agriculture and rural development' policy area
4,40354171 4,40 0 0,00 % 0,00 0,00 0,00
05 07
Audit of agricultural expenditure financed by the European Agricultural Guarantee Fund (EAGF)
102,4269274 102,43 0 0,00 % 0,00 0,00 0,00
05 08 Policy strategy and coordination of the 'Agriculture and rural development' policy area
24,44644911 9,02 15,42872725 63,11 % 23,73 39,16 43,85
Total Title 05 64946,00506 46463,31 18482,69341 28,46% 11722,32077 30205,01418 25280,657
Total DG AGRI 64946,00506 46463,31 18482,69341 28,46 % 11722,32077 30205,01418 25280,657
agri_aar_2016_annexes Page 28 of 273
0,00
5.000,00
10.000,00
15.000,00
20.000,00
25.000,00
30.000,00
35.000,00
="Breakdown of Commitments remaining to be settled (in Mio EUR)"
agri_aar_2016_annexes Page 29 of 273
TABLE 4 : BALANCE SHEET AGRI
BALANCE SHEET 2016 2015
A.I. NON CURRENT ASSETS 4,199,977,973.56 4,744,734,690.82
A.I.1. Intangible Assets 8,726,583.86 6,630,602.17
A.I.5. Non-Current Pre-
Financing 3,491,336,147.23 3,881,631,309.30
A.I.6. Non-Cur Exch Receiv &
Non-Ex Recoverab 699,915,242.47 856,472,779.35
A.II. CURRENT ASSETS 3,465,866,013.22 4,188,751,142.18
A.II.2. Current Pre-Financing 1,458,534,907.86 1,311,961,079.37
A.II.3. Curr Exch Receiv
&Non-Ex Recoverables 2,007,331,105.36 2,876,790,062.81
ASSETS 7,665,843,986.78 8,933,485,833.00
P.I. NON CURRENT LIABILITIES (148,550,431.58) (129,180,308.55)
P.I.2. Non-Current Provisions (148,550,431.58) (129,180,308.55)
P.II. CURRENT LIABILITIES (62,887,820,568.85) (62,533,823,852.65)
P.II.4. Current Payables (12,657,676,460.23) (9,273,761,512.33)
P.II.5. Current Accrued
Charges &Defrd Income (50,230,144,108.62) (53,260,062,340.32)
LIABILITIES (63,036,371,000.43) (62,663,004,161.20)
NET ASSETS (ASSETS less
LIABILITIES) (55,370,527,013.65) (53,729,518,328.20)
P.III.2. Accumulated Surplus / Deficit 173,232,065,358.66 113,738,292,917.78
Non-allocated central (surplus)/deficit* (117,861,538,345.01) (60,008,774,589.58)
TOTAL
agri_aar_2016_annexes Page 30 of 273
TABLE 5 : STATEMENT OF FINANCIAL PERFORMANCE AGRI
STATEMENT OF FINANCIAL PERFORMANCE 2016 2015
II.1 REVENUES -€1.923.198.107 -€2.263.635.779
II.1.1. NON-EXCHANGE REVENUES -€1.925.659.159 -€2.264.173.040
II.1.1.5. RECOVERY OF EXPENSES -€1.758.705.086 -€1.399.221.822
II.1.1.6. OTHER NON-EXCHANGE REVENUES -€166.954.073 -€864.951.217
II.1.2. EXCHANGE REVENUES €2.461.052 €537.260
II.1.2.1. FINANCIAL INCOME -€58.931 -€2.061.802
II.1.2.2. OTHER EXCHANGE REVENUE €2.519.982 €2.599.063
II.2. EXPENSES €57.394.698.801 €61.757.408.220
II.2. EXPENSES €57.394.698.801 €61.757.408.220
II.2.10.OTHER EXPENSES €51.416.752 €133.772.680
II.2.1. EXP IMPLEM BY MEMBER STATES (SHARED) €57.137.834.449 €61.435.265.052
II.2.2. EXP IMPLEM BY COMMISS&EX.AGENC. (DM) €32.301.048 €33.302.818
II.2.4. EXP IMPL BY 3RD CNTR & INT ORG (IM) €165.281.630 €92.970.097
II.2.6. STAFF AND PENSION COSTS -€416.396 -€1.054.713
II.2.8. FINANCE COSTS €8.281.319 €63.152.286
STATEMENT OF FINANCIAL PERFORMANCE €55.471.500.694 €59.493.772.441
Explanatory Notes (facultative):
It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.
agri_aar_2016_annexes Page 31 of 273
TABLE 5bis : OFF BALANCE SHEET AGRI
OFF BALANCE 2016 2015
OB.1. Contingent Assets 226.694,50 56.623,37
GR for performance 0,00 0,00
GR for pre-financing 226.694,50 56.623,37
OB.2. Contingent Liabilities -1.711.244.940,47 -1.377.033.549,91
OB.2.3. CL EAGGF Guarantee -1.711.244.940,47 -1.377.033.549,91
OB.3. Other Significant Disclosures -69.818.997.920,14 -84.500.667.279,33
OB.3.2. Comm against app. not yet consumed -12.535.347.780,14 -8.567.417.644,33
OB.3.3.1 Structural operations -57.283.650.140,00 -75.933.249.635,00
OB.4. Balancing Accounts 76.447.940.928,65 90.795.568.968,41
OB.4. Balancing Accounts 76.447.940.928,65 90.795.568.968,41
OFF BALANCE 4.917.924.762,54 4.917.924.762,54
Explanatory Notes (facultative):
It should be noted that the balance sheet and statement of financial performance presented in Annex 3 to this Annual Activity Report, represent only the assets, liabilities, expenses and revenues that are under the control of this Directorate General. Significant amounts such as own resource revenues and cash held in Commission bank accounts are not included in this Directorate General's accounts since they are managed centrally by DG Budget, on whose balance sheet and statement of financial performance they appear. Furthermore, since the accumulated result of the Commission is not split amongst the various Directorates General, it can be seen that the balance sheet presented here is not in equilibrium. Additionally, the figures included in tables 4 and 5 are provisional since they are, at this date, still subject to audit by the Court of Auditors. It is thus possible that amounts included in these tables may have to be adjusted following this audit.
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TABLE 6: AVERAGE PAYMENT TIMES FOR 2016 - DG AGRI
Legal Times
Maximum Payment
Time (Days)
Total Number of Payments
Nbr of Payments
within Time Limit
Percentage
Average Payment Times
(Days)
Nbr of Late Payments
Percentage
Average Payment
Times (Days)
30 939 904 96,27 % 9,672566372 35 3,73 % 41,68571429
45 838 756 90,21 % 22,25 82 9,79 % 106,3170732
60 24 24 100,00 % 35,66666667
90 50 41 82,00 % 48,07317073 9 18,00 % 97,22222222
Total Number of Payments
1851 1725 93,19 % 126 6,81 %
Average Net Payment Time
21,3095624
16,45913043 87,71428571
Average Gross Payment Time
72,48946515
63,46144928 196,0873016
Target Times
Target Payment
Time (Days)
Total Number of Payments
Nbr of Payments
within Target Time
Percentage
Average Payment Times
(Days)
Nbr of Late Payments
Percentage
Average Payment
Times (Days)
20 31 28 90,32 % 11,64285714 3 9,68 % 22,66666667
30 298 158 53,02 % 15,79746835 140 46,98 % 76,60714286
Total Number of Payments
329 186 56,53 % 143 43,47 %
Average Net Payment Time
41,38297872
15,17204301 75,47552448
Average Gross Payment Time
311,9513678
354,3064516 256,8601399
Suspensions
Average Report
Approval Suspen-
sion Days
Average Payment Suspen-
sion Days
Number of
Suspen-ded Pay-
ments
% of Total
Number
Total Number of Payments
Amount of Suspended Payments
% of Total
Amount
Total Paid Amount
0 255 372 20,10 % 1851 4.490.230.147,66 38,24 % 11.741.425.532,40
agri_aar_2016_annexes Page 33 of 273
TABLE 7 : SITUATION ON REVENUE AND INCOME IN 2016
Revenue and income recognized Revenue and income cashed from Outstanding
Chapter Current year RO Carried over RO Total Current Year RO Carried over RO Total balance
1 2 3=1+2 4 5 6=4+5 7=3-6
61 REPAYMENT OF MISCELLANEOUS EXPENDITURE
0,00 4.659.319,52 4.659.319,52 0,00 0,00 0,00 4.659.319,52
65 FINANCIAL CORRECTIONS 7.510.368,55 14.228.992,77 21.739.361,32 2.433.175,15 4.099.537,93 6.532.713,08 15.206.648,24
67
REVENUE CONCERNING THE EUROPEAN AGRICULTURE GUARANTEE FUND AND THE EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT
2.853.896.730,39 14.616.889,29 2.868.513.619,68 2.850.361.799,02 14.616.889,29 2.864.978.688,31 21.794.654,25
90 MISCELLANEOUS REVENUE 67.102,12 0,00 67.102,12 67.102,12 0,00 67.102,12 0,00
Total DG AGRI 2.879.733.923,94 33.505.201,58 2.913.239.125,52 2.852.862.076,29 18.716.427,22 2.871.578.503,51 41.660.622,01
NB : Les montants du tableau Income de la DG BUDG ont été modifiés pour y inclure la balance des receivables ouverts pour le FEAGA (3.094.271,22€ sur la ligne 67): cette table n'inclut jamais la situation réelle du FEAGA, mais montre uniquement les montants régularisés qui sont, par définition, toujours recouvrés à la fin de l'exercice.
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TABLE 8 : RECOVERY OF PAYMENTS (Number of Recovery Contexts and corresponding Transaction Amount)
INCOME BUDGET RECOVERY ORDERS ISSUED IN 2016
Irregularity Total undue
payments recovered Total transactions in recovery
context(incl. non-qualified) % Qualified/Total
RC
Year of Origin (commitment) Nbr RO Amount Nbr RO Amount Nbr RO Amount Nbr RO
Amount
2008 7,00 21.353.994,10
No Link 27 47.554.086,57 27 47.554.086,57 176,00 331.171.055,77 15,34% 14,36%
Sub-Total 27 47.554.086,57 27 47.554.086,57 183,00 352.525.049,87 14,75% 13,49%
EXPENSES BUDGET Error Irregularity OLAF Notified Total undue payments recovered Total transactions in
recovery context(incl. non-qualified)
% Qualified/Total RC
Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount
INCOME LINES IN INVOICES 250 47.504.009,35
NON ELIGIBLE IN COST CLAIMS 1 86.842,69 23 473.665,54 24 560.508,23 105 314.188.750,56 22,86% 0,18%
CREDIT NOTES 34 258.013,55 10 1.106.451,43 44 1.364.464,98 74 1.698.338,58 59,46% 80,34%
Sub-Total 35 344.856,24 33 1.580.116,97 68 1.924.973,21 429 363.391.098,49 15,85% 0,53%
GRAND TOTAL 35 344.856,24 60 49.134.203,54 95 49.479.059,78 612 715.916.148,36 15,52% 0,31%
agri_aar_2016_annexes Page 35 of 273
TABLE 8 : RECOVERY OF PAYMENTS (Number of Recovery Contexts and corresponding Transaction Amount)
(DG AGRI DIRECT PAYMENT CIRCUIT ONLY)
INCOME BUDGET RECOVERY ORDERS ISSUED IN 2016
Irregularity Total undue payments
recovered Total transactions in recovery
context(incl. non-qualified) % Qualified/Total
RC
Year of Origin (commitment) Nbr RO Amount Nbr RO Amount Nbr RO Amount Nbr RO
Amount
2013 1 47.102,12 0,00% 0,00%
2016 2 20.000,00 0,00% 0,00%
Sub-Total 3 67.102,12 0,00% 0,00%
(Internal Commission Revenue; Debtor = other Commission Service)
EXPENSES BUDGET Error Irregularity OLAF Notified Total undue payments recovered Total transactions in
recovery context(incl. non-qualified)
% Qualified/Total RC
Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount
INCOME LINES IN INVOICES 0 0 0 0 4 295.616,00 0,00% 0,00%
NON ELIGIBLE IN COST CLAIMS 1 86.842,69 23 473.665,54 25 628.957,57 96,00% 89,12%
CREDIT NOTES 25 258.013,55 11 1.355.688,51 45 1.947.575,66 80,00% 82,86%
Sub-Total 26 344.856,24 34 1.829.354,05 74 2.872.149,23 81,08% 75,70%
GRAND TOTAL 26 344.856,24 34 1.829.354,05 77 2.939.251,35 77,92% 73,97%
agri_aar_2016_annexes Page 36 of 273
Tableau tenant compte d'une correction effectuée le 04/01/2017 (modification note de crédit SI2.173291, donc n'est plus reprise en 2016) :
EXPENSES BUDGET Error Irregularity OLAF Notified Total undue payments recovered Total transactions in
recovery context(incl. non-qualified)
% Qualified/Total RC
Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount Nbr Amount
INCOME LINES IN INVOICES 0 0 0 0 4 295.616,00 0,00% 0,00%
NON ELIGIBLE IN COST CLAIMS 1 86.842,69 23 473.665,54 25 628.957,57 96,00% 89,12%
CREDIT NOTES 25 258.013,55 10 1.106.451,43 44 1.698.338,58 79,55% 80,34%
Sub-Total 26 344.856,24 33 1.580.116,97 73 2.622.912,15 80,82% 73,39%
GRAND TOTAL 26 344.856,24 33 1.580.116,97 76 2.690.014,27 77,63% 71,56%
agri_aar_2016_annexes Page 37 of 273
TABLE 9 : AGEING BALANCE OF RECOVERY ORDERS AT 31/12/2016 FOR AGRI
Number at 01/01/2016
Number at 31/12/2016
Evolution Open Amount
(EUR) at 01/01/2016
Open Amount (EUR) at
31/12/2016 Evolution
1998 1 1 0,00 % 83.708,07 80.255,49 -4,12 %
1999 10 10 0,00 % 7.244.527,00 7.236.856,35 -0,11 %
2000 1 1 0,00 % 1.850.432,59 1.678.232,59 -9,31 %
2001 2 2 0,00 % 1.725.160,75 1.134.110,41 -34,26 %
2003 1 1 0,00 % 3.674.865,52 3.674.865,52 0,00 %
2004 1 1 0,00 % 984.454,00 984.454,00 0,00 %
2015 44
-100,00 % 95.345.450,06 -100,00 %
2016 8 24 200,00 % 375.523.683,09 29.966.118,87 -92,02 %
68 40 -41,18 % 486.432.281,08 44.754.893,23 -90,80 %
TABLE 9 : AGEING BALANCE OF RECOVERY ORDERS AT 31/12/2016 FOR AGRI
(DG AGRI DIRECT PAYMENT CIRCUIT ONLY)
Number at 01/01/2016
Number at 31/12/2016
Evolution Open Amount
(EUR) at 01/01/2016
Open Amount (EUR) at
31/12/2016 Evolution
1998 1 1 0,00 % 83.708,07 80.255,49 -4,12 %
1999 10 10 0,00 % 7.244.527,00 7.236.856,35 -0,11 %
2000 1 1 0,00 % 1.850.432,59 1.678.232,59 -9,31 %
2001 2 2 0,00 % 1.725.160,75 1.134.110,41 -34,26 %
2003 1 1 0,00 % 3.674.865,52 3.674.865,52 0,00 %
2004 1 1 0,00 % 984.454,00 984.454,00 0,00 %
16 16 15.563.147,93 14.788.774,36
agri_aar_2016_annexes Page 38 of 273
TABLE 10 : RECOVERY ORDER WAIVERS IN 2016 >= EUR 100.000
Waiver Central
Key Linked RO
Central Key
RO Accepte
d Amount (EUR)
LE Account Group
Commission Decision
Comments
Total DG
Number of RO waivers
Justifications:
TABLE 11 : CENSUS OF NEGOTIATED PROCEDURES - DG AGRI - 2016
Negotiated Procedure Legal base
Number of Procedures Amount (€)
Total
No data to be reported
TABLE 12 : SUMMARY OF PROCEDURES OF DG AGRI EXCLUDING BUILDING CONTRACTS
Internal Procedures > € 60,000
Procedure Type Count Amount (€)
Internal Procedures > € 60,000 Open Procedure (Art. 104(1) (a) FR)
4 7.056.896,38
TOTAL 4 7.056.896,38
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TABLE 13 : BUILDING CONTRACTS
Total number of contracts :
Total amount :
Legal base Contract Number
Contractor Name Description Amount (€)
No data to be reported
TABLE 14 : CONTRACTS DECLARED SECRET
Total Number of Contracts :
Total amount :
Legal base
Contract Number
Contractor Name Type of contract
Description Amount (€)
No data to be reported
agri_aar_2016_annexes Page 40 of 273
ANNEX 4: Materiality criteria
General Principle
Reasonable assurance is the judgement of the Authorising Officer by Delegation (hereafter referred to as the Director General). For this purpose, he/she is required
to assess all relevant information at his/her disposal available to support the declaration of assurance. Under shared management, implementation tasks
including controls and payments are delegated to the Member States in accordance with the criteria and procedures laid down in the Financial Regulation and in sector-
specific rules. For EAGF and EAFRD the provision of assurance has therefore to be based on the assessment of the information and indicators resulting from the
management reporting and supervision arrangements in place and of the functioning
of the internal control systems operated by the Member States' implementing bodies. This assessment allows the Director General to form an opinion as to the
effectiveness of the management and control systems operated at the level of the Member States' implementing bodies.
Assurance model for expenditure implemented under shared management
The EAGF and EAFRD are implemented through a management and control system based on four levels. Taken together, these four levels and the results they produce
are the basis for the Director General to obtain reasonable assurance as to the
effectiveness of management and control systems and the legality and regularity of the expenditure.
agri_aar_2016_annexes Page 41 of 273
Levels
of assura
nce
from
the
Mem
ber
Sta
tes' contr
ol syste
ms
Administrative structure set up at Member States level: management, control and payment of the expenditure are entrusted to
accredited Paying Agencies. Compliance with strict accreditation criteria (which are laid down in Commission Implementing Regulation
(EU) No 908/2014 and in Commission Delegated Regulation (EU) No 907/2014) is subject to constant supervision by the competent national
authority (at Ministerial level). The Paying Agencies are required to provide an annual Management Declaration which includes a
declaration that the system in place provides reasonable assurance on the legality and regularity of the underlying transactions.
Administrative controls and on-the-spot checks (prior to
payment): for each support scheme financed by the EAGF or EAFRD,
the Paying Agencies apply a system of exhaustive administrative controls (100% of aid applications must be checked) and on-the-
spot checks (at least 5% in the case of most schemes) prior to any payment. These controls are made in accordance with precise rules set
out in the sector specific legislation (e.g., the Integrated Administration and Control System – IACS, including a Land Parcel Identification
System – LPIS). Member States are required to send detailed information on the checks carried out and their results on a yearly
basis to the Commission (control data and statistics).
Audits by Certification Bodies and controls after payment by the Paying Agencies: The Certification Bodies deliver each year an
opinion on the completeness, accuracy and veracity of the Paying
Agencies' annual accounts, on the proper functioning of their internal control systems and on the legality and regularity of the expenditure
for which reimbursement has been requested from the Commission. They also verify compliance of the Paying Agencies with accreditation
criteria and the Management Declarations. In addition all aid measures other than direct payments covered by the IACS are also
subject to ex-post controls, either by a specific control body (in the case of the EAGF) or by the Paying Agency itself (in the case of the
EAFRD)
Assura
nce fro
m t
he C
om
mis
sio
n's
checks
DG AGRI audits: The audits carried out by DG AGRI serve a number of purposes.
In the first place, they protect the EU budget from irregular payment
by recovering amounts unduly spent by the Member State as a result of deficiencies detected in their management and control systems.
This is done via a clearance procedure consisting of both an annual financial clearance (limited to the Paying Agencies' annual accounts)
and a multi-annual conformity clearance, whose aim is to exclude the expenditure not compliant through net financial corrections which
return to the EU budget as assigned revenue.
Secondly, by revealing deficiencies to be remedied and by leading to
financial corrections up to the moment those deficiencies have been
corrected, they have a remedial and preventive role.
Thirdly, DG AGRI's audits are also used to provide assurance to the
Director General on the Member States' management and control systems.
agri_aar_2016_annexes Page 42 of 273
Assessment of management and control systems in the Member States
The Director General carries out an assessment on the extent to which he/she can
draw assurance from the four levels of the management and control systems
described. This assessment is based on three elements as follows: The first element is the assessment of the functioning of management and
control systems in the Paying Agencies. This is carried out by DG AGRI’s audit directorate and includes:
Checking compliance of the Paying Agencies with the accreditation criteria. This is carried out by the Certification Bodies with, where appropriate, the
placing under probation of those Paying Agencies with serious deficiencies in their application of the accreditation criteria by the Competent Authority.
The performance by DG AGRI, on the basis of a detailed risk analysis, of accreditation audits in order to check by itself the respect by Paying Agencies
of accreditation criteria as well as audits on the proper functioning and
operation of the Certification Bodies.
The qualitative analysis of the Management Declarations issued by the
directors of the Paying Agencies whereby they are required to declare whether they have put in place systems which provide reasonable assurance
on the legality and regularity of the underlying transactions.
The qualitative analysis of the opinions from the Certification Bodies on these
Management Declarations.
An annual financial clearance exercise carried out by DG AGRI examining the
completeness, accuracy and veracity of the accounts declared by the Paying
Agencies and resulting in the adoption of a clearance of accounts decision without prejudice to the conformity procedure with regard to the legality and
regularity of the expenditure.
The second element assessed is the result of the controls carried out by the
Member States on the final beneficiaries and their certification.
For most of the agriculture budget, each year Member States are required to
send detailed information to the Commission in relation to the more than 900 000 on-the-spot checks carried out. For the large part15, these results
relate to the financial year covered by the AAR in question. These data
provide detailed information on the errors discovered in the course of administrative and/or on-the-spot checks and enable DG AGRI to determine
the reported error rate per Paying Agency or aid scheme.
The Certification Bodies are required to give an opinion on the legality and
regularity of the expenditure for which reimbursement has been requested from the Commission.
The third assurance element is comprised of the Commission's own conformity audits on Member States management and control systems. DG AGRI's conformity
clearance procedure can exclude from EU financing expenditure made in the 24
months prior to the notification to the Member States of a deficiency and up to the moment the identified deficiencies are remedied. Around 150 such audits are opened
each year on the basis of a detailed risk analysis and enable the Commission to obtain direct assurance as to the effectiveness of the Paying Agencies' management
and control systems.
15 This is presently not always the case for statistics for certain measures under Rural Development where
there is a limited overlap between reporting period and financial year.
agri_aar_2016_annexes Page 43 of 273
Materiality criteria
DG AGRI estimates the error rate on the basis of control statistics for each Paying
Agency (or measure for market measures, ABB 02) and for each ABB activity and also takes into account all available information and audit results (Certification
Bodies, Commission and Court of Auditors), including on-the-spot missions; this information is used as the best estimate of the possible risk for expenditure in the
reporting year. In the event that the error rates reported by Member States are not accurate or found not to be reliable or are not available, the audit directorate either
re-calculates them when it has sufficient information to do so or, alternatively, adjusts them upwards by flat rates in line with the results of the assessment of the
functioning of the management and control systems. This results in an error rate at
Paying Agency level validated and adjusted by the management of DG AGRI (adjusted error rate).
Further steps in the process determine when a reservation shall be made by the Director General, what elements are included in the amount at risk and how he/she
can demonstrate the overall remaining financial risk to the EU budget when all corrective measures have been taken into account.
As regards "corrective measures", the net financial corrections imposed by the Commission and the recoveries operated by the Member States themselves are ex-
post exercises and multi-annual in nature. It is extremely rare that financial
corrections and recoveries are executed in the same financial year as that of the expenditure concerned. However, the performance of the ex-post corrective system
can be estimated from its results in the most recent years. Consequently, DG AGRI reports on a corrective capacity that is estimated as the annual average of the
implemented net financial corrections imposed by the Commission and recoveries of undue payments declared by the Member States for the last three years.
Comparing the corrective capacity with the amount at risk gives a solid indication of the remaining financial risk to the EU budget when all corrective actions are taken
into account ("error rate at closure", see last section of this Annex, as well as key
performance indicator 5 and Part 2.2 of the body of the AAR).
Step 1: Estimation of an error rate at Paying Agency level = REPORTED
ERROR RATE
In the first place, for each ABB, the statistical data sent by the Paying Agencies on
the results of the administrative and on-the-spot checks carried out is collected,
compiled and checked for consistency and completeness. The error rate per Paying Agency used as the basis for the subsequent assessment is the error rate found in
the random on-the-spot check sample, and after deduction of the errors found as a result of administrative controls. On that basis, a "reported error rate" is
calculated, which represents the error rate that remains in the non-controlled population (= the aid applications/payment claims which have not been controlled
on-the-spot by the Paying Agencies). This reported error rate is used for calculating a first estimate of the amount at risk. It is noted that the vast majority of
this statistical data relates to checks carried out in respect of the financial year which
is the subject of the report.
agri_aar_2016_annexes Page 44 of 273
Step 2: Validation and adjustment of the reported error rate by DG AGRI at
Paying Agency/Member State and ABB level = ADJUSTED ERROR RATE
All available information is considered in determining to what extent the reported
error rate is reliable for each Paying Agency for each ABB activity. Where ex-post audits (by the Commission, Certification Bodies or the European Court of Auditors
(ECA)) have revealed management and control systems' deficiencies, these are not reflected in the Member States' control statistics and, therefore, those statistics do
not reflect the risk resulting from those deficiencies. In order to estimate the level of unreported errors, the auditors make adjustments to the reported error rates taking
into account the following evidence:
DG AGRI's own audits over the previous three years (including conformity
audits and accreditation audits); older reports in cases where available information indicates that no or insufficient remedial actions have been
implemented. This includes the auditors' professional judgement on the
evolution of the control environment in the Paying Agency.
The opinion which the Certification Bodies have delivered on the legality and
regularity of the expenditure for which reimbursement has been requested from the Commission, including the reliability of the control statistics reported
by the Paying Agencies and the quality of the underlying controls, is also examined.
ECA's previous three annual reports are also taken into account; older reports in cases where available information indicates that no or insufficient
remedial actions have been implemented. In the event that a DG AGRI audit
has taken place more recently than the ECA' saudit, it is possible that the assessment arising from the latter is replaced by the DG AGRI more recent
appreciation of the situation.
Information furnished by the operational units within the DG regarding the
reliability of Member States' statistics or other information obtained pertaining to deficiencies in their management and control systems, or
remedial action taken by Member States.
Other relevant evidence including elements signalled by
o the Anti-Fraud Correspondent of DG AGRI;
o the director of the Paying Agency in his/her Management Declaration;
In determining the extent of the adjustment to make to the reported error rate,
DG AGRI applies the professional judgement of its auditors and in particular the criteria for estimating the seriousness and extent of the identified deficiencies
established in its "Guidelines on the calculation of the financial corrections in the framework of the conformity and financial clearance of accounts procedures "16.
When using these criteria, the auditors take into account that the methodology for preparing financial corrections aims at covering the risk to the EU budget whereas
the top-up to be applied should represent the audit assessment of the extent to
which the Paying Agency's reported error rate is understated; for instance, insufficient sanctions represent a risk to the EU budget but shall not be considered
as errors to be included in the error rate for the expenditure of the year in question.
For ABB 03 and ABB 04, the decision making process for the assessment is
carried out by the auditors concerned, on a case by case basis, for each Paying Agency. All available information, including the input of the operational units, is
integrated to complete the assessment process.The professional judgement of the audit services of the DG is applied particularly when weighing contradictory
information or considering abnormal statistical results. This results in an
16 See C(2015) 3675 final; previously Document VI/5330/97, AGRI/60637/2006, AGRI-2005-64043,
COM(2010) 2498 final and D(2012)1338812 were considered.
agri_aar_2016_annexes Page 45 of 273
additional error rate top-up to the reported error rate and the calculation of an adjusted error rate and the corresponding amount at risk.
For ABB 02, the same approach is followed but per measure instead of per
Paying Agency.
Coordination is carried out at the level of DG AGRI's audit directorate to ensure
that there is a consistency of approach taken as regards the adjustments made to the Member States' error rates.
For measures about which there is no information on the risk (no reporting required by the legislation), the average adjusted error rate (for that part of the
ABB for which statistics are available) is extrapolated to the expenditure concerned.
The additional amount at risk resulting from an adjustment or "top-up" is added to the initial amount at risk calculated in Step 1, resulting in an adjusted amount
at risk for each Paying Agency.
The adjusted error rate per Paying Agency is obtained by dividing the adjusted amount at risk by the expenditure declared to the Commission for the financial
year. Adjusted error rates are aggregated at Member State and ABB levels by aggregating the adjusted amounts at risk.
Step 3: DG AGRI materiality criteria
Article 66(9) of the Financial Regulation provides that
"The authorising officer by delegation shall report to his or her institution on the
performance of his or her duties in the form of an annual activity report containing
financial and management information, including the results of controls, declaring that, except as otherwise specified in any reservation related to defined
areas of revenue and expenditure, he or she has reasonable assurance …"
The Director General for DG AGRI shall make financial reservations at Paying
Agency level (and/ or aid scheme level as regards market measures within ABB02).
Paying Agencies with an adjusted error rate above 5% shall in general be
subject to a reservation.
For Paying Agencies with an adjusted error rate between 2% and 5%,
professional judgement shall be applied in assessing whether the risk is
sufficiently covered by mitigating factors and thus whether a financial reservation is necessary. The operational units of DG AGRI are integrated into
the decision making process for determining the existence of mitigating factors. The mitigating factors are disclosed in all cases where a reservation is
deemed to be not necessary. They shall include notably whether the necessary remedial actions have been implemented by the Member
State/Paying Agency concerned and whether there is an on-going conformity clearance procedure covering the expenditure for the financial year of the
AAR.
A de minimis approach for deciding on reservations shall be applied. Given the amounts at stake for the CAP with expenditure of ± 55 billion EUR, a
de minimis threshold of 1 million EUR is applied. All cases for which the amount at risk is below that threshold are not subject to a reservation (unless
on reputational grounds). Reservations made for the preceding year shall not be issued for the financial year concerned by the AAR if the amount at risk for
that financial year is below the 1 million EUR threshold.
For market measures a flexible approach may also be taken when deciding on
reservations, notably where the adjusted error rate is calculated on a
agri_aar_2016_annexes Page 46 of 273
purely risk based sample. For most market schemes, the legislation does not require that a random sample is selected for on-the-spot checks. The latter
are, rather, risk based. Extrapolating the result of the risk sample therefore
to the uncontrolled population would result in overstating the error rate and amount at risk. In such cases it shall be evaluated if there are elements
which mitigate against applying a reservation even where the adjusted error rate is above 5%.
If the adjusted error rate is below 2%, generally no reservation is made.
Coordination is carried out between all relevant parts of DG AGRI to ensure that
there is a consistency of approach as regards the mitigating factors examined when deciding whether a reservation is necessary.
In the framework of shared management, as set out in the Financial Regulation and the rules on the financing of the CAP, it is the Member State, which has to assume
the overall responsibility for ensuring that actions financed by the budget are
implemented correctly in accordance with the rules. Therefore, while the action plans, accompanying reservations where necessary, should identify the deficiencies
and Paying Agencies concerned, it is the Member State which must ensure that the corresponding remedial actions are precisely defined and actually implemented.
Step 4: Quantification of the reservation
The amount under reservation is the amount at risk for each Paying Agency (or Member State in respect of ABB02) for which a reservation has been made. It is
aggregated at Member State level.
Step 5: Calculation of the amount at risk at ABB level
The amount at risk aggregated at ABB level is the amount of EU expenditure
which risks to have been misspent on the basis of the adjusted error rates; it covers all Paying Agencies irrespective of whether they are subject to a reservation.
agri_aar_2016_annexes Page 47 of 273
Paying Agency
control statistics
DG AGRI Validation
Process = PA control
statistics + DG AGRI
adjustment
adjusted
Error Rate
(aER)/PA
Reservation
Amount
subject to
reservation
aER >5%
Yes Yes
Yes
No
aER < 2%
Step 1 Step 2 Step 3 Step 4 Step 5
DG
AG
RI'S D
ECISIO
N P
RO
CESS FO
R M
AK
ING
RESER
VA
TION
S
Action Plan
Paying agency level MS level ABB Level
Amount at
risk
estimation of a
reported error rate at
Paying Agency level
validation and adjustment
by DG AGRI; calculation of
an adjusted Error Rate (aER)
DG AGRI materiality criteria
aER 2-5%
Risk
mitigation
factors
No
de minimis
quantification of
the reservation
calculation of the
amount at risk at
ABB level
Insufficient
risk
mitigation
factors
agri_aar_2016_annexes Page 48 of 273
ANNEX 5: Internal Control Template for budget implementation (ICT)
EXPENDITURE IN SHARED MANAGEMENT17
Stage 1 – (Negotiation and) assessment/approval of spending proposals:
Main control objectives: Ensuring that the Commission (COM) adopts the actions that contribute the most towards the achievement of
the policy objectives (effectiveness);
Main risks Mitigating controls How to determine coverage frequency
and depth
How to estimate the costs and benefits of
controls
Control indicators
The actions financed18 do not adequately reflect
the policy objectives or priorities.
Internal consultation, hierarchical validation at
DG-level of each action. Inter-service
consultation (including all relevant DGs)
Adoption by Commission Decision,
where foreseen by EU
law.
Coverage / Frequency: 100%.
Depth: checklist, guidelines and lists of
requirements in the relevant regulatory
provisions.
Costs: estimation of cost of staff involved in the
validation of the spending proposals put
forward by the Member States (for 2014-2020).
Benefits: adopted actions have a clear
intervention logic,
allowing the Commission to evaluate their impact
[non-quantifiable individually]
Effectiveness: - % of actions adopted/
approved19 - % of financial allocation
approved20 Efficiency:
- average time to adopt/ approve an action21
17 DG AGRI uses the Internal Control Template for shared management covering 99.6 % of its total expenditure and other management modes fall under the 'de minimis'
threshold. 18 For CAP: the programmes, measures and schemes supported under the Market measures, Direct Aids and Rural Development pillars (EAGF and EAFRD). 19 For the 1st pillar, the indicator refers to legal acts adopted; for the 2nd pillar to legal acts adopted, to the modification of RDP 2007-2013 and to the approval of RDP 2014-
2020. 20 For the 1st pillar the indicator refers to the execution of financial ceilings, for the 2nd pillar to budget allocation of RDP 2014-2020 approved in 2014. 21 For the 1st pillar, the indicator refers to legal acts adopted, for the second pillar to legal acts adopted and to the approval of RDP 2014-2020.
agri_aar_2016_annexes Page 49 of 273
Stage 2 – Implementation of operations (Member States):
A. Setting up of the systems
Main control objectives: ensuring that the management and control systems are adequately designed
Main risks It may happen (again)
that…
Mitigating controls How to determine coverage, frequency
and depth
How to estimate the costs and benefits of
controls
Control indicators
The process of designation (and
accreditation) of national authorities in
the Member States (MS)
is not effective and, as a result, the management
and control systems are not compliant with the
applicable rules.
Supervision by Commission (for 2014-2020):
- Commission review (and audits) of a sample
of national
designations/ accreditations
- submission of MS Audit Strategies to the
Commission (on request)* * [For Cohesion policy]
Coverage / Frequency: fixed in
sector-specific rules Depth: verification
(desk review + audit
missions where necessary) of
description of management and
control systems communicated by MS.
Accreditation audits are generally done on-the-
spot.
Costs: estimation of cost of COM staff involved in
the audits of samples of national designations/
accreditations (for 2014-
2020) Benefits:(part of) the
amounts associated with unreliable systems for
which the Commission audit work revealed
substantial compliance problems (for 2014-2020
) [not quantifiable]
For 2014-2020: Effectiveness:
- % of authorities designated/accredited
- number of authorities
for which serious system weaknesses were found
following accreditation reviews/audits
Efficiency: - number of authorities for
which serious weaknesses found by accreditation
reviews/audits (% of total
checked)
agri_aar_2016_annexes Page 50 of 273
B. Member states' controls to prevent, detect and correct errors within the declared certified expenditure
Main control objectives: ensuring that the periodic expenditure declarations submitted to the Commission for each action are legal and
regular
Main risks
It may happen (again) that…
Mitigating controls
How to determine coverage, frequency and
depth
How to estimate the costs and benefits of
controls Control indicators
Periodic expenditure
declarations submitted to the Commission
include expenditure
which is irregular or non-compliant with EU and/or
national eligibility rules and legislation.
Management
verifications: first level checks by
designated/accredited
programme authorities or bodies.22
Certification, audit opinion and annual
report by the relevant authorities or bodies
designated/accredited.23
MS recoveries from
final beneficiaries (CAP)
Coverage: fixed in sector-
specific rules Depth:
- management verifications:
performance of first-level checks (administrative and
on the spot controls). - certification: [limited]
additional verification (desk checks and on-the-spot),
with where appropriate additional checks.
- audit opinion: system
audits on the checks already carried out, where necessary
with re-performance of on-the-spot checks; where
applicable, audits of operations (on a statistical
basis) and additional substantive testing on
expenditure.
Costs: real costs for the
management and control activities of
paying agency
Benefits:
- Amounts of corrected undue payments (prior
to reimbursement from the control statistics)
- MS recoveries
Effectiveness:
- Amount and % of corrected undue
payments (prior to
reimbursement from the control statistics) as
reported by MS. - annual certificate
opinions of the Member States.
- MS recoveries Efficiency:
Ratio = (amount of
corrected undue payments plus MS
recoveries) divided by costs of management and
controls - time to lift interruption
of payments24
22 For CAP: Paying Agency (PA) 23 For CAP: Certification Body (CB) 24 For EAFRD: average time of interruption/suspension.
agri_aar_2016_annexes Page 51 of 273
Stage 3 – Monitoring and supervision of the execution, including ex-post control
Main control objectives: ensuring that the expenditure reimbursed from the EU budget is eligible and regular
Main risks
It may happen (again) that…
Mitigating controls
How to determine
coverage, frequency and depth
How to estimate the
costs and benefits of controls
Control indicators
The management
verifications and subsequent
audits/controls by the
Member States have failed to detect and
correct ineligible costs or calculation
errors.
The audit work carried out by the
audit/certification
authorities is not sufficient to obtain
adequate assurance on the submitted
declarations.
The Commission services have failed to
take appropriate
measures to safeguard EU funds, based on the
information it received.
Commission checks of
periodic MS expenditure declarations.
Commission assessment of
management and control systems in the
Member States, in
particular of work done and/or reported by the
AA25/PA/CB, namely:
- assessment of annual
control/audit/certification report
- calculation of projected error rate
(where applicable)
- estimation of a residual error rate
(RER)
- assessment of
systems audits reports from AA/CB
- assessment of annual summaries (where
applicable)
Coverage: verification
of information provided in the annual
(audit/control /certification) report
and annual audit
opinions. Depth: desk checks
and/or on-the-spot audits based on risk
assessment; verification of the
quality and reliability of the information
based on
Commission’s own audit work; ‘validation’
and where necessary adjusting of error rates
reported by MS to calculate a cumulative
residual error risk (RER);
[at closure: where applicable scrutiny of
closure report and closure opinion, if
needed with audits on
Costs:
- cost of Commission financial officers
checking MS expenditure (financial
circuits)
- estimation of cost of Commission staff
involved in the assessment of
management and control systems in MS,
including analysis of AA/CB report, own
audit work26,and
drafting of interruption letters
Benefits: errors prevented
[unquantifiable], errors detected or corrected
(amount of financial corrections).
Effectiveness:
- best estimate of residual risk of error per MS
- number of programmes/MS/PA with a
reported error rate assessed as
reliable (and not subject to an adjustment)
- Number, amount and % (of expenditure declared in 2014)
of interruptions/suspensions of payments
- net financial corrections made resulting from Commission
audit work
Efficiency: - cost of control/financial
management of the Commission checks and
assessment (% of total appropriations)
- Ratio = cost of Commission
staff involved in the assessment of management and control
systems in MS divided by total amount of net financial
corrections adopted by the
25 Audit Authority (AA) 26 Systems audit, re-performance of annual control reports (ACR), follow-up of audit authorities, closure audits, fact finding audits, conformity audits of PA (CAP), etc.
agri_aar_2016_annexes Page 52 of 273
Main risks
It may happen (again) that…
Mitigating controls
How to determine
coverage, frequency and depth
How to estimate the
costs and benefits of controls
Control indicators
- own Commission
audits
- technical and bilateral
meetings with MS
Interruptions and suspensions of
payments
Financial corrections (implemented by
Commission) Annual financial
clearance procedure and multi-annual
conformity clearance procedure (CAP)
sample of OPS] Commission
- Time-to-payment / % of
Commission payments within delays
agri_aar_2016_annexes Page 53 of 273
ANNEX 6: Implementation through national or international public-sector bodies and bodies governed
by private law with a public sector mission (not applicable)
ANNEX 7: EAMR of the Union Delegations (not
applicable)
ANNEX 8: Decentralised agencies (not applicable)
agri_aar_2016_annexes Page 54 of 273
ANNEX 9: Evaluations and other studies finalised or cancelled during the year
agri_aar_2016_annexes Page 55 of 273
Title Rea-son1
Scope 2 Type3
Associated
DGs
Costs
(EUR)
Comments4 Reference5
I. Evaluations finalised or cancelled in 2016
a. Evaluations finalised in 2016
No evaluations finalised in 2016, POSEI still ongoing (SWD), others were relabelled as study (see below)
b. Evaluations cancelled in 2016
Evaluation of the impact of
the CAP on new marketing strategies (2017)
L elements of
R1305/2013; R1306/2013;
R1307/2013; R1308/2013
influencing marketing
strategies
Restructuration of
evaluations: will be covered in 2018
evaluation under FC 1
Evaluation of EU quality schemes (2017)
L (R1151/2012; relevant elements of
R1308/2013)
Restructuration of evaluations: will be
covered in 2018 evaluation under FC 1
and a study in 2020
Evaluation of the application of Art. 29 of R. 1308/2013
(2017)
FR R1308/2013, art 29 Content will be covered in 2018 evaluations under
FC1 and FC2
agri_aar_2016_annexes Page 56 of 273
Title Rea-son1
Scope 2 Type3
Associated
DGs
Costs
(EUR)
Comments4 Reference5
II. Other studies finalised or cancelled in 2016
a. Other studies finalised in 2016
Impact of free trade
agreements
impacts of concluded
FTAs on the EU agricultural sector and
agricultural trade; factors influencing EU
agricultural trade
R SG, TRADE,
GROW, MARE, ENV,
TAXUD, REGIO,
JUST, SANTE,
CLIMA
285000 https://bookshop.e
uropa.eu/en/impacts-of-eu-trade-
agreements-on-the-agricultural-sector-
pbKF0116070
Distribution of the added value of the organic food
chain
identify and analyse the distribution of
added value in the organic supply chain in
the European Union
E SG, TRADE, AGRI,
GROW, DEVCO
222850 publication ongoing. Will be available via
https://ec.europa.eu/agriculture/extern
al-studies_en
State of play of the inter-branch organisations in the
EU
state of IBOs in the context of the CAP,
focussing on
agricultural income, productivity, price
stability
E JRC, COMP, GROW, SJ
176380 https://ec.europa.eu/agriculture/extern
al-studies/2016-
interbranch-organisations_en
Influence of water intake on water/protein ratios from
scalding to chilling
examine the water uptake in the different
processing stages of poultry and its
influence on the calculation of
Water/Protein ratio (W/P ratio)
R SANTE, RTD, JRC
286694 https://ec.europa.eu/agriculture/extern
al-studies/2016-water-in-
poultrymeat_en
agri_aar_2016_annexes Page 57 of 273
Title Rea-son1
Scope 2 Type3
Associated
DGs
Costs
(EUR)
Comments4 Reference5
Mapping and analysis of the implementation of the CAP
R1305/2013; R1307/2013
E ENV, TRADE,SG
410511 initially labelled as evaluation, reformulated
as study following the introdution of the better
regulation guidelines
https://bookshop.europa.eu/en/mappi
ng-and-analysis-of-the-
implementation-of-
the-cap-pbKF0416021/
EIP agricultural productivity
and sustainability
R1305/2013, Art.53 E ENV, SG,
JRC, RTD, EAC, COMP,
GROW
369720 initially labelled as
evaluation, reformulated as study following the
introdution of the better regulation guidelines
https://bookshop.e
uropa.eu/en/evaluation-study-of-the-
implementation-of-the-european-
innovation-partnership-for-
agricultural-productivity-and-
sustainability-
pbKF0216023/?CatalogCategoryID=1uw
KABstHaoAAAEjB5EY4e5L
EU plant and animal genetic
resources I (open call)
to deliver input on how
to imporve communication,
knowledge exchange, networking among all
stakeholders in area of conservation of
agricultural relevant
genetic resources
O RTD, SANTE,
ENV, SG, DEVCO
1488460 preparatory action publication ongoing.
Will be available via https://ec.europa.e
u/agriculture/external-studies_en
agri_aar_2016_annexes Page 58 of 273
Title Rea-son1
Scope 2 Type3
Associated
DGs
Costs
(EUR)
Comments4 Reference5
b. Other studies cancelled in 2016
Farming and forestry: engines for employment and
growth in the upstream and downstream sectors (open
call)
extent to which farming and forestry
create growth and jobs upstream and
downstream, including diversification
R 400000 content will be covered in the 2018 evaluation
"evaluation of the impact of the CAP on
developments and jobs in rural areas"
CLLD study (budget transfer
to DG REGIO)
AGRI concerned by
R1305/2013 and R1303/2013
E 200000 DG
1 Reason why the evaluation/other study was carried out, please align with Annex 3 of the MP 2016. The individual symbols used have the
following meaning: L - legal act, LMFF - legal base of MFF instrument, FR - financial regulation, REFIT, REFIT/L, CWP - 'evaluate first', O - other (please specify in Comments) 2 specify what programme/regulatory measure/initiative/policy area etc. has been covered 3 FC – fitness check, E – expenditure programme/measure, R – regulatory measure (not recognised as a FC), C – communication activity, I – internal Commission activity, O – other – please specify in the Comments 4 Allows to provide any comments related to the item (in particular changes compared to the planning). When relevant, the reasons for
cancelling evaluations/ other studies also needs to be explained in this column. 5 For evaluations the references should be 1) number of its Evaluation Staff Working Document and number of the SWD's executive summary; 2) link to the supportive study of the SWD in EU bookshop. For other studies the references should be the link to EU bookshop or other
reference where the ‘other study’ is published via different point.
agri_aar_2016_annexes Page 59 of 273
No evaluations were finalised in 2016, yet, several studies27 were finalised:
The study Mapping and analysis of the implementation of the CAP provides a
review of the choices that have been made by the 28 Member States in the two Pillars as well as a qualitative analysis of the potential impact of these choices. The study confirms
that the CAP became more complex: the new flexibilities resulted in a more diversified implementation, with measures being used in many different ways and in wide array of
combinations. The study states that the Member States’ strategy to reach the 3 CAP objectives is not sufficiently documented: the implementation choices are more
influenced by the consideration to “maintain the status quo” than by a long-term strategy
that takes into account the general CAP objectives. The study also raises concerns about the potential impact of the CAP: the degree to which funds have been targeted to certain
needs might not be sufficient to have a significant impact. In the short term, it is recommended to encourage the exchange of good practices between countries to
promote smart simplification and reduce administrative burden. For the CAP post 2020, Member States should be encouraged to establish a long term strategy that takes into
account the CAP objectives.
The study of the implementation of the European Innovation Partnership (EIP)
for agricultural productivity and sustainability shows that EIP’s bottom-up and
farmer-led approach is truly distinctive and highly appreciated by stakeholders. The EIP is being implemented in 26 Member States, in 96 out of a possible 111 RDPs, which
testifies to the perceived need for its distinctive approach to innovation. The study found that the EIP’s premise on incentivising innovative farming practices to foster a
competitive and sustainable agriculture and forestry sector is seen as valid and important. Innovation actors, especially farmers and forest managers, emphasised a
need for projects linking research and practice. The EIP is found to be a flexible tool that is addressing this in in a way that can be adapted to divergent circumstances and policy
contexts. Farmers are more likely to become involved in the innovation process under
the EIP as compared with other funding streams for innovation in the agricultural sector.
The study states that EIP's effectiveness could be increased by: making better use of
multiplication actors; by simplifying national and regional administrative implementation and by adapting rules at European level to incentivise participation (e.g. enabling
advance payments). By reducing fragmentation and improving knowledge flows, the EIP provides a crucial opportunity to build coherent national / regional agricultural knowledge
and innovation systems (AKISs). These should be interlinked into an integrated EU-wide AKIS.
The study on the impacts of EU trade agreements on the agricultural sector aims,
on the basis of the example of three trade agreements with different characteristics – i.e. the trade agreements of the EU with South Korea, Mexico and Switzerland – to better
understand the impacts of trade agreements on the EU agricultural sector and to identify the factors supporting or impeding EU agricultural external trade..
The study finds that the trade agreements with Mexico, South Korea and Switzerland have increased EU agri-food exports to these countries by more than 1 bn. EUR and
raised value added in the agri-food sector by 600 mn. EUR. The increased exports have supported almost 20,000 jobs in the agri-food sector, of which 13,700 jobs are in
primary agriculture. The export increase has also benefited other actors in the agri-food
supply chain. The trade agreements have also increased EU imports and given EU consumers access to agri-food products at lower prices.
With respect to the potential to further increase the benefits from trade agreements, the study finds that, while the EU-South Korea FTA is the most comprehensive FTA ever
27 The studies "mapping and analysis of the implementation of the CAP" and "implementation of the European
Innovation Partnership (EIP) for agricultural productivity and sustainability were initially scheduled as
"evaluation", yet following the adoption of the better regulation guidelines rescheduled as study.
agri_aar_2016_annexes Page 60 of 273
negotiated by the EU, there is a potential to expand both the scope and depth of the trade agreements with Mexico and Switzerland. Furthermore, the findings stress the
importance of activities that allow to EU exporters expand trade within the existing agreements, such as promotion and information actions and resolving SPS barriers.
The study on the distribution of the added value of the organic food chain points out that over the last decade the organic market in the EU has grown faster than the
organic agricultural area, which raises the question to what extent organic supply chains function effectively. Therefore, it investigated the creation and distribution of added value
in a number of organic supply chains in different EU countries.
The results of the case studies suggest that higher added value is created in organic compared to conventional supply chains. However, no evidence was found that the
relative share of organic farmers in the total added value differs substantially from that of conventional farmers. Also in organic food supply chains farmers capture a relative
small proportion of added value. This can partly be explained by similarities of organic with conventional supply chains. It appears that the distribution of added value strongly
depends on the structure and characteristics of the specific supply chain, such as level of chain integration and power relations between market players. No common patterns were
identified regarding the impact of different types of retails and markets on the creation
and distribution of added value. Investments in quality aspects, increased consumer interest in organic food, differentiation of products as well as efficiency in supply chain
management are all relevant factors that contribute to higher added value.
The study on agricultural interbranch organisations in the EU provides a
comprehensive inventory of existing recognised interbranch organisations (IBOs) across all 28 Member States and the rules applicable to them under EU and national law. The
study further examines the impact of IBOs on the markets where they operate with respect to its objectives and the benefits for producers stemming from the participation
in the IBO. It also illustrates the conditions which enable a good functioning of the IBO.
The study is based on evidence gathered from existing literature, interviews with senior policy officials within the European Commission and national competent authorities,
interviews with IBOs representatives, a survey of all recognised IBOs, and five case studies.
The analysis shows that 19 Member States have adopted national rules on the recognition and functioning of IBOs. In June 2016, 123 recognised IBOs, four of them
solely recognised only under national rules, are active in eight different Member States but their total number is growing. Of all factors considered, internal organisation of the
IBO appears less important for its proper functioning. The working principles (such as
dialogue and consensus) within the IBO and the relations between the IBOs and other actors of the supply chain (private stakeholders or public authorities) are the main pillars
underpinning a good governance of such organisations.
The study on state of play of processing technologies and the absorption of water
in poultrymeat has provided a comprehensive account of the current technologies used in the processing of poultry in the European Union and the amount of technologically
unavoidable water added to broiler chickens by different chilling methods.
The results obtained showed that the largest observed effect on the water/protein ratio
was for portion type, with Breast behaving very differently to Leg and Carcase.
Chilling method did not have a significant effect on Breast and provides evidence for retention of a single legal limit for Breast fillet.
Immersion chilling adds significantly more water to Leg and Carcase than any other chilling method. This provides evidence for retention of a separate legal limit for
immersion chilled carcases but there is no strong evidence to require different limits for
agri_aar_2016_annexes Page 61 of 273
the other four chilling methods. Leg also behaved very similarly to Carcase in this study. Thus it would be prudent to retain a separate legal limit for immersion chilled leg.
Although this study has provided valuable information, data sets for some of the variables studied were small due to the unavailability of some of the required samples, so
the results from this study should be treated with caution.
The preparatory action on EU plant and animal genetic resources was carried over
a period of two years (2014-2016).
Evidence was gathered through a variety of means in the context of the study. These
included a mapping exercise of current activities and the stakeholders involved, a review
of existing literature, over three hundred interviews with stakeholders and competent authorities, twenty-one case studies of good practices, and seven thematic workshops
covering methodological issues. The findings of the study were shared with stakeholders and competent authorities across the EU28 during a conference which took place at the
end of the preparatory action.
The analysis highlighted the need to develop an agro-biodiversity strategy towards the
conservation and sustainable use of genetic diversity in the EU, while considering issues specific to each of the four domains of the study: plant genetic resources, animal genetic
resources, forestry genetic resources; and microbial and invertebrate genetic resources.
Significant efforts have to be made by all stakeholders to secure an optimal conservation of genetic resources in the EU, and use these resources in a sustainable way in
agriculture and forestry. This can be achieved through e.g. supporting partnerships and cooperation between stakeholders at all levels in the supply chain.
agri_aar_2016_annexes Page 62 of 273
ANNEX 10: Specific annexes related to "Financial Management"
This annex explains in detail the complex relationship between the Directorate General for Agriculture and Rural Development and the 28 Member States (comprising 80 Paying
Agencies).
The two principal funds under the Common Agricultural Policy (the European Agricultural Guarantee Fund - EAGF and the European Agricultural Fund for Rural Development –
EAFRD) are implemented under shared management through a comprehensive
management and control system based on four levels. This system includes, on the one hand, all the necessary building blocks to guarantee a sound administration at Member
States’ level and, on the other hand, allows the Commission to audit the proper functioning of their management and control systems and, if need be, to counter the risk
of financial losses as a result of any deficiencies in the set-up and operation of those systems through the conformity clearance mechanism. Taken together, these levels and
the results that they produce are the basis for DG AGRI to gain reasonable assurance as to the effective management of the risk of error in the legality and regularity of the
underlying transactions.
An explanation of these four levels as well as the findings and the indicators which result
from them are set out in detail in this annex which is organised as follows:
Part 1: Description of the system for shared management and the
various levels of control in place
Level 1: Compulsory administrative structure at the level of Member States
Level 2: Detailed systems for controls before payments and dissuasive penalties Level 3: Audits by Certification Bodies and controls after payment
Level 4: Commission audits and Clearance of accounts
Part 2: Functioning of the Paying Agencies
2. Financial clearance exercise for financial year 2016 2.1: Compliance with the accreditation criteria
2.2: Management Declaration from the Directors of the Paying Agencies and related opinions from the Certification Bodies
2.3: Legality and regularity of expenditure
2.4: National Declarations 2.5: Overall conclusions of the Certification Bodies' work
Part 3: Control results at the level of the final beneficiaries, the assessment thereon by the Certification Bodies and the overall
appreciation of the Commission on their reliability taking into
account all available information
3.1: ABB02: Market Measures 3.2: ABB03: Direct Payments
3.3: ABB04: Rural Development
Part 4: Conformity Clearance Procedure and Net Financial corrections
Part 5: Debt management by the Member States
Part 6: Cross compliance
agri_aar_2016_annexes Page 63 of 273
Part 1: Description of the system for shared management and the various levels of control in place
Level 1: Compulsory administrative structure at the level of Member States
Management and control of the expenditure is entrusted to dedicated Paying Agencies, which prior to their operation must be accredited by the Member States on the basis of a
comprehensive set of accreditation criteria laid down in EU law. The Paying Agencies' compliance with these criteria is subject to a constant supervision by the competent
national authority, and clear procedures exist as to how to address and remedy any problems.
Moreover, the directors of the Paying Agencies are required to provide an annual
management declaration which covers the completeness, accuracy and veracity of the
accounts as well as a declaration that a system is in place which provides reasonable assurance on the legality and regularity of the underlying transactions. For those Member
States with only one Paying Agency, this management declaration from the director of the Paying Agency, together with the certificate and opinion of the Certification Body (see
Part 3), constitutes by definition the annual summary referred to in point (b) of Article 59(5) of the Financial Regulation28. The Member States which have more than one Paying
Agency are further required to produce a synthesis report of all management declarations.
Level 2: Detailed systems for controls before payments and dissuasive penalties For each aid support scheme financed by the EAGF or EAFRD, there is a system of
administrative and on-the-spot checks to be performed before payments to beneficiaries, completed with dissuasive penalties in case of serious non-compliance by the beneficiary.
These systems are to be applied by the Paying Agencies and contain some common features and special rules tailored to the specificities of each aid regime. The systems
generally provide for exhaustive administrative controls of 100% of the aid applications, cross-checks with other databases where this is considered appropriate as well as on-
the-spot checks of a sample of transactions ranging between 1% and 100%, depending
on the risk associated with the regime in question. If the on-the-spot checks reveal a high number of irregularities, additional controls must be carried out.
In this context, the by far most important system is the Integrated Administration and Control System (IACS), which in financial year 2016 covered 93.9% of EAGF expenditure
(93.8% in 2015). To the extent possible, the IACS is also used to manage and control rural development measures relating to parcels or livestock, which in 2016 accounted for
50.1% of payments under the EAFRD (54.1% in 2015). For both Funds together, the IACS covered 84.2% of total expenditure.
A detailed reporting from the Member States to the Commission on the individual results
of the checks they carried out is provided for in the legislation. The reporting system enables a calculation, for the main aid schemes, of the extent of error found by the
Member States at the level of the final beneficiaries. The reliability of the control data reported by the Paying Agencies and the quality of the underlying controls are also to be
verified and validated by the Certification Bodies.
Level 3: Audits by Certification Bodies and controls after payment
The Paying Agencies' annual accounts, the functioning of their internal control procedures and the legality and regularity of the expenditure for which reimbursement has been
requested from the Commission are to be verified and certified by the Certification
Bodies. The report of the Certification Bodies shall also include a detailed review of the Paying Agencies' compliance with the accreditation criteria and a verification of the
Management Declarations. In addition, all aid measures under EAGF other than direct
28 Regulation (EU, Euratom) No. 966/2012 of the European Parliament and of the Council on the financial rules
applicable to the general budget of the Union
agri_aar_2016_annexes Page 64 of 273
payments covered by the IACS are subject to ex-post controls under Articles 79 to 88 of Regulation (EU) No 1306/201329. As regards EAFRD, ex-post checks are carried out for
investment operations according to Article 52 of Commission Implementing Regulation (EU) No 809/201430.
Level 4: Commission audits and clearance of accounts
Finally, the clearance system applied by the Commission consists of both an annual financial clearance of accounts and a multi-annual conformity clearance
procedure.
The financial clearance of accounts covers the completeness, accuracy and veracity of
the Paying Agencies' accounts, and is without prejudice to decisions subsequently adopted pursuant to the conformity clearance procedure.
Moreover, it includes a mechanism under which 50% of any undue payments which the
Member States have not recovered from the beneficiaries within 4 or, in the case of legal proceedings, 8 years will be charged to their respective national budgets (50/50 rule). If
the undue payments are the result of administrative errors committed by the national
authorities, the entire amount involved is deducted from the annual accounts and, thus, excluded from EU financing. Even after the application of the 50/50 rule, Member States
are, however, obliged to pursue their recovery procedures and, if they fail to do so with the necessary diligence, the Commission may decide to charge the entire outstanding
amounts to the Member State concerned.
The conformity clearance audits, for their part, relate to the legality and regularity of the expenditure. The conformity clearance is designed to exclude expenditure as regards
EAGF from EU financing which has not been executed in conformity with EU rules, or as
regards the EAFRD has not been spent in conformity with the applicable EU and national rules, thus shielding the EU budget from expenditure that should not be charged to it
(net financial corrections). In contrast, it is not a mechanism by which irregular payments to beneficiaries are recovered from beneficiaries, which according to the
principle of shared management is the sole responsibility of Member States.
Financial corrections are determined on the basis of the nature and gravity of the infringement and the financial damage caused to the EU. Where possible, the amount is
calculated on the basis of the loss actually caused or on the basis of an extrapolation
(usually such calculations are based on work carried out by or information supplied by the Member States). Where this is not possible, flat-rates are used which take account of
the severity of the deficiencies in the national control systems in order to reflect the financial risk for the EU. Where undue payments are or can be identified as a result of
the conformity clearance procedures, Member States are required to follow them up by recovery actions against the final beneficiaries. However, even where this is not possible
because the financial corrections only relate to deficiencies in the Member States' management and control systems, financial corrections are an important means to
improve these systems and, thus, to prevent or detect and recover irregular payments to
final beneficiaries. The conformity clearance procedure thereby contributes to the legality and regularity of the transactions at the level of the final beneficiaries.
29 Regulation (EU) No 1306/2013 of the European Parliament and of the Council on the financing, management
and monitoring of the common agricultural policy 30 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
agri_aar_2016_annexes Page 65 of 273
In order to determine which measures and/or Paying Agencies to visit each year, DG AGRI carries out, in accordance with the audit strategy, a comprehensive risk
assessment, which includes both quantitative and qualitative analysis of risks. In the preparation of the audit work programme, the paying agencies, Member States,
certification bodies and the specific part of the control system to be audited in a 3-year time period are selected on the basis of risk mapping using all available information and
the following main elements:
Central Risk Analysis (CRA)
Sector-specific risk analysis
Risk mapping based on the annual activity report and Certification Bodies opinion on legality and regularity
Risk mapping based on the CAP reform and other external factors.
What is the Central Risk Analysis?
DG AGRI's Central Risk Analysis (CRA) serves the purpose to apply a common and
unique approach for planning its conformity audits. It is based on the latest certified expenditure under the clearance of accounts exercise. It aims to ensure that the work of
the entire directorate is orientated and focussed on the main risks.
For the CRA the following indicators are taken into account: 1) materiality (amounts of declared expenditure), 2) latest audit year (period elapsed since the latest audit of the
measure in question), 3) inherent risk to the measure in question, 4) control system risks (risk associated with the control system), 5) Paying Agency risk (risk related to the
Paying Agency) and finally 6) the OLAF risk (related to OLAF denunciations and irregularities) and 7) the European Court of Auditors (ECA) risk (related to the findings
from the ECA).
The CRA is established at Paying Agency / audit field level (audit field = aid measures
with a similar control system) as the audits are addressed to a specific Paying Agency for
auditing expenditure spent for aid schemes under one or more specific audit fields.
From mid-2014, DG AGRI introduced a rolling three-year audit work programme. The
CRA is now carried out after the financial clearance exercise in order to use information resulting from the analysis of the opinions of the Certification Bodies and also to include
in the audit work programme any audit missions necessary in the context of following up
reservations or as a result of findings notified by the Certification Bodies.
Explanatory Box: Annex 10-1.1
agri_aar_2016_annexes Page 66 of 273
With a view to taking a more multi-annual perspective for the new programming period, in 2014 the DG AGRI audit directorate adopted an audit strategy for the period 2014-
2020.
DG AGRI audit strategy for 2014-2020
The DG AGRI audit strategy aims to formalise the main elements of the clearance of accounts system in terms of background, context, objectives, risks assessment, audit
approach and indicators for the audit activities. In particular, it aims to identify the main inherent risks and control risks that will have to be addressed in the coming years, not
only taking into account the changes introduced by policy developments and the
implementation of the CAP 2014-2020 but also considering previous years' experience and audit findings.
This audit strategy recalls the principle that DG AGRI audits are first and foremost system-based with risk-based audits checking specific components of the Paying
Agencies' or Member States' internal control systems. Notwithstanding, it opens the door to defining other ways of addressing specific risks or situations in particular Paying
Agencies or Member States.
In addition, it anticipated the impact of the extended role given by the Horizontal
Regulation on the financing, management and monitoring of the Common Agricultural
Policy (Regulation No 1306/2013) to the Certification Bodies. From the beginning of 2016 (in respect of financial year 2015), Certification Bodies give an opinion on the legality and
regularity of the expenditure for which reimbursement was requested from the Commission to a much greater extent and detail than has been the case under the
previous regulatory frameworks. Not only the information thus gathered have to be evaluated and input to DG AGRI's own risk analysis, but its impact on the focus and
scopes of DG AGRI audit activities are to be fully taken into account. When done in accordance with applicable rules and guidelines, the audit work of the Certification Bodies
becomes the key element for assurance on the legality and regularity of the CAP
expenditure. Therefore DG AGRI is progressively rebalancing its audit activities towards checking the reliability of the opinion of the Certification Bodies. Conformity clearance
procedures continue to be used in cases where insufficient assurance, for instance because the work of the Certification Body is not in accordance with guidelines, creates a
risk to the EU budget.
Explanatory Box: Annex 10-1.2
agri_aar_2016_annexes Page 67 of 273
Part 2: Functioning of the Paying Agencies
2. Financial clearance exercise for financial year 2016
The rules on the financing of the CAP provide for an annual financial clearance exercise
covering the completeness, accuracy and veracity of the Paying Agencies' accounts. By 15 February (with possible extension to 1 March) following the end of the financial year
in question, Member States are required to send the annual accounts of their Paying
Agencies to the Commission, together with an audit opinion from the Certification Body of each Paying Agency stating whether it has gained reasonable assurance that these
accounts are complete, accurate and true, that the agency's internal control procedures have operated satisfactorily and, since 2015, that the expenditure for which
reimbursement was requested from the Commission is legal and regular. The Commission has until 30 April to review this information and communicate its findings to
the Member States. Where the information received is considered acceptable, the Commission has, until 31 May, to adopt a decision clearing the accounts of the Paying
Agencies concerned.
The financial year 2016 for the EAGF and EAFRD Funds runs from 16 October 2015 to 15 October 2016. By 1 March 2017, the 2016 accounts of 78 out of 80 Paying Agencies were
submitted. Of these, only 77 had submitted the related audit reports and opinions from the Certification Bodies. The Certification Body report for GB06 - SGRPID was received on
2 March 2017. By 31 March, the Certification Body reports for BG01 - State Fund Agriculture and DK02 - Danish AgriFish Agency had not yet been received, consequently
the accounts for these two Paying Agencies will be disjoined.
As in previous financial clearance exercises, the accounts of a limited number of Paying
Agencies will probably not be cleared by the 31 May deadline. This is either because the
annual accounts and audit opinion were submitted after the 1st of March (see above), or the opinions from the Certification Bodies are qualified, thus requiring further work from
the Paying Agencies and/or from the Certification Bodies, or the level of error exceeds the materiality threshold for the fund. The accounts of these Paying Agencies will be
disjoined from the financial clearance decision due by 31 May 2017 and cleared at a later stage. In such cases, DG AGRI takes into account the qualifications and/or the levels of
detected error when making adjustments to the error rate of the population concerned (for details on the specific cases considered for financial year 2016, please see sections 3
to 5 of Annex 10).
2.1 Compliance with the accreditation criteria
2.1.1 Status of the Paying Agencies' accreditation
At 15 October 2016, the 28 Member States had 80 operating accredited Paying Agencies. This is the same number of Paying Agencies as at 15 October 2015.
The status of accreditation of the 80 Paying Agencies was as follows on 15 October 2016:
79 fully accredited Paying Agencies
1 Paying Agency (OPEKEPE in Greece) continued to be under limited accreditation; accreditation continues to be limited to those EAFRD
measures for which a proper control system and procedures have been
put in place (no further measures have been accredited since April 2011).
agri_aar_2016_annexes Page 68 of 273
Status of Paying Agencies' accreditation
At the beginning
of financial year 2016
At the end of
financial year 2016
Fully accredited
Limited accreditation Accreditation under probation or provisional
accreditation
79
131 0
79
11 -
Total Member States: 28 80 80
Table: Annex 10 – 2.1
2.1.2 Certification of the functioning of the Paying Agencies' internal control systems and the accounts
In the context of the financial clearance exercise for financial year 2016, the Certification Bodies are required – besides certifying the accounts of the Paying Agencies - to report
on and certify whether the Paying Agencies' internal control systems operated satisfactorily.
Taking into consideration the EAGF / EAFRD split, 150 opinions (70 Paying Agencies
dealing with both Funds and 10 Paying Agencies dealing only with one Fund – 8 dealing exclusively with EAGF and 2 exclusively with EAFRD) covering the internal control
systems, should be received.
19 Paying Agencies requested permission32 to submit the accounts or audit opinions and
related reports after the deadline of 15 February 201733. 17 requests were accepted. With the exception of BG01 - State Fund Agriculture; DK02 – Danish AgriFish Agency and
GB06 - SGRPID, all audit opinions and reports had been received by the ultimate deadline 1 March 2017. The Certification Body report for GB06 - SGRPID was received on
2 March 2017. By 31 March, the Certification Body reports concerning paying agencies
BG01 - State Fund Agriculture and DK02 - Danish AgriFish Agency have not been received. The accounts for these two Paying Agencies will consequently be disjoined.
By 31 March, 146 audit opinions had been received and assessed. In all cases, the Certification Body concluded that the internal control system of the Paying Agencies
operated at least satisfactorily34. Despite this assessment, in 4 cases, the Certification Body qualified its opinion on the EAFRD accounts. In 3 cases (ES14 – Navarra, FR18 –
ODARC and SK01 - APA) the qualification was due to the presence of material error, either at fund level or at population (EAFRD IACS or EAFRD Non-IACS) level in the EAFRD
accounts. In case of IT26 – ARCEA, the reservation was linked to issues in public
procurement. See Annex 10, part 3.3, for more information on these 4 cases.
For EAGF a qualified opinion was issued for CY01 - CAPO regarding information and
control activities of third parties and RO02 – PIAA for the detected differences and suspicion of fraud. In addition for MT01 – MRRA a disclaimer of opinion has been issued
for the EAGF accounts with regard to the livestock payments for Voluntary Couple Support. See Annex 10, part 3.2, for information on these 3 cases.
31 OPEKEPE (Greece) 32 According to the provisions of Article 59(5) of the Financial Regulation (EU, Euratom) No 966/2012 and
Article 7(3) of Regulation (EU) No 1306/2013 of the European Parliament and of the Council, the deadline of 15
February may exceptionally be extended by the Commission to 1 March. 33 BG01 - State Fund Agriculture; CY01 – CAPO, DE17 - Rhineland Pfalz; DE23 - Thüringen; DK02 - Danish
AgriFish Agency; ES07 - Castilla La Mancha; ES08 - Castilla y Leon; ES10 - Extremadura; ES11 – Galicia; ES13
– Murcia; ES14 - Navarra; GB05 - DARD; GB06 - SGRPID; GB07 - WAG; GB09 - RPA; GR01 - OPEKEPE; PT03-
IFAP, RO01 - RIFA; RO02 - APIA 34 ratings of “works well”, “works” or “works partially”
agri_aar_2016_annexes Page 69 of 273
2.1.3 The Commission's accreditation audits and summary of findings
The Commission regularly performs accreditation audits. The selection of these audits is
based on a detailed risk assessment, to check whether the Paying Agencies (continue to) respect the accreditation criteria. As the unit's resources were primarily focused on the
Certification Bodies' work on legality and regularity, on conducting two financial clearance exercises as in 2016 the rural development programmes for 2007-2013 had to be cleared
for closure, and on addressing the accumulated backlog of ongoing enquiries from previous years, only one accreditation mission took place during the year. This was to the
Italian Paying Agency IT01 – AGEA. This mission was a follow-up on the implementation
of an action plan developed by the Paying Agency which was aimed at mitigating the risks identified by the competent authority in 2014.
2.1.4 The Certification Bodies' main findings on accreditation for financial year 2016
By 31 March, the Certification Body report for BG01 - State Fund Agriculture and DK02 - Danish AgriFish Agency were still outstanding.
In the opinion of the Certification Bodies, none of the Paying Agencies have deficiencies that are serious enough to conclude that they no longer comply with the accreditation
criteria.
Concerning the Italian Paying Agency IT01 – AGEA, it is recalled that the Competent Authority placed the Paying Agency under probation on 25 April 2014. Full accreditation
was reinstated on 25 April 2015 after a remedial plan required by the Competent Authority had been implemented. However, the reinstatement of accreditation was
accompanied by a recommendation that the Paying Agency successfully implemented a separate action plan, that was more detailed than the remedial plan of the Competent
Authority and which covered various accreditation criteria. The deadline for full implementation of the action plan was 15 October 2015. After several delays in its
implementation, the deadline was subsequently extended to 15 October 2016. A mission
carried out by DG AGRI in November 2016 found that the Action Plan had not yet been fully implemented by the extended deadline. DG AGRI has been following the
developments since then also with a view to assessing the financial risk for the EU funds. The Certification Body, in its audit report concerning FY2016, reported on some
deficiencies of intermediate level in the accreditation criteria, but did not identify major deficiencies. However, in its comments on the Action Plan, the Certification Body
concluded that, despite the clear progress made by the Paying Agency AGEA in the implementation of the Action Plan, various problems remain.
Concerning the Paying Agency in the Czech Republic CZ01, there is an ongoing
conformity procedure by DG AGRI in relation to a conflict of interest situation and possible breach of the accreditation criteria, as members of the supervisory board of the
Paying Agency were at the same time connected to beneficiaries of agricultural funds.
2.1.5 Conclusion on the opinion on the Internal Control System
The opinions of the Certification Bodies' reports received, and with the exception of the delayed submission for BG01 and DK02, is that the Internal Control Systems of all the
Paying Agencies function adequately.
agri_aar_2016_annexes Page 70 of 273
2.2 Management Declaration from the Directors of the Paying Agencies and related opinions from the Certification Bodies
2.2.1 Management Declaration from the Directors of the Paying Agencies
In respect of financial year 2016, the Directors of all Paying Agencies, except BG01- State Fund Agriculture and DK02 - Danish AgriFish, submitted to the Commission their
management declarations on the completeness, accuracy and veracity of the accounts, on the proper functioning of the internal control systems and on the legality and
regularity of the underlying transactions. All declarations were without reservations (see table 1 below).
According to the Guideline on the Management Declaration, in the event that any
deficiency is identified in the context of establishing the Management Declaration which
does not fulfil the criteria for justifying a reservation but which, in the opinion of the Director of the Paying Agency nonetheless constitutes an issue which should be brought
to the attention of the Commission services, this should be disclosed in a document attached to the Management Declaration.
The declaration of the Paying Agencies BE03 – Region Wallonia, GB05- DAERA, GB06 –
SGRPID, GB07- WAG, GB09 – RPA, RO01 – PARDF and SE01 – SJV included such a document.
For BE03 – Region Wallonia, it concerned challenges related to the implementation of the CAP reform.
For GB05- DAERA it concerned management and control issues related to debts under
EAFRD Less Favoured Areas. For GB06 – SGRPID it covered delays and possible inaccuracy in the production of control statistics due to problems with the IT system;
ongoing monitoring of the action plan related to EAFRD; and issues related to the Internal Audit Function. In the case of GB07- WAG, it concerned issues related to the
administrative processing of EAFRD IACS claims. For GB09 – RPA it concerned a number
of EAFRD IACS transactions that had been paid from EAFRD funds without all the necessary checks to prove the eligibility of the associated payments having been
completed.
For SE01 – SJV the specific document concerned the challenges related to the implementation of the CAP reform, including the delays in the production of control
statistics for EAGF and EAFRD IACS.
For RO01 – PARDF the document concerned the action plan put in place to remedy the
deficiencies in measure 215-Animal welfare. The action plan is reported as finalised.
agri_aar_2016_annexes Page 71 of 273
EAGF IACS EAGF NIACS EAFRD IACS EAFRD NIACS
1 AT01 AMA Y Y Y Y
2 AT03 Zollamt Salzburg N/A Y N/A N/A
3 BE02 ALV Y Y Y Y
4 BE03 Rég. Wallonne Y Y Y Y
5 BG01 State Fund Agriculture Not received Not received Not received Not received
6 CY01 CAPO Y Y Y Y
7 CZ01 SAIF Y Y Y Y
8 DE01 BLE N/A Y N/A Y
9 DE02 Hamburg-Jonas N/A Y N/A N/A
10 DE03Baden-Württemberg
MLRY Y Y Y
11 DE04 Bayern StMLF Y Y Y Y
12 DE07 Brandenburg MLUV Y Y Y Y
13 DE09 Hamburg Y Y Y Y
14 DE11Mecklenburg-
Vorpommern MELFFY Y Y Y
15 DE12 Niedersachsen Y Y Y Y
16 DE15 Nordrhein-Westfalen Y Y Y Y
17 DE17 Rheinland-Pfalz Y Y Y Y
18 DE18 Saarland AAL Y Y Y Y
19 DE19 Sachsen Y Y Y Y
20 DE20 Sachsen-Anhalt Y Y Y Y
21 DE21 Schleswig-Holstein Y Y Y Y
22 DE23 Thüringen Y Y Y Y
23 DE26 Hessen Y Y Y Y
24 DK02 DAFA Not received Not received Not received Not received
25 EE01 PRIA Y Y Y Y
26 ES01 Andalucia Y Y Y Y
27 ES02 Aragón Y Y Y Y
28 ES03 Asturias Y Y Y Y
29 ES04 Islas Baleares Y Y Y Y
30 ES05 Islas Canarias y y Y Y
31 ES06 Cantabria Y Y Y Y
32 ES07 Castilla La Mancha Y Y Y Y
33 ES08 Castilla y Léon Y Y Y Y
34 ES09 Cataluña Y Y Y Y
35 ES10 Extremadura Y Y Y Y
36 ES11 Galicia Y Y Y Y
37 ES12 Madrid Y Y Y Y
38 ES13 Murcia Y Y Y Y
39 ES14 Navarra Y Y Y Y
40 ES15 País Vasco Y Y Y Y
41 ES16 La Rioja Y Y Y Y
42 ES17 C. Valenciana Y Y Y Y
43 ES18 FEGA N/A Y N/A Y
44 FI01 MAVI Y Y Y Y
45 FR05 ODEADOM Y Y N/A N/A
46 FR18 ODARC N/A N/A N/A Y
47 FR19 ASP Y N/A Y Y
48 FR20 France Agrimer N/A Y N/A N/A
49 GB05 DAERA Y Y Y Y
Is the Management Declaration free of reservations?
PAYING AGENCY DIRECTOR'S MANAGEMENT DECLARATION
Paying Agency
2.5/ TABLE 1
Reservation/Additional remark
Additional remark: material error rate in the
EAFRD IACS population; explanations
provided
Additional remark: material error rate in the
EAFRD IACS population; explanations
provided
Additional remark: material error rates in
the EAGF and the EAFRD IACS populations;
explanations provided
Additional remark: material error rates in
the EAGF IACS and Non-IACS populations;
explanations provided
Additional remark: material error rates in
the EAFRD IACS and EAGF Non-IACS
populations, explanation of corrective
actions
Additional remark: material error rates in
the EAGF Non-IACS and EAFRD IACS
populations; explanations provided
Additional remark: explanation of issues
related to management and control of
debts under EAFRD Less Favoured Area
Compensatory Allowances scheme.
agri_aar_2016_annexes Page 72 of 273
50 GB06 SGRPID Y Y Y Y
51 GB07 WAG Y Y Y Y
52 GB09 RPA Y Y Y Y
53 GR01 OPEKEPE Y Y Y Y
54 HR01 PAAFRD Y Y Y Y
55 HU01 ARDA Y Y Y Y
56 IE01 DAFM Y Y Y Y
57 IT01 AGEA Y Y Y Y
58 IT02 SAISA N/A Y N/A N/A
59 IT03 ENR Y N/A N/A N/A
60 IT05 Veneto (AVEPA) Y Y Y Y
61 IT07 Toscana (ARTEA) Y Y Y Y
62 IT08Emilia-Romagna
(AGREA)Y Y Y Y
63 IT10 ARPEA Y Y Y Y
64 IT23 OPR Lombardia Y Y Y Y
65 IT24 OPPAB Y N/A Y Y
66 IT25 APPAG Y N/A Y Y
67 IT26 ARCEA Y N/A Y Y
68 LT01 NMA Y Y Y Y
69 LU01 Min. Agric. Y Y Y Y
70 LV01 RSS Y Y Y Y
71 MT01 MRRA PA Y Y Y Y
72 NL04 RVO Y Y Y Y
73 PL01 ARMA Y Y Y Y
74 PL02 AMA N/A Y N/A N/A
75 PT03 IFAP Y Y Y Y
76 RO01 PARDF N/A N/A Y Y
77 RO02 PIAA Y Y N/A N/A
78 SE01 SJV Y Y Y Y
79 SI01 AAMRD Y Y Y Y
80 SK01 APA Y Y Y Y
Additional remark: material error rate in the
EAFRD IACS population and explanations of
the actions taken
Additional remark: delays and possible
inaccuracy in the production of control
statistics due to problems with the IT
system; issues related to the Internal Audit
Function.
Additional remark: control issues with one
delegated body
Additional remark: material error rates in
the EAGF and the EAFRD IACS populations,
and in EAGF Non-IACS; explanations
provided
Additional remark: material error rate in the
EAFRD IACS population; explanations
provided
Additional remark: material error rate in the
EAGF IACS and EAFRD IACS populations;
explanations provided
Additional remark: the anti-fraud strategy is
still not fully implemented
Additional remark: material error rates in
the EAGF and the EAFRD IACS populations;
explanations provided
Additional remark: material error rate in the
EAGF IACS and Non-IACS populations;
explanations provided
Additional remark: control statistics for
EAFRD IACS are still not produced
Additional remark: material error rate in the
EAFRD Non-IACS population; explanations
providedAdditional remark: material error rate in the
EAFRD IACS population; explanations
provided
Additional remark: material error rates in
the EAGF and EAFRD IACS, as well as
EAFRD Non-IACS populations; explanations
provided
Additional remark: material error rates in
the EAGF and EAFRD IACS, as well as
EAFRD Non-IACS populations; explanations
provided
Additional remark: material error rate in the
EAFRD IACS population and explanations
provided
agri_aar_2016_annexes Page 73 of 273
2.2.2 Opinion of the Certification Bodies on the Management Declaration
Table 2 lists the individual opinions of Certification Bodies on the Paying Agencies'
Management Declarations. Please also see section 2.3.3.
EAGF IACS EAGF NIACS EAFRD IACS EAFRD NIACS
1 AT01 AMA Y Y Y Y
2 AT03 Zollamt Salzburg N/A Y N/A N/A
3 BE02 ALV Y Y Y Y
4 BE03 Rég. Wallonne Y Y Y Y
5 BG01 State Fund Agriculture Not received Not received Not received Not received
6 CY01 CAPO N N Y Y
7 CZ01 SAIF Y Y Y Y
8 DE01 BLE N/A Y N/A Y
9 DE02 Hamburg-Jonas N/A Y N/A N/A
10 DE03 Baden-Württemberg MLR Y Y Y Y
11 DE04 Bayern StMLF Y Y Y Y
12 DE07 Brandenburg MLUV Y Y Y Y
13 DE09 Hamburg Y Y Y Y
14 DE11Mecklenburg-Vorpommern
MELFFY Y Y Y
15 DE12 Niedersachsen Y Y Y Y
16 DE15 Nordrhein-Westfalen Y Y Y Y
17 DE17 Rheinland-Pfalz Y Y Y Y
18 DE18 Saarland AAL Y Y Y Y
19 DE19 Sachsen Y Y Y Y
20 DE20 Sachsen-Anhalt Y Y Y Y
21 DE21 Schleswig-Holstein Y Y Y Y
22 DE23 Thüringen Y Y Y Y
23 DE26 Hessen Y Y Y Y
24 DK02 DAFA Not received Not received Not received Not received
25 EE01 PRIA Y Y Y Y
26 ES01 Andalucia Y Y Y Y
27 ES02 Aragón Y Y Y Y
28 ES03 Asturias Y Y Y Y
29 ES04 Islas Baleares Y Y Y Y
30 ES05 Islas Canarias Y Y Y Y
31 ES06 Cantabria Y Y Y Y
32 ES07 Castilla La Mancha Y Y Y Y
33 ES08 Castilla y Léon Y Y Y Y34 ES09 Cataluña Y Y Y Y
35 ES10 Extremadura Y Y Y Y
36 ES11 Galicia Y Y Y Y
37 ES12 Madrid Y Y Y Y
38 ES13 Murcia Y Y Y Y
39 ES14 Navarra Y Y Y Y
40 ES15 País Vasco Y Y Y Y
41 ES16 La Rioja Y Y Y Y
42 ES17 C. Valenciana Y Y Y Y
43 ES18 FEGA N/A Y N/A Y
44 FI01 MAVI Y Y Y Y
45 FR05 ODEADOM Y Y N/A N/A
46 FR18 ODARC N/A N/A N/A Y
47 FR19 ASP Y N/A Y Y
48 FR20 France Agrimer N/A Y N/A N/A
49 GB05 DAERA Y Y Y Y
Emphasis of matter for EAGF Non-IACS and
EAFRD IACS
Emphasis of matter for both EAGF and EAFRD
Emphasis of matter
Emphasis of matter related to the error rates
reported for certains schemes
Emphasis of matter for EAFRD Non-IACS
Qualified for EAGF
Reservation/Remarks
CERTIFICATION BODIES' OPINION ON THE PAs' MANAGEMENT DECLARATION
Is the Management Declaration confirmed by the Audit
Opinion?
2.5/TABLE 2
agri_aar_2016_annexes Page 74 of 273
50 GB06 SGRPID N Y N Y
51 GB07 WAG Y Y Y Y
52 GB09 RPA Y Y Y Y
53 GR01 OPEKEPE Y Y Y Y
54 HR01 PAAFRD Y Y Y Y
55 HU01 ARDA Y Y N/A N/A
56 IE01 DAFM Y Y Y Y
57 IT01 AGEA Y Y Y Y
58 IT02 SAISA N/A Y N/A N/A
59 IT03 ENR Y N/A N/A N/A
60 IT05 Veneto (AVEPA) Y Y Y Y
61 IT07 Toscana (ARTEA) Y Y Y Y
62 IT08 Emilia-Romagna (AGREA) Y Y Y Y
63 IT10 ARPEA Y Y Y Y
64 IT23 OPR Lombardia Y Y Y Y
65 IT24 OPPAB Y N/A Y Y
66 IT25 APPAG Y N/A Y Y
67 IT26 ARCEA Y N/A Y N
68 LT01 NMA Y Y Y Y
69 LU01 Min. Agric. N N N N
70 LV01 RSS Y Y Y Y
71 MT01 MRRA PA N N N N
72 NL04 RVO Y Y Y Y
73 PL01 ARMA Y Y Y Y74 PL02 AMA Y Y Y Y
75 PT03 IFAP Y Y Y Y
76 RO01 PARDF N/A N/A Y Y
77 RO02 PIAA Y Y N/A N/A
78 SE01 SJV Y Y N Y
79 SI01 AAMRD Y Y Y Y
80 SK01 APA Y Y N N Qualified opinion for EAFRD
Emphasis of matter for EAFRD Non-IACS
Emphasis of matter for EAGF IACS
Disclaimer of opinion for EAFRD IACS
Qualified for EAFRD Non-IACS
Anti-fraud strategy not fully implemented
Disclaimer of opinion for EAGF and EAFRD
Qualified for EAGF and EAFRD IACS
Emphasis of matter for EAFRD IACS
EAFRD : The CB did not finalize the work on the
MD for EAFRD
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2.2.3 Follow-up of reservations included in the Paying Agency Directors' Management Declarations
There was no reservation included in the Management Declarations in the previous financial year that would have required a follow up.
2.2.4 Conclusion on the opinion on the Management Declarations of the Paying
Agencies
As mentioned in section 2, the Certification Bodies have to provide an opinion on the
Paying Agencies' Management Declarations based on their assessment of the residual risk
for the given population. A detailed assessment is included in section 2.3.3.
In several cases the Certification Bodies did not consider the Paying Agencies' control
statistics' error rate reported in the Management Declaration when drawing conclusions on the residual risk. Most of the Certification Bodies took into account their own results
(the incompliance rate calculated), which did not indicate a breach of materiality in the majority of cases. However, if the Certification Body confirms, with its own result, an
error rate reported by the Paying Agency in the control statistics which exceeds the level of materiality for the given population, that material error rate should be considered by
the Certification Body in the conclusion on the residual risk. As summarized in section
2.3.3 per population there was a number of Certification Bodies which concluded that the residual risk was not material based on their own incompliance rates without considering
the high error rate reported by the Paying Agency.
A few Certification Bodies, while they gave a qualified opinion on the accounts, gave an
unqualified opinion on the Paying Agency's Management Declaration even though the issues and errors identified are linked to legality and regularity of the expenditure
declared and so should have had an impact on the opinion on the Management Declaration. For HU01, the Certification Body has not finalized its audit work on the
Management Declaration for EAFRD to date, thus, no opinion on the Management
declaration for EAFRD was issued.
In such cases DG AGRI cannot use directly the conclusion on the Management
Declaration.
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2.3 Legality and regularity of the expenditure
2.3.1 Opinion of the Certification Bodies' work on legality and regularity of
expenditure
In accordance with Article 9 of Regulation (EU) 1306/2013, the Certification Bodies are
requested to give an opinion on the legality and regularity of expenditure for which
reimbursement has been requested. The Certification Bodies shall also provide an opinion on the completeness, accuracy and veracity of the accounts and the functioning of the
internal control system.
The opinion on legality and regularity should certify whether the expenditure effected in
the Member States during the financial year is legal and regular. Moreover, through their audit work on legality and regularity, the Certification Bodies should confirm the level of
errors in the management and control systems of the Paying Agencies in their opinion on the Management Declaration. This is done through a review of the control results which
include the results of the eligibility checks (administrative and on-the-spot controls)
carried out by the Paying Agency and the Management Declaration of the Paying Agency
The opinion is given at the level of each Paying Agency, covering both Funds (EAGF and
EAFRD) and the following four populations, organised as per the main internal control systems of the Paying Agency:
- EAGF IACS (schemes covered by the Integrated Administrative and Control System) - EAGF Non-IACS (schemes not covered by the IACS)
- EAFRD IACS (schemes covered by the Integrated Administrative and Control System) - EAFRD Non-IACS (schemes not covered by the IACS)
Integrated sampling approach: According to Article 9 (2)(b) of Regulation (EU)
1306/2013 the Certification Bodies can use a single integrated sample for each population where appropriate. The integrated sampling approach means that the
Certification Bodies can use one statistical sample to test the legality and regularity of expenditure declared (including the administrative and on-the-spot eligibility checks) and
the annual accounts.
The method starts with the review and assessment of the internal control system of the
Paying Agency, including compliance testing, i.e. testing the systems and procedures of the Paying Agency for compliance with the applicable regulations (see section 2.1). The
second and key part of the audit work is the substantive testing: through testing of
transactions (based on a statistical sample), the Certification Body auditors are requested to confirm the level of errors found in the initial eligibility checks performed by the Paying
Agency and, if not confirmed, to give a qualified opinion. The purpose of the Certification Body's substantive testing is twofold:
- to confirm the level of error in the checks of the Paying Agency in order to give an opinion on the legality and regularity of the expenditure and on the assertions
made in the Management Declaration and the control results of the Paying Agencies;
- to confirm the level of error in the payments and to give an opinion on the
accounts.
The Certification Body must provide two rates to assess the level of error in the checks of
the Paying Agency:
- An error rate related to the errors found in the payments made to the beneficiaries
based on comparing their results to the accounts of the Paying Agency. This will support the basis for the Certification Body’s' opinion on the annual accounts of the
Paying Agencies (see section 2.1.2).
- An incompliance rate related to the errors found based on the re-verified eligibility
checks (including administrative and on-the-spot controls), namely verification of legality and regularity. The maximum level of risk needs to be assessed taking
account of this incompliance rate. The Certification Body's opinion on the Paying
agri_aar_2016_annexes Page 77 of 273
Agency's Management Declaration (see section 2.2) is based on this result (see section 2.3).
For the purpose of assessing the reliability of the Paying Agencies' reported error rates stemming from their control results and for estimating an adjusted error rate, DG
AGRI takes into account the incompliance rate established by the Certification Bodies. In this assessment the following three scenarios may occur:
- The Certification Body calculated the incompliance rate, it validated the control results expressed in the control statistics (unqualified opinion on the Paying
Agency's Management Declaration) and it performed its work to standard: in this
case the Paying Agency's error rate should be retained as the final error rate unless DG AGRI auditors are aware of any systemic weaknesses not detected or not
quantified by the Certification Body.
- The Certification Body calculated the incompliance rate but it did not validate the control results (qualified opinion on the Paying Agency's Management Declaration)
and it performed its work to standard; In this case the Paying Agency's initial error rate shall be topped up by the incompliance rate where material in order to
establish the “adjusted error rate”;
- The Certification Body did not perform its task to standard; In this case the Paying
Agency's reported error rate shall be topped up as proposed by DG AGRI auditors. DG AGRI auditors also use the error rate (most likely error) established by the
Certification Body when determining the extent of the adjustment (top-up) to be made to
the error rate reported by the Paying Agency.
Explanatory box: Annex 10 – 2.2
The method is based on the audit method used for auditing financial statements in
accordance with internationally accepted audit standards. The focus is on compliance with applicable eligibility rules. Thus, through a statistical sample the auditors verify at
final beneficiary level if all eligibility criteria are met. Therefore, the Certification Bodies also need to perform re-verification of the on-the-spot controls done by the Paying
Agencies.
The reliability of the Certification Bodies' work has been assessed through dedicated audit missions and in the framework of the 2016 financial clearance exercise. The results are
outlined in the subsequent sections.
2.3.2 DG AGRI's audits of Certification Bodies' work on legality and regularity
In this second year of the Certification Body work on legality and regularity, DG AGRI in its audit programme gave priority to those Certification Bodies covering the Paying
Agencies with the highest expenditure which had not been audited in 2015. Moreover, the results and conclusions from the first year of the Certification Bodies' work on legality
and regularity were also taken into account.
Mission programme implemented in 2016
In 2016, the 16 missions listed in Table 2.3 below were carried out. The missions covered
the audit strategy of the Certification Bodies and the re-verifications of on-the-spot and administrative controls depending on the state of play of the Certification Body's work at
the time of the mission.
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Table: Annex 10 – 2.3
Summary of the main findings of these audits and monitoring activities
Due to the late appointment of some Certification Bodies, but not solely for this reason, some of the Certification Bodies did not plan a timely re-verification of controls, which is
in particular important for the IACS measures where controls and their re-verification shall be done in the summer/autumn of the claim year. In some cases the Certification
Bodies were not yet sufficiently familiar with the on-the-spot controls and therefore relied to a too large extent on the experience of the Paying Agency's own inspectors, without
ensuring an independent re-verification. The above instances were noted to various
degrees in 8 of the missions carried out in 2016 with scope on the IACS populations.
Previous conformity audit findings are not always taken into account in the Certification
Bodies' review.
Based on the observations from the missions, the majority of the Certification Bodies'
established the audit strategy in line with the approach outlined in the guidelines. However, there were some Certification Bodies for which this was not the case. In most
of the cases the error evaluation and the review of the control statistics could not be reviewed at the time of carrying out the missions as the Certification Bodies' audit had
not reached that stage yet.
In 10 of the 16 missions it was observed that the Certification Bodies' check on the eligibility criteria was not always sufficient (i.e. it did not cover all eligibility
requirements) or the conclusion was incorrect.
Nonetheless, it was concluded that reliance could be placed on 5 Certification Bodies for
their work on the audited population in scope of the Legality and Regularity mission.
Certification Body
ES04 Islas Baleares
Intervención General de la Comunidad
Autónoma de las Islas Baleares
ES13 Murcia
Intervención General de la Comunidad
Autónoma de la Región de Murcia
LT01 NMA KPMG Baltics
DE11 Mecklenburg-Vorpommern Deloitte & Touche GmBH
ES09 Cataluña
Intervención General de la Generalidad de
Cataluña
GB07 WAG National Audit Office
DE21 Schleswig-Holstein
Finanzministerium des Landes Schleswig-
Holstein
DE12 Niedersachsen/Bremen Niedersächsisches Finanzministerium
IT25 APPAG Deloitte & Touche SpA
EE01 PRIA KPMG Baltics OÜ
LU01 Ministère de l'Agriculture KPMG Luxembourg
FR20 France Agrimer
CCCOP (Commission de Certification des
Comptes des Organismes Payeurs)
GR OPEKEPE
SOL - Collaborating Chartered
Accountants S.A.
NL RVO Auditdienst Rijk
FI MAVI BDO Oy
BG01 SFA
Executive agency -Certification audit of
Agricultural Funds
List of Paying Agencies and related Certification Bodies audited on
legality and regularity in 2016
Paying Agency
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2.3.3 Summary of the opinions of the Certification Bodies' work on legality and
regularity of the expenditure
A complete review of the results of the Certification Bodies’ work and assessment of the
work on legality and regularity took place in the financial year 2016 financial clearance assessment which started in February 2017.
The results of the work on legality and regularity are expressed through assessment of the residual risk by the Certification Bodies. The conclusion of the assessment is reflected
in the Certification Body's opinion on the Paying Agency's Management Declaration.
EAGF IACS population
72 out of the 80 Paying Agencies declared expenditure under EAGF IACS schemes
Opinion on the Paying Agency's
Management Declaration
Number
of Paying Agencies
Related Paying Agencies
Unqualified
Qualified/Disclaimer of opinion
Opinion with an emphasis of matter Not received by 31 March 2017
64
4
2 2
-
LU01; CY01;GB06;MT01
FR19; RO02 BG01; DK02
Total Member States: 28 72
Table: Annex 10 – 2.4
For LU01 – Ministère de l’Agriculture, the reservation concerns the delay in the implementation of the anti-fraud strategy.
For CY01-CAPO and MT01- MRRA PA, the Certification Body issued a disclaimer of opinion.
For GB06- SGRPID, the Certification Body qualified the opinion because of potentially
incomplete and inaccurate control statistics.
The Certification Body of the Paying Agency FR19 – ASP, without qualifying its opinion,
emphasized that the control statistics for this population have not been transmitted to the Commission and that the Management Declaration does not include error rates.
Similarly, the Certification Body of RO02-PIAA included an emphasis of matter paragraph on the compilation of the control statistics and on the deteriorated error rates.
The residual risk was assessed as not material for all Paying Agencies except for Paying Agencies CY01; MT01 and RO02.
There was no material incompliance rate established.
EAGF Non-IACS population
73 out of the 80 Paying Agencies declared expenditure under EAGF Non-IACS schemes,
however, BG01 have not been received by 31 March 2017.
The only qualified opinion was for LU01 – Ministère de l’Agriculture, for the same reason
as mentioned above under the EAGF-IACS population.
For CY01-CAPO and MT01- MRRA PA, the Certification Body had a disclaimer of opinion.
For FR20-FranceAgrimer and ES16-La Rioja, the respective Certification Bodies made an emphasis of matter due to material error rates reported on some of the market
measures.
The Certification Bodies of the Paying Agencies ES16- La Rioja, HU01 – ARDA and RO02
– PIAA found material error (Most Likely Error exceeding the materiality) in this
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population, which should have been reflected upon in their assessment of the residual risk and/or in the opinion on the Management Declaration.
In 7 cases35 no separate opinion on the residual risk for the EAGF Non-IACS population has been provided as the Certification Body treated this population as a de-minimis
population.
EAFRD IACS population
69 Paying Agencies declared expenditure under EAFRD IACS measures.
Opinion on the Paying Agency's Management
Declaration
Number
of Paying
Agencies
Related Paying Agencies
Unqualified Qualified/Disclaimer of opinion
Opinion with an emphasis of matter
Not received by 31 March 2017
59 5
3
2
N/A GB06; LU01; MT01;SE01;
SK01 ES16; FR19; GB09
BG01; DK02
Total Member States: 28 69
Table: Annex 10 -2.5
For GB06- SGRPID, the Certification Body qualified the opinion because of potentially incomplete and inaccurate control statistics.
For LU01 – Ministère de l’Agriculture, the qualification concerned the delay in the implementation of the anti-fraud strategy.
For SK01- APA, the Certification Body, on the basis of its testing, assessed the residual risk as significant for both EAFRD IACS and Non-IACS and thus did not confirm the
control statistics and issued a qualified opinion.
For MT01- MRRA PA, the Certification Body did not issue an opinion for EAFRD IACS and Non-IACS, as it did not receive in a timely manner the Paying Agency's control results
and error rates in order to evaluate them.
For SE01-SJV, since the Paying Agency has not produced control statistics for EAFRD
IACS, the Certification Body issued a disclaimer of opinion.
For 4 Paying Agencies, the residual risk was assessed as material: GB-06 SGRPID, LT01-
NMA; RO01-PARDF and SK01-APA for the rest of the Paying Agencies the risk was not material.
For the Paying Agencies, for which there is a disclaimer of opinion by the Certification
Body (MT01-MRRA PA and SE01-SJV), the residual risk has not been evaluated. In 1 case: SK01-APA, the Certification Bodies found material error (Most Likely Error
exceeding the materiality) for this population.
35 DE04 – Bayern, DE21 - Schleswig-Holstein, DE23- Thüringen; GB05 – DARD, GB06 – SGRPID, GB07 – WAG,
GB09 – RPA
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EAFRD Non-IACS
72 Paying Agencies have expenditure declared under EAFRD Non-IACS measures.
Opinion on the Paying Agency's
Management Declaration
Number
of Paying Agencies
Related Paying Agencies
Unqualified
Qualified/Disclaimer of opinion
Opinion with an emphasis of matter
Not received by 31 March 2017
62
4
4
2
N/A
IT26; LU01; MT01;
SK01 ES10; FR18; FR19;
RO01 BG01; DK02
Total Member States: 28 72
Table: Annex 10 – 2.6
As regards the Certification Body's opinion on the Paying Agency's Management Declaration, qualifications were included for the same 2 Paying Agencies (LU01 and
SK01) as mentioned above for the EAFRD IACS population and for the same reasons.
The Certification Body for IT26-ARCEA issued a qualified opinion because of material differences encountered for some files, which led to an Upper Error Limit exceeding the
materiality threshold.
The Certification Body for MT01- MRRA PA did not issue an opinion as explained above for
EAFRD IACS.
Without qualifying its opinion, the Certification Body for ES10-Extremadura, FR18-
ODARC, FR19-ASP and RO01-PARDF issued an emphasis of matter on the error rates reported by the respective Paying Agencies in the control statistics/Management
Declarations.
For 5 Paying Agencies (ES03 – Asturias, FR18-ODARC, IT26-ARCEA, PL01-ARMA and SK01-APA), the Certification Body found material error (Most Likely Error exceeding the
materiality) for this population.
General assessment
In most of the cases it was confirmed by the Certification Bodies that the Paying Agencies had established the necessary action plans to remedy the weaknesses leading
to reservations in the 2015 Annual Activity Report of DG AGRI. The state of play and potential delays in the implementation were indicated by the Certification Bodies, but the
deficiencies leading to the implementation of the Action Plan were not always reflected in
the incompliance rate established by the Certification Bodies.
In the second year of delivering an opinion on the Paying Agency's Management
Declaration based on the substantive testing, the Certification Bodies encountered some difficulties in drawing conclusions on the Management declaration and the control
statistics, especially when a material incompliance rate was determined. In some cases, the Certification Bodies' own results are not correctly reflected in their assessment of the
residual risk and the opinion on the Management Declaration. In addition, as mentioned in section 2.2.4, in some cases the Certification Bodies' conclusions on the residual risk
are inconsistent with the error rates reported by the Paying Agencies in the control
statistics.
However, as summarised above, the reports from the Certification Bodies contain
numerous and valuable information on legality and regularity of the expenditure that has been examined in details by DG AGRI auditors and taken into account for their
assessment of the adjustments to be made to the error rates reported by the Paying Agencies. Annexe 10.3 contains detailed information on the use of the audit work of the
Certification Bodies to top-up error rates.
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2.3.4 Assessment of the Certification Bodies' work on legality and regularity The Certification Body's work on legality and regularity was assessed through several
components:
Timing of the re-verification of the on-the-spot controls, in particular whether the on-
the-spot controls carried out by the Paying Agency in claim year 2015 were verified by the Certification body in the same year, to minimise the risk that the situation of the
land parcels or animals concerned might have changed in the meantime.
Quality of Certification Body's re-verification of eligibility checks (administrative and
on-the-spot controls) through the DG AGRI audit missions and assessment of the
Certification Body's results, and in particular the technical skills and expertise that are necessary to be able, for instance, to very precisely assess the eligibility of land or to
check in details that a given procurement procedure respects all applicable rules.
Adequacy of the Certification Body's audit strategy, in particular adequacy of the risk
assessment especially in the first year of the CAP reform, evaluation of the representativeness of the Paying Agency random on-the-spot check sample and
sufficient testing for one or both audit objectives
and reported results (see previous sections).
Main observations per population:
EAGF IACS
This is the population for which the Certification Bodies could provide results on legality
and regularity to the greatest extent after the implementation of the new audit approach (under the reformed legal framework). Nevertheless, a number of Certification Bodies
could not start the re-verification of on-the-spot controls on time and as a result, re-verifications were done even in the autumn of 2016. In some cases, this was due to
delays from the respective Paying Agency in launching the control campaign after the CAP reform. A few Certification Bodies applied an inappropriate audit strategy which was
based on previous years' audits, failing to factor in the CAP reform and the new schemes
and new eligibility criteria. In addition, the new on-the-spot control sampling for Paying Agencies as defined in the legal framework (i.e. the cascade sampling) proved to be
challenging for the Certification Bodies in terms of auditing it and assessing its representativeness. In some cases, this resulted in the Certification Body not assessing
the representativeness of the Paying Agency's initial random sample for on-the-spot controls.
EAGF Non-IACS
In a number of cases no assessment of the residual risk was provided for the EAGF Non-
IACS population as it was treated as a de-minimis population. If the expenditure of the
given population is below 2% of the total expenditure declared to the Fund and if no specific risk is linked to the schemes or measures of that population the Certification
Bodies can decide to test the whole expenditure of the Fund under one single population. However, these conditions were not assessed correctly in all cases when this approach
was used, and an opinion on the residual risk should have been provided for this population as well. In several cases the Certification Bodies did not conclude on the
residual risk as no incompliance rate was calculated although conclusions could have been provided considering the error rate established for the certification of the accounts
and considering the internal control system testing. It was also found through the DG
AGRI audits carried out in 2016 and the assessment of the Certification Bodies' results in the financial clearance exercise that eligibility conditions are not always verified to their
full extent by the Certification Bodies.
agri_aar_2016_annexes Page 83 of 273
EAFRD IACS
For this population, like EAGF IACS, the Certification Bodies could provide results on
legality and regularity. Nevertheless, the Certification Bodies' work on legality and regularity can be relied upon to lesser extent than in the case of the EAGF IACS
population. Apart from the reasons mentioned under the EAGF IACS population, especially the timing issue, it was observed during the DG AGRI audits that for several
cases the re-verification of the on-the-spot controls were not performed correctly, i.e. commitments linked to respective measures are not appropriately re-verified by the
Certification Bodies, or not at all.
EAFRD Non-IACS
Due to the mismatch between payment claims, control statistics and payments, the
Certification Bodies could not always establish an incompliance rate and conclude on the control statistics. Moreover, in many cases, the Certification Bodies have used a stratified
approach for EAFRD (i.e. testing IACS and Non-IACS together), thus due to insufficient testing not being able to conclude on the control statistics and residual risk for Non-IACS.
Nonetheless, some Certification Bodies managed to test appropriately EAFRD Non-IACS and to provide conclusive results on the control statistics and the residual risk. For this
population, it was also found through the DG AGRI audits carried out in 2016 and the
assessment of the Certification Bodies' results in the financial clearance exercise that eligibility conditions are not always verified to their full extent by the Certification Bodies.
Overall conclusion on the Certification Bodies' work as regards DG AGRI's adjusted error rate calculation
In the second year of application of the new approach, the Certification Bodies delivered more results on auditing the legality and regularity of the expenditure compared to the
first year. The overall reliance on the results of the Certification Bodies' work on legality and regularity has increased compared to FY2015. Therefore, the Certification Bodies'
results could be taken into account to a greater extent in the calculation of DG AGRI's
adjusted error rate for FY2016.
However, for a number of Certification Bodies, reliability of the results of their work is
limited as a result of shortcomings detailed above.
One major issue is that most of the Certification Bodies limited the size of the samples to
the minimum, without, as set out in the Commission guidelines, assessing properly the Paying Agency's internal control system or the limitations in the effectiveness of their
own checks resulting for example from the late timing. As a result of insufficient testing, major conformity issues identified by other auditors (Commission and/or Court of
Auditors) were not found.
2.4 Overall conclusion on the Certification Bodies' work
Although in the second year of implementation, in some cases the Certification Bodies' work on legality and regularity was affected by weaknesses as described above,
assurance can be obtained from the Certification Bodies' opinions on legality and regularity.
In FY2016, in most cases, the Certification Bodies' work on legality and regularity was delivered to higher standard compared to FY2015. In general, the Certification Bodies
identified higher number of conformity issues and took into consideration findings coming
from DG AGRI/ECA's audits. However, this is not the case for all Certification Bodies. For some, the Certification Bodies' work on legality and regularity, and thus, its reliability,
was affected by inadequate audit risk response, late on-the-spot re-verifications, insufficient sample sizes and incorrect conclusions on eligibility.
DG AGRI considers the Certification Bodies' work on legality and regularity of expenditure, when done in accordance with applicable regulations and guidelines, the key
element in DG AGRI's assurance building model (cf. the pyramid of controls) where each upper layer builds its work upon the results of the previous layer, and where each layer
agri_aar_2016_annexes Page 84 of 273
may use the results of the upper layer to improve its own controls. It is also significant progress towards full implementation of the single audit approach.
Taking into account of the experience from the first 2015 and 2016 exercises, DG AGRI has presented Member States and finalised on 19 January 2017 new guidelines for
voluntary application from FY2018. DG AGRI will continue to work closely with the Certification Bodies, in order to continue to update where necessary the audit
methodology on legality and regularity and to assist them in the implementation thereof so as to ensure that a greater assurance can be drawn from their work in the future.
However, the timing of substantive testing will remain the same due to the inherent
nature of the CAP measures to be audited.
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Part 3: Control results at the level of the final beneficiaries, the assessment thereon by the Certification Bodies and the overall appreciation of the
Commission on their reliability taking into account all available information
Annex 10 - part 3 presents DG AGRI's process to calculate an adjusted error rate and the
amounts at risk to the EU budget from the starting point of the control data sent by the Member States and taking into account all other available relevant information.
This part of the Annex is split into three separate sections to deal with the three distinct AAB activities:
Part 3.1: ABB02: Market Measures
Part 3.2: ABB03: Direct Payments
Part 3.3: ABB04: Rural Development
Part 3.4 Error rate and corrective capacity
agri_aar_2016_annexes Page 86 of 273
Part 3.1 ABB02 – Market Measures
Index for part 3.1 – ABB02: Market Measures
3.1.1 Introduction
3.1.2 ABB02 Expenditure
3.1.3 What assurance does the Director General have regarding
the expenditure under ABB02 – Market Measures?
3.1.4 Fruit & Vegetable Sector
3.1.5 Wine sector
3.1.6 Posei & Aegean Islands
3.1.7 Export Refunds
3.1.8 School Milk Scheme
3.1.9 Conclusions for ABB02
3.1.10 Root causes of the error rate in market measures – is DG
AGRI doing anything?
3.1.1 Introduction
This ABB activity deals with measures many of which were put in place to provide a safety net for producers and support markets. Since the beginning of the CAP, price
support was the main instrument for ensuring market stability and a reasonable income to farmers. Price support or "intervention" was based on institutional prices set for
agricultural products which guaranteed a fixed price to farmers for their products. In today's CAP, market instruments are instead used to provide targeted, market safety
nets. Intervention prices are set at levels that ensure they are used only in times of real
price crisis and when there is a risk of market disruption.
3.1.2 ABB02 Expenditure
Before 1992, more than 90% of all EU agricultural expenditure went to market support including export subsidies; in 2009, that figure was down to 10% of the CAP budget and
by the end of 2015 it stood at 4.5% of the CAP budget (5.5% in 2013 and 4.5% in 2014). In the last two years, due to the allocation of additional funds for temporary
exceptional measures in the livestock sector, expenditure for ABB02 increased by around 1 000 million EUR and stood at 5.51% of the CAP budget in 2016.
The following chapter sets out the elements which DG AGRI uses in order to give
assurance on expenditure reimbursed to Member States in 2016.
The overall expenditure in shared management with the Member States is 3 135 795 805
EUR while a further 1 463 065 EUR relates to indirect expenditure by DG AGRI for promotion measures.
The total expenditure in 2016 amounts to 3 127 902 558 EUR.
The following table sets out the shared management expenditure reimbursed by DG AGRI
in 2016 for the various market sectors:
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Table Annex 10 – 3.1.1
3.1.3 What assurance does the Director General have regarding the
expenditure under ABB02 – Market Measures?
The assurance of the Director General is drawn from the various levels of management
and control that are in place and the results which can be obtained from them. ABB02 is characterised by a number of very diverse measures some of which incur very limited
expenditure and some of which are applicable in a limited number of Member States
only. The various market measures are completely different from each other with their own distinct control systems. In particular, control statistics only exist for around 63% of
expenditure. There is not enough data of a sufficiently broad, comprehensive and representative nature to allow the calculation of an adjusted error rate at individual
Paying Agency level. DG AGRI therefore deviates from the methodology used for ABB03 and ABB04 as set out in its Materiality Criteria at Annex 4 of this report. Where statistics
exist, an adjusted error rate has been calculated for the measure concerned. It does intend however to adhere as closely as possible to the principles set out in that Annex
and to diverge only where technically necessary.
The approach taken by DG AGRI, therefore, was to examine the situation for the largest spending measures in particular and for any measure for which it had statistical data. A
qualitative approach was taken on a measure by measure basis for the main expenditure items (annual spending above 100 m EUR). This approach was differentiated depending
on the information available for each scheme.
(i) Where statistics existed, along with a meaningful extent of other audit opinions (from
Certification Bodies, DG AGRI audits, ECA assessment) an adjusted error rate was estimated at scheme level.
(ii) Where this was not possible the approach taken examined the control environment
for each scheme, reported on DG AGRI's audit response over the preceding years as well as any other audit evidence, notably from ECA and from the Certification Bodies.
The professional audit judgement of the DG AGRI auditors was sought, on a measure by measure basis, as to the assurance that could be given to the Director General as
well as to give an assessment of the maximum amount of the expenditure which might be at risk.
(iii) For those measures for which there was neither statistical nor audit information
Chapter Article Sector/measure Expenditure (EUR)
050201 Cereals 0
050202 Rice 0
050203 Refunds on non-Annex 1 products 0
050204 Food programmes -968
050205 Sugar 0
050206 Olive oil 45 989 114
050207 Textile plants 6 134 000
050208 Fruit and vegetables 1 163 368 107
050209 Products of the wine-growing sector 1 027 130 938
050210 Promotion 62 587 884
050211 Other plant products/measures 242 007 764
050212 Milk and milk products 406 577 659
050213 Beef and veal 30 206 396
050214 Sheepmeat and goatmeat 1 836 787
050215 Pigmeat, eggs and poultry, bee-keeping and other animal products 140 601 812
3 126 439 493
ABB 02 direct management 05 02 10 02 Promotion measures - Direct payments by the Union 1 463 065
3 127 902 558ABB 02 total
Expenditure reimbursed by DG AGRI to the Member States in 2016
0502
ABB 02 shared management
agri_aar_2016_annexes Page 88 of 273
available, the average adjusted error rate resulting from the examination at points (i) and (ii) was extrapolated in order to assess the risk. For 2016, this was necessary
in respect of around 18% of expenditure for the ABB.
This approach has resulted in a clear conclusion being drawn for each of the measures
concerned on the effectiveness of each system in preventing, detecting and correcting errors as well as on the amount of expenditure considered to be at risk at measure level
and at ABB level.
For the 1.463 m EUR under direct management (promotion measures), DG AGRI
assesses the amount at risk as 1%. This is taken into account in the overall assessment
for ABB in paragraph 3.1.9 (Conclusions for ABB02).
3.1.4 Fruit and Vegetable Sector
The EU funding for the fruit and vegetable sector is targeted at measures to structure the
market. Growers are encouraged to join producer organisations (POs) in order to
strengthen the position of producers in the market. POs receive support for implementing operational programmes, based on a national strategy. They are the
principle operators in the fruit and vegetables regime.
The EU fruit and vegetable regime supports operational programmes implemented by
recognised producer organisations (POs), by making a funding contribution to the
programmes' operational funds. National authorities "recognise" groups of producers that meet the requirements of PO status. A recognised PO may set up an operational fund to
finance its operational programme (the latter must be approved by the national authorities). This fund is financed by the financial contribution of members (or the
producer organisation itself) and the EU financial assistance.
In certain regions, transitional support is also given to encourage producers, who wish to acquire the status of recognised POs, to form producer groups (PGs), to cover
administration costs and the investments needed to attain recognition as producer organisations. This funding may be partially reimbursed by the EU and it ceases once the
PG is recognised as a PO.
The school fruit scheme is an EU-wide voluntary scheme which provides school children with fruit and vegetables, aiming thus to encourage good eating habits in young
people. Besides providing fruit and vegetables to the children the scheme requires
participating Member States to set up strategies including educational and awareness-raising initiatives.
Temporary exceptional support measures for producers of certain fruit and vegetables were introduced by the Commission in August 2014 in order to provide relief to European
producers as a result of the market disturbances caused by the Russian ban on certain food imports. .
agri_aar_2016_annexes Page 89 of 273
Table Annex 10 – 3.1.2
3.1.4.1 Operational programmes of producer organisations
In 2016, the expenditure under this measure amounted to 862.5 m EUR.
Article 97(b) of Commission Regulation (EU) No 543/2011 obliges Member States to submit to the Commission by 15 November of each year an annual report on the
implementation of financial accounting controls and other checks on producer organisations' operational programmes.
DG AGRI audits on operational programmes of producer organisations carried out between 2014 and 2016 identified both recognition criteria issues and control deficiencies
for a number of Member States. The auditors consider that the error rates reported by some of these Member States do not fully reflect the irregular spending. In order,
therefore, to compensate for uncertainties with regard to the assurance that can be
taken from the Member States’ reported data, DG AGRI auditors reviewed all available data in order to come to a conclusion based on their professional audit judgment on what
was the likely extent of understatement in the error reported and (in line with the principles set out in step 3 of DG AGRI's materiality criteria – see Annex 4 to this AAR),
have adjusted the error rates concerned (BE, DK, ES, FR, GR, IT, NL, PT, SE).
The statistical reports received concern operational programme expenditure incurred in
financial year 2016 in respect of operational year 2015. The level of error detected by the Member States was 3.1% with rates above 2% reported by a number of Member States.
Is should be noted that this measure is subject to a very high degree of scrutiny by the
national authorities. Every producer organisation has to be checked on-the-spot at least once every three years in order to verify respect of recognition criteria as well as the
correct implementation of the operational programme. Due therefore, to the 100% (or close to 100%) control coverage in several of these Member States, there is little or no
Member
State
Operational
programmes for
producer organisations
Pre-recognition of
producer groups
School Fruit
Scheme
Temporary
exceptional
measures
Total Fruit &
Vegetables
AT 7 818 682 - 2 567 994 - 10 386 677
BE 56 861 325 - 2 815 024 - 59 676 349
CY 2 071 241 - 201 309 452 511 2 725 062
CZ 3 039 000 86 244 4 800 247 20 197 7 945 689
DE 40 627 683 - 23 982 725 - 64 610 408
DK 4 379 082 - 2 003 939 - 6 383 021
ES 252 667 017 - 7 820 929 1 113 337 261 601 284
FI 2 631 276 - - - 2 631 276
FR 100 807 023 2 551 2 127 845 16 773 102 954 193
GB 41 034 965 - - - 41 034 965
GR 28 913 896 - - 1 081 091 29 994 987
HU 4 158 099 3 225 845 4 748 138 - 12 132 083
IE 4 163 331 - 1 129 498 - 5 292 829
IT 241 698 099 - 20 480 135 298 208 262 476 442
LV 728 767 559 350 774 614 1 612 2 064 342
NL 39 682 278 - 4 753 632 270 937 44 706 847
PL 10 323 192 63 296 480 17 312 218 120 996 503 211 928 393
PT 13 748 326 - 408 520 20 005 14 176 851
RO 1 215 965 1 162 990 3 079 319 161 329 5 619 603
SE 4 717 997 - - - 4 717 997
SK 1 196 017 - 2 882 825 - 4 078 842
Grand Total 862 483 264 71 373 085 109 915 856 128 952 215 1 172 724 419
Expenditure by Measure in 2016 - Fruit and Vegetables
agri_aar_2016_annexes Page 90 of 273
error remaining in the uncontrolled population for those Member States on the basis of their "reported" error rates. For ES and FR, errors found by the Certification Bodies have
also been added to the amount at risk (0.584m and 0.437m EUR respectively).
DG AGRI's adjustments or "top-ups" to the reported error rates and their impact on the
amounts at risk are summarised in the following table:
Table Annex 10 – 3.1.3
The following summary sets out for all cases for the Operational Programmes for
Producer Organisations where the adjusted error rate is above 2%, the reasons which led to DG AGRI making top-ups to the reported error rates. In each case it is assessed
whether it is necessary to make a reservation and if so, an indication is given of the follow-up action required. It is noted that the error rates reported by all MS are inflated
to an unknown extent by the results of the administrative checks which are carried out on all files. DG AGRI will endeavour to clarify this with the MS for the next reporting
period.
Member
State
Aid paid for OPs
in 2015
% of claims
checked OTS
reported
error rateadjustment
amount at risk if
no top-up
amount at risk if
top-up
adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 7 818 682 60.9% 0.8% - 24 262 - 0.31% 24 262
BE 56 861 325 33.6% 0.5% 5.0% 176 828 2 843 066 5.31% 3 019 894
CY 2 071 241 100.0% 1.7% - - - - -
CZ 3 039 000 100.0% 0.1% - - - - -
DE 40 627 683 88.1% 2.3% - 113 325 - 0.28% 113 325
DK 4 379 082 28.7% 0.4% 7.0% 12 823 306 536 7.29% 319 359
ES 252 667 017 50.8% 5.2% 1.0% 6 416 039 2 605 780 3.57% 9 021 819
FI 2 631 276 40.8% 0.0% - 267 - 0.01% 267
FR 100 807 023 33.4% 0.5% 5.4% 350 094 5 478 055 5.78% 5 828 149
GB 41 034 965 100.0% 0.0% - - - - -
GR 28 913 896 100.0% 2.0% 5.0% - 1 445 695 5.00% 1 445 695
HU 4 158 099 99.8% 7.0% - 446 - 0.01% 446
IE 4 163 331 88.4% 1.8% - 8 774 - 0.21% 8 774
IT 241 698 099 79.9% 0.5% 2.7% 257 196 6 525 849 2.81% 6 783 045
LV 728 767 100.0% 0.5% - - - - -
NL 39 682 278 61.1% 22.7% - 3 498 811 - 8.82% 3 498 811
PL 10 323 192 100.0% 0.0% - - - - -
PT 13 748 326 42.9% 5.8% - 455 583 - 3.31% 455 583
RO 1 215 965 100.0% - - - - - -
SE 4 717 997 31.4% 0.8% 10.0% 24 856 471 800 10.53% 496 656
SK 1 196 017 100.0% 0.4% - - - - -
Grand Total 862 483 264 63.2% 3.1% 11 339 304 19 676 780 3.60% 31 016 085
Fruit and Vegetables - Operational Programmes for Producer Organisations
Calculation of adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 91 of 273
Member
State Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
BE 5.31% 3.02 m EUR A DG AGRI audit in 2016
detected deficiencies in the
checks on Operational
Programmes (OPs) concerning
the system of approval and
modification of operational
programmes and the checks to
establish the eligibility of the
aid which leads to a top-up of
5%.
Yes A reservation is entered in
respect of 2016 expenditure.
The deficiencies found have
already been remedied by the BE
authorities (the control
instructions regarding the checks
on OPs approval and the
verifications to establish the
eligibility of the aid were
updated).
The ongoing conformity clearance
procedure will ensure that the
financial risk to the EU budget is
covered. No formal action plan is
necessary.
DK 7.29% 0.319 m
EUR
A DG AGRI audit in 2016
identified deficiencies as
regards the checks carried out
before the approval of the OP
i.e. verification of the
soundness of estimates and in
the controls carried out on
measures of operational
programmes as well as the
absence of an ancillary control.
These deficiencies lead to a
top-up of 7%.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see Annex
4) no reservation is required.
It is also noted that the Danish
authorities have taken corrective
action which will take effect from
OP 2017.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
ES 3.57
%
9.022 m
EUR
A DG AGRI audit in 2016 found
weaknesses as regards the
control of personnel costs and
the use of selective carry over
in the Autonomous Community
of Valencia. These deficiencies
lead to a top-up of 5% for a
limited population.
The follow up of the
environmental actions in Spain
revealed that there were still
some shortcomings for limiting
the expenditure to the
additional costs. These
deficiencies lead to a top-up of
5% for a limited population.
The ES authorities have
reported an error rate of 5.2%
in their control statistics
(2.57% in the uncontrolled
population) to which is added
a top-up of 1% representing
the risk detected by DG AGRI
for limited populations as
described in the previous
paragraphs.
It is noted that the error rate
declared (incorrectly) includes
the results of the
administrative checks which
therefore inflates the error
rate.
Yes A reservation is entered in
respect of 2016 expenditure.
The Valencia authorities took
remedial measures from OP
2016.
The Spanish authorities amended
the Framework for Environmental
Actions and are finishing the
studies for calculating the specific
cost of certain environmental
actions.
Therefore, no further specific
corrective action is necessary.
The ongoing conformity clearance
procedure will ensure that the
financial risk to the EU budget is
covered
FR 5.78
%
5.828 m
EUR
The deficiencies have been
detected in previous DG AGRI
audits and a reservation was
made in the 2015 AAR. The DG
Yes The reservation is carried forward
from 2015.
Some correctives measures were
agri_aar_2016_annexes Page 92 of 273
Member
State Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
AGRI audit found deficiencies
in the controls carried out on
the eligibility of operational
programmes and the aid
claimed, checks on value of
marketed production and
checks on delivery of the full
production. This leads to a
top-up of 5%.
In addition, the CB found a
number of errors amounting to
0.438 m EUR which is added to
the amount at risk.
already implemented in 2016 by
FR. The FR authorities have
initiated the process of revising
the guidelines and check-lists and
these corrective actions will be
followed up via the conformity
clearance procedure which will
also ensure that the financial risk
to the EU budget is covered.
The ongoing conformity clearance
procedure will ensure that the
financial risk to the EU budget is
covered.
GR 5% 1.446 m
EUR
A DG AGRI audit in 2016
identified deficiencies as
regards the verification of the
soundness of estimates,
actions implemented before
approval of the amendments
to OP, compliance with
minimum number of
environmental actions,
assessment of recognition
criteria in the context of the
main activity and technical
means. These deficiencies
lead to a top-up of 5%.
Yes A reservation is entered in
respect of 2016 expenditure.
The ongoing conformity clearance
procedure will ensure that the
financial risk to the EU budget is
covered.
An action plan is necessary.
IT 2.81
%
6.783 m
EUR
A DG AGRI audit in 2016 found
several deficiencies in the
controls carried out on
eligibility of operational
programmes and the aid
claimed, checks on outsourcing
of the PO' main activity,
checks on democratic
accountability and checks on
delivery of the full production.
These deficiencies lead to a
top-up of 5% for a limited
population.
Yes A reservation is entered in
respect of 2016 expenditure.
Following the exchanges with the
Member State in the framework
of the ongoing conformity
clearance procedure, the
necessary remedial actions will be
agreed with the Member State.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
NL 8.82
%
3.499 m
EUR
A DG AGRI audit in 2015
identified deficiencies related
to the verifications of the
soundness of estimates and
the inclusion in the Operational
Programmes of non-eligible
actions. However, since the
error rate reported by the NL
authorities is 22.7%, it is
considered that this is
sufficient to cover the risks
identified by DG AGRI .
Yes A reservation is entered in
respect of 2016 expenditure.
The reservation is carried forward
from 2015. NL is currently
implementing an action plan to
review recognition and to recover
undue expenditure. The
authorities plan to have
completed all remedial actions for
OP 2017.
The ongoing conformity clearance
procedure will ensure that the
financial risk to the EU budget is
covered.
PT 3.31
%
0.456 m
EUR
PT detected a high error rate
of 5.8% in the control carried
out. No further top-up was
added by DG AGRI.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see Annex
4) no reservation is required.
agri_aar_2016_annexes Page 93 of 273
Member
State Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
SE 10.53
%
0.497 m
EUR
A DG AGRI audit in 2016
identified an absence in the
checks performed before the
approval of the OP i.e. the
consistency, technical quality
and soundness of estimates
and deficiencies in : the
controls of the eligibility of the
actions and expenditures
proposed and the compliance
of the operations with the
national regulations and in the
controls on carried out on
measures of OP. These
deficiencies lead to a top-up of
10%.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see Annex
4) no reservation is required.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
Table Annex 10 – 3.1.4
3.1.4.2 Pre-recognition of producer groups In 2015 the expenditure under this measure amounted to 120.3 million EUR. In 2016,
expenditure had fallen to 71.4 million EUR.
Article 97(b) of Commission Regulation (EU) No 543/2011 obliges Member States to
submit to the Commission, by 15 November of each year an annual report on the implementation of financial accounting controls and other checks on producer groups’
recognition plans in the preceding year.
The overall error rate calculated on the basis of the Member States' statistics was 1%,
with RO the only Member State reporting a material error rate (6.6%). However, due to
the 100% control rate in RO there is no residual error for this Member State and therefore no need to consider a reservation.
DG AGRI audits on operational programmes of producer groups carried out between 2014 and 2016 identified serious control deficiencies for HU, PL and RO. Enquiries for HU
and RO have been closed with financial correction and there are currently no open audit findings for those two Member States.
Poland is by far the highest spending Member State under this measure and represents 88.6% of expenditure in 2016. Spending under the measure rose in previous years as
producers in Poland applied for and went through the process of being recognised as
producer organisations but is now decreasing as Poland completes the recognition process. Hungary is the second highest spending MS with 4.5%, followed by Bulgaria, at
3.6% of the expenditure.
Serious deficiencies have been detected with regard to the recognition of producer
groups in Poland and a reservation has been in place since 2013 AAR. The completion of the remedial action plan has been delayed on a number of occasions and in April 2016
the Commission suspended payments (at a rate of 25%) in order to protect the EU budget. In April 2017, since the action plan had still not been completed, the
Commission prolonged the suspension of payments for a further 12 months.
In order to compensate for uncertainties with regard to the assurance that can be taken from the Member States’ reported data, DG AGRI auditors reviewed all available
information in order to come to a conclusion based on their professional audit judgment on what was the likely extent of understatement in the error reported. This resulted in
adjustments being made to the error rates reported as summarised in the following table:
agri_aar_2016_annexes Page 94 of 273
Table Annex 10 – 3.1.5
The following summary sets out for the cases for Pre-recognition of Producer Groups
where the adjusted error rate is above the 2% materiality threshold, the reasons which led to DG AGRI making top-ups to the reported error rates. In each case it is assessed
whether it is necessary to make a reservation and if so, an indication is given of the follow-up action required.
Membe
r State
Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
BG 2.0% 0.052
m EUR
A 2% top up has been applied on the
expenditure, as the package of final
accounts, audit reports and audit
certificates has not been submitted by
the Member State within the deadlines
and at the time of drafting and
therefore there is insufficient assurance.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see
Annex 4) no reservation is
required.
PL 10.2
%
6.500
m EUR
Grave deficiencies have been found with
regard to the granting of recognition to
producer groups. In 2016 the
Commission suspended payments at a
rate of 25% from March 2016 to
February 2017. A top-up is, therefore,
only necessary in respect of expenditure
from October 2015 to February 2016 as
the 25% suspension covers the risk for
the remaining period.
Yes The reservation is carried
forward from 2015.
An Action Plan is under
implementation.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
RO 10% 0.116
m EUR
A DG AGRI audit in 2014 revealed
structural deficiencies in Romania in the
approval procedure for recognition
plans. When plans were approved the
groups received preliminary recognition
which created the entitlement to aid.
However as there were problems with
the approval procedure the entitlement
to aid is called into question. An action
plan is being implemented but is not yet
completed. The previously applied top-
up of 10% is therefore repeated for
2016.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI’s
materiality criteria (see Annex
4) no reservation is required.
A remedial Action Plan is
under implementation.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
Table Annex 10 – 3.1.6
Member
StateAid Paid
% of claim
checked
OTS
reported error
rate
DG AGRI
top-up
amount at risk
where no top-
up
amount at risk
for top-up
adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
BG 2 592 374 100.0% 0.7% 2% - 51 847 2.00% 51 847
CZ 86 244 100.0% - - - - - -
FR 2 551 100.0% 0.8% - - - - -
HU 3 225 845 100.0% 1.2% - - - - -
LT 447 250 100.0% - - - - - -
LV 559 350 100.0% 0.0% - - - - -
PL 63 296 480 92.4% 0.9% 10% 44 079 6 456 241 10.27% 6 500 320
RO 1 162 990 100.0% 6.6% 10% - 116 299 10.00% 116 299
Grand Total 71 373 085 93.2% 1.0% 44 079 6 624 387 9.34% 6 668 466
Fruit and Vegetables -Prerecognition of Producer Groups
Calculation of Adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 95 of 273
Aid for Pre-recognition of Producer Groups in Poland – what is the problem and what is the Commission doing to protect the financial interests of the EU?
For the past several years, Poland has been the principal beneficiary of this measure. The huge Polish fruit and vegetables sector was characterised by a multitude of small and medium sized producers which were in competition with each other and had little bargaining power. The lack of coordination in the sector led to particular fruits or vegetables being overproduced at one time or another which impacted negatively on other European markets. The sector in Poland was a good candidate for this measure which aims to enable producers to organise themselves and set up the necessary structures for the formal creation of producer organisations.
However, several audits carried out by both DG AGRI (2010, 2013 and 2014) and the European Court of Auditors (2013) revealed widespread deficiencies in the Polish control system of aid to producer groups in the fruit and vegetables sector.
The main deficiencies concerned insufficient controls of the recognition status of the producer groups and of the quality of initial and modified recognition plans as well as of the implementation of producer groups' recognition plans. The deficiencies in the controls when approving the plans concerned, in particular, insufficient checks on commercial consistency of the plans, the necessity of investment and reasonableness of costs. For the implementation of the plans the main deficiencies were in the controls of the soundness of investments, the controls of production potential in this respect and the check on the plans' completion. Consequently producer groups have been unduly recognised and this has resulted in EU aid being paid to ineligible producer groups.
Moreover, the direct involvement of third bodies (Marshall's offices) in the recognition of producer groups in Poland creates an administrative uncertainty, not least with regard to the authority and responsibility of the paying agency, but also as concerns the protection of the financial interests of the Fund.
A reservation was made in the AAR for 2013 and it was carried forward to 2014 as well as to the present AAR. In November 2014, Poland established an action plan with a view to remedying the deficiencies by end of 2015.
Two monitoring missions carried out by the Commission in 2015 found serious problems in the implementation of the action plan, mainly due to the lack of supervision and monitoring of the quality of the control work carried out and the lack of appropriate follow-up regarding the producer groups. Insufficient controls remained in respect of the recognition status of the producer groups, of the quality of recognition plans and of their implementation. The actions undertaken by the Polish authorities demonstrated that the objectives of Poland's action plan had not been met, ineligible producer groups had not been derecognised and aid continued to be paid. Furthermore, Poland has notified that the implementation of the action plan will be delayed.
However, in spite of both Commission findings regarding the eligibility of producer groups, the Polish authorities continue to pay aid to all beneficiaries and the amounts recovered so far are very low.
As the Polish authorities failed to take the necessary action to protect the EU's financial interests and, since they were not in a position to remedy the deficiencies in the immediate future, the Commission adopted implementing decision C(2016/2050) suspending payments to Poland. The suspension was in respect of 25% of expenditure for the measure from March 2016 until February 2017.
In April 2017, since Poland had still not completed its action plan, the Commission concluded that the conditions for the suspension continued to be met and therefore, by implementing decision C(2017)2104, extended the suspension of payments until February 2018.
Financial corrections have been implemented in respect of financial years 2009 to 2013 and have been proposed in respect of financial years 2014-2015. Conformity clearance procedures are underway in respect of subsequent financial years .
Table Annex 10 – 3.1.7
3.1.4.3 School Fruit scheme
In 2016, the expenditure under this scheme (i.e. for school year 2016/2017) amounted to 110 m EUR.
Article 15(1) of Regulation (EC) No 288/2009 requires Member States to report on the School Fruit Scheme. Member States' statistical data show that on-the-spot checks were
conducted on 45.6% of aid distributed for the 2015/2016 school year resulting in errors
of 0.91 %. FR and IT have reported material error rates of 7.49% and 3.96% respectively. As the control rate for Italy is very high the remaining risk to the EU
budget for the uncontrolled population is low at 0.47%. For France, while the error rate in the uncontrolled population remains material at 6.83%, the amount at risk is below DG
AGRI's de minimis threshold at 0.145 million EUR. DG AGRI has neither audit findings nor
agri_aar_2016_annexes Page 96 of 273
any other information which would lead to the application of an adjustment of any of the reported error rates.
Table Annex 10 – 3.1.8
Member
State Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
BG 2.01
%
0.067 m
EUR
A 2% top up has been applied
on the expenditure, as the
package of final accounts,
audit reports and audit
certificates has not been
submitted by the Member
State within the deadlines and
at the time of drafting and
therefore there is insufficient
assurance.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see Annex
4) no reservation is required.
FR 6.83
%
0.145 m
EUR
FR detected a high error rate
of 7.49% in the control
carried out. No further top-up
was added by DG AGRI.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see Annex
4) no reservation is required.
3.1.4.4 Exceptional Support Measures
Following market disturbances in summer 2014 caused by the Russian ban on various products, which impacted heavily on fruit exports, temporary exceptional support
measures were introduced for producers of certain fruit and vegetables. Expenditure for
Member
StateAid Paid
% of claim
checked OTS
reported
error rate
DG AGRI
top-up
amount at risk
where no top-up
amount at risk
for top-up
adjusted
error rate
Total
amount at
risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 2 567 994 32.4% - - - - - -
BE 2 815 024 10.6% 0.10% - 2 620 - 0.09% 2 620
BG 3 314 543 9.2% 0.01% 2% 383 66 291 2.01% 66 674
CY 201 309 11.9% - - - - - -
CZ 4 800 247 88.2% 0.00% - 3 - 0.00% 3
DE 23 982 725 17.6% 0.02% - 3 121 - 0.01% 3 121
DK 2 003 939 54.9% - 2% - 40 079 - 40 079
EE 675 606 17.5% 0.05% - 283 - 0.04% 283
ES 7 820 929 74.7% 0.00% - 70 - 0.00% 70
FR 2 127 845 8.8% 7.49% - 145 406 - 6.83% 145 406
HR 1 294 057 49.5% - - - - - -
HU 4 748 138 12.9% - - - - - -
IE 1 129 498 22.2% - - - - - -
IT 20 480 135 88.1% 3.96% - 96 969 - 0.47% 96 969
LT 1 207 220 40.9% - - - - - -
LU 395 161 100.0% - - - - - -
LV 774 614 16.7% - - - - - -
MT 344 550 100.0% - - - - - -
NL 4 753 632 100.0% - - - - - -
PL 17 312 218 16.9% 0.02% - 2 914 - 0.02% 2 914
PT 408 520 21.8% - - - - - -
RO 3 079 319 96.3% 0.64% - 744 - 0.02% 744
SI 795 807 13.2% - - - - - -
SK 2 882 825 43.9% - - - - - -
Grand Total 109 915 856 45.6% 0.91% 252 513 106 370 0.23% 358 883
Fruit and Vegetables -School Fruit Scheme
Calculation of Adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 97 of 273
exceptional support measures in 2016 was 128.95 m EUR (see Table: Annex 10-3.1.6). The biggest spender for the measure was Poland with 121 m EUR (93.8% of the
expenditure).
No control statistics are required for these temporary support measures. A DG AGRI
audit mission in 2016 detected deficiencies leading it to propose a "top-up" of 10% to the expenditure for the measure. This results in an amount at risk of 12.1 m EUR.
Table Annex 10 – 3.1.9
Member
State
Adjuste
d error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
FR 9.90
%
0.002
m EUR
The Certification Body identified the top-
up amount. No further amounts were
added by DG AGRI.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see
Annex 4) no reservation is
required.
PL 10% 12.1 m
EUR
A DG AGRI audit in 2016 detected
deficiencies in the checks on withdrawal
operations for free distribution in respect
of the minimum rate of the 1st level
controls as well as in the extent and
depth required for the 1st level controls
on producers and the 2nd level controls
on the recipients of withdrawn products.
Further weaknesses were identified on
the checks on eligibility of operations.
These deficiencies lead to a top-up of
10%.
Yes The reservation is carried over
from 2015.
The measures are temporary
one-off measures so no action
plan is necessary.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
Table Annex 10 – 3.1.10
Member
State
Aid paid for OPs
in 2016
% of claims
checked OTS
reported
error rateadjustment
amount at risk if
no top-up
amount at risk if
top-up
adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
BG 248 886 N/D - - - - - -
CY 452 511 N/D - - - - - -
CZ 20 197 N/D - - - - - -
EE 22 484 N/D - - - - - -
ES 1 113 337 N/D - - - - - -
FR 16 773 N/D - 10% - 1 661 9.90% 1 661
GR 1 081 091 N/D - - - - - -
HR 3 312 861 N/D - - - - - -
IT 298 208 N/D - - - - - -
LT 75 003 N/D - - - - - -
LV 1 612 N/D - - - - - -
NL 270 937 N/D - - - - - -
PL 120 996 503 N/D - 10% - 12 099 650 10.00% 12 099 650
PT 20 005 N/D - - - - - -
RO 161 329 N/D - - - - - -
SI 860 479 N/D - - - - - -
Grand Total 128 952 215 - - 12 101 311 9.38% 12 101 311
Fruit and Vegetables - Temporary Exceptional Measures
Calculation of adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 98 of 273
3.1.4.5 Conclusion for the Fruit and Vegetable sector
For the fruit and vegetables sector there are a number of Member States for which
serious problems have been detected by the DG AGRI auditors in recent years. The errors which such deficiencies would produce were not indicated in the data on the
results of control carried out and reported by those Member States. The DG AGRI
auditors have therefore, used their professional audit judgment to propose adjustments to the error rates reported and thus enable a more realistic calculation of the amount at
risk for the sector.
The table below summarises the data which is set out in detail above and indicates that 8
reservations are required in respect of 7 Member States for a total amount of 48.197 million EUR. The total amount at risk in the 2016 expenditure is estimated at 50.145 m
EUR.
Table Annex 10 – 3.1.11
The 2015 reservations for operational programmes for producer organisations for ES, FR, and NL are carried over as the remedial action plans are still on-going. For AT
and GB, as the amount at risk is below the de minimis threshold, there is no reservation; however the remedial action plans shall be completed. New reservations are introduced
for BE, GR and IT.
The 2013/2014/2015 reservation for pre-recognition of producer groups is carried over for PL. For RO as the amount at risk is below the threshold there is no reservation;
however the action plan launched in 2015 shall be continued.
For the school fruit scheme, no new reservations are considered necessary.
For temporary exceptional support measures for the fruit and vegetables sector, the 2015 reservation is carried over for expenditure incurred by Poland. No action plan is
however required since the measure is temporary in nature.
It is emphasised furthermore, that in the case of all of the amounts under reservation,
the conformity clearance procedure shall ensure that undue expenditure will be
Measure Expenditure
Adjusted
error rate
MS with
reservation
Amount under
reservation
Total amount
at risk
EUR EUR EUR
BE 3 019 894
ES 9 021 819
FR 5 828 149
GR 1 445 695
IT 6 783 045
NL 3 498 811
Total OPPO 29 597 413
PL 6 500 320
Total PRPG 6 500 320
PL 12 099 650
Total TEM 12 099 650
Grand Total 1 172 724 419 4.28% 48 197 383 50 144 744
Operational programmes for
Producer Organisation
School Fruit 109 915 856 0.23% - 358 883
Temporary Exceptional Measures 128 952 215 9.38% 12 101 311
Summary of reservations and amounts at risk for Fruit & Vegetable Sector
862 483 264 0.02%
31 016 085
Pre-Recognition of Producer
Groups71 373 085 9.34%
6 668 466
agri_aar_2016_annexes Page 99 of 273
recovered from the Member States concerned.
3.1.5 Wine sector
In 2008, the Council introduced a reform of the common organisation of the market in wine aimed essentially at improving the competitiveness of EU wine producers and
balancing supply and demand in the wine sector. The main financial instruments of this reform included a temporary grubbing-up scheme and the setting up of national support
programmes: a specific budget made available for each Member State, which can choose
the breakdown best adapted to its particular situation. The most significant measures, in financial terms, have been restructuring and conversion of vineyards; investments;
promotion on third country markets and information within EU; by-product distillation and harvest insurance.
A review of the EU legislation concerning the wine market also took place in 2013-2014,
with Regulation (EC) No 1308/2013, which added new support measures to the existing ones. The existing measures now are: promotion; restructuring and conversion of
vineyards; green harvesting; mutual funds; harvest insurance; investments; innovation
in the wine sector and by-product distillation. Besides, the regulatory framework has been completed with the review of Regulation (EC) No 555/2008 through Regulations
(EU) No 1149/2016, and (EU) No 1150/2016, which entered into force on 18 July 2016. They have also extended the obligation for the MS of reporting the controls carried out,
for all the wine measures.
Table Annex 10 – 3.1.12
For the 2016 AAR, statistics are available, for the first time for all wine measures (with the exception of the very small amounts under innovation and "other".
Restructuring and conversion of vineyards
Aid applications for restructuring and conversion in the wine sector are subject to 100 %
on-the-spot checks before and after operations, and in all cases before the final payment. The controls, which aim at assessing the eligibility of parcels and operations, and at
measuring the areas, are performed by means of both remote sensing and classical (on-the-spot) checks both prior and subsequent to restructuring operations.
Member
State
Restructuring
and
Conversion of
Vineyards
Investment
Promotion in
Third
Countries and
Information in
By-product
distillation
Harvest
Insurance
Green
harvestingInnovation Others Total Wine
AT 5 907 730 4 631 580 2 827 265 - - - - - 13 366 575
BG 21 358 594 - 224 336 - - - - - 21 582 930
CY 2 402 650 1 981 637 22 106 - 239 607 - - - 4 646 000
CZ 4 113 677 1 031 647 - - - - - - 5 145 324
DE 19 300 096 16 202 976 940 029 - 176 220 - - - 36 619 320
ES 74 952 204 55 289 465 49 654 145 30 385 398 - - 9 867 64 171 210 355 251
FR 105 473 360 100 822 399 41 052 467 33 196 760 - - - - 280 544 985
GR 12 066 013 - 5 059 405 - - - - - 17 125 417
HR 679 606 2 363 130 160 761 - - - - - 3 203 497
HU 26 994 323 179 082 425 000 1 504 595 - - - - 29 103 000
IT 155 127 202 43 439 185 84 540 513 16 518 869 19 885 966 1 381 141 - 72 226 320 965 103
PT 53 612 117 - 7 011 633 1 513 977 2 996 504 - - 1 885 65 136 116
RO 10 923 549 70 474 479 328 - 186 734 - - - 11 660 085
SI 4 671 058 - 367 821 - - - - - 5 038 879
SK 1 748 491 698 169 29 800 - 161 995 - - - 2 638 455
Grand Total 499 330 670 226 709 744 192 794 608 83 119 599 23 647 026 1 381 141 9 867 138 282 1 027 130 938
Expenditure by Measure in 2016 - Wine
agri_aar_2016_annexes Page 100 of 273
DG AGRI has carried out 8 audits on the measure in 2014, 2015 and 2016 in AT, BG, FR, IT (x 3), PT and DE. The most significant issues detected (both by DG AGRI and the ECA)
were that in some cases the paying agency did not systematically and/or completely perform the on-the-spot checks before the operations (ex-ante), and in other cases the
producers have been overcompensated with the use of flat rates.
Investment measures
The investment measure provides for the possibility to invest in tangible and non-
tangible "goods" in order to improve the quality of wine (such as expertise). The aid is a maximum of 40 to 75% of the investment depending on the region. Investment
measures require a 100% control on the spot prior to payment.
For investment measures, between 2014 and 2016, DG AGRI carried out audits in FR and
HU.
Promotion on third country markets
A 100% administrative check is carried out by the Member States in order to detect
ineligible costs. Between 2014 and 2016, the MS audited by DG AGRI were ES, IT and PT. These audits, which checked that the expenditure was effected in accordance with
the existing rules, did not find any serious non-compliance requiring significant financial corrections.
Green harvesting
The green harvesting measure provides for the possibility of total destruction or removal of grape bunches while still in their immature stage, in order to contribute to restoring
the balance of supply and demand in the Union wine market. The aid can reach a maximum of 50% of the related direct costs. This measure requires a 100% control on
the spot prior to payment.
In 2016, IT was the only MS where this measure was used. Italy's control statistics show
a 100% control rate on final payments as required by Regulation (EC) No 555/2008 and,
while the reported error rate was 14.8% there was, therefore, no residual risk to the EU Budget.
By-product distillation
By-product distillation is a simple measure. Member States can decide that the wine
producer should bring the by-products ("must" and "lies") to a distillery. By–products
should be removed from the market in order to avoid that (low quality) wine can be produced from it.
DG AGRI carried out an audit mission in October 2013 in Spain (the second largest beneficiary) and did not detect any deficiencies. DG AGRI considers that distillation
measures are low risk as the interest of the MS, to keep every drop of alcohol produced under control, is very high.
Harvest Insurance
Harvest insurance is another simple measure. Wine producers can claim up to 80% of the cost of their insurance policy. This requires a straightforward administrative control. On
top of that, the aid amount is capped by maximum insurance premium and maximum insured value of the harvest. DG AGRI audit missions took place between 2012 and
2015 to IT and RO. Based on both the evaluation on the spot as well as the structure of
the control system, the auditors conclude that there is no or very low risk in this
agri_aar_2016_annexes Page 101 of 273
measure.
Other (innovation measure)
These amounts are extremely marginal and the risk is considered to be zero. No audit has yet been performed for this expenditure.
3.1.5.3 Conclusion for the wine sector
For the wine sector, based on the audits carried out, DG AGRI found that there was some risk with regard to restructuring and conversion measures due to ex-ante on-the-spot
checks in AT as well as for investment measures for wine in FR. The errors which such deficiencies would produce were not indicated in the data on the results of control carried
out and reported by those Member States. The DG AGRI auditors have therefore, used their professional audit judgment to propose adjustments to the error rates reported and
thus enable a more realistic calculation of the amount at risk for the sector. The CBs for FR and HU have also found errors with regard to restructuring of vineyards.
Table Annex 10 – 3.1.13
The above table indicates that 2 reservations are required in respect of FR and HU for a
total amount of 7.97 million EUR. The adjusted error rate for the wine sector is 1.07% which represents a total amount at risk in the 2016 expenditure of 11.033 million EUR.
Member
State Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
AT 6.85
%
0.916
m EUR
A DG AGRI audit in 2016 detected an
absence of ex-ante controls and poor ex-
post controls for vineyard restructuring
leading to a top-up of 10%.
The findings were confirmed by the
Certification Body.
No As the amount at risk is below
the de minimis threshold
established in DG AGRI's
materiality threshold (see
Annex 4) no reservation is
required.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
BG 2.0% 0.432
m EUR
A 2% top up has been applied on the
expenditure, as the package of final
No As the amount at risk is below
the de minimis threshold
Member
StateAid paid in 2016
% of claims
checked OTS
Reported
error rateAdjustment
Amount at risk if
no top-up
Amount at risk if
top-up
Adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 13 366 575 100.0% 2.4% 6.85% - 915 761 6.85% 915 761
BG 21 582 930 - - 2.00% - 431 659 2.00% 431 659
CY 4 646 000 - - - - - - -
CZ 5 145 324 100.0% 5.3% - - - - -
DE 36 619 320 98.2% 1.0% 0.87% 6 819 319 180 0.89% 325 999
ES 210 281 212 100.0% 0.9% 0.02% - 49 637 0.02% 49 637
FR 280 544 985 98.9% 5.9% 2.23% 177 132 6 250 757 2.29% 6 427 890
GR 17 125 417 100.0% 0.0% - - - - -
HR 3 203 497 100.0% 0.1% - - - - -
HU 29 103 000 100.0% 22.4% 5.32% - 1 547 102 5.32% 1 547 102
IT 320 892 877 96.6% 2.7% 0.14% 290 645 465 277 0.24% 755 922
PT 65 134 231 9.2% 0.9% - 504 433 - 0.77% 504 433
RO 11 660 085 100.0% 1.1% 0.64% - 74 712 0.64% 74 712
SI 5 038 879 - - - - - - -
SK 2 638 455 - - - - - - -
Grand Total 1 026 982 789 89.5% 3.4% 979 029 10 054 084 1.07% 11 033 114
Wine - 2016 Expenditure :
Calculation of Adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 102 of 273
Member
State Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
accounts, audit reports and audit
certificates has not been submitted by
the Member State within the deadlines
and at the time of drafting and
therefore there is insufficient assurance.
established in DG AGRI's
materiality threshold (see
Annex 4) no reservation is
required.
FR 2.29
%
6.428
m EUR
For investment measures for wine, a DG
AGRI audit in 2016 detected weaknesses
in the performance of the administrative
checks of the procedure concerning
cases of partial implementation of the
projects and the assessment of the
reasonableness of the costs. This leads
to a top-up of 2% for expenditure under
investment measures.
The CB also found errors amounting to
4.234 m EUR for restructuring and
conversion of vineyards, which are
added to the amount at risk.
Yes A reservation is entered in
respect of 2016 expenditure.
A corrective action plan is not
considered necessary for
investment measures. The
partial implementation is
allowed according to the new
regulation that entered in
force in June 2016 therefore
this weakness will not exist
anymore in 2017. The
contradictory procedure is on-
going and MS provided
information with mitigating
factors concerning the
reasonableness of the costs.
The MS should follow the
recommendations for remedial
actions of the Certification
Body and the latter will be
requested to follow up and
report in its 2017 report.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
HU 5.32
%
1.547
m EUR
The HU Certification Body has reported
an extrapolated error of 1.557 m EUR for
wine restructuring.
Yes A reservation is entered in
respect of 2016 expenditure.
The MS will be requested to
follow the recommendations
of the CB and the latter will be
requested to follow up and
report in its 2017 report.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
3.1.6 POSEI
The EU´s outermost regions benefit from the POSEI arrangements ("Programme
d'Options Spécifiques à l'Éloignement et l'Insularité") in the agricultural sector. These programmes are designed to take account of their geographical and economic handicaps
such as remoteness, insularity, small size, difficult topography and climate, and economic dependence on a few products.
The outermost regions, as identified in Art 349 of the Treaty for the Functioning of the European Union (TFEU) are:
France: Guadeloupe, French Guyana, Martinique, Réunion, Saint-Barthélemy and
Saint-Martin
Portugal: the Azores and Madeira
Spain: the Canary Islands
agri_aar_2016_annexes Page 103 of 273
For Greece, the smaller Aegean islands also benefit from specific supply arrangements for certain agricultural products and adapted support measures for local agricultural
production (even if under a different legal basis than the "real" POSEI regions).
The POSEI measures are funded both under ABB02 and ABB03. This sub-chapter only
deals with ABB02 expenditure.
ABB02 measures fall into two categories:
specific supply arrangements, aimed at mitigating the additional costs for the supply of essential products for human consumption, for processing
and as agricultural inputs, and
measures to assist local agricultural products.
The measures to assist local agricultural products concern a multitude of products and
include measures aimed at supporting production, marketing or processing. Each Member State concerned defines the products and the eligible actions.
Table Annex 10 – 3.1.15
Article 32(2) of Regulation (EU) No 228/2013, Article 39(1)(k) of Regulation (EU) No 180/2014 Article 20(2) of Regulation (EU) No 229/2013) and Article 31(1)(k) of
Regulation (EU) No 181/2014 oblige Member States to submit statistics on the checks carried out by the competent authorities.
The measures financed by POSEI are extremely differentiated in terms of scope and
financial importance. The analysis of the statistics indicates that the error rates for the individual actions fluctuate considerably. Several conformity clearance procedures are
ongoing in different Member States.
Table Annex 10 – 3.1.17
The table above indicates that one reservation is required in respect of FR for an amount of 3.051 million EUR. The adjusted error rate for the market measures under POSEI is
1.29% which represents a total amount at risk in the 2016 expenditure of 3.086 million
Member
State
Supply
Arrangements
EUR
Local support
measures
EUR
Total
ES 66 087 382 19 761 203 85 848 585
FR 26 874 955 98 547 757 125 422 712
GR 5 668 186 - 5 668 186
PT 15 167 841 7 460 270 22 628 111
Grand Total 113 798 363 125 769 230 239 567 593
Expenditure for POSEI and Aegean Islands in 2016
Member
StateAid paid in 2016
% of claims
checked OTS
Reported
error rateAdjustment
Amount at risk if
no top-up
Amount at risk if
top-up
Adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
ES 85 848 585 18.0% 0.0% - 23 585 - 0.03% 23 585
FR 125 422 712 44.9% 0.2% 2.3% 109 382 2 941 537 2.43% 3 050 919
GR 5 668 186 - - - - - - -
PT 22 628 111 66.5% 0.2% - 11 570 - 0.05% 11 570
Grand Total 239 567 593 36.3% 0.1% - 144 537 2 941 537 1.29% 3 086 074
POSEI Market measures
Calculation of adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 104 of 273
EUR. The table above also shows the error rates detected by the Member States. No top-ups are proposed by DG AGRI. The extrapolated error reported by the Certification Body
in FR has been taken into account in the calculation of adjusted error rate. POSEI – ABB02
Member
State/PA
Adjusted
error
rate
Amount
at risk
from
top-up
Reasons for top-up Reservation
2016
Mitigating factors/reservation
follow up.
FR05
ODEADOM
2.43% 3.051
m EUR
An extrapolated error of
EUR 2.941.537 has been
reported by the
Certification Body in its
report for 2016, in
respect of local support
measures. When added
as an amount at risk, it
results in a material
adjusted error rate for
Posei- ABB02.
The Certification Body's
findings concern:
- transformation de la
canne en rhum
-structuration de
l'élevage
-diversification végetale
Yes A reservation is entered in
respect of 2016 expenditure.
The Paying agency should
follow the recommendations for
remedial actions of the
Certification Body, which is to
follow-up and report in 2017.
The ongoing clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
Table Annex 10 – 3.1.16
3.1.8 School Milk Scheme
In 2016, expenditure in respect of this measure amounted to 80.3 m EUR. There is a
very high level of control generally for the scheme with over 27% of aid claimed being subject to on-the-spot checks.
Material error rate of 4.2% and 2.7% are reported by FR and UK respectively but the amounts at risk are below DG AGRI's de minimis threshold. Further to audits carried out
in 2016, top-ups are applied for RO and SE and while these result in material adjusted error rates, the amounts at risk are below DG AGRI's de minimis threshold.
agri_aar_2016_annexes Page 105 of 273
Table Annex 10 – 3.1.18
The adjusted error rate for the school milk scheme is 2.41% which represents a total amount at risk in the 2016 expenditure of 1.555 million EUR. The adjusted error rate is
above 5% threshold in RO, but as the amount at risk is below the de minimis threshold, no reservation is required. In the same way, no reservation is made in 5 other Member
States, where the adjusted error rate is between 2% and 5%.
Paying Agen-
cy
Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/
reservation follow-up
BG 2.0% 0.008 m
EUR
A 2% top up has been applied on the expenditure,
as the package of final accounts, audit reports
and audit certificates has not been submitted by
the Member State within the deadlines and at the
time of drafting and therefore there is insufficient
assurance.
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
no reservation is required.
DK 2.0% 0.012 m
EUR
A 2% top up has been applied on the expenditure,
as the package of final accounts, audit reports
and audit certificates has not been submitted by
the Member State within the deadlines and at the
time of drafting and therefore there is insufficient
assurance.
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
no reservation is required.
FR 4.38
%
0.384 m
EUR
FR reported a high error rate of 4.2% in the
controls carried out which mainly led to the
adjusted error rate of 4.38%.
The FR Certification Body has reported an error
which was also taken into account in the
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
Member
StateAid paid in 2016
% of claims
checked
Reported
error rateAdjustment
Amount at risk if
no top-up
Amount at risk if
top-up
Adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 562 745 42.5% - - - - -
BE 443 182 - - - - - -
BG 391 958 64.4% - 2.0% - 7 839 2.00% 7 839
CY 189 726 12.7% - - - - -
CZ 416 555 100.0% - - - - -
DE 4 460 603 39.2% 0.7% 18 160 - 0.41% 18 160
DK 612 699 65.0% - 2.0% - 12 254 2.00% 12 254
EE 710 993 10.0% 0.2% 1 023 - 0.14% 1 023
ES 300 625 41.8% - - - - -
FI 3 968 692 29.9% 0.1% 2 782 - 0.07% 2 782
FR 8 780 051 5.6% 4.2% 0.4% 349 867 34 395 4.38% 384 262
GB 4 382 787 10.8% 2.7% 103 987 - 2.37% 103 987
GR 50 672 - - - - - -
HR 42 304 - - - - - -
HU 2 047 897 6.1% - - - - -
IE 405 589 14.8% - - - - -
IT 2 856 276 11.3% - - - - -
LT 445 768 20.0% - - - - -
LU 28 133 100.0% - - - - -
LV 859 573 9.4% - - - - -
MT 21 754 13.5% - - - - -
NL 391 215 100.0% 0.4% - - - -
PL 9 508 788 19.4% - - - - -
PT 1 873 539 5.9% - - - - -
RO 11 220 468 99.6% - 5.6% - 632 918 5.64% 632 918
SE 8 776 465 11.4% 1.7% 10.0% 128 334 263 294 4.46% 391 628
SI 3 629 97.3% - - - - -
SK 683 739 53.4% - - - - -
Grand Total 64 436 427 27.4% 0.3% 604 154 950 700 2.41% 1 554 854
School Milk Scheme - 2016 expenditure and calculation of amount at risk
Calculation of adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 106 of 273
Paying Agen-
cy
Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/
reservation follow-up
calculation of the adjusted error rate. no reservation is required.
GB 2.37
%
0.104 m
EUR
GB detected an error rate of 2.7% in the control
carried out. No further top-up was added by DG
AGRI.
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
no reservation is required.
RO 5.64
%
0.633 m
EUR
A DG AGRI audit in 2016 detected an absence of
checks on numbers of pupils in regular attendance
in some municipalities. This leads to a top-up of
10% on a limited population.
The RO Certification Body has reported an error
which was also taken into account in the
calculation of the adjusted error rate.
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
no reservation is required.
The conformity clearance
procedure will ensure that
the financial risk to EU
budget is covered.
SE 4.46
%
0.392 m
EUR
A DG AGRI audit in 2016 detected deficiencies in
verification of the eligibility for support, in the
performance of administrative and on-the-spot
checks and with regard to application of
reductions and penalties. This leads to a top-up of
10% on a limited population of c. 30% of the
expenditure.
No As the amount at risk is
below the de minimis
threshold established in
DG AGRI's materiality
threshold (see Annex 4)
no reservation is required.
The conformity clearance
procedure will ensure that
the financial risk to EU
budget is covered.
Table Annex 10 – 3.1.19
3.1.9 Temporary exceptional measures – livestock sectors
In October 2015, the Commission adopted Regulation (EU) No 2015/1853 providing for temporary exceptional aid to farmers in the livestock sectors. This was in order to
address market disturbances since 2014 in the milk products and pigmeat sectors. The measure provided for a one-time financial grant to Member States. Most of the aid was
paid on the basis of milk production using 2014/2015 national milk quotas as a reference while aid was also paid for structural measures designed by the Member States.
Expenditure under the measure in financial year 2016 amounted to 311.7 m EUR
Given the temporary nature of the measure, there are no control statistics available and
no top-ups have been considered necessary by the DG AGRI auditors. However,
adjustments has been made as indicated in the tables below for France as a result of errors detected by the Certification Body.
agri_aar_2016_annexes Page 107 of 273
Paying Agen-
cy
Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/
reservation follow-up
FR 11.23
%
3.851 m
EUR
An extrapolated error of 3.851 m EUR has been
reported by the Certification Body in its report for
2016, in respect of this measure. When added as
an amount at risk, it results in a material adjusted
error rate.
Yes A reservation is entered in
respect of 2016
expenditure.
The Paying agency should
follow the
recommendations for
remedial actions of the
Certification Body, which is
to follow-up and report in
2017.
The ongoing clearance
procedure will ensure that
the financial risk to the EU
budget is covered.
Member
State
Aid paid in 2016 % of claims
checked OTS
Reported
error rate
Adjustment Amount at risk if
no top-up
Amount at risk if
top-up
Adjusted
error rate
Total amount
at risk
EUR EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 4 003 030 N/D - - - - -
BE 2 676 968 N/D - - - - -
BG 6 019 605 N/D - - - - -
CZ 8 143 508 N/D - - - - -
DE 52 240 190 N/D - - - - -
DK 11 100 520 N/D - - - - -
EE 5 670 884 N/D - - - - -
ES 24 828 543 N/D - - - - -
FI 4 997 440 N/D - - - - -
FR 34 291 339 N/D - 11.2% - 3 850 563 11.23% 3 850 563
GB 36 633 865 N/D - - - - -
GR 62 089 N/D - - - - -
HR 1 803 097 N/D - - - - -
HU 9 463 585 N/D - - - - -
IE 12 868 102 N/D - - - - -
IT 26 347 320 N/D - - - - -
LT 12 315 452 N/D - - - - -
LV 7 141 256 N/D - - - - -
NL 11 565 344 N/D - - - - -
PL 14 453 732 N/D - - - - -
PT 4 764 179 N/D - - - - -
RO 8 769 595 N/D - - - - -
SE 8 313 862 N/D - - - - -
SI 1 094 746 N/D - - - - -
SK 2 164 245 N/D - - - - -
Grand Total 311 732 496 - - - 3 850 563 1.2% 3 850 563
Temporary and Exceptional measures: Milk and milk products
Calculation of adjusted Error Rate and Amount at Risk
agri_aar_2016_annexes Page 108 of 273
3.1.10 Promotion Measures
Table Annex 10 – 3.1.20
Control statistics are not available in respect of promotion measures but are being
required under the current review of the promotion legislation.
Expenditure reimbursed by DG AGRI in 2016 amounted to 62.6 m EUR. However, the
risk has also to be considered bearing in mind that the programmes are multiannual and that risks identified in respect of 2016 may impact also on expenditure for 2017 and
2018 and 2019.
Audits carried out in 2015 have raised doubts with regard to the application of
procurement rules for the selection of the implementing bodies in Greece and Italy. The preliminary assessment of error for these two MS is 10% and 25% respectively. This
would lead to amounts at risk of 1.196 m EUR for Greece and 1.891 m EUR for Italy.
Reservations must therefore be considered for both MS. However, the usefulness of action plans is questionable as the necessary remedial action has been taken by
Greece while for both the promotion regime has been reformed and new guidance is being established with regard to selection procedures for implementing bodies.
Member
StateExpenditure
% of
claims
checked
Reported
error rateAdjustment
Amount at risk
if no top-up
Amount at risk
if top-up
Adjusted
error rate
Total amount
at risk
EUR OTS EUR EUR EUR
(a) (b) (c) (d) (e) (f) = b*(1-c)*d (g)= (b)*(e) (h) = (f+g)/b (i) = (f) +((g)
AT 2 255 603 N/D N/D - - - - -
BE 1 351 500 N/D N/D - - - - -
BG 2 509 401 N/D N/D - - - - -
CY 83 717 N/D N/D - - - - -
CZ 1 804 018 N/D N/D - - - - -
DE 1 563 302 N/D N/D - - - - -
DK 1 185 912 N/D N/D - - - - -
EE 257 767 N/D N/D - - - - -
ES 3 612 833 N/D N/D - - - - -
FI 177 087 N/D N/D - - - - -
FR 10 431 620 N/D N/D 0.1% - 12 404 0.12% 12 404
GB 2 857 897 N/D N/D - - - - -
GR 11 964 976 N/D N/D 10.0% - 1 196 498 10.00% 1 196 498
IE 885 393 N/D N/D - - - - -
IT 7 563 416 N/D N/D 25.0% - 1 890 854 25.00% 1 890 854
LT 2 037 480 N/D N/D - - - - -
LV 146 013 N/D N/D - - - - -
NL 3 371 166 N/D N/D - - - - -
PL 6 841 393 N/D N/D - - - - -
PT 890 164 N/D N/D - - - - -
RO 490 582 N/D N/D - - - - -
SI 306 645 N/D N/D - - - - -
Grand Total 62 587 884 - - - 3 099 755 4.95% 3 099 755
Promotion Measures - Expenditure in 2016
Calculation of amount at risk
agri_aar_2016_annexes Page 109 of 273
Paying
Agency/measur
e
Adjusted
error
rate
Amount at
Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
GR 10% 1.197 m
EUR
A DG AGRI audit in 2015
detected deficiencies in the
controls on selection
procedures of implementing
bodies. This leads to a top-up
of 10%.
Yes A reservation is entered in
respect of 2016 expenditure.
Remedial action has been
taken by GR. An action plan is
not considered necessary as,
in the context of the reform of
the promotion regime, a new
control set-up will in any
event be established.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
IT 25% 1.891 m
EUR
A DG AGRI audit in 2015
found serious non-compliance
with procurement procedures
leading to a top-up of 25%.
Yes A reservation is entered in
respect of 2016 expenditure.
An action plan is not
considered necessary as in,
the context of the reform of
the promotion regime, a new
control set-up will in any
event be established.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
Table Annex 10 – 3.1.21
3.1.11 Conclusions as regards assurance for ABB02
As a result of the "tops-ups" made by DG AGRI to the error rates reported by the
Member States, an adjusted error rate of 2.77% has been calculated for shared management. For ABB02 as a whole, the adjusted error rate is also 2.77%.
Following is a summary of all cases where a reservation is applied in respect of the various measures within ABB02. In the section dealing with each aid measure there is an
explanation for those cases where a reservation was considered unnecessary (error rate
between 2 and 5% or de minimis amount at risk) and details are also given for reservations made in the 2015 AAR which are not carried over in respect of 2016.
1 reservation from 2015 and earlier can be lifted
UK for Operational Programmes for Producer Organisations (the remedial action has been taken)
7 reservations from 2015 are carried over as the remedial action plans are still
underway:
ES, FR and NL for operational programmes for producer organisations PL for pre-recognition of producer groups
PL for temporary exceptional support measures in the fruit and vegetables sector GR and IT for promotion measures
7 new reservations are introduced: BE, GR and IT for operational programmes for producer organisations
FR and HU for wine measures – restructuring of vineyards FR for POSEI measures
FR for temporary exceptional measures – milk and milk products
The following table details all cases where a reservation was considered necessary in
respect of 2016 expenditure:
agri_aar_2016_annexes Page 110 of 273
Paying Agency
/measure
Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
BE
F and Veg
Producer
organisations
5.31
%
3.02 m
EUR
A DG AGRI audit in 2016
detected deficiencies in the
checks on Operational
Programmes (OPs) concerning
the system of approval and
modification of operational
programmes and the checks to
establish the eligibility of the
aid which leads to a top-up of
5%.
Yes A reservation is entered in
respect of 2016 expenditure.
The deficiencies found have
already been remedied by the
BE authorities (the control
instructions regarding the
checks on OPs approval and
the verifications to establish
the eligibility of the aid were
updated).
The ongoing conformity
clearance procedure will
ensure that the financial risk
to the EU budget is covered.
No formal action plan is
necessary.
ES
F and Veg
Producer
organisations
3.57
%
9.022 m
EUR
A DG AGRI audit in 2016 found
weaknesses as regards the
control of personnel costs and
the use of selective carry over
in the Autonomous Community
of Valencia. These deficiencies
lead to a top-up of 5% for a
limited population.
The follow up of the
environmental actions in Spain
revealed that there were still
some shortcomings for limiting
the expenditure to the
additional costs. These
deficiencies lead to a top-up of
5% for a limited population.
The ES authorities have
reported an error rate of 5.2%
in their control statistics (2.57%
in the uncontrolled population)
to which is added a top-up of
1% representing the risk
detected by DG AGRI for limited
populations as described in the
previous paragraphs.
It is noted that the error rate
declared (incorrectly) includes
the results of the administrative
checks which therefore inflates
the error rate.
Yes A reservation is entered in
respect of 2016 expenditure.
The Valencia authorities took
remedial measures from OP
2016.
The Spanish authorities
amended the Framework for
Environmental Actions and are
finishing the studies for
calculating the specific cost of
certain environmental actions.
Therefore, no further specific
corrective action is necessary.
The ongoing conformity
clearance procedure will
ensure that the financial risk
to the EU budget is covered
FR
F and Veg
Producer
organisations
5.78
%
5.828 m
EUR
The deficiencies have been
detected in previous DG AGRI
audits and a reservation was
made in the 2015 AAR. The DG
AGRI audit found deficiencies in
the controls carried out on the
eligibility of operational
programmes and the aid
claimed, checks on value of
marketed production and
checks on delivery of the full
production. This leads to a top-
up of 5%.
In addition, the CB found a
number of errors amounting to
0.438 m EUR which is added to
the amount at risk.
Yes The reservation is carried
forward from 2015.
Some correctives measures
were already implemented in
2016 by FR. The FR
authorities have initiated the
process of revising the
guidelines and check-lists and
these corrective actions will
be followed up via the
conformity clearance
procedure which will also
ensure that the financial risk
to the EU budget is covered.
The ongoing conformity
clearance procedure will
ensure that the financial risk
to the EU budget is covered.
agri_aar_2016_annexes Page 111 of 273
Paying Agency
/measure
Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
GR
F and Veg
Producer
organisations
5% 1.446 m
EUR
A DG AGRI audit in 2016
identified deficiencies as
regards the verification of the
soundness of estimates, actions
implemented before approval of
the amendments to OP,
compliance with minimum
number of environmental
actions, assessment of
recognition criteria in the
context of the main activity and
technical means. These
deficiencies lead to a top-up of
5%.
Yes A reservation is entered in
respect of 2016 expenditure.
The ongoing conformity
clearance procedure will
ensure that the financial risk
to the EU budget is covered.
An action plan is necessary.
IT
F and Veg
Producer
organisations
2.81
%
6.783 m
EUR
A DG AGRI audit in 2016 found
several deficiencies in the
controls carried out on eligibility
of operational programmes and
the aid claimed, checks on
outsourcing of the PO' main
activity, checks on democratic
accountability and checks on
delivery of the full production.
These deficiencies lead to a top-
up of 5% for a limited
population.
Yes A reservation is entered in
respect of 2016 expenditure.
Following the exchanges with
the Member State in the
framework of the ongoing
conformity clearance
procedure, the necessary
remedial actions will be
agreed with the Member
State.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
NL
F and Veg
Producer
organisations
8.82
%
3.499 m
EUR
A DG AGRI audit in 2015
identified deficiencies related to
the verifications of the
soundness of estimates and the
inclusion in the Operational
Programmes of non-eligible
actions. However, since the
error rate reported by the NL
authorities is 22.7%, it is
considered that this is sufficient
to cover the risks identified by
DG AGRI .
Yes A reservation is entered in
respect of 2016 expenditure.
The reservation is carried
forward from 2015. NL is
currently implementing an
action plan to review
recognition and to recover
undue expenditure. The
authorities plan to have
completed all remedial actions
for OP 2017.
The ongoing conformity
clearance procedure will
ensure that the financial risk
to the EU budget is covered.
PL
F and Veg
Producer
groups
10.27
%
6.500 m
EUR
Grave deficiencies have been
found with regard to the
granting of recognition to
producer groups. In 2016 the
Commission suspended
payments at a rate of 25% from
March 2016 to February 2017.
A top-up is, therefore, only
necessary in respect of
expenditure from October 2015
to February 2016 as the 25%
suspension covers the risk for
the remaining period.
Yes The reservation is carried
forward from 2015.
An Action Plan is under
implementation.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
agri_aar_2016_annexes Page 112 of 273
Paying Agency
/measure
Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
PL
F and Veg
exceptional
support
measure
10% 12.1 m
EUR
A DG AGRI audit in 2016
detected deficiencies in the
checks on withdrawal
operations for free distribution
in respect of the minimum rate
of the 1st level controls as well
as in the extent and depth
required for the 1st level
controls on producers and the
2nd level controls on the
recipients of withdrawn
products. Further weaknesses
were identified on the checks on
eligibility of operations. These
deficiencies led to a top-up of
10%.
Yes The reservation is carried over
from 2015.
The measures are temporary
one-off measures so no action
plan is necessary.
The conformity clearance
procedure will ensure that the
financial risk to EU budget is
covered.
FR
Wine
2.29
%
6.428 m
EUR
For investment measures for
wine, a DG AGRI audit in 2016
detected weaknesses in the
performance of the
administrative checks of the
procedure concerning cases of
partial implementation of the
projects and the assessment of
the reasonableness of the costs.
This leads to a top-up of 2% for
expenditure under investment
measures.
The CB also found errors
amounting to 4.234 m EUR for
wine, which are added to the
amount at risk.
Yes A reservation is entered in
respect of 2016 expenditure.
A corrective action plan is not
considered necessary for
investment measures. The
partial implementation is
allowed according to the new
regulation that entered in
force in June 2016 therefore
this weakness will not exist
anymore in 2017. The
contradictory procedure is on-
going and MS provided
information with mitigating
factors concerning the
reasonableness of the costs.
The MS should follow the
recommendations for remedial
actions of the Certification
Body and the latter will be
requested to follow up and
report in its 2017 report.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
HU
Wine
5.32
%
1.547 m
EUR
The HU Certification Body has
reported an extrapolated error
of 1.557 m EUR for wine
restructuring.
Yes A reservation is entered in
respect of 2016 expenditure.
The MS will be requested to
follow the recommendations
of the CB and the latter will be
requested to follow up and
report in its 2017 report.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
FR
Temporary
exceptional
measure –
milk and milk
products
11.23
%
3.851 m
EUR
An extrapolated error of 3.851
m EUR has been reported by
the Certification Body in its
report for 2016, in respect of
this measure. When added as
an amount at risk, it results in a
material adjusted error rate.
Yes A reservation is entered in
respect of 2016 expenditure.
The Paying agency should
follow the recommendations
for remedial actions of the
Certification Body, which is to
follow-up and report in 2017.
The ongoing clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
agri_aar_2016_annexes Page 113 of 273
Paying Agency
/measure
Adjusted
error
rate
Amount
at Risk
Reason for top-up Reser-
vation
Mitigating factors/ reservation
follow-up
GR
Promotion
measure
10% 1.197 m
EUR
A DG AGRI audit in 2015
detected deficiencies in the
controls on selection procedures
of implementing bodies. This
leads to a top-up of 10%.
Yes A reservation is entered in
respect of 2016 expenditure.
Remedial action has been
taken by GR. An action plan is
not considered necessary as,
in the context of the reform of
the promotion regime, a new
control set-up will in any
event be established.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
IT
Promotion
measure
25% 1.891 m
EUR
A DG AGRI audit in 2015 found
serious non-compliance with
procurement procedures leading
to a top-up of 25%.
Yes A reservation is entered in
respect of 2016 expenditure.
An action plan is not
considered necessary as in,
the context of the reform of
the promotion regime, a new
control set-up will in any
event be established.
The conformity clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
FR
POSEI
2.43
%
3.051 m
EUR
An extrapolated error of EUR
2.941.537 has been reported by
the Certification Body in its
report for 2016, in respect of
local support measures. When
added as an amount at risk, it
results in a material adjusted
error rate for Posei- ABB02.
The Certification Body's findings
concern:
- transformation de la canne en
rhum
- structuration de l'élevage
- diversification végetale
Yes A reservation is entered in
respect of 2016 expenditure.
The Paying agency should
follow the recommendations
for remedial actions of the
Certification Body, which is to
follow-up and report in 2017.
The ongoing clearance
procedure will ensure that the
financial risk to the EU budget
is covered.
Table: Annex 10 – 3.1.22
The following table gives details of cases where a reservation made in the 2015 AAR was
not carried over in the 2016 AAR:
MS Adjusted
error
rate
Justification
GB F&V
Producer
organisation
0% UK has taken corrective action with regard to deficiencies detected in the past
and which were the subject of reservations in previous years.
Table: Annex 10 – 3.1.23
The following table shows the portion of ABB02 expenditure covered by Member States'
control statistics and the amounts at risk which results from DG AGRI's validation and adjustment process. Control statistics are available in respect of 75.7% of the
expenditure covering m 2.375 EUR. While for 2016, additional statistical coverage was obtained for a further 0.5 billion EUR for wine, the 0.420 billion EUR granted for
temporary exceptional measures in the milk and liverstock sectors was not subject to statistical reporting requirements.
For a further 185 m EUR for which no statistics were available, DG AGRI auditors have used their judgement to estimate the maximum amount at risk in that expenditure. For
the remaining 575 m EUR the aggregate error rate for the other measures (2.85%) was
extrapolated to the expenditure concerned. For an additional 1.463 m EUR (DG AGRI direct expenditure on promotion measures), an error rate of 1% is applied.
agri_aar_2016_annexes Page 114 of 273
Table Annex 10 – 3.1.24
Overall, the adjustments made resulted in the reported error rate of 0.52% increasing to
2.85% for ABB02.
The total amount at risk for ABB02 is 89.145 m EUR with an error rate of
2.85%.
It is noted that the average amount of net financial corrections per year for the
five-year period 2012-2016 (excluding corrections made for cross-compliance)
is 168.759 m EUR for ABB02.
3.1.12 Root causes of the error rate in market measures – progress report
In May 2014, the Commission Staff Working Document SWD (2014)176 was published. It
identifies the root causes for payment errors in non-IACS EAGF spending (Market Measures and POSEI) and lists 15 actions to be taken to address these causes. In 2016,
progress was made on the actions as follows:
Action Description Progress
1 (a) DG AGRI will propose introducing a list of eligible
measures either in Commission Regulation (EU) No 543/2011 (Fruit
and Vegetables) or in guidelines.
(b) DG AGRI will also propose
(a) Adoption of delegated and implementing act replacing
Commission Regulation (EU) No 543/2011 scheduled for first half of
2017.
Expenditure(1) Risk Expenditure(1) Risk
050204 Food Aid -968 -968 -968 -28
050205 Sugar - - - -
050206 Olive Oil 45 989 114 45 989 114 45 989 114 1 307 173
050207 Textile Plants 6 134 000 6 134 000 6 134 000 174 350
050208 Fruit and Vegetables 1 172 724 419 1 043 772 204 38 043 433 128 952 215 121 013 276 12 101 311 7 938 939 225 653
050209 Wine 1 027 130 938 1 026 982 789 11 033 114 148 150 148 150 - - -
050210 Promotion (shared management only) 62 587 884 62 587 884 29 960 012 3 099 755 32 627 872 927 399
050211 Other plant products and POSEI 242 007 764 239 567 593 3 086 074 2 440 170 2 440 170 69 358
050212 Milk and Milk Products 406 577 659 64 436 427 1 554 854 342 141 232 34 291 339 3 850 563 307 849 893 8 750 179
050213 Beef and Veal 30 206 396 30 206 396 30 206 396 858 572
050214 Sheepmeat and goatmeat 1 836 787 1 836 787 1 836 787 52 208
050215 Pigmeat, eggs, poultry & apiculture 140 601 812 140 601 812 140 601 812 3 996 399
Total 3 135 795 805 2 374 759 013 53 717 474 761 036 792 185 412 777 19 051 629 575 624 015 16 361 263
ExpenditureAmount at
risk% coverage Error rate
2 374 759 013 53 717 474 75.73%
185 412 777 19 051 629 5.91%
2 560 171 789 72 769 103 81.64%
2.84%
575 624 015 16 361 263
3 135 795 805 89 130 366
-9 356 312 -
3 126 439 492 89 130 366 2.85%
1 463 065 14 631 1.00%
3 127 902 558 89 144 997 2.85%
Footnote:
Measure risk assessed by
auditors
No statistics
available
EUR
Risk
EURExpenditure(1)
EUR
Overall assessment of risk for ABB02 - Market Measures
Expenditure for which no control statistics are availableExpenditure covered by
statisticsExpenditure (1)
EURSector
Budget
itemABB02 error rate applied*
2.85%
(2) Suspension of payments made in respect of financial year 2016 for Poland. The amounts corresponding to payments suspended have been declared by the
Paying Agency to the Commission in its monthly declarations (i.e. no recovery order issued for the amounts concerned) but the the amounts are suspended and
not reimbursed to the Member State by the Commission.
Total ABB 02 - payments made
Expenditure covered by control statistics
Expenditure for which there are no statistics but for which risk assessment carried out
Risk for expenditure covered by statistics and by risk assessment
*Error rate used on expenditure covered by statisitcs and risk assessed
Extrapolated risk for non-risk assessed expenditure
ABB02 - direct management - payments made on Promotion measures - direct payments by the Union
ABB02 - shared management - monthly declaration
Suspension of payments (2)
ABB02 - shared management - payments made
(1) Monthly declaration of expenditure affected by Paying Agencies.
agri_aar_2016_annexes Page 115 of 273
laying down eligible costs and ceilings for the accompanying
measures under the School Fruit
Scheme.
(b) - Commission Delegated Regulation (EU) No 500/2014
introducing accompanying measures.
- Commission Delegated Regulation (EU) 2016/247 and Commission
Implementing Regulation (EU) 2016/248, include provisions on
eligibility and controls of the accompanying measures.
2 DG AGRI will request Member
States – where appropriate by introducing legal provisions to this
effect - to demonstrate the verifiability and controllability of
requirements and eligibility
conditions of measures proposed in their national support programmes.
Adoption of delegated and
implementing acts in Fruit and Vegetables scheduled for first half of
2017.
Wine sector - Delegated Regulation
(EU) 2016/1149 and Implementing
Regulation (EU) 2016/1150 (IR) on the wine support programmes
entered into force on 18 July 2016 and include such provision.
3 DG AGRI will propose amendments to
the relevant Commission Regulation (EU) No 543/2011 with a view to
rendering sanctions in reaction to the non-observance of non-
substantial recognition criteria more proportionate as measured
against the policy objective of the
support. Accordingly, such non-respect will give rise to a reduction in
payments but will not entail the withdrawal of the recognition. A
progressive approach to the non-respect of substantial criteria is
introduced, ultimately leading to withdrawal of the recognition.
Commission Delegated Regulation
(EU) No 499/2014 was published on 16 May 2014.
The new Implementing and Delegated Regulations on the wine
support programmes entered into force on 18/7/2016 (see progress
under Action 2).
4 In the area of support for
promotion measures for agricultural products, DG AGRI will propose
incorporating further
clarifications as to the requirements for an appropriate
procurement procedure in the relevant implementing rules
(concerning for instance information about the legal status
of the proposing body and the corresponding analysis by Member
States).
Regulation (EU) No 1829/2015:
Recital No 5 and Article 2 lay down the legal framework as regards inter
alia procurement carried out by
public bodies.
On 7 June 2016, the Commission
services shared with national authorities guidance on competitive
procedures to be used for the selection of (non-public procurement)
programmes to be managed by the MS.
As regards the old regime, in 2013,
the Commission services adapted their standard documentation
(evaluation form and letter to the competent authorities) in order to
agri_aar_2016_annexes Page 116 of 273
ensure that the MS has checked adherence to public procurement
rules. The MS must clearly declare
whether a proposing organisation is public or private. As regards private
bodies, rules are different between MS, therefore a homogenous
approach is difficult. In the last adaptation of the guidelines
(handbook presented in the management Committee of 4 April
2014), the Commission advises
private bodies to follow the procurement thresholds of the
Financial Regulation.
Member States are requested to
confirm that an appropriate procedure for the selection of the
implementing body was followed in all cases: both in the cases where the
implementing body is selected before
and after the application.
DG AGRI will make continuous
reminders of the importance of respecting procurement rules in
management committees, advisory groups and monitoring committees in
the Member States. Most recently a presentation was made on this
specific point at the Conference of
Directors of Paying Agencies in Brussels on 19 December 2016. In
addition, letters are sent to those MS where information is not complete or
not presented in a timely manner.
5. The Commission will, where appropriate, work with Member
States to clarify and simplify support measures and encourage
them to take verifiability and controllability of measures into
account at the early stages of
drawing up their support programmes.
POSEI, clarification of Article 40 of Implementing Regulation (EU) No
180/2014 has been given during the meeting of the Committee for Direct
Payments (CDP) on 30 September 2014. At the meetings of the CDP,
and during bilateral meetings with
ES, PT and FR, DG AGRI asked Member States to pay special
attention to the implementation of this action plan, in particular
concerning the verifiability and controllability of new measures or
actions to be presented in the next modifications of programmes.
As regards Fruit and Vegetables
and Wine, the Commission proposes a specific provision on verifiability
and controllability in the
agri_aar_2016_annexes Page 117 of 273
implementing acts (see Action 2).
As regards Fruit and Vegetables,
the current work on the Commission
regulations foresees simplified indicators and hence information
requirements applying to the annual reports of producer groups, producer
organisations and associations of Producer Organisation.
6. DG AGRI will, where appropriate:
(a) request Member States to submit updated information on
management and controls required under Article 31 of
Regulation (EU) 228/2013 along with
their annual modifications of the national support
(b) improve the coordination of the analysis of the annual control
statistics submitted by Member States.
a) As regards POSEI, DG AGRI
wrote letters to FR, ES, PT and GR authorities in 2014 and 2015. The
replies were considered satisfactory by the DG AGRI services.
(b) - Standard reporting forms for
POSEI control statistics sere introduced.
The new Implementing and Delegated Regulations on the wine
support programmes entered into force on 18/7/2016 extending control
statistics to whole sector.
7. DG AGRI will, together with Member States, look into the possibility of
using simplified cost reimbursement approaches
wherever this is appropriate to
facilitate the implementation and checking of measures and
expenditure.
Wine national support programmes: the Guidelines
prepared by DG AGRI at the beginning of 2013 dealt among
others with the use of flat-rate
amounts for promotion and restructuring.
The new draft Implementing and Delegated acts foresee clear rules on
the simplified cost reimbursement (standard scales of unit costs) for
promotions of information in the Member States, promotion in third
countries, restructuring and
conversion of vineyards and green harvesting as well of contributions
in kind for restructuring and green harvesting operations, personnel
and administrative costs for information, promotion and
innovation operations. New guidelines have been issued in 2016
(containing further explanations on
simplified cost reimbursement options (standard scales of unit costs
and flat-rate) and how to deal with contributions in kind, personnel and
administrative costs).
The future Commission regulations
covering the modalities applying to
agri_aar_2016_annexes Page 118 of 273
the MS support programmes in the Fruit and Vegetables sectors will
contain clarified rules on Simplified
Cost Options.
Promotion: Simplified cost
reimbursement approaches already in place. Several cost categories were
already presented using the flat rate approach in the budgets of promotion
programmes and this was recently extended.
This approach has simplified
application procedures to a great extent and has facilitated controls.
8. A specialists' group made up of
Commission and Member State representatives will be established
to exchange views and discuss horizontal issues related to
eligibility and recognition criteria as well as any other issue discussion
of which is appropriate in regard of the occurrence of irregular
expenditure. As appropriate,
external actors like the European Court of Auditors could be invited
to give presentations.
See Annex B for a list of the error
rate and simplification workshops that have taken place so far for the
different sectors where Commission-level regulations (implementing and
delegated acts are planned).
POSEI: to continue to be dealt with
in bilateral meetings with the MS concerned in the context of the
approval of annual programme
modifications.
9. DG AGRI will make use of monitoring wherever this is
appropriate in view of the experience gained so far to work with Member
States to improve programmes at an early stage of planning as well as to
discuss possible deficiencies in the Member States' management and
controls of measures.
For detailed information on such monitoring in the relevant sectors,
see Annex A.
Promotion: Commission services
continue the efforts for improvement of programmes by discussing
important issues in committees and monitoring groups. Also continued:
the practice of workshops in the
Member States.
Fruit and Vegetables, DG AGRI
carries out monitoring missions to check the level of implementation of
Action Plans that are to redress deficiencies, see Annex A.
Assessment reports have already been sent to the Netherlands and
Austria. For UK and RO reports will
be delivered after respective follow-up missions.
In POSEI, guidelines for applicants contain detailed advice
on how to avoid common errors in applications.
agri_aar_2016_annexes Page 119 of 273
This practice has proven to be efficient as the errors in the
applications have been reduced
significantly during the last 3 years. Discussions also take place in the
context of the bilateral meetings to discuss annual programme
modifications.
Wine support programmes:
Commission services continue to discuss issues with Member States'
delegates in the CMO Management
Committee meetings.
10. DG AGRI will streamline the
presentation of replies to Member
States implementation questions in the IT system it shares with
Member States so as to create a reference library for all Member
States.
DG AGRI uploads its replies to MS
questions on implementation to the
CIRCA platform where they are available to other MS.
11. DG AGRI will provide up-dated lists of key and ancillary controls for the
main support schemes in the CMO.
Key and ancillary control documents for market measures were presented
to the Agricultural Funds Committee on 21 April 2015.
They are available for Member States on CIRCABC.
12 (a) Encourage Paying Agencies to
organise work-shops focused on best practices in the area of
management and control procedures
and participate actively in them. (b) Look into feasibility of pluri-
annual activities including peer-review missions in Member States
which result in benchmarking.
(a)
- Presentation of Staff Working Document at conference with
directors of the paying agencies on
18 September 2014.
- A dedicated workshop on the
"error rate" theme was held at the conference of paying agencies (10-12
November 2014). See Summary Report to be put in Ares.
(b)
- A workshop was held on 30 May
2016 with representatives of the
responsible Ministries and Paying Agencies to discuss the updated
guidelines on the implementation of the Wine support programmes,
including exchanges on good management and control practices.
13 (a) Encourage Member States to
provide adequate training for management and control officers.
(b) Look into the possibility of
(a)
Questionnaire distributed to Member States re training measures
agri_aar_2016_annexes Page 120 of 273
developing (e-) training modules. and their accessibility at Management Committee of 21 May 2014.
DG AGRI organizes an exchange of
views on the F&V scheme controls in the framework of the Expert Group
(for Delegated Acts)
(b)
Presentations concerning the key and ancillary controls were made in the
agricultural funds committee and are made available to Member States on
CIRCA.
Questions & answer documents have been prepared in this context and are
also available on CIRCA.
14. Member States should: (a) Ensure that beneficiaries can
efficiently obtain adequate information about the applicable
support conditions; (b) Include in their support
programmes information on measures taken to enhance
beneficiaries' understanding of
the applicable support conditions.
(a)
As regards POSEI, during bilateral
meetings with ES, PT and FR, DG AGRI services asked the Member
States to pay special attention to the implementation of this action plan, in
particular concerning the information given to the beneficiaries.
(b)
As regards Fruit and Vegetables, the main tool for Member States to
ensure that beneficiaries obtain the adequate information about the
applicable support conditions are the National Strategy and the National
Framework for environmental actions which describe and list the eligible
actions with their requirements based
on the EU Regulations (regulations 1308/13 and 543/11). These
instruments are publicly available for potential beneficiaries in Member
States.
15. The errors found are taken into account in the design of the audit
programme in the framework of Clearance of Accounts by DG
AGRI.
For list of cases, see Annex C.
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ANNEX A
List of monitoring actions with Member States (Action 9)
Promotion
Monitoring Committees in the Member States (art.12 of Reg (EC) 3/2008 and art
24 of Reg. (EC) 501/2008):
o 2015: DK, CZ, FR (twice), IE, NL, UK and upcoming in BE, CY, DE, EL, PL,
PT. In addition up to November 2015, 16 workshops on the new rules of
the promotion policy: AT, BG, EE, ES (twice), FI, FR, HR, HU, IT, LT
(twice), LV, PL, SE, UK. Planned by the end of 2015: CZ, DE, BE, FR
(twice), PL (twice), PT.
o 2014: AT, BG, EL, ES, FR (X3), IT, PT, RO, UK
o 2013: AT, BG, DE, DK, ES, FR, PT
o 2012: AT, CZ, DE, DK, ES, FR, IE, IT, PT
Workshops held in different MS during the last 4 years:
o BG: 16/1/2013, 19/10/2010
o CZ: 24/5/2012
o EL: 24/1/2012, 30/1/2010
o FI: 23/10/2011
o HU: 27/4/2011
o IE: 4/10/2013, 18/10/2012, 15/11/2011
o MT: 28/7/2011
o NL: 5/9/2012
o PL: 24/5/2011, 6/6/2012
o PT: 27/5/2013
o RO: 19/10/2011
o UK: 22/1/2013
Action plans after reservations in AAR 2015
In the case of two reservations for promotion measures, DG AGRI services identified deficiencies pertaining to controls on the selection procedure of
implementing bodies (Greece) and non-compliance with procurement
procedures (Italy).
agri_aar_2016_annexes Page 122 of 273
Fruits and vegetables & wine
a) Reservations from AAR 2013
o NL: Action plan dates from November 2014. Assessment report has been
sent.
o AT: Action plan dates from December 2014. Assessment report has been
sent.
o UK: Action plan dates from December 2014. Assessment report will be
delivered after a follow-up mission during 1st semester 2017.
o The Action Plan for Polish producer groups in the fruits and vegetables sector,
after a number of extensions, was due to have been completed by 31 October
2016. The plan has not been completed and the Polish authorities have
informed (orally) that it will be completed by the end of 2017. Due to the
delays in completing the action plan, the Commission took a decision
suspending payments to the aid measure (at a rate of 25%) from March 2016
– February 2017.
b) Reservations from AAR 2014
o RO: action plan dates from November 2015; it will be assessed by way of
bilaterals/workshops on the spot with representatives from the Ministries and
Paying Agencies.
c) Reservations from AAR 2015
o FR: request of the action plan dates from September 2016; Second request
will be launched after conclusions of ongoing clearance of accounts procedure
is at a more advanced stage; it will be assessed by way of
bilaterals/workshops on the spot with representatives from the Ministries and
Paying Agencies.
d) Wine
Management Committee on 15 July 2014: first part of discussion on Issues Paper
for the recast of Commission Regulation (EC) No 555/2008. The new Commission
Delegated Regulation (EU) 2016/1149 and Commission Implementing Regulation
(EU) 2016/1150 entered into force on 18 July 2016.
The Workshop of management and control experts on the new Guidelines for the
implementation of the national support programmes was held on 30 May 2016
POSEI
Bilateral meetings with MS (FR, ES, PT) held, when necessary, in the context of
the annual POSEI programme modifications. For 2014, D2 didn’t receive any new
measure.
Bilateral meetings in 2014 in the context of the draft guidelines on control
statistics data, in the margins of the Management Committee Meetings for direct
payments.
agri_aar_2016_annexes Page 123 of 273
ANNEX B
List of error rate and simplification workshops
Fruit and Vegetables
Workshop on simplification and reduction of error rate for Fruit and Vegetables
operational programmes - 25 March 2014
Wine
Workshop on simplification and reduction of error rate for Wine national support
programmes – 14 May 2014
Workshop on simplification as regards labelling rules and requited language in the
Wine sector – 16 July 2014
Workshop with representatives of the responsible Ministries and Paying Agencies
to discuss the updated guidelines on the implementation of the Wine support
programmes, including exchanges on good management and control practices -
30 May 2016.
Hops
Workshop planned for 5 March 2015
Apiculture
Workshop on simplification and reduction of error rate - 19 June 2014
Carcass classification
Workshop on simplification and reduction of administration burden – 18
September 2014
Poultry meat marketing standard
Workshop on simplification and reduction of administrative burden – 23 October
2014
Seminar on public intervention - 25 June 2014
Workshop on simplification of trade mechanisms – 1 July 2014
Workshop on marketing standards – 5 February 2015
agri_aar_2016_annexes Page 124 of 273
ANNEX C
List of DAS cases taken up under clearance of accounts
2012
5244PT POSEI in eligible TA costs included36 in enquiry VT/2013/004/PT
5244PT POSEI stocking density individual case recovery by MS indicated.
5372ES POSEI animal register included in enquiry VT/2012/009/ES
5374IT Wine promotion included in enquiry INT/2015/006/IT
5375PL Producer Groups included in enquiry FV/2013/001/PL
5511DE Public Procurement included in enquiry LA/2013/008/DE
2013
6072 PL and 5822 PL Producer Groups included in enquiry FV/2014/101 PL
6074 IT Promotion; promotion included in enquiry INT/2015/006/IT
36 Identified DAS error is taken into account during the on-the-spot audit.
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Part 3.2: ABB03 – Direct Payments
Index for part 3.2 – ABB03: Direct Payments
3.2.1 Introduction
3.2.2 ABB03 Expenditure
3.2.3 What assurance does the Director General have regarding the
expenditure under ABB03 – Direct Payments?
3.2.4 How is all this information used in order to "validate" and adjust the
error rate reported in the Member States control statistics?
3.2.5 What mitigating factors exist in order to render a reservation
unnecessary?
3.2.6 Conclusions as regards assurance for ABB03
3.2.7 Root causes of the error rate in direct payments – what is DG AGRI
doing about it?
3.2.1 Introduction
With a yearly budget of more than 40 billion EUR, Direct Payments (also called direct
aids, direct support, area aids) represent the most significant part of the CAP budget and a substantial part of the EU budget.
Direct payments benefited nearly 7 million farms throughout the European Union in financial year 2016. They often represent an important share of their agricultural income
(on average, nearly half of farmers' income in the last ten years came from this direct support).
The new direct payment system (applied as from 2015 and paid-out as from 2016) is a move towards a fairer, greener and more targeted distribution of support. As from 2015,
active farmers in the EU have access to compulsory schemes applicable in all EU
countries, as well as to voluntary schemes if established at the national level.
Direct payments are granted to farmers in the form of a basic income support based on
the number of hectares farmed. This so-called 'basic payment' is complemented by a series of other support schemes targeting specific objectives or types of farmers:
a 'green' direct payment for agricultural practices beneficial for the climate and the environment, which conditions the payment of 30%
Member States’ annual allocation to meeting three categories of generalised, non-contractual and annual obligations beneficial for the
environment and climate: crop diversification, maintenance of permanent
grassland, and the dedication of five per cent of arable land to ecologically beneficial areas ("ecological focus areas"). 72% of the total
EU agricultural area is subject to at least one "greening" obligation. a payment to young farmers, a top-up payment added to the basic
payment – which is also obligatory in every member state. It is granted for a maximum of five years from the moment a young farmer takes over
as the head of a farm holding. This payment can account for up to 2% of total direct payment national allocations.
agri_aar_2016_annexes Page 126 of 273
(where applied) a redistributive payment to provide improved support to small and middle-size farms. Under this scheme, member states may
allocate up to 30% of their national budget to a top-up payment for the first eligible hectares. The number of hectares for which this payment can
be allocated is limited to a threshold set by national authorities (30 hectares or the average farm size in member states if the latter is more
than 30 hectares). The amount per hectare is the same for all farmers in the country where it is applied, and cannot exceed 65% of the average
payment per hectare.
(where applied) payments for areas with natural constraints, where farming conditions are particularly difficult, such as mountain areas.
Under this scheme, up to 5% of the national allocation for direct payments can be used for top-up payments to farmers in areas with
natural constrains ('ANC') – an option applied at present only by Denmark as from 2015, and Slovenia as from 2017
(where applied) a small farmers scheme, a simplified scheme for small farmers replacing the other schemes. It is a simplified direct payment
scheme granting a one-off payment to farmers who choose to participate.
The maximum level of the payment is decided at the national level, but in any case may not exceed €1,250. The small farmers scheme includes
simplified administrative procedures, and participating farmers are exempt from greening and cross-compliance sanctions and controls.
and (where applied) voluntary support coupled to production to help certain sectors undergoing difficulties. Under this scheme, Member States
may continue to link (or couple) a limited amount of direct payments to certain products. The aim of this type of support is to maintain the level
of production in regions or in sectors undergoing difficulties and that are
particularly important for economic, social or environmental reasons. This option is presently applied by 27 Member States (not Germany).
In addition, a crop specific payment to cotton is also available to cotton producing
countries.
Active farmer
In order to be eligible to receive direct payments, applicants have to be active farmers.
In the context of the latest CAP reform, the co-legislators adopted the active farmer provision which aims at preventing individuals and companies from receiving support
from the CAP when their business is not agricultural or is only marginally so.
The key element of the active farmer provision is a negative list of businesses/activities5,
which includes airports, waterworks, real estate services, railway services and permanent sport and recreational grounds. Generally speaking, entities with activities on the
negative list are not usually farms. They just happen to have some farmland. Entities operating an activity on the "negative list" are not considered "active farmers" unless
they can prove that their farming activity is not marginal, using one of the 3 possibilities
to rebut the negative presumption.
If Member States want to, they can apply a stricter definition of active farmer:
• they can enlarge this negative list to include other similar activities,
• they can apply a test on all claimants, so that claimants with a marginal
agricultural activity are excluded (even if they do not perform an activity of the negative list).
However, those who received less than a certain amount of direct payments in the previous year are considered de facto active farmer. This amount is set by Member
States but may not be higher than € 5000.
Finally, those farmers who have mainly areas which do not need any intervention to
agri_aar_2016_annexes Page 127 of 273
remain in a state suitable for grazing or cultivation and who do not perform a minimum activity on those areas, whatever the level of direct payments they were granted in the
previous year, are considered non-active and may not receive support.
Explanatory box: Annex 10 – 3.2.1
Member States can combine different direct payment schemes to ensure efficient support
to farmers, adapted to their national context. Some are compulsory and some are optional. For example, all eligible farmers receive the basic payment and greening
payments (subject to respect of the greening requirements), while some farmers may
also qualify for a further payment under the compulsory young farmers scheme, and, depending on member states' choices, a possible additional payment under one or more
of the voluntary schemes.
The relevance of the new flexibility in the system is also illustrated by the range of
implementation decisions made by Member States, e.g. the modalities for implementation of the young farmers' scheme, the application of the small farmers'
scheme, or the range of measures implementing voluntary coupled support.
As a result of the new system:
The distribution of payments is more balanced due to external and internal
convergence: first data show that the average direct payments per hectare are converging (at Member State and farmer levels) (see point 1.1 of the report).
The payments are better targeted, addressing the particular needs of the young farmers, smaller farmers and specific sectors or regions with certain difficulties.
Payment entitlements
The basic payment is applied either as the basic payment scheme (BPS) or as a
transitional simplified scheme, the single area payment scheme (SAPS).
The BPS works on the basis of payment entitlements distributed to farmers.
In the first year of implementation of the BPS (2015) eligible farmers were allocated
payment entitlements. The general rule was that each eligible hectare gave right to one entitlement (although some member states applied limitations on the number of
entitlements that could be allocated). All entitlements allocated to a farmer have the same value, but differences in the value of entitlements may exist between farmers, if a
Member State opted for such an approach. In that case, the past level of direct payments to individual farmers was taken into account (or the value of the entitlements they
possessed under the previous direct payments regime) in order to avoid too abrupt disruptions in their level of support. However, since one of the objectives of the new
system is to move away from these historical references, the Member States that take
this approach have agreed to progressively reduce the differences in the values of entitlements and bring these values to (or closer to) the average by 2019.
The actual payment is made to active farmers based on the activation of the payment
entitlements they hold and calculated in relation to the eligible land they declare.
Explanatory box: Annex 10 – 3.2.2
agri_aar_2016_annexes Page 128 of 273
3.2.2 ABB03 Expenditure
ABB03 expenditure in financial year 2016 was as follows:
Table: Annex 10 – 3.2.3
3.2.3 What assurance does the Director General have regarding the
expenditure under ABB03 – Direct Payments?
The assurance of the Director General is drawn from the various levels of management and control that are in place and the results which can be obtained from them. In the
first place, the Member States, with 69 accredited Paying Agencies, are responsible for managing and checking the aid applications received from nearly 7 million beneficiaries
and for paying them.
All direct aid payments to farmers are dealt with within the framework of the Integrated Administration and Control System (IACS). This system enables the processing of
the aid claims received by the Paying Agencies and also provides for several eligibility checks including cross-checks between databases and on-the-spot checks.
Budget item Measure Expenditure (EUR) Totals (EUR)
050301 Decoupled direct payments 35 028 687 928
05030101 SPS (single payment scheme) 43 415 840
05030102 SAPS (single area payment scheme) 4 032 384 138
05030103 Separate sugar payment 165 092
05030104 Separate fruit and vegetables payment 94 542
05030105 Specific support (Article 68 of Regulation (EU) No 73/2009) — Decoupled direct payments -2 271 052
05030106 Separate soft fruit payment 47
05030107 Redistributive payment 1 226 573 728
05030110 Basic payment scheme (BPS) 17 755 821 525
05030111 Payment for agricultural practices beneficial for the climate and the environment 11 654 564 922
05030112 Payment for farmers in areas with natural constraints 2 794 447
05030113 Payment for young farmers 315 723 994
05030199 Other (decoupled direct payments) -579 295
050302 Other direct payments 5 384 677 863
05030206 Suckler-cow premium 605 296
05030207 Additional suckler-cow premium 15 538
05030213 Sheep and goat premium 326 097
05030214 Sheep and goat supplementary premium 51 527
05030228 Aid for silkworms 0
05030240 Crop-specific payment for cotton 243 860 904
05030244 Specific support (Article 68 of Regulation (EU) No 73/2009) — Coupled direct payments 5 439 736
05030250 POSEI — European Union support programmes 410 729 110
05030252 POSEI — Aegean islands 16 059 012
05030260 Voluntary coupled support scheme 3 800 556 915
05030261 Small farmers scheme 907 708 038
05030299 Other (direct payments) -674 308
050303 Additional amounts of aid 5 539
050303 Additional amounts of aid 5 539
050309 Reimbursement of direct payments to farmers from appropriations carried-over in relation to financial discipline 395 356 763 395 356 763
40 808 728 092 ABB 03 total
Expenditure reimbursed by DG AGRI to the Member States in 2016
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3.2.3.1. Control results reported by the Member States.
Member States are required to perform administrative checks on all aid applications
received as well as on-the-spot checks for at least 5% of applications, unless derogations apply. By 15 July of year N+1, the Member States are obliged to send to the
Commission, data on the outcome of the controls carried out in respect of claim year N. These control statistics contain information on amounts claimed, errors detected as a
result of administrative, risk based and random on-the-spot checks. The latter result in particular is considered to be the one which is most representative of the error which the
Member State would have detected if it had carried out on-the-spot checks on all farms,
and thus is the one which is used as the basis for the calculation of the reported error rate.
3.2.3.2 DG AGRI validation and adjustment process
The reliability of the statistics communicated by the Member States depends on the
effectiveness of their control and reporting systems. DG AGRI carries out an extensive review and validation process (explained in detail in its Annex 4 to this report setting out
its materiality criteria) in order to adjust this error rate upwards to a level which it considers better reflects the actual level of error. In so doing, it uses its professional
judgement on the basis of all available information. The main elements assessed are the
following
A. Assessment of the Certification Bodies' opinions on the control
statistics
As described in Annex 10 – part 2, the Certification Bodies are required to give an opinion on the completeness, accuracy and veracity of the annual accounts of the Paying
Agency, on the proper functioning of its internal control system and on the legality and regularity of the expenditure for which reimbursement has been requested from the
Commission. That opinion shall also state whether the examination puts in doubt the
assertions made in the management declaration. This opinion is received with the annual declarations of the Member State on 15 February of N+1.
Depending on whether a qualified or unqualified opinion was received and any other information available in the opinion, an adjustment was made to the error rate reported
by the Member State.
For ABB03 these findings had an impact for several Paying Agencies:
For Scotland, a 2% top up has been added due to the fact that the Certification Body did not confirm the control statistics submitted by the Member State. For Belgium and
Romania, a top-up is based on the amount at risk on the basis of which the accounts
are qualified. For Spain a top up is based on an amount assessed by the certification bodies as unduly paid in relation to entitlement calculations. In two further cases (Italy
01 AGEA and Italy 26 ARCEA), the level of incompliances detected by the Certification Bodies closely matches the top ups applied by DG AGRI auditors.
B. Assessment of findings from the European Court of Auditors (ECA)
The annual reports of the European Court of Auditors (ECA) and the available DAS cases 2016 indicating an error rate above 5% were analysed, possibly leading to adjustment
depending on the severity and extent of the identified deficiencies.
agri_aar_2016_annexes Page 130 of 273
C Assessment of findings from DG AGRI audit missions carried out in 2014-2016
(i) Direct Decoupled Aids
In 2016, 22 Paying Agencies in 12 Member States were audited. The Paying Agencies audited were selected on the basis of a risk analysis. Over the period 2015-2017, the
multi-annual work programme of DG AGRI has scheduled audits in order to ensure that Member States are visited with respect to covering a certain % of expenditure declared
in financial year 2016.
The general objective of the audits performed was to review if Member States carry out the administration and control of the decoupled direct payments to farmers in accordance
with EU legislation. In these audits particular attention is paid to the existence and functioning of the following key elements of the IACS: the implementation of the LPIS-
GIS (Land Parcel Identification System – Geographical information system) and the entitlements database (for area based aids) and the related functioning of the cross-
checks, the quality of the on-the-spot checks, the correct payment and application of administrative penalties.
An overview of the findings is provided here below and in the table under point 3.2.5.
The audit missions in 2015 and 2016 focused on the first year of implementation of the reform. They revealed conformity issues in respect of the following:
The correct interpretation of permanent grassland following the new definition
The correct distinction of permanent versus temporary grassland The identification of Ecological Focus Areas (EFA)
The inappropriate timing of on-the-spot checks in relation to greening and area based voluntary coupled support measures
The control of active / young farmer eligibility conditions
As regards UK – England (GB 09) and France – ASP (FR 19) the following is to be noted:
As regards UK – England (GB 09) for claim year 2014, the adjusted error
rate, including the top-up did not exceed the materiality threshold of 2%. Hence, no reservation was made in the AAR for financial year 2015. For
claim year 2015 a similar situation arises. It is noted as well that the underlying system's conformity issues (weaknesses in the LPIS and the
performance of on-the-spot checks affecting the legality and regularity of area based payments) were covered under an action plan which
continued to be closely monitored throughout 2016 and was finally duly
implemented. For France (FR19), on the decoupled payments, no further adjustment of
the error rate was made, as the risk to the EU budget is covered by the ongoing payment suspension procedure for 3% of expenditure relating to
claim year 2015 in view of the delayed and inadequate implementation of the action plan. A top up was applied for control deficiencies for some
VCS measures. The adjusted error rate, including the top-up does not exceed the materiality threshold of 2%.
(ii) Voluntary Coupled Support measures
27 Member States have decided to make use of the new voluntary coupled support (VCS), and farmers could apply for this aid for the first time in claim year 2015 (financial
year 2016). The Member States' decisions on VCS measures were not subject to prior approval by the Commission. However, DG AGRI ensured an extensive review of the
notifications.
agri_aar_2016_annexes Page 131 of 273
An essential point of this review is the compliance with Article 52(3) of Regulation (EU) No 1307/2013, which provides for the legal condition that such coupled support can only
be granted to sectors or regions undergoing certain difficulties and to the extent necessary to create an incentive to maintain current level of production. Following
assessments of the Member States' notifications and further correspondence with Member States concerned DG AGRI has opened conformity audits on the risk of non-
compliance with this condition in 8 Member States. The purpose of these audits is to collect additional information that will allow the Commission to get assurance that the
concerned measures comply with the legal condition and, where it is not the case, to
request Member states to amend the concerned measures as well as to apply net financial corrections to protect the EU budget from ineligible expenditure.
The outcome of these 8 conformity audits is subject to a significant degree of uncertainty. The precise population (hence the precise amount at risk) of farmers'
claims affected by the non-compliance of one or more VCS measures cannot be established by the Commission without further information from Member States on the
justification that the measures comply with the legal condition. Currently, these 8 audits are still at the early stage of the conformity audit procedure, and only two audits have
reached the second stage of the bilateral meeting. The final outcome of the 8 audits
remains extremely uncertain.
This is a very specific situation linked to the implementation of a new measure and
the specific risk is not at all linked to the legality and regularity of the farmers' claims or the effectiveness of the management and control system applied by the Paying Agencies.
It merely derives from the lack at this stage of due justification of policy decisions made by Member States, putting into question the legality of newly established measures
and thus, their eligibility for EU funding.
This also means that assurance obtained from the control results of the Member States
and from DG AGRI and/or Certification Body audits on the functioning of the
management and control system in relation to the implementation of VCS would still be considered in accordance with annex 4 on materiality criteria.
An unquantified reservation covering the 8 Member States concerned (FR, GR, IE, IT, LT, MT, PL and RO) is therefore necessary to transparently disclose this specific issue and
clearly distinguish it from the overall assurance established on the effectiveness of the control framework in the Paying Agencies. See also Parts 2.1.2 and 2.1.1.2.2 of the
report.
agri_aar_2016_annexes Page 132 of 273
Voluntary coupled support
Chapter 1 of Title IV of Regulation of the European Parliament and the Council (EU) No
1307/2013 provides for the possibility for Member States to use up to a maximum percentage of their annual national ceiling for direct payments to finance voluntary
coupled support (VCS).
That support can only be granted to a list of sectors and productions (cereals, oilseeds,
protein crops, grain legumes, flax, hemp, rice, nuts, starch potato, milk and milk products, seeds, sheepmeat and goatmeat, beef and veal, olive oil, silkworms, dried
fodder, hops, sugar beet, cane and chicory, fruit and vegetables and short rotation
coppice), to the extent necessary to create an incentive to maintain current levels of production in sectors or regions where specific types of farming or specific agricultural
sectors particularly important for economic, social or environmental reasons undergo certain difficulties.
Coupled support is granted as an annual payment per hectare or head. It must be granted within defined quantitative limits. In this context, for each measure, a
quantitative limit (QL) has been determined by Member States. Such limit reflects the production levels in the targeted region or sector in at least one year in the period of 5
years that precedes the year of the decision about VCS (for the 27 Member States that
decided to apply the VCS from 2015, this is 2009-2013).
In 2014, 27 Member States decided to apply VCS between 2015 and 2020. From the EUR
41-42 billion per year available to direct payments (EU-28), they earmarked EUR 4.1-4.2 billion per year to this purpose. Overall, this represented more than 250 different
measures.
Member States had the unique possibility to revise their VCS decisions by 1 August 2016
so that the intended changes could apply as from 2017. 19 Member States reviewed their
decisions impacting more than 150 measures.
Explanatory box: Annex 10 – 3.2.4
3.2.4 How is all this information used in order to "validate" and adjust
the error rate reported in the Member States control statistics?
Adjustments have been made by DG AGRI to the reported error rates calculated on the basis of the Member States' control data. These adjustments or top-ups have been
established in line with the criteria set out in Annex 4 to this AAR and have been made where there were indications of error arising notably from the findings of the Certification
Bodies, the Court of Auditors and DG AGRI's own audits. Where possible the amount at
risk was quantified and where this was not the case a % flat rate was used to express the risk for the budget arising from error in the expenditure which is not reflected in the
Member States' control statistics.
agri_aar_2016_annexes Page 133 of 273
The table below summarises this information for all Paying Agencies:
Paying
Agency
Paying Agency
Name
Expenditure (1)
in FY 2016
EUR
Reported
(residual)
Error Rate
%
Adjusted Error
Rate
%
Amount at
Risk
EUR
AT01 AMA 686 377 880 0.48% 0.53% 3 613 238
BE02 ALV 237 643 914 1.49% 1.49% 3 538 086
BE03 SPW-DGARNE 284 985 447 0.18% 0.77% 2 192 620
BG01 DFZ [SFA] 705 306 488 1.25% 4.42% 31 162 984
CY01 ΚΟΑΠ [CAPO] 49 788 828 3.44% 4.14% 2 059 857
CZ01 SZiF [SAIF] 834 008 540 0.36% 0.36% 2 970 187
DE03 Baden-Württemberg
MLR 400 875 357 0.25% 0.86% 3 460 479
DE04 Bayern StMLF 998 085 309 0.22% 0.77% 7 706 827
DE07 Brandenburg MLUV 331 638 431 0.27% 0.96% 3 182 237
DE11 Mecklenburg-
Vorpommern MELFF 360 481 290 0.13% 0.78% 2 804 382
DE12 Niedersachsen 796 264 914 0.64% 1.20% 9 579 636
DE15 LWK Nordrhein-
Westfalen 468 679 497 0.23% 0.80% 3 729 102
DE17 Rheinland- Pfalz 188 837 930 1.15% 1.78% 3 361 745
DE18 Saarland 20 598 679 0.50% 1.16% 239 765
DE19 Sachsen 254 245 698 0.30% 0.91% 2 319 339
DE20 Sachsen-Anhalt 322 723 350 0.17% 0.79% 2 563 077
DE21 Schleswig-Holstein 306 935 183 0.63% 1.22% 3 750 443
DE23 Thüringen 210 539 029 0.73% 1.37% 2 891 623
DE26 Helaba 215 196 122 0.91% 1.54% 3 310 848
DK02 DAFA 852 260 873 0.76% 2.97% 25 338 972
EE01 PRIA 112 835 661 2.02% 2.02% 2 281 596
ES01 Andalucía 1 442 106 121 1.43% 2.01% 29 008 997
ES02 Aragón 419 124 688 0.78% 1.17% 4 906 712
ES03 Asturias 63 920 188 0.40% 0.52% 333 517
ES04 FOGAIBA 27 832 410 1.88% 2.50% 696 989
ES05 Islas Canarias 182 833 416 1.28% 1.28% 2 339 784
ES06 Cantabria 42 629 194 0.37% 0.37% 157 233
ES07 Castilla La Mancha 649 955 187 1.53% 1.73% 11 217 742
ES08 Castilla y Léon 896 126 481 0.47% 1.12% 10 021 596
ES09 Cataluña 264 148 707 0.79% 0.81% 2 143 362
ES10 Extremadura 510 676 689 0.30% 0.52% 2 660 978
ES11 FOGGA 168 739 872 2.35% 2.64% 4 455 859
ES12 Madrid 37 631 018 1.18% 1.54% 578 997
ES13 Murcia 57 724 574 1.47% 1.47% 845 966
ES14 Navarra 100 594 879 0.41% 0.41% 411 203
ES15 País Vasco 45 000 430 1.04% 1.23% 554 472
ES16 La Rioja 27 986 938 1.00% 1.04% 290 573
ES17 AVFGA 108 561 360 9.28% 9.28% 10 075 857
FI01 MAVI 522 194 621 0.67% 0.67% 3 488 434
FR05 ODEADOM 138 841 478 0.05% 2.08% 2 894 717
agri_aar_2016_annexes Page 134 of 273
FR19 ASP 6 954 355 659 0.32% 0.40% 27 375 628
GB05 DARD 320 601 292 0.28% 0.58% 1 861 794
GB06 SGRPID 523 259 993 0.19% 2.97% 15 547 294
GB07 WG 259 463 993 0.05% 0.05% 138 564
GB09 RPA 1 932 940 897 0.41% 1.33% 25 623 732
GR01 Ο.Π.Ε.Κ.Ε.Π.Ε.
[O.P.E.K.E.P.E.] 2 072 079 443 2.48% 2.63% 54 400 662
HR01 PAAFRD 179 801 123 0.75% 0.75% 1 349 105
HU01 MVH [ARDA] 1 267 308 687 2.33% 3.24% 41 099 691
IE01 DAFM 1 208 736 460 0.06% 0.24% 2 868 250
IT01 AGEA 1 810 633 857 0.40% 2.41% 43 616 741
IT05 AVEPA 366 704 758 0.80% 2.70% 9 905 831
IT07 ARTEA 159 635 080 1.46% 3.52% 5 616 522
IT08 AGREA 343 482 279 0.08% 2.11% 7 255 510
IT10 ARPEA 366 573 553 0.13% 2.00% 7 331 771
IT23 OPR Lombardia 496 397 252 0.22% 2.13% 10 581 667
IT24 OPPAB 23 020 608 0.25% 1.66% 383 123
IT25 APPAG 12 415 535 0.72% 2.41% 298 842
IT26 ARCEA 254 956 939 0.76% 2.63% 6 692 701
LT01 NMA [NPA] 409 894 533 0.81% 0.81% 3 301 588
LU01 Ministère de
l'Agriculture 33 245 345 0.48% 0.48% 159 453
LV01 RSS 177 864 441 1.80% 1.80% 3 204 895
MT01 MRRA PA 5 037 777 1.87% 1.87% 94 232
NL04 RVO 725 516 364 0.72% 1.38% 9 980 051
PL01 ARiMR [ARMA] 3 339 889 763 2.67% 4.30% 143 680 889
PT03 IFAP 646 509 144 1.90% 2.66% 17 229 300
RO02 PIAA 1 521 315 445 3.46% 9.24% 140 575 256
SE01 SJV 666 608 665 1.08% 3.08% 20 527 150
SI01 ARSKTRP 137 618 722 0.78% 0.78% 1 066 659
SK01 APA 425 429 925 0.82% 0.82% 3 488 121
Grand
Total ABB 03 40 986 234 205
Amounts reimbursed to DG AGRI
by Coordinating Bodies -2 102 757 0.00%
Suspension of payment (2) -175 403 355
ABB03 - Payments made 40 808 728 092 1.04% 1.996% 814 395 052
Footnote: (1) Monthly declaration of expenditure effected by Paying Agencies.
(2) Suspension of payments made in respect of financial year 2016 for France. The
amounts corresponding to payments suspended have been declared by the Paying
Agency to the Commission in its monthly declarations (i.e. no recovery order issued for
the amounts concerned) but the amounts are suspended and not reimbursed to the
Member State by the Commission.
Table: Annex 10 - 3.2.5
In a limited number of cases – Germany (all PAs for greening), Spain (ES07 and ES08),
England and Nord Ireland, Italy (IT24) and The Netherlands top-ups were made to the
reported error rate but the resulting adjusted error rate was not above the materiality threshold of 2% and therefore a reservation was not considered. All these cases are of
agri_aar_2016_annexes Page 135 of 273
course followed up by a conformity clearance procedure and financial corrections shall be applied as appropriate in order to protect the EU budget.
3.2.5 What mitigating factors exist in order to render a reservation
unnecessary?
The following table sets out the situation for all cases where the adjusted error rate is above 2%. A brief explanation is given for the top-up applied and any mitigating factors
which exist are examined in order to determine if a reservation is required. Both the
DG AGRI auditors and the operational unit concerned are involved in this process.
PA Adjusted
error rate
Amount
at risk Reasons for top-up
Res
2016 Mitigating factors/reservation follow up.
BG01 4.42% 31. 163
m EUR
A 2016 audit of DG AGRI identified
weaknesses in the greening aid
scheme (incorrect definition of the
fallow land/ temporary grassland/
permanent grassland, deficiencies in
the definition of the Ecological Focus
Area and issues with the organic
status). Finally, a 2% top up has been
applied on all expenditure, as the
package of final accounts, audit
reports and audit certificates has not
been submitted by the Member State
within the deadlines and at the time of
drafting and therefore there is
insufficient assurance.
Yes A reservation is entered in respect of
2016 expenditure.
Following the exchanges with the
Member State in the framework of the
ongoing conformity clearance procedure,
the necessary remedial actions will be
agreed with the Member State.
DG AGRI will closely monitor the
situation. The reports and the accounts
will be analysed at a later stage.
The conformity clearance procedure
already on-going in respect of financial
year 2016 and onwards will ensure that
the financial risk to the EU budget is
covered.
CY01 4.14% 2.0599
m EUR
Several deficiencies identified in a
2015 DG AGRI audit of the specific
support granted under Article 68 of
Reg. 73/2009 for the ovine and caprine
sectors have not yet been remedied:
administrative checks to establish the
eligibility of the aid and the calculation
of the aid (including the application of
administrative penalties), sufficient
quality of on-the-spot checks.
Yes A reservation is entered in respect of
2016 expenditure.
For claim year 2015, the on the spot
checks have been performed to the
required extent. The other weaknesses
identified by the audit are addressed via
an on-going Action Plan. A mission to
Cyprus to verify the implementation of
the Action Plan is scheduled for the end
of April 2016.
The conformity clearance procedure on-
going in respect of financial year 2016
will ensure that the financial risk to the
EU budget is covered.
DK02 2.97% 25.339
m EUR
A 2% top up has been applied on all
expenditure, as the package of final
accounts, audit reports and audit
certificates has not been submitted by
the Member State within the deadlines
and at the time of drafting and
therefore there is insufficient
assurance.
Yes A reservation is entered in respect of
2016 expenditure.
DG AGRI will closely monitor the
situation. The reports and the accounts
will be analysed at a later stage.
EE01 2.02% 2.282 m
EUR
The adjusted error rate is only based
on the control data reported by the
Member State.
No A reservation is not considered
necessary.
The Member State should address where
necessary the causes underlying the
error rate reported in the control
statistics.
ES01 2.01% 29.009
m EUR
The adjusted error rate is based on the
known error amount related to the
payment entitlements reported by the
Certification Body.
No A reservation is not considered
necessary.
The Paying agency should follow the
recommendations for remedial actions of
the Certification Body.
agri_aar_2016_annexes Page 136 of 273
PA Adjusted
error rate
Amount
at risk Reasons for top-up
Res
2016 Mitigating factors/reservation follow up.
ES04 2.50% 0.697 m
EUR
A 2016 audit of DG AGRI identified
deficiencies in the performance of on
the spot checks, which are affecting
greening and the area related VCS
measures. Further, a known error
amount related to the payment
entitlements was reported by the
Certification Body.
No As the amount at risk is below the de
minimis threshold established in DG
AGRI's materiality threshold (see Annex
4) no reservation is required.
ES11 2.64% 4.456 m
EUR
The adjusted error rate is based on the
control data reported by the Member
State and the known error amount
related to the payment entitlements
reported by the Certification Body.
No A reservation is not considered
necessary.
The Member State should address where
necessary the causes underlying the
error rate reported in the control
statistics.
ES17 9.28% 10.075 m
EUR
The adjusted error rate is only based
on the control data reported by the
Member State.
Yes A reservation is entered in respect of
2016 expenditure.
The Member State should address where
necessary the causes underlying the
error rate reported in the control
statistics.
DG AGRI will closely monitor the
situation.
GB06 2.97% 15.548 m
EUR
A 2016 audit by DG AGRI found
weaknesses in the management of the
national reserve in Scotland, as top
ups on payment entitlements were
granted circumventing the 1st
allocation. Furthermore, a top up was
added as the Certification Body did not
confirm the control statistics.
Yes A reservation is entered in respect of
2016 expenditure.
The Paying agency should follow the
recommendations for remedial actions of
the Certification Body.
GR01 2.63% 54.401 m
EUR
A 2016 audit in Greece detected
deficiencies in the verification of the
eligibility conditions to be fulfilled by
applicants when claiming payment
entitlements from the national reserve
and/or payment for the Young Farmer.
No A reservation is not considered
necessary.
Remedial actions are being taken by the
Member State following the audit. The
conformity clearance procedure already
on-going in respect of financial year
2016 and onwards will ensure that the
financial risk to the EU budget is
covered.
HU01 3.24% 41.100 m
EUR
A 2016 DG AGRI audit identified
weaknesses in the control of the
greening payment (incorrect definition
of the fallow land/temporary and
permanent grassland, deficiencies in
the definition of the Ecological Focus
Area).
Yes A reservation is entered in respect of
2016 expenditure.
Following the exchanges with the
Member State in the framework of the
ongoing conformity clearance procedure
the necessary remedial actions will be
agreed with the Member State. DG AGRI
will closely monitor the situation.
The conformity clearance procedure
already on-going in respect of financial
year 2016 and onwards will ensure that
the financial risk to the EU budget is
covered.
IT01 2.41% 43.617 m
EUR In 2016, DG AGRI audits identified
weaknesses that affect all the Italian
PAs. It concerns deficiencies in the
correct establishing of the eligibility of
land (Permanent Grassland with trees).
This affects all area based premia.
Furthermore, weaknesses in the
verification of the Active Farmer status
were detected. The related top ups are
applied for all the Italian Paying
Agencies.
Yes
A reservation is entered in respect of
2016 expenditure.
Following the exchanges with the
Member State in the framework of the
ongoing conformity clearance procedure
the necessary remedial actions in the
form of an action plan will be assessed
and agreed with the Member State. DG
AGRI will closely monitor the situation.
The conformity clearance procedure
IT05 2.70% 9.906 m
EUR
IT07 3.52% 5.616 m
EUR
IT08 2.11% 7.255 m
EUR
IT10 2.00% 7.332 m
EUR
IT23 2.13% 10.582 m
EUR
agri_aar_2016_annexes Page 137 of 273
PA Adjusted
error rate
Amount
at risk Reasons for top-up
Res
2016 Mitigating factors/reservation follow up.
IT26 2.63% 6.693 m
EUR
already on-going in respect of financial
year 2016 and onwards will ensure that
the financial risk to the EU budget is
covered.
In the case of IT 26, The Action Plan
proposed by IT-Calabria did not
satisfactorily identify the deficiencies
leading to the high error rate. IT-
Calabria has been invited to submit a
reworked version, which would more
effectively target the reasons for errors.
IT25 2.41% 0.299 m
EUR
Idem as above for other IT Paying
Agencies No
As the amount at risk is below the de
minimis threshold established in DG
AGRI's materiality threshold (see Annex
4) no reservation is required.
PL01 4.30% 143.681
m EUR
A 2016 DG AGRI audit identified
weaknesses in the control of the
greening payments. Furthermore, a
top up was applied on the expenditure
for the Small Farmers Scheme, as the
control statistics have not been
submitted.
Yes A reservation is entered in respect of
2016 expenditure.
Following the exchanges with the
Member State in the framework of the
ongoing conformity clearance procedure
the necessary remedial actions will be
agreed with the Member State. DG AGRI
will closely monitor the situation.
The conformity clearance procedure
already on-going in respect of financial
year 2016 and onwards will ensure that
the financial risk to the EU budget is
covered.
PT03 2.66% 17.229
m EUR
A 2015 DG AGRI audit identified
weaknesses in the correct establishing
of the eligibility of the land. The issue
affects mainly the Permanent
Grassland with trees.
Yes A reservation is entered in respect of
2016 expenditure.
The Member State should implement an
action plan to address the weaknesses
detected.
The conformity clearance procedure
already on-going in respect of financial
year 2016 and onwards will ensure that
the financial risk to the EU budget is
covered.
RO02 9.24% 140.575
m EUR
A 2016 DG AGRI audit found that the
two estimated amounts per hectare to
be granted to the farmers and
consequently also the ceiling for the
redistributive payment were not
properly justified. A top up was added
based on the error amount reported by
the Certification Body.
Yes A reservation is entered in respect of
2016 expenditure.
The Action Plan proposed by the
Romanian authorities did not
satisfactorily identify the deficiencies
leading to the high error rate. The
Member State has been invited to
reinforced and submit a reworked
version, which would more effectively
target the reasons for errors.
SE01 3.08% 20.527 m
EUR
A 2016 DG AGRI audit identified
weaknesses in the correct establishing
of the eligibility of the land (Permanent
Grassland). Furthermore, weaknesses
were established in the control of the
greening payment. A further DG AGRI
audit identified weakness in the
performance of the administrative and
on the spot controls for the support
granted in the bovine sector under the
VCS schemes.
Yes A reservation is entered in respect of
2016 expenditure.
Following the exchanges with the
Member State in the framework of the
ongoing conformity clearance procedure
the necessary remedial actions in the
form of an action plan will be assessed
and agreed with the Member State. DG
AGRI will closely monitor the situation.
The conformity clearance procedure
already on-going in respect of financial
year 2016 and onwards will ensure that
agri_aar_2016_annexes Page 138 of 273
PA Adjusted
error rate
Amount
at risk Reasons for top-up
Res
2016 Mitigating factors/reservation follow up.
the financial risk to the EU budget is
covered.
FR05
ODEAD
OM
2.08% 2.895 m
EUR
A DG AGRI audit in 2014 detected an
absence of consignment checks in
respect of banana shipments.
Yes The reservation is carried forward from
2015.
The FR authorities have been requested
to implement an action plan. The
conformity clearance procedure will
ensure that the financial risk to the EU
budget is covered.
Table: Annex 10 - 3.2.6
In addition, as indicated in point 3.2.3 above, an unquantified reservation covering 8
Member States (FR, GR, IE, IT, LT, MT, PL and RO) is necessary.
PA
Adjusted
error rate
Amount
at risk Reasons for top-up
Res
2016
Mitigating
factors/reservation follow up.
8 MS
(FR, GR,
IE, IT
LT, MT,
PL and
RO)
Unquantified 2016 DG AGRI audits identified
a risk of non-compliance of certain measures under the
Voluntary coupled support with
the conditions provided for in the EU legislation. Lack of due
justification of policy decisions made by some Member States
put into question the legality of newly established measures
and thus their eligibility for EU funding.
Yes An unquantified reservation is
entered in respect of 2016. DG AGRI will closely monitor
the situation.
The conformity clearance procedure already on-going in
respect of financial year 2016 and onwards will ensure that
the financial risk to the EU budget is covered.
agri_aar_2016_annexes Page 139 of 273
The following table gives details of cases for Direct Payments where a reservation made in the 2015 AAR was not carried forward in the 2016 AAR:
Paying Agency Adjusted
error
rate
Amount at risk Justification
ES06 Cantabria
ES10
(Extremadura)
ES13 (Murcia)
0.37%
0.52%
1.47%
0.157 EUR
2.661 m EUR
0.846 m EUR
2013 DG AGRI audits found weaknesses in the controls
regarding the eligibility of permanent pasture and its
recording in the LPIS. A DG AGRI audit mission to ES in
March 2016 showed that the Action Plan was implemented
according to agreed milestones. No top ups were applied for
FY2016 and the reported error rates are below the materiality
threshold of 2%.
FR19 0.40% 28.084 m EUR For the decoupled payments, no further top up was applied,
as the risk to the EU budget is covered by the ongoing
suspension procedure.
A top up was applied for the VCS measures.
ES05 (Canary
Islands) - POSEI
1.28% 2.340 m EUR The Spanish authorities have reported an error rate of
31.57% in respect of aid for animal premia (c. 5m EUR). Put
in the context of the overall Posei aid for ABB03 (206 m
EUR), this results in an overall error rate of 1.28%. The ES
authorities took measures to improve the animal
identification and registration system and in particular to
ensure an update and correction of existing records in the
system. This has resulted in the discovery and correction of
a high number of errors which explains the high error rate.
DG AGRI's audit mission in 2016 verified that the correction
measures were underway. DG AGRI will continue to monitor
the situation. The conformity clearance procedure will ensure
that the financial risk to the EU budget is covered.
Table: Annex 10 - 3.2.7
3.2.6 Conclusions as regards assurance for ABB03
As a result of the "top-ups" made, an adjusted error rate has been calculated of
1.996% with 24 out of 69 Paying Agencies having an adjusted error rate above 2% and 2 above 5% – see Table: Annex 10 - 3.2.6 above. Overall, the reported error rate for
ABB03 increased from 1.04% to 1.996% as a result of adjustments made by DG AGRI.
For the Paying Agencies with an error rate between 2 and 5%, an examination was
carried out of any risk mitigating factors which indicated that the EU budget was protected for the past (conformity clearance procedure, culminating in an ongoing
financial correction) and that it is protected for the future (the deficiencies have been
addressed by the Paying Agency). In 4 out of the 22 cases (Estonia, Spain for 2 Paying Agencies and Greece), it was considered that, given the mitigating factors present (see
summary under point 3.2.3), it would not be necessary to make reservations. Table: Annex 10 – 3.2.7 sets out the reasoning in respect of each case.
The overall outcome of this exercise is that 18 reservations are necessary at Paying
Agency level:
Italy (7 Paying Agencies)
Bulgaria Cyprus
Denmark France
Hungary Poland
Portugal Romania
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Spain Sweden
United Kingdom (Scotland)
5 Reservations from 2015 (4 for Spain, France) are not carried forward in the 2016 AAR
due to error rates in 2016 below 2%, and moreover in the case of France where a substantial part of the amount potentially at risk was subject to a suspension in financial
year 2016 with a conformity clearance procedure covering the residual financial risk (see Table: Annex 10 – 3.2.7).
For direct payments, the increase compared to last year in the adjusted error rate (from
1.37% to 1.996%) and the number of Paying Agencies under reservation (from 10 to 18) results from some difficulties experienced by Member States with the first year of
implementation of the new direct payments, including greening. However, the overall result confirms that, even in such challenging circumstances with higher inherent risks,
the Integrated Administration and Control System (IACS), when implemented in accordance with applicable rules and guidelines, limits effectively the risk of irregular
expenditure.
The error rate for ABB03 is 1.996% with an amount at risk of 814.4 million EUR.
It is noted that the average amount of net financial corrections per year for the five-year period 2012-2016 (excluding corrections made for cross-compliance)
is 626.5 million EUR for ABB0337.
3.2.7 Root causes of the error rate in direct payments – what is DG AGRI doing about it?
In 2013 DG AGRI carried out an assessment of the root causes of errors in the
implementation of direct payments and of possible preventive and corrective actions. This assessment was further formalised with the adoption and publication on 26 May
2014 of a Commission staff working document (SWD(2014) 175 final). The main root causes of error identified therein were the following:
Errors/non-compliances by national administration arising when national
administrations do not adapt their system as to ensure compliance with the rules or do not follow their own instructions,
Insufficient quality and update of the Land Parcel Identification System (LPIS),
Low quality of the on-the-spot checks,
Mistakes in the aid applications.
While these root causes are still valid, some additional risks linked to the implementation
of the reformed Direct Payments of the new CAP have been identified. Bearing in mind that the recent reform aims at an improved targeting of support measures and ultimately
a more effective and efficient CAP, such better targeting often implies additional eligibility
conditions and thus greater complexity of support schemes where Member States are given more flexibility. Moreover, compromise solutions incorporated in the basic acts in
the inter-institutional decision-making process sometimes give rise to diverging interpretations when implemented by Member States.
37 See section 2.4.1.5.1 of the main body of the report on "corrective capacity". No information is given on the
corrective capacity which derives from recoveries as this is not split by ABB activity and is available only at
Fund level.
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For Direct Payments the additional main areas of risk in the context of the reformed system are likely to relate to issues regarding the first allocation of payment entitlements
and the calculation of their initial unit value due to the sometimes complex options chosen by Member States, risks relating to establishing correct eligible area, especially
regarding areas of permanent grassland, challenges relating to the new and unprecedented set of greening requirements, including controls of beneficiaries exempted
from those requirements, and risks related to implementation of the new Voluntary Coupled Support schemes, where a high flexibility for Member States to shape the
schemes renders the control of compliance complex.
DG AGRI addresses the main risks for the Funds of the existing root causes by means of audit enquiries and action plans already underway in certain Member States. On top of
that, and at a more upstream stage, a series of actions covering improvements in monitoring, communication and remedial action have been taken to mitigate the situation
further and prevent issues from arising in the future:
1. The quality assessment (QA) which Member States must carry out of their
LPIS is actively followed-up by a new unit in DG AGRI ("Implementation support, monitoring, IACS and LPIS") to ensure that Member States take the remedial actions
required to meet the quality standards DG AGRI considers appropriate. Moreover, the
conformity clearance procedure will still include in its process the assessment of the correct application of the LPIS QA method.
2. DG AGRI has reinforced its actions to inform in meetings (e.g. meeting with Paying Agencies; or ad hoc expert groups) the responsible bodies in the Member States
(Paying Agencies, Ministries) and has also developed guidance documents addressing problematic issues in particular in the following areas:
principles for the LPIS under the renewed direct payments schemes,
on-the-spot checks and area measurement,
aid applications by farmers,
the "active farmer" provision and
the definition and implementation of permanent grassland.
Other technical guidance, established in collaboration with the Commission’s Joint Research Centre have followed, on e.g. the implementation of a pro-rata system for
permanent grassland or more technical features of on-the-spot controls for greening (e.g. on measurement of EFA or on the control of crop diversification), the LPIS upkeep
and the LPIS QA methodology execution.
DG AGRI has reinforced its actions to inform Member States about implementation issues
in committees and expert groups. DG AGRI has also carried out implementation
support activities through a series of visits to most Member States in the course of 2014, 2015 and 2016, through bilateral meetings and via replies to written questions on
the implementation of the Direct Payment schemes and of the Greening, as well as with regard to the Integrated Administration and Control System (IACS).
Finally, a set of targeted workshops/expert groups allowing Member States to exchange experience and good practices for the administration and control of Direct Payments were
organised in 2015 and 2016 in the following areas: greening, Young Farmers' payment, Voluntary Coupled Support for animals, the provisions related to active farmer, specific
area-related aspects and the system of geo-spatial aid application (GSAA) including the
implementation of preliminary checks, and circumvention, force majeure and exceptional circumstances.
3. Following conformity clearance audits that detected major deficiencies, or reservations in previous AARs, specific actions have been taken to address deficiencies in
agri_aar_2016_annexes Page 142 of 273
certain Member States. They have proven effective in triggering changes. Based on an analysis of the DAS exercises, of Member States' statistics and of audit results, new
specific action plans may need to be implemented by some Member States.
4. DG AGRI provides guidance to the Member States and monitors the effectiveness
of the control systems on an on-going basis, in particular through compliance audit missions (including also audits of Paying Agencies' compliance with the accreditation
criteria and audits of the Certification Bodies) as well as conformity clearance procedures. Whenever weaknesses are found, the Commission protects the Union's
financial interests by means of financial corrections imposed on the Member States. The
error rate for Direct Payments is also being addressed through DG AGRI’s audit activity.
5. The previous legislation provided for the possibility to reduce or suspend
payments but only in the case of repeated deficiencies having been the reason for at least two financial correction Decisions by the Commission. The Horizontal Regulation
now enables the Commission to reduce or suspend payments when a Member State has not addressed the deficiencies via an action plan. This will provide Member States with a
stronger incentive to improve their systems where necessary. As an example, this new procedure was implemented in July 2016 through a Commission Implementing decision
to suspend monthly payments to France under EAGF for 3% of expenditure relating to
claim year 2015 in view of the delayed and inadequate implementation of the action plan.
6. DG AGRI has also proposed a series of rules in the secondary legislation (delegated acts and implementing acts) aiming at mitigating the risks identified above,
e.g. by introducing the possibility for Member States to carry out preliminary checks to identify non-compliances and the possibility for farmers to correct them for a certain
period of time after the submission of the aid application. . These mainly concern control provisions. As is already the case, the need to amend secondary legislation in view of
specific difficulties encountered in the process of implementation of the reform has been
and will be constantly assessed and acted upon.
7. In the framework of the reform, an exhaustive inventory of information regarding
the options taken by Member States to implement the new system of Direct Payments has been obtained by the services of DG AGRI in charge of the management of the policy
and has been processed for diffusion to the concerned services in charge of monitoring of the implementation and audit. Based on an enhanced co-operation with Member States,
the quality and reliability of the information gathered will allow the monitoring of the implementation of Direct Payment rules and control systems. The information to hand
will be used to feed the risk analysis established for planning the usual audits and in the
decisional process on the relevance of launching actions plans.
The actions listed above draw upon the Commission services and Member States in equal
measure.
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Part 3.3: ABB04 – Rural Development
Index for part 3.3 – ABB04: Rural Development
3.3.1 Introduction
3.3.2 ABB04 expenditure
3.3.3 What assurance does the Director General have regarding the expenditure under ABB04 – Rural Development?
3.3.4 How is this information used in order to assess the error rate reported in Member States' control data?
3.3.5 What mitigating factors exist in order to render a reservation
unnecessary?
3.3.6 Conclusions as regards assurance for ABB04
3.3.7 Root causes of the error rate in Rural Development expenditure – what is
DG AGRI doing about it?
3.3.1 Introduction
One of DG AGRI's key objectives is to contribute to the sustainable development of rural areas. It does this through its rural development policy which is funded under the
European Agricultural Fund for Rural Development (EAFRD). In 2015, DG AGRI finalised
the process for assessing and approving the Rural Development programmes for the 2014-2020 programming period. In total, 118 national and regional programmes co-
funded by the EAFRD were adopted. With the entry into force of Regulation (EU) No 1305/201338, the structure of the programmes has changed (see 2.4.1.1.4 ABB04
expenditure). There are some 3.36 million beneficiaries of Rural Development programmes in the Member States where their aid claims are processed, checked and
monitored.
While the EAFRD bears many similarities to the European Structural and Investment
Funds (ESIF) of DGs REGIO, EMPL and MARE, there are also a number of differences. In
particular, the EAFRD has been increasingly aligned with the EAGF management system which deals with direct payments to farmers. Many of the EAFRD measures are 'area and
animal-based' and are managed under the IACS. The new CAP reform, which entered into force in 2014 as regards the support for rural development, strengthens that
alignment in particular with regard to application, payment dates, penalties and the maximum eligible area for area-based measures.
Maximum eligible area
Since 2015, Member States have had to define a maximum eligible area for all rural
development area-based measures, in line with IACS and the land parcel identification
system (LPIS). Practically, this means that a specific layer for rural development
measures has had to be implemented in the LPIS.
Explanatory Box: Annex 10 – 3.3.1
38 Regulation (EU) No 1305/2013 of the European Parliament and of the Council 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 of 20.12.2013).
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One of the main differences between the reporting styles for the EAFRD and the ESIF
used to be that, in the case of the EAFRD, greater emphasis was placed on the annual review of expenditure, as under Article 51 of Regulation (EU) No 1306/201339,
expenditure managed under the EAFRD is subject to the annual financial clearance procedure. However, since the Common Provisions Regulation entered into force40, also
the other ESI Funds must, from 2015 onwards, examine the accounts and determine whether to accept them on an annual basis (Article 139) in respect of expenditure
managed under all the ESIF.
Another difference is that, to protect the EU budget, the other ESIF have to date used interruption and reduction/suspension (of interim payments) mechanisms, as well as
recycled recovery procedures (i.e. the recovered amounts are retained by the Member States to re-use for other projects). However, the main instrument used by DG AGRI is
the conformity clearance procedure, which results in net financial corrections being clawed back to the EU budget. Since the Common Provisions Regulation as well as the
Regulation (EU) No 1306/2013 entered into force, DG AGRI has, in addition to the effective mechanism under the conformity clearance procedure, tightened up the use of
its interruption and reduction/suspension mechanisms. For further information on the use
of these mechanisms in 2016, see Chapter 2.4.2.2 of this report.
3.3.2 ABB04 expenditure
A. 2007-2013 programming period In the 2007-2013 programming period, the rural development measures were organised
into 'Title I' (generally IACS) measures and 'Title II' (generally non-IACS) measures, the former being area- and animal-based measures and the latter being investment, flat rate
types of measure, Leader and Technical Assistance as provided for in Council Regulation (EC) No 1698/200541.
What are flat-rate measures?
Flat-rate measures are those with a fixed amount of support for particular actions with
a view to simplifying the application and payment procedures.
Explanatory Box: Annex 10 – 3.3.2
The Rural Development legislation for the 2007-2013 programming period also
distinguished between five thematic priority areas or 'axes':
axis 1: competitiveness of the agricultural and forestry sector;
axis 2: environment and land management; axis 3: economic diversity and quality of life;
axis 4: Leader;
axis 5: Technical Assistance.
Axes 1, 3 and 4 fell mainly within Title II while Axis 2 measures fell across Title I and II.
Some were purely Title I or Title II but measures 214, 221 and 223 had both an area-based and an investment-based dimension and were thus funded under both Titles.
39 Regulation (EU) No 1306/2013 of the European Parliament and of the Council on the financing, management
and monitoring of the common agricultural policy (OJ L 347 of 20.12.2013). 40 Regulation (EU) No 1303/2013 of the European Parliament and of the Council laying down common
provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the
European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying
down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion
Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L
347 of 17.12.2013). 41 Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund
for Rural Development (EAFRD) (OJ L 277 of 21.10.2005).
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B. 2014-2020 programming period For the 2014-2020 programming period implemented under the new EU rules, Member
States base their Rural Development programmes on at least four of the six common EU priorities:
1. fostering knowledge transfer and innovation in agriculture, forestry and rural areas;
2. enhancing the viability/competitiveness of all types of agriculture, and promoting innovative farm technologies and sustainable forest management;
3. promoting food chain organisation, animal welfare and risk management in
agriculture; 4. restoring, preserving and enhancing ecosystems related to agriculture and
forestry; 5. promoting resource efficiency and supporting the shift toward a low-carbon and
climate-resilient economy in the agriculture, food and forestry sectors; 6. promoting social inclusion, poverty reduction and economic development in
rural areas.
These priorities were based on 20 proposed measures which are either area- and animal-
related measures or non-area- and non-animal-related measures (see Table: Annex 10 –
3.3.3). The list of measures and sub-measures is described in Annex I, Part 5 of Commission Implementing Regulation (EU) No 808/201442.
Rural Development measures – 2014-2020 programming period
01 Knowledge transfer and information actions
02 Advisory services, farm management and farm relief services
03 Quality schemes for agricultural products and food stuffs
04 Investments in physical assets
05 Restoring agricultural production potential damaged by natural disasters and introducing
appropriate prevention
06 Farm and business development
07 Basic services and village renewal in rural areas
08 Investments in forest area development and improvement of the viability of forests
09 Setting up producer groups and organisations
10 Agri-environment climate
11 Organic farming
12 Natura 2000 and Water Framework Directive payments
13 Payments to areas facing natural or other specific constraints
14 Animal welfare
15 Forest-environmental and climate services and forest conservation
16 Cooperation
17 Risk management
18 Financing of complementary national direct payments for Croatia
19 Support for Leader local development (CLLD)
20 Technical assistance
Table: Annex 10 – 3.3.3
In 2016, Member States could, under certain conditions, implement measures from both
programming periods in line with the transitional provisions of Regulation (EU) No 1310/2013. This means that expenditure was claimed under the new 2014-2020
programming period for projects to which the commitments for the 2007-2013
42 Commission Implementing Regulation (EU) No 808/2014 of 17 July 2014 laying down rules for the application
of Regulation (EU) No 1305/2013 of the European Parliament and of the Council on support for rural
development by the European Agricultural Fund for Rural Development (EAFRD) (OJ L 227 of 31.7.2014).
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programming period applied.
Why implementing a simplified cost option ('SCO') for investment measures?
In the 2014-2020 programming period, Member States have the opportunity to implement simplified cost options for investment measures of their rural development
programme. Using simplified costs means that the human resources and administrative effort
involved in management of the Funds can be focused on achieving of policy objectives rather than being concentrated on collecting and verifying financial documents. It also
gives small beneficiaries easier access to the funds thanks to the simplified
management process.
Explanatory Box: Annex 10 – 3.3.4
C. Expenditure reimbursed
Expenditure reimbursed by DG AGRI to Member States in 2016 amounted to EUR 12 364 998 639.
Expenditure paid and financed under the 2007-2013 programming period, amounted to EUR 4 495 770 025. Expenditure paid and financed under the 2014-2020 programming
period, amounted to EUR 7 809 874 920, of which EUR 1 000 590 984 was paid as pre-
financing and EUR 6 809 283 936 paid as intermediate payments.
Table: Annex 10 – 3.3.5
Management
typeChapter
Budget
itemDescription
Payments
(EUR)
05040114 Completion of rural development financed by the EAGGF
Guarantee Section - Programming period 2000 to 2006
-1 048 601
05040201 Completion of the European Agricultural Guidance and
Guarantee Fund, Guidance Section - Objective 1 regions (2000
to 2006)40 410 348
Rural development programmes 2007-20134 495 770 025
Interim payments 2007-2013
1 833 639 985
Final balance2 662 130 040
Promoting sustainable rural development, a more
territorially and environmentally balanced, climate-
friendly and innovative Union agricultural sector7 809 874 920
Interim payments for promoting sustainable rural development,
a more territorially and environmentally balanced, climate-
friendly and innovative Union agricultural sector 2014-2020
6 809 283 936
Pre-financing for promoting sustainable rural development, a
more territorially and environmentally balanced, climate-friendly
and innovative Union agricultural sector 2014-20201 000 590 984
05040206 Completion of Leader (2000 to 2006)7 437 218
05046002 Operational technical assistance 2014-202012 554 730
12 364 998 639
Direct
Management
Shared
Management
Total
Payments reimbursed by DG AGRI to the Member States in 2016
0504
05040501
05046001
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3.3.3 What assurance does the Director General have regarding expenditure under ABB04 – Rural Development?
The assurance of the Director General derives from the various levels of management and controls that are in place, and the results that can be obtained from them. In the
first place, the Member States, through 72 accredited Paying Agencies for Rural Development, are responsible for managing and checking the aid applications received
from some 3.36 million beneficiaries and for paying them.
3.3.3.1 Control results reported by the Member States
In order to provide information on controls and error rates in the area of rural development, Commission Implementing Regulation (EU) No 809/201443 provides for
detailed and systematic reporting of the results of the controls and reductions applied by the Member States.
By 15 July of year N+1, the Paying Agencies are required to send to the Commission data on the outcome of the controls carried out for year N. These control data contain
information on amounts claimed, errors corrected as a result of administrative checks, risk and random on-the-spot checks and the resulting reductions applied. The result of
the random on-the-spot checks is considered to be the most representative of the likely
error that the Paying Agency would have detected if it had carried out on-the-spot checks on all holdings. This result is the reported error rate that is used as the basis for
calculating the adjusted error rate.
The control statistics (aggregated figures at Paying Agency level) and control data (at
claimant level) received in 2016 by DG AGRI correspond to the payment claims made by the claimant in the year 2015 (i.e. claim year).
Checks to be carried out by each Member State
The checks are composed of three separate sets:
– administrative checks on all applications that must cover all elements that can
be checked by administrative means, including: - cross-checks with the IACS database for the IACS-related measures, and
- one visit to the operation to verify the realisation of the investment for the non-IACS-related measures;
– on-the-spot checks that were tightened up in 2015 by the Commission Implementing Regulation (EU) No 809/2014, where:
– for the IACS-related measures, a minimum of 5% of all claimants have to be assessed on the spot, including 5% of claimants for measures 10 and 11;
– for the non-IACS-related measures, a minimum of 5% of the whole expenditure
has to be assessed on the spot, including 5% of the expenditure under Leader measures.
- ex-post checks on investment operations that must, in each calendar year, cover at least 1% of EAFRD expenditure for investment operations that are still
subject to commitment.
Explanatory Box: Annex 10 – 3.3.6
43 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 of 31.7.2014).
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3.3.3.2 DG AGRI validation and adjustment process
The reliability of the control data from the Paying Agencies depends on the efficiency of
their control systems. DG AGRI carries out an extensive review and validation process (explained in detail in Annex 4 setting out its materiality criteria) in order to adjust, if
appropriate, the reported error rate upwards to a level which it considers better reflects the actual level of error. In so doing, it uses its professional judgement on the basis of all
the information available. The main elements assessed are described in the following paragraphs.
In 2016, according to the transitional provisions in Regulation (EU) No 1310/2013,
measures from the 2007-2013 programming period are, under certain conditions, eligible for EAFRD co-financing under the 2014-2020 budget. As DG AGRI considers that the risk
to the Fund is the same for both programming periods, DG AGRI assessed the control data for both programming periods together.
3.3.3.3 Assessment of the opinions of the Certification Bodies on the control
data
As described in Annex 10 – part 2, the Certification Bodies are required to give an
opinion on the completeness, accuracy and veracity of the annual accounts of the Paying
Agency, on the proper functioning of its internal control system and on the legality and regularity of the expenditure for which reimbursement from the Commission has been
requested. That opinion must also specify whether the examination puts in doubt the assertions made in the management declaration. This opinion is received with the annual
declaration of the Member State on 15 February of N+1.
Based on whether a qualified or unqualified opinion was received and on any other
information provided in the opinion, an adjustment (positive) is made to the error rate reported by the Member State. Below is a summary of the impact of the Certification
Body findings on the reported error rates of 15 Paying Agencies:
– BG01 – Bulgaria: a 2% top-up was applied to all expenditure as the Certification Body failed to
submit the clearance documents by the agreed deadlines.
– CY01 – Cyprus:
Based on the extrapolated financial errors detected on IACS expenditure, the calculated most likely error was taken into account.
– DE07 – Germany - Brandenburg and Berlin: Based on the extrapolated financial errors detected on IACS expenditure, the
calculated most likely error was taken into account.
– DK02 – Denmark: a 2% top-up was applied to all expenditure as the Certification Body failed to
submit the clearance documents by the agreed deadlines.
– ES03 – Spain – Asturias:
Based on the extrapolated financial errors detected on non-IACS expenditure, the calculated most likely and known errors were taken into account.
– ES07 – Spain - Castilla La Mancha: Based on the extrapolated financial errors detected on IACS expenditure, the
calculated most likely error was taken into account.
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– ES14 – Spain – Navarra: Based on the extrapolated financial errors detected on non-IACS expenditure, the
calculated most likely and known errors were taken into account.
– ES17 – Spain – Valencia:
Based on the extrapolated financial errors detected on non-IACS expenditure, the calculated known error was taken into account.
– FR18 – France – Corsica: Based on the extrapolated financial errors detected on non-IACS expenditure, the
calculated most likely and known errors were taken into account.
– FR19 – France (ASP): Based on the extrapolated financial errors detected on IACS and non-IACS
expenditure, the calculated most likely and known errors were taken into account.
– GB06 – United Kingdom – Scotland: Following the qualified opinion expressed on IACS expenditure, the calculated
incompliance rate was taken into account.
– IE01 – Ireland:
Based on the extrapolated financial errors detected on IACS expenditure, the
calculated most likely error was taken into account.
– IT26 – Italy – Calabria:
Based on the extrapolated financial errors, the most likely error is taken into account.
– LT01 – Lithuania: Based on the extrapolated financial errors detected on IACS expenditure, the
most likely and known errors were taken into account.
– PL01 – Poland:
Based on the extrapolated financial errors detected on IACS and non-IACS
expenditure, the most likely errors were taken into account.
– RO01 – Romania:
Based on the extrapolated financial errors detected on IACS and non-IACS expenditure, the most likely error was taken into account.
– SK01 – Slovakia: Following the qualified opinion expressed on both IACS and non-IACS
expenditure, the most likely error was taken into account.
3.3.3.4 Assessment of findings from the European Court of Auditors (ECA)
The ECA's annual reports and the available Statements of Assurance (DAS cases 2016)
indicating an error rate above 5% were analysed, and may result in adjustments being made depending on the severity and extent of the deficiencies identified.
3.3.3.5 Assessment of findings from DG AGRI audits carried out in 2014-2016
A. Audits carried out
In 2016, 55 on-the-spot audits were carried out; these audits were selected mainly on the basis of DG AGRI's central risk analysis. In addition, three desk audits were
performed, to follow up ECA findings, a citizens' complaint, or a deficiency identified in a previous audit.
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What is a desk audit?
A desk audit is an enquiry launched without an on-the-spot audit being carried out, and
based on a specific subject. It follows all steps of the conformity clearance procedure in
the same way as on-the-spot audits.
Explanatory Box: Annex 10 – 3.3.7
Note that, in 2016, audits mainly focused on the 2007-2013 programming period for
non-IACS related measures due to late implementation of these measures of the new 2014-2020 programming period.
B. Audit fields
DG AGRI has decided to carry out audits on measures with similar control systems or targets, and has then grouped measures within so-called audit fields. Since 2016, all on-
the-spot audits have been based on all measures within a specific audit field. These groupings are the following:
Audit field Measures of the programming period 2014-2020
Name Code Name Code
Investment -
private
beneficiaries
RD-Invest-
private
Investments in physical assets 04
131 — Meeting standards based on Union legislation 98
Investment - public
beneficiaries
RD-Invest-
public
Basic services and village renewal in rural areas 07
Technical assistance 20
Measures with flat
rate support
RD-Flat-
rate
Farm and business development 06
Setting up of producer groups and organisations 09
113 — Early retirement 97
Leader RD-Leader Support for Leader local development (CLLD) 19
Knowledge and
innovation
RD-Know-
Innov
Knowledge transfer and information actions 01
Advisory services, farm management and farm relief services 02
Quality schemes for agricultural products and food stuffs 03
Cooperation 16
341 — Skills acquisition, animation and implementation of local
development strategies 99
Risk management RD-Risk-
manage
Restoring agricultural production potential damaged by natural
disasters and introduction of appropriate prevention 05
Risk management 17
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Audit field Measures of the programming period 2014-2020
Name Code Name Code
IACS RD-IACS
Agri-environment climate 10
Organic farming 11
Natura 2000 and Water Framework Directive payments 12
Payments to areas facing natural or other specific constraints 13
Animal welfare 14
Financing of complementary national direct payments for Croatia 18
Forestry RD-Forestry
Investments in forest area development and improvement of the
viability of forests 08
Forest-environmental and climate services and forest
conservation 15
Table: Annex 10 – 3.3.8
3.3.3.5.1 Audits carried out on audit fields IACS and Forestry
a) Audit plan and coverage
In 2016, based on the results of the central risk analysis and on reservations made in the
2015 annual activity report (AAR), 18 audits of IACS-related measures and of Forestry
measures were carried out:
1. 14 on-the-spot audits concerned IACS-related measures, based on agri-
environmental measures and/or agri-environment climate, organic farming, natural handicaps measures or payments to areas facing natural constraints,
animal welfare payments and Natura 2000 payments;
2. 3 on-the-spot audits of IACS-related measures were carried out jointly with
auditors dealing with the area-based measures of the 1st pillar to focus more on the identification of agricultural parcels under rural development in the LPIS
database, in line with the new EU rules, and particularly with Article 5 of
Regulation (EU) No 640/201444;
3. 2 on-the-spot audits were carried out on Forestry measures (including one carried
out jointly with an audit on IACS-related measures);
4. 2 desk audits were opened: the first one on the basis of a complaint about the
rare breeds measure and the second on the basis of an ECA enquiry into animal welfare.
The audits assessed the management and control systems set up by Member States to ensure that they complied with EU and national rules, that the eligibility criteria had been
met and that the commitments were controllable, verifiable, and respected by the
beneficiaries. They covered the assessment of the new obligation for IACS related measures to have specific layers defined in the LPIS for each specific measures as stated
in Article 5(2)(b) of Regulation (EU) No 640/2014. Moreover, these enquiries assessed whether the controls were effectively applied, if appropriate reductions and penalties had
been imposed for non-compliance and if the control data sent by the Member States
44 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 of 20.6.2014).
agri_aar_2016_annexes Page 152 of 273
were consistent and reliable. In addition, these enquiries also helped to partly evaluate the work carried out by the Certification Body on legality and regularity, as well as to
detect the root causes for the high error rate and possible actions to remedy the deficiencies. Finally, these audits enabled the implementation of the recommendations
made by DG AGRI during the previous audits to be assessed.
b) Results and possible improvements
The control systems in the Paying Agencies visited in 2016 were not always found to be effective, and there was scope for significant improvement in a number of cases. The
auditors found improvements in some Paying Agencies where the visit was a follow-up to
a previous audit still linked to the previous programming period. In the case of some Paying Agencies already visited in connection with the new programming period,
significant delays in implementing the control systems were found. The scope of the audit was not achieved in one case. DG AGRI auditors recommended actions to increase the
robustness of the control system for some specific issues and registered these weaknesses in an internal database to ensure timely follow-up.
The audits carried out in 2016 found scope for improving the following issues in relation to audits on IACS-related measures:
for organic farming, there were significant inconsistencies in the system which
required additional work from the Paying Agency. In addition, cross-notification between the different bodies involved was not sufficiently developed or formalised;
additional improvements are required to better assess respect for the maximum eligible area per measure, in some cases the system was found not to be fully in line
with the EU rules;
continued efforts are required to reduce the high error rate found in some Member
States on the basis of simple and clear eligibility criteria and commitments that must be respected by the farmers;
additional improvements are required to extend the administrative checks of certain
agri-environmental commitments that are easy to check administratively (training certificate, organic certificate, state of the crops, etc.), and to better target risk
analysis to the 5% sample of beneficiaries to be checked on the spot;
continued improvements in the on-the-spot check systems are necessary to better
assess farmers' compliance with the commitments made, mainly concerning respect for the maximum livestock density, to perform checks at the best time of the season
for assessing compliance, and to integrate visual checks with other control tools wherever is possible;
more targeted and proportionate penalty systems need to be developed in respect of
the commitments and obligations, as poor targeting may also be one of the causes of a high error rate;
better traceability and clear conclusions as to the quality of the controls carried out must be achieved by indicating how the checks were performed and how the
inspectors came to their conclusions. The control methods used during the on-the-spot check, to verify compliance with the farmer's commitments, must be indicated in the
control report together with measurements, verification of fertilisers and animal counting, to assess whether the livestock density is correct, wherever appropriate;
control data provided under Article 9 of Regulation (EU) No 809/2014 must be
improved in terms of quality and deadline compliance.
From a general point of view, when serious deficiencies are found, follow-up audits are
carried out to assess the implementation of the recommendations made by DG AGRI. The conformity clearance procedure leads to net financial corrections so as to protect the EU
budget from irregular spending resulting from the deficiencies found.
agri_aar_2016_annexes Page 153 of 273
3.3.3.5.2 Audits carried out on non-IACS-related measures
a) Audit plan and coverage
In 2016, 36 on-the-spot audits were carried out on non-IACS-related measures,
comprising 18 audits of investments measures, 8 audits of Leader, 5 audits of the audit field RD-flat-rate, 4 audits of Technical Assistance, one audit on knowledge and
innovation measures; and 3 audits of non-IACS-related measures of Axis II (see previous chapter). The 2016 audits were selected mainly on the basis of DG AGRI's central risk
analysis.
A desk enquiry was opened to ensure the appropriate follow-up of a deficiency identified in a previous audit on measure 112 'Setting up of young farmers'.
The audits covered the procedures implemented by Member States to ensure that administrative checks, on-the-spot checks and ex-post checks had been carried out in
line with EU legislation, paying special attention to the correct application of selection criteria and compliance with the eligibility criteria. They also checked that the costs had
been correctly evaluated as reasonable, that there was compliance with procurement rules, that coverage of the risk of double funding was adequate and that reductions and
sanctions imposed for non-compliance were adequate.
Verification of SME status (small and medium-sized enterprises)
Article 48(2)(a) of Regulation (EU) No 809/2014 states that administrative checks should
be made to check the eligibility of the applicant following applicable obligations established by Union law or by the Rural Development Programme. Member States have,
in their rural development programme, opted for several measures to restrict the eligibility to SMEs or to give more priority points to SMEs in the project selection process
or to give higher aid intensity to SMEs. The way in which the Member States check compliance with the SME criteria (in
particular the existence of linked and partner enterprises) differs significantly. For
example, some Member States rely on a self-declaration by the applicant; others check the companies' shareholdings on the basis of extracts from chambers of commerce,
consolidated accounts, etc. (non-exhaustive list). Commission Recommendation 2003/361/EC of 06.05.2003 concerning the definition of
micro, small and medium sized enterprises highlights that linked and partner enterprises should be taken into account when determining the size of the applicant. Therefore,
Member States should include the linked and partner enterprises (in their country and abroad) in their checks, also in cases where shareholders are natural persons. Member
States should therefore set up a system allowing them to assess these obligations and to
keep an audit trail of these checks.
Explanatory Box: Annex 10 – 3.3.9
b) Results and possible improvements
The control systems in the Paying Agencies visited in 2016 were generally found to be effective, albeit with scope for improvement in several cases. The DG AGRI auditors
recommended actions to increase the robustness of the control system for some specific issues and registered these weaknesses in an internal database to ensure a timely follow-
up.
agri_aar_2016_annexes Page 154 of 273
Reasonableness of the costs: key control element
Article 48(2)(e) of Regulation (EU) No 809/2014 states that for the costs referred to in
Article 67(1)(a) of Regulation (EU) No 1303/2013, excluding contribution in kind and depreciation, and administrative checks on applications for support must include
verification of the reasonableness of the costs submitted. The costs must be evaluated using a suitable evaluation system, such as reference costs, a comparison of different
offers or an evaluation committee. The administrative checks on the verification of the reasonableness of costs are considered to be a key element of the controls to be carried
out by the Paying Agencies.
Several audits carried out in 2016 on investment and flat-rate measures as well as on Leader measures, detected shortcomings in relation to the assessment of the
reasonableness of the costs. Examples include the use of insufficiently detailed or outdated list of unit prices, the absence of checks on the independence and authenticity
of the offers received, the absence of checks below a certain threshold, etc. Member States should therefore set up control systems allowing them to effectively assess the
reasonableness of costs and to keep an audit trail of these checks.
Explanatory Box: Annex 10 – 3.3.10
With regard to investment and flat-rate measures, in eight cases the audits revealed management and control deficiencies which would suggest that the systems are
ineffective in determining whether claims are eligible and preventing irregularities. The weaknesses found may lead to a financial correction of 10% for the measures audited45.
In most of these cases, the detected shortcomings related to elements of the management and control system:
checks on the eligibility of the applicant (SME status);
checks on the eligibility of the application/project/investment;
selection and appraisal of applications;
assessment of cost reasonableness;
quality of the on-the-spot checks;
quality of ex-post checks;
checks of the payment claims.
In some cases, the deficiencies were related to:
quality of in-situ visits;
quality of the sanction system;
checks on double funding;
public procurement verifications;
With regard to Leader, two audits revealed management and control deficiencies which may lead to a financial correction of 10%20. The shortcomings were related to the
selection and appraisal of projects or applications, the verifications related to the reasonableness of costs, the public procurement procedures, the payment claims and the
quality of on-the-spot checks and in-situ visits.
Regarding Technical Assistance two audits carried out in 2016 revealed management
and control deficiencies which may lead to a financial correction of 10%45. The shortcomings were related to the verification of the eligibility of the investment/project,
45 The clearance of accounts procedure is still on-going; the level of financial correction is only decided once the
conformity clearance procedure has been finalised.
agri_aar_2016_annexes Page 155 of 273
the reasonableness of costs, the double financing, public procurement procedures and payment claim verifications.
With regard to knowledge and innovation, an audit on measure 331 'Training and information', revealed shortcomings as regards the eligibility of the applicant (SME
criteria), selection criteria and verification of payment claim checks. The detected shortcomings may lead to a financial correction of 10%45.
What is the "N+3 decommitment" rule as provided for in Regulation (EU)
No 1306/2013?
Article 38 of Regulation (EU) No 1306/2013 provides that the Commission must automatically decommit any portion of a budget commitment for a rural development
programme that has not been used for the purpose of pre-financing or making intermediate payments. The Funds must be used by 31 December of the third year46 (in
accordance with Regulation (EU) No 1306/2013) following that of the budget commitment (so called N+3 rule). However, according to Article 41(4)(a) of Regulation
(EU) No 907/2014, the references to N+3 in Regulation (EU) No 1306/2013 must be regarded as references to N+2, as regards the 2007-2013 programmes. The purpose of
the N+2/N+3 rule is to speed up execution of programmes and contribute to sound
financial management.
Explanatory Box: Annex 10 – 3.3.11
3.3.3.5.3 Audits of Financial Instruments
One audit was carried out in respect of Financial Instruments in 2016. It concerned an audit in Romania. The preliminary findings point to some weaknesses regarding the total
eligible expenditure at the time of the closure of the Guarantee Fund (Article 52 of Regulation (EU) No 1974/200647). The findings also indicate that the aid intensity was
exceeded for some Rural Development beneficiaries that benefitted from both the aid in
capital from the investment measure and the (subsidy equivalent of the) advantage offered by the Guarantee Fund.
What are financial instruments?
Financial instruments are measures of financial support provided on a complementary
basis from the EU budget in order to address one or more policy objectives. Such instruments may take the form of loans, guarantees, equity or quasi-equity investments,
or other risk-sharing instruments and may, where appropriate, be combined with grants.
Explanatory Box: Annex 10 – 3.3.12
3.3.4 How is this information used to assess the error rate reported in Member States' control data?
As described in Annex 4 on DG AGRI's materiality criteria, DG AGRI's Assurance and Audit Directorate analysed the audit evidence arising from, in particular, the findings of
the Certification Bodies, the ECA and its own audit findings. This was with a view to assessing the risk that errors are not detected by the Paying Agency before payments are
46 For the rural development programmes under the 2007-2013 programming period, the Funds must be used
by 31 December of the second year following that of the budget commitment (so called N+2 rule). 47 Commission Regulation (EC) No 1974/2006 of 15 December 2006 laying down detailed rules for the
application of Council Regulation (EC) No 1698/2005 on support for rural development by the European
Agricultural Fund for Rural Development (EAFRD) (OJ L 368 of 23.12.2006).
agri_aar_2016_annexes Page 156 of 273
made to beneficiaries. Where possible, the amount at risk was precisely quantified. Where this was not the case, a % flat rate was used to express the risk to the budget
arising from error in the expenditure that is not reflected in the Member States' control data.
The following table summarises this information for all Paying Agencies for interim payments made in financial year 2016:
Paying Agency
Paying Agency Name
Interim payments FY 2016
EUR
Reported (residual) error
rate
Adjusted error rate
Amount at risk EUR
AT01 AMA 394 576 581 1.42% 1.44% 5 679 430
BE02 ALV 14 837 399 0.81% 0.81% 119 644
BE03 SPW-DGARNE 24 665 652 0.77% 5.41% 1 333 721
BG01 DFZ [SFA] 234 181 393 0.92% 10.58% 24 785 072
CY01 ΚΟΑΠ [CAPO] 7 177 699 0.20% 0.37% 26 816
CZ01 SZiF [SAIF] 182 467 119 6.92% 11.05% 20 156 600
DE01 BLE 729 267 1.50% 1.50% 10 974
DE03 Baden-Württemberg MLR
62 647 550 1.40% 1.40% 875 725
DE04 Bayern StMLF 177 752 294 0.78% 1.15% 2 038 851
DE07 Brandenburg MLUV
57 190 535 0.60% 0.84% 478 188
DE09 Hamburg 1 354 150 0.15% 0.15% 2 046
DE11 Mecklenburg-Vorpommern MELFF
32 907 654 0.16% 0.16% 51 521
DE12 Niedersachsen 76 820 996 3.50% 3.50% 2 690 649
DE15 LWK Nordrhein-Westfalen
29 222 343 1.88% 1.88% 548 529
DE17 Rheinland- Pfalz 15 188 966 1.11% 1.38% 209 056
DE18 Saarland 1 122 059 0.03% 0.03% 371
DE19 Sachsen 50 792 902 2.12% 2.12% 1 077 220
DE20 Sachsen-Anhalt 33 202 658 0.28% 0.28% 93 928
DE21 Schleswig-Holstein 36 468 148 2.09% 2.09% 761 713
DE23 Thüringen 59 467 752 1.07% 1.07% 635 887
DE26 Helaba 24 929 408 0.92% 0.92% 230 088
DK02 DAFA 82 172 079 0.73% 3.49% 2 869 136
EE01 PRIA 87 901 431 0.77% 2.13% 1 869 904
ES01 Andalucía 208 951 505 1.26% 3.94% 8 228 027
ES02 Aragón 39 102 234 0.42% 0.42% 162 677
ES03 Asturias 22 732 456 0.48% 1.47% 334 446
ES04 FOGAIBA 3 341 372 1.44% 1.44% 48 254
ES05 Islas Canarias 6 199 904 0.00% 0.00% 0
ES06 Cantabria 15 949 788 0.17% 0.17% 27 087
ES07 Castilla La Mancha 77 296 626 0.58% 1.61% 1 247 261
ES08 Castilla y Léon 108 778 220 0.87% 1.40% 1 523 188
ES09 Cataluña 18 298 439 1.66% 1.66% 303 280
ES10 Extremadura 73 155 769 0.63% 1.40% 1 024 936
ES11 FOGGA 66 691 655 0.44% 0.44% 293 288
ES12 Madrid 5 310 485 0.96% 1.03% 54 747
ES13 Murcia 7 723 175 0.25% 0.25% 18 939
ES14 Navarra 10 158 590 0.10% 0.83% 83 866
agri_aar_2016_annexes Page 157 of 273
Paying Agency
Paying Agency Name
Interim payments FY 2016
EUR
Reported (residual) error
rate
Adjusted error rate
Amount at risk EUR
ES15 País Vasco 4 205 614 0.00% 1.45% 61 028
ES16 La Rioja 12 130 189 0.25% 0.25% 30 668
ES17 AVFGA 572 743 0.79% 0.97% 5 529
ES18 FEGA 1 679 171 0.00% 0.00% 0
FI01 MAVI 328 110 757 1.64% 1.80% 5 909 231
FR18 ODARC 7 230 536 0.00% 4.95% 357 986
FR19 ASP 581 501 578 5.80% 10.80% 62 826 560
GB05 DARD 49 794 728 2.08% 2.08% 1 036 818
GB06 SGRPID 31 931 436 0.30% 7.58% 2 420 881
GB07 WG 43 766 525 1.05% 1.05% 458 029
GB09 RPA 530 155 888 0.04% 0.56% 2 989 389
GR01 Ο.Π.Ε.Κ.Ε.Π.Ε. [O.P.E.K.E.P.E.]
684 280 003 0.64% 3.87% 26 515 634
HR01 PAAFRD 131 044 159 1.66% 1.66% 2 174 281
HU01 MVH [ARDA] 208 468 125 0.95% 3.32% 6 928 987
IE01 DAFM 253 822 792 2.02% 3.84% 9 748 225
IT01 AGEA 538 282 248 1.17% 4.00% 21 534 192
IT05 AVEPA 47 207 073 0.11% 1.00% 470 252
IT07 ARTEA 15 699 885 0.08% 0.08% 13 206
IT08 AGREA 24 394 577 0.81% 0.81% 198 161
IT10 ARPEA 13 785 881 1.15% 1.15% 158 367
IT23 OPR Lombardia 21 173 759 0.20% 0.52% 110 604
IT24 OPPAB 23 598 306 0.11% 0.11% 27 046
IT25 APPAG 9 042 992 3.08% 7.43% 671 776
IT26 ARCEA 65 658 654 2.38% 4.28% 2 811 186
LT01 NMA [NPA] 173 957 330 2.65% 5.84% 10 154 746
LU01 Ministère de l'Agriculture
6 355 840 0.67% 0.67% 42 564
LV01 RSS 109 136 225 0.88% 0.88% 958 603
MT01 MRRA PA 2 460 019 1.55% 1.55% 38 111
NL04 ELFPO 34 449 926 3.70% 4.16% 1 432 489
PL01 ARiMR [ARMA] 362 852 034 1.17% 2.04% 7 411 740
PT03 IFAP 540 867 570 5.75% 6.24% 33 745 074
RO01 PARDF 1 059 493 147 1.53% 3.74% 39 601 555
SE01 SJV 191 405 372 4.83% 13.94% 26 679 043
SI01 ARSKTRP 77 260 537 1.26% 1.26% 974 949
SK01 APA 105 682 050 1.89% 6.72% 7 101 508
ABB04 Rural Development Programmes
8 642 923 921 1.78% 4.11% 355 493 479
Table: Annex 10 – 3.3.13
agri_aar_2016_annexes Page 158 of 273
When taking into account the interim payments and the amounts of prefinancing cleared in 2016, the information for all Paying agencies is summarised in the table below:
Paying Agency
Paying Agency Name
Relevant expenditure
FY 2016 (Interim
payments and cleared
amounts)
Reported (residual) error
rate
Adjusted error rate
Amount at risk at payment for
the relevant expenditure
EUR
AT01 AMA 394 576 581 1.42% 1.44% 5 679 430
BE02 ALV 14 837 399 0.81% 0.81% 119 644
BE03 SPW-DGARNE 24 665 652 0.77% 5.41% 1 333 721
BG01 DFZ [SFA] 416 818 294 0.92% 10.58% 44 114 826
CY01 ΚΟΑΠ [CAPO] 16 833 157 0.20% 0.37% 62 889
CZ01 SZiF [SAIF] 215 022 967 6.92% 11.05% 23 752 948
DE01 BLE 729 267 1.50% 1.50% 10 974
DE03 Baden-Württemberg MLR
62 647 550 1.40% 1.40% 875 725
DE04 Bayern StMLF 177 752 294 0.78% 1.15% 2 038 851
DE07 Brandenburg MLUV 57 190 535 0.60% 0.84% 478 188
DE09 Hamburg 2 738 843 0.15% 0.15% 4 139
DE11 Mecklenburg-Vorpommern MELFF
61 211 105 0.16% 0.16% 95 834
DE12 Niedersachsen 76 820 996 3.50% 3.50% 2 690 649
DE15 LWK Nordrhein-Westfalen
29 222 343 1.88% 1.88% 548 529
DE17 Rheinland- Pfalz 17 105 868 1.11% 1.38% 235 439
DE18 Saarland 1 122 059 0.03% 0.03% 371
DE19 Sachsen 50 792 902 2.12% 2.12% 1 077 220
DE20 Sachsen-Anhalt 67 260 645 0.28% 0.28% 190 275
DE21 Schleswig-Holstein 36 468 148 2.09% 2.09% 761 713
DE23 Thüringen 59 467 752 1.07% 1.07% 635 887
DE26 Helaba 24 929 408 0.92% 0.92% 230 088
DK02 DAFA 113 298 334 0.73% 3.49% 3 955 946
EE01 PRIA 87 901 431 0.77% 2.13% 1 869 904
ES01 Andalucía 328 483 098 1.26% 3.94% 12 934 905
ES02 Aragón 47 821 145 0.42% 0.42% 198 950
ES03 Asturias 22 732 456 0.48% 1.47% 334 446
ES04 FOGAIBA 6 482 572 1.44% 1.44% 93 617
ES05 Islas Canarias 16 929 586 0.00% 0.00% 0
ES06 Cantabria 15 949 788 0.17% 0.17% 27 087
ES07 Castilla La Mancha 142 008 393 0.58% 1.61% 2 291 452
ES08 Castilla y Léon 129 278 851 0.87% 1.40% 1 810 252
ES09 Cataluña 18 298 439 1.66% 1.66% 303 280
ES10 Extremadura 127 744 565 0.63% 1.40% 1 789 743
ES11 FOGGA 126 645 683 0.44% 0.44% 556 946
ES12 Madrid 10 180 397 0.96% 1.03% 104 951
ES13 Murcia 22 141 390 0.25% 0.25% 54 296
ES14 Navarra 10 158 590 0.10% 0.83% 83 866
ES15 País Vasco 9 675 284 0.00% 1.45% 140 398
agri_aar_2016_annexes Page 159 of 273
Paying Agency
Paying Agency Name
Relevant expenditure
FY 2016 (Interim
payments and cleared
amounts)
Reported (residual) error
rate
Adjusted error rate
Amount at risk at payment for
the relevant expenditure
EUR
ES16 La Rioja 12 130 189 0.25% 0.25% 30 668
ES17 AVFGA 8 950 187 0.79% 0.97% 86 405
ES18 FEGA 1 679 171 0.00% 0.00% 0
FI01 MAVI 328 110 757 1.64% 1.80% 5 909 231
FR18 ODARC 9 521 129 0.00% 4.95% 471 394
FR19 ASP 701 356 166 5.80% 10.80% 75 775 882
GB05 DARD 49 794 728 2.08% 2.08% 1 036 818
GB06 SGRPID 31 931 436 0.30% 7.58% 2 420 881
GB07 WG 60 824 041 1.05% 1.05% 636 540
GB09 RPA 530 155 888 0.04% 0.56% 2 989 389
GR01 Ο.Π.Ε.Κ.Ε.Π.Ε. [O.P.E.K.E.P.E.]
830 011 977 0.64% 3.87% 28 817 081
HR01 PAAFRD 131 044 159 1.66% 1.66% 2 174 281
HU01 MVH [ARDA] 260 105 791 0.95% 3.32% 8 645 300
IE01 DAFM 253 822 792 2.02% 3.84% 9 748 225
IT01 AGEA 916 092 613 1.17% 4.00% 36 648 643
IT05 AVEPA 47 207 073 0.11% 1.00% 470 252
IT07 ARTEA 41 544 585 0.08% 0.08% 34 946
IT08 AGREA 53 182 147 0.81% 0.81% 432 008
IT10 ARPEA 41 400 881 1.15% 1.15% 475 597
IT23 OPR Lombardia 23 814 660 0.20% 0.52% 124 399
IT24 OPPAB 23 598 306 0.11% 0.11% 27 046
IT25 APPAG 9 042 992 3.08% 7.43% 671 776
IT26 ARCEA 109 292 524 2.38% 4.28% 4 679 377
LT01 NMA [NPA] 215 589 413 2.65% 5.84% 12 585 016
LU01 Ministère de l'Agriculture
6 355 840 0.67% 0.67% 42 564
LV01 RSS 109 136 225 0.88% 0.88% 958 603
MT01 MRRA PA 7 824 354 1.55% 1.55% 121 215
NL04 ELFPO 34 449 926 3.70% 4.16% 1 432 489
PL01 ARiMR [ARMA] 515 801 516 1.17% 2.04% 10 535 939
PT03 IFAP 553 117 570 5.75% 6.24% 34 509 359
RO01 PARDF 1 072 507 066 1.53% 3.74% 40 087 987
SE01 SJV 191 405 372 4.83% 13.94% 26 679 043
SI01 ARSKTRP 77 260 537 1.26% 1.26% 974 949
SK01 APA 187 277 143 1.89% 6.72% 12 584 447
ABB04 Rural Development Programmes
10 489 282 923 1.78% 4.14% 434 305 128
Table: Annex 10 – 3.3.14
agri_aar_2016_annexes Page 160 of 273
A closure balance was also paid in financial year 2016 for majority of 2007-2013 programmes which were closed in 2016. For these closure balances the adjusted error
rate assessed for financial year 2015 in the 2015 AAR where used for each individual paying agency. The following table summarises this information for all concerned Paying
Agencies as regards the closure balance:
Paying Agency
Paying Agency Name
Payments FY 2016
EUR
Adjusted error rate
Amount at risk EUR
AT01 AMA 201 048 843 2.26% 4 539 504
BE02 ALV 11 915 307 1.81% 215 372
BE03 SPW-DGARNE
BG01 DFZ [SFA]
CY01 ΚΟΑΠ [CAPO] 8 138 265 0.20% 16 108
CZ01 SZiF [SAIF] 138 417 270 2.31% 3 195 431
DE01 BLE 6 965 0.00% 0
DE03 Baden-Württemberg MLR 33 079 775 0.81% 269 483
DE04 Bayern StMLF 70 357 110 1.36% 958 136
DE07 Brandenburg MLUV 48 036 736 2.89% 1 389 759
DE09 Hamburg
DE11 Mecklenburg-Vorpommern MELFF
31 329 671 4.73% 1 482 481
DE12 Niedersachsen 35 725 133 2.09% 745 707
DE15 LWK Nordrhein-Westfalen 17 233 960 1.58% 272 138
DE17 Rheinland- Pfalz 12 727 510 3.22% 410 191
DE18 Saarland 1 076 915 0.05% 542
DE19 Sachsen 49 441 490 4.40% 2 174 856
DE20 Sachsen-Anhalt 30 994 065 1.99% 616 914
DE21 Schleswig-Holstein 13 350 534 0.33% 43 517
DE23 Thüringen 33 053 720 1.05% 347 152
DE26 Helaba 12 195 402 1.75% 213 073
DK02 DAFA 20 963 291 6.86% 1 439 006
EE01 PRIA 35 481 510 1.17% 413 655
ES01 Andalucía
ES02 Aragón 19 105 468 0.91% 174 262
ES03 Asturias
ES04 FOGAIBA
ES05 Islas Canarias 1 375 448 0.07% 1 031
ES06 Cantabria 3 982 140 1.34% 53 547
ES07 Castilla La Mancha 9 728 211 1.03% 99 988
ES08 Castilla y Léon 42 163 089 4.02% 1 694 159
ES09 Cataluña 15 649 113 1.53% 240 099
ES10 Extremadura 27 166 580 4.62% 1 255 564
ES11 FOGGA
ES12 Madrid
ES13 Murcia 5 712 499 0.31% 17 958
ES14 Navarra 4 898 851 0.48% 23 652
ES15 País Vasco 3 703 059 0.29% 10 839
agri_aar_2016_annexes Page 161 of 273
Paying Agency
Paying Agency Name
Payments FY 2016
EUR
Adjusted error rate
Amount at risk EUR
ES16 La Rioja 2 888 364 3.03% 87 496
ES17 AVFGA
ES18 FEGA 2 384 920 0.00% 0
FI01 MAVI 73 189 520 1.36% 991 855
FR18 ODARC
FR19 ASP
GB05 DARD 15 989 737 1.91% 304 641
GB06 SGRPID 33 256 486 5.54% 1 842 480
GB07 WG
GB09 RPA 92 304 670 5.60% 5 171 208
GR01 Ο.Π.Ε.Κ.Ε.Π.Ε. [O.P.E.K.E.P.E.]
HR01 PAAFRD
HU01 MVH [ARDA] 100 146 037 6.98% 6 990 692
IE01 DAFM 123 238 683 2.77% 3 410 702
IT01 AGEA
IT05 AVEPA 23 854 689 0.20% 47 508
IT07 ARTEA 19 437 090 4.13% 803 218
IT08 AGREA 26 354 360 5.97% 1 572 521
IT10 ARPEA 14 047 618 1.18% 165 398
IT23 OPR Lombardia 22 526 681 0.67% 151 604
IT24 OPPAB 6 402 389 0.06% 4 000
IT25 APPAG 4 794 115 1.00% 47 718
IT26 ARCEA
LT01 NMA [NPA] 86 077 487 1.78% 1 534 257
LU01 Ministère de l'Agriculture 4 310 828 2.97% 128 126
LV01 RSS 52 512 931 4.05% 2 126 191
MT01 MRRA PA 2 656 238 1.16% 30 739
NL04 ELFPO 27 849 916 3.96% 1 102 793
PL01 ARiMR [ARMA] 654 646 405 1.79% 11 724 831
PT03 IFAP 166 884 840 10.49% 17 501 139
RO01 PARDF
SE01 SJV 39 280 927 3.88% 1 522 522
SI01 ARSKTRP 42 697 633 0.94% 402 691
SK01 APA 86 339 546 1.39% 1 203 130
ABB04 Rural Development Programmes
2 662 130 040 3.05% 81 181 581
Table: Annex 10 – 3.3.15
agri_aar_2016_annexes Page 162 of 273
3.3.5 What mitigating factors exist in order to render a reservation unnecessary?
The following table sets out the situation for all Paying Agencies where the adjusted error rate is above 2%. It indicates if reservations are required and details mitigating factors.
The amount at risk is calculated based on the relevant expenditure.
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
BE03 -
Belgium
5.41% EUR
1 334 m
DG AGRI audits performed in
2016, also supported by the
ECA findings and Certification
Body opinion, revealed serious
deficiencies in the
management and control
system of the Paying Agency
for investment and start-up
support.
Yes A reservation is entered in respect of 2016
expenditure.
The action plan implemented by the Member
State addresses the shortcomings identified
for IACS measures by the Certification Body
for the financial year 2015. DG AGRI will
monitor the effectiveness of such actions.
Furthermore, the action plan should be
reinforced to address effectively the
identified deficiencies under investment and
start-up support.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
BG01 -
Bulgaria
10.58% EUR
44 115 m
The DG AGRI audit and FVO
detected serious deficiencies
in the management and
control system for area-
related measures, mainly
organic farming. Serious
deficiencies were also
identified in basic services and
village renewal operations as
regards both public
procurement and private
investments.
Finally, a 2% top up was
applied to all expenditure, as
the package of final accounts,
audit reports and audit
certificates was not submitted
by the Member State within
the deadlines and at the time
of drafting and therefore there
is insufficient assurance.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has reported the
implementation of corrective actions
addressing most of the deficiencies
identified. For IACS measures, the action
plan should be reinforced in order to
address the rest of deficiencies identified in
2016. On public procurement, the Member
State has reported that new mechanisms
and a legal framework have been put in
place for the 2014-2020 programming
period. DG AGRI will closely monitor the
situation. The reports and the accounts will
be analysed at a later stage.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
CZ01 -
Czech
Republic
11.05% EUR
23 753 m
The Member State has
reported high error rates for
IACS payments.
DG AGRI audits revealed
deficiencies in the
coordination of checks which
led to pre-notifications of on-
the-spot checks to
beneficiaries under area-
related payments that
partially affect financial year
2016. DG AGRI audits also
identified deficiencies in the
management and control
system for investments and
farm and business
development support.
Yes A reservation is entered in respect of 2016
expenditure.
Previously identified deficiencies related to
the supervision of delegated bodies under
area-related payments have been duly
corrected. On the pre-notification of on-the-
spot checks, the situation has been
remedied, although expenditure is still
partially affected. The Member State should
implement an action plan correcting the
deficiencies in farm and business
development support and the underlying
causes of high error rates in IACS
payments.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
agri_aar_2016_annexes Page 163 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
DE12 -
Germany
3.50% EUR
2 691 m
The Member State reported
high error rates for agri-
environment-climate
payments and organic farming
payments.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State should implement an
action plan addressing the persistent
deficiencies identified in IACS measures. DG
AGRI will monitor the situation.
Germany
- DE19
2.12% EUR
1 077 m
The adjusted error rate is
based only on the control data
reported by the Member
State, in particular on the
agri-environment-climate
measure.
No A reservation is not considered necessary.
The Member State has informed that the
high reported error rate is mainly due to
outliers and that, nevertheless, additional
trainings and information sessions for
beneficiaries have been set up. DG AGRI will
monitor the situation.
Germany
- DE21
2.09% EUR
0.762 m
The adjusted error rate is
based only on the control data
reported by the Member
State, in particular for IACS,
which is mainly due to the
livestock density requirement
for the organic farming
measure and support for
areas with natural constraints
(ANC).
No As the amount at risk is below the de-
minimis threshold established in DG AGRI's
materiality threshold (see Annex 4); no
reservation is required.
The Member State has informed that the
commitments will be revised and if
necessary, the RDP modified accordingly.
Denmark
- DK02
3.49% EUR
3 956 m
A 2% top up was applied to all
expenditure, as the package
of final accounts, audit reports
and audit certificates was not
submitted by the Member
State within the deadlines and
at the time of drafting. As a
result, there is insufficient
assurance.
DG AGRI audits also detected
serious deficiencies in the
management and control
system for Leader.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has effectively addressed
previously identified deficiencies in
investment measures. It is currently
implementing an action plan that addresses
most of the recent audit findings under
Leader. However, the Member State should
reinforce the action plan to address the
remaining deficiencies. DG AGRI will closely
monitor the situation. The reports and the
accounts will be analysed at a later stage.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
Estonia -
EE01
2.13% EUR
1 870 m
DG AGRI audits identified
limited deficiencies in the
quality of on-the-spot checks
of farm and business
development support.
No A reservation is not considered necessary.
Following the DG AGRI audit findings in
2016, the Estonian authorities have
mitigated the risk to the Fund by carrying
out additional retro-active on-the-spot
checks for beneficiaries who received
support under Measure 6 prior to the audit.
For new applications, Estonia has improved
the on-the-spot checks and the associated
check-list.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
Spain -
ES01
3.94% EUR
12 935 m
The paying agency reported a
high error rate for agri-
environment-climate support
and ANC support.
DG AGRI audits detected
deficiencies in the verification
of the priority status in
Yes A reservation is entered in respect of 2016
expenditure.
Based on the last action plan update, the
Member State has addressed the root
causes identified in previous audit findings
on IACS measures.
In relation to 2016, the Member State
agri_aar_2016_annexes Page 164 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
relation to support for young
farmers in the 2007-2013
period, which still affects
financial year 2016. A 2016
DG AGRI audit also uncovered
deficiencies in the verifiability
of certain eligibility conditions
for investment support.
informed that it had introduced a new
control plan from February 2016 for
administrative checks and on-the-spot
checks performed on the register of the
priority holdings, which should correct the
deficiency in the system. However, the
deficiency still affects at least part of the
expenditure for FY 2016. The Member State
should reinforce the action plan addressing
the deficiencies found under non-IACS
measures in 2016.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
FR18 -
France
4.95% EUR
0.471 m
The reliability of control data
on IACS measures cannot be
assessed as the reports were
not submitted to the
Commission on time.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
No As the amount at risk is below the de-
minimis threshold established in DG AGRI's
materiality threshold (see Annex 4); no
reservation is required.
FR19 -
France
10.80% EUR
75 776 m
The reliability of control data
on IACS measures cannot be
assessed as the reports were
not submitted to the
Commission on time.
DG AGRI audits found that
previously identified
deficiencies in the checks
performed on livestock
density had been partially
addressed from claim year
2015. However, expenditure
relating to financial year 2016
is still partially affected. DG
AGRI audits also detected
deficiencies in the checks
performed on reasonableness
of costs and on payment
claims under investment
measures. In the particular
case of the RDP of La
Réunion, weaknesses were
also detected in the checks
performed on public
procurement and in-situ visits.
According to the Member
State action plan, deficiencies
identified for in-situ visits of
non-productive investments
were only amended from
September 2016. Some
deficiencies were also found in
the timing of on-the-spot
checks on the setting up of
young farmers. In 2016, DG
AGRI detected serious
deficiencies in the system of
checks performed on Leader
and Technical Assistance,
which affected several key
Yes A reservation is entered in respect of 2016
expenditure.
The action plan implemented by the Member
State addresses the checks performed on
livestock density. Deficiencies in the in-situ
visits of non-productive investments have
been addressed. The Member State reported
that the timing of the on-the-spot checks
performed on young farmers has been
corrected for the 2014-2020 RDP.
Nonetheless, the action plan should be
reinforced to address effectively the
identified weaknesses in Leader, investment
operations and Technical assistance.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
agri_aar_2016_annexes Page 165 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
and ancillary controls.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
GB05 -
The
United
Kingdom
2.08% EUR
1 037 m
The adjusted error rate is
based only on the control data
reported by the Member
State, with a high error rate
coming from ANC support.
No A reservation is not considered necessary.
The Member State is implementing
corrective actions to reduce the errors
linked to declared land.
GB06 -
The
United
Kingdom
7.58% EUR
2 421 m
The Member State reported
high error rates for public
investments and knowledge
and information support.
Recent DG AGRI audits have
found that previously
identified deficiencies in cross-
checks with the animal
database and livestock
assessment remain. Other
serious deficiencies in animal
welfare were also identified.
DG AGRI audits also identified
recurring deficiencies in first
afforestation of agricultural
land support, which still
impact payments made to
beneficiaries in 2016. Several
deficiencies were also found in
key controls of forestry
measures as well as some
deficiencies in the quality of
on-the-spot checks and the
audit trail under Leader.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
Yes A reservation is entered in respect of 2016
expenditure.
The action plan covers most of the areas
where previous deficiencies were detected,
although closer monitoring is required for
actions involving examination and review of
procedures and tools. However, the action
plan should be reinforced to address
deficiencies in Forestry and Leader.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
GR01 -
Greece
3.87% EUR
28 817 m
The reliability of control data
on IACS cannot be assessed
given the absence of timely
reporting to the Commission.
DG AGRI audit on First
afforestation support detected
possible deficiencies in the
cross-checks performed on
IACS payments and the order
of application of penalties. In
addition, DG AGRI audits
identified deficiencies in the
assessment of reasonableness
of costs for private
beneficiaries. DG AGRI audits
also identified deficiencies in
the selection of infrastructure
projects. Finally, the ECA
identified a systematic
deficiency relating to amounts
paid under the discontinued
measure 'Early Retirement',
which affects financial year
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has duly addressed the
previous deficiencies linked to permanent
pasture recording in LPIS. It is currently
improving IT tools to address the
deficiencies identified in cross-checks, and
updating the reference price list for
equipment and building infrastructure costs.
Corrective actions have also been
implemented for first afforestation support.
DG AGRI will closely monitor the situation.
However, the Member State should
reinforce the action plan to address the
deficiencies under early retirement
payments.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
agri_aar_2016_annexes Page 166 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
2016.
HU01 -
Hungary
3.32% EUR
8 645 m
The Member State has
reported high error rates for
IACS payments.
DG AGRI audits in 2016
identified serious deficiencies
in the management and
control system for area-
related payments, affecting
several key controls. DG AGRI
audits also detected several
deficiencies in investments,
infrastructure and technical
assistance, concerning public
procurement and
reasonableness of costs.
Serious deficiencies were also
found in support to producer
groups relating to the checks
performed on the eligibility of
beneficiaries and expenditure.
Finally, deficiencies were also
detected in the selection of
Leader projects.
Yes A reservation is entered in respect of 2016
expenditure.
For the 2014-2020 period, the procedure for
selecting producer groups and Leader
projects has been amended. The Member
State has also introduced revised
procedures to assess the reasonableness of
costs and public procurement procedures.
DG AGRI will closely monitor the situation.
Furthermore, the Member State should
implement an action plan addressing the
rest of the identified deficiencies mainly for
IACS measures and payments under certain
producer groups.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
IE01 -
Ireland
3.84% EUR
9 748 m
DG AGRI audit detected
deficiencies in the checks
performed on the agri-
environment-climate
measure. Deficiencies were
also identified in on-the-spot
checks performed on
investment operations and in
the administrative checks to
verify the eligibility of the
applicant and in the audit trail
for Leader.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has reported the
implementation of corrective actions for
Leader, which will be closely monitored by
DG AGRI. The action plan should be
reinforced to address deficiencies identified
in investments by private beneficiaries and
agri-environment-climate support.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
IT01 -
Italy
4.00% EUR
36 649 m
The reliability of control data
on IACS measures cannot be
assessed given the absence of
timely reporting to the
Commission.
DG AGRI audits identified
deficiencies in the assessment
of reasonableness of costs,
namely the three-offer
method, public procurement
and some eligibility checks
performed on investment
measures. In addition,
deficiencies linked to setting-
up support for young farmers
still have an impact on
financial year 2016. On
technical assistance
expenditure, DG AGRI
detected deficiencies in the
management and control
system, namely the
assessment of reasonableness
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has reported the
implementation of corrective actions to
address deficiencies under technical
assistance and reasonableness of costs. For
measure 112 'Setting-up of young farmers',
corrective actions have been taken for the
future, although deficiencies still affect 2016
expenditure.The Member State should
reinforce the action plan to address the rest
of deficiencies identified, notably as regards
public procurement and Leader.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
agri_aar_2016_annexes Page 167 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
of costs that still affect
financial year 2016. Finally,
DG AGRI audits observed
deficiencies in the assessment
of the reasonableness of costs
and eligibility checks
performed on SME status
under Leader support.
IT25 -
Italy
7.43% EUR
0.672 m
The Member State reported
high error rates for the agri-
environment-climate
measure.
A 2016 DG AGRI audit also
identified deficiencies in IACS
measures.
No As the amount at risk is below the de-
minimis threshold established in DG AGRI's
materiality threshold (see Annex 4); no
reservation is required.
The Member State should address the
deficiencies in IACS measures detected by
both regional controls and the DG AGRI
audit in 2016. DG AGRI will closely monitor
the situation.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
IT26 -
Italy
4.28% EUR
4 679 m
The Member State reported
high error rates for IACS.
DG AGRI audits, following up
on deficiencies observed in
previous years, detected
shortcomings in investment
measures in terms of the
verification of project
eligibility and reasonableness
of costs.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
Yes A reservation is entered in respect of 2016
expenditure.
The deficiencies identified in IACS measures
during previous audits, namely
administrative checks performed on crop
rotation and double financing, have been
addressed. The Member State has informed
that an updated reference price list for the
assessment of the reasonableness of costs
was adopted in July 2016. DG AGRI will
monitor the situation.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
LT01 -
Lithuania
5.84% EUR
12 585 m
The Member State has
reported high error rates in
EAFRD payments.
DG AGRI audits in 2014
identified serious deficiencies
in the management and
control system for investment
measures by private
beneficiaries. Deficiencies
were also identified in Leader.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has reported corrective
actions for the deficiencies identified in DG
AGRI audits. However, it should identify the
reasons for the high number of errors
detected as a result of administrative and
on-the-spot checks and introduce
appropriate corrective measures.
On the deficiencies identified during DG
AGRI audits, the ongoing conformity
clearance procedure will ensure that the
financial risk to the EU budget is covered.
NL04 -
The
Netherla
nds
4.16% EUR
1 432 m
The Member State has
reported high error rates for
EAFRD payments.
Deficiencies were also
identified in the checks
performed on public
procurement for non-
productive investments.
Finally, shortcomings in the
system of checks under
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has reported the
implementation of corrective actions
addressing the deficiencies identified.
However, it should continue to implement
the action plan and identify the underlying
reasons for the high reported errors in non-
IACS, implementing corrective actions
where necessary. DG AGRI will closely
agri_aar_2016_annexes Page 168 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
Leader identified in 2014 have
not yet been corrected.
monitor the situation.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
PL01 -
Poland
2.04% EUR
10 536 m
DG AGRI audit detected
deficiencies in the
management and control
system for agri-environment
payments and organic farming
payments. Deficiencies were
also identified in support for
producer groups. Finally,
some deficiencies were also
found by DG AGRI and ECA
audits in technical assistance.
The Certification Body also
identified deficiencies in the
management and control
system.
Yes
A reservation is entered in respect of 2016
expenditure.
For IACS measures, the Member State has
implemented corrective actions addressing
the deficiencies identified.
The action plan should be reinforced in the
light of the findings of the Certification
Body.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
PT03 -
Portugal
6.24% EUR
34 509 m
The Member State has
reported high error rates for
IACS.
DG AGRI audits, following ECA
findings, detected deficiencies
in the checks performed on
the SME verification of private
investments, which affect
financial year 2016. DG AGRI
audits also identified
deficiencies in the
management and control
system for Leader operations,
namely checks performed on
the eligibility criteria and the
reasonableness of costs.
Finally, deficiencies were
identified in technical
assistance expenditure.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has corrected previous
deficiencies identified in IACS measures and
has reported the implementation of some
corrective actions on SME verification and
reasonableness of costs. It should reinforce
the action plan to address deficiencies under
technical assistance and high error rates
under IACS. DG AGRI will closely monitor
the situation.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
RO01 -
Romania
3.74% EUR
40 088 m
The Member State reported
high error rates for IACS
payments.
A DG AGRI audit also detected
some deficiencies in these
measures. The ECA audits
identified systematic
irregularities in the amounts
paid to beneficiaries under the
animal welfare measure,
triggering further audit
assessment by DG AGRI.
DG AGRI audits also detected
deficiencies in the
management of investment
measures by private
beneficiaries, and deficient
checks performed on semi-
subsistence farming support;
although they were partially
corrected by the national
authorities, they still affect
2016 expenditure. In addition,
breaches in public
procurement for infrastructure
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has partially corrected
the calculations of animal welfare payments
from January 2016. Following the audit
findings, the Member State also amended
the RDP in 2016 to improve the verifiability
and controllability of IACS measures.
The Member State is currently implementing
an action plan to reduce the error rate in
rural development spending and addressing
the deficiencies identified in the
management and control system. DG AGRI
will continue to monitor the situation.
The financial risk to the EU budget for
financial year 2016 is covered by ongoing
conformity clearance procedures and, in the
case of animal welfare payments, by
interruptions and reductions of part of
quarterly payments (see specific section).
agri_aar_2016_annexes Page 169 of 273
Paying
Agency
Adjusted
error rate
Relevant
amount at
risk
Reasons for top-up Reservation Mitigating factors/reservation follow up
support were also identified.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the
Member State.
SE01 -
Sweden
13.94% EUR
26 679 m
The reliability of control data
under IACS measures cannot
be fully assessed given the
absence of timely reporting to
the Commission.
DG AGRI audits in 2016 also
identified several deficiencies
in the management and
control system for both IACS
and non-IACS measures.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State has duly corrected
previously identified deficiencies in non-
productive investments in financial year
2016. Nonetheless, given the serious
deficiencies identified in both IACS and non-
IACS management and control systems
during recent DG AGRI audits, an action
plan should be implemented to correct the
situation.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
SK01 -
Slovakia
6.72% EUR
12 584 m
The Member State reported
high error rate for IACS
measures.
A DG AGRI audit also detected
minor deficiencies in the
timing of on-the-spot checks
of organic farming. Moreover,
serious deficiencies were
detected in the management
and control systems for
agricultural private
investments and business
development support.
Based on the Certification
Body's assessment, an
adjustment was made to the
error rate reported by the MS.
Yes A reservation is entered in respect of 2016
expenditure.
The Member State should implement an
action plan to correct the situation under
investments and business development
support and eventually, the timing of checks
performed on organic farming. The Member
State should also address the underlying
causes of the high errors rate reported in
IACS.
The ongoing conformity clearance procedure
will ensure that the financial risk to the EU
budget is covered.
Table: Annex 10-3.3.16
Note that the calculation of the top-up is based on the results of the audit and the financial correction proposed for the audited single population at the level of the Paying
Agencies concerned.
agri_aar_2016_annexes Page 170 of 273
For the closure balance:
PA/MS
Adjusted
error
rate
Amount at
risk
Calculation of the amount at
risk Reservation Mitigating factors
Closure
EAFRD
3.05% EUR
81.181 m
A total amount of
EUR 2 662 130 m was paid as
closure balance for EAFRD
2007-2013 programming
period for 55 Paying Agencies
(AT01, BE02, CY01, CZ01,
DE01, DE03, DE04, DE07,
DE11, DE12, DE15, DE17,
DE18, DE19, DE20, DE21,
DE23, DE26, DK02, EE01,
ES02, ES05, ES06, ES07,
ES08, ES09, ES10, ES13,
ES14, ES15, ES16, ES18,
FI01, GB05, GB06, GB09,
HU01, IE01, IT05, IT07, IT8,
IT10, IT23, IT24, IT25, LT01,
LU01, LV01, MT01, NL04,
PL01, PT03, SE01, SI01,
SK01) and corresponding to
64 out of 92 rural
development programmes.
The closure was done in the
framework of the financial
clearance of the accounts for
the last year of execution
(expenditure incurred before
31 December 2015). The
adjusted error rate for those
Paying agencies for FY2015
(in AAR 2015) was used for
the calculation of the error
rate of the closure balance.
No The accounts of the Paying agencies listed
in
Table: Annex 10 – 3.3.15 concerning the
last execution year of EAFRD 2007-2013
programming period were cleared in
November 2016. The final balances for
these programmes for which the annual
accounts have been cleared were paid in
2016.
The bulk of the final balance corresponds to
payments declared by Member States in
2015. Therefore the adjusted error rates
reported in DG AGRI's AAR 2015 for the
paying agencies concerned have been used
to estimate the adjusted error rate and
amount at risk for the overall payment at
closure.
Where necessary, deficiencies identified in
the control systems already triggered in
2015 requests to the Member States to
take remedial actions and opening of
conformity procedures.
No specific reservation is considered
necessary for the balance payments paid in
2016. Concerning two Paying agencies,
IT08 (Italie) and GB09 (The United
Kingdom) for which the error rate for
closure balance is significantly above the
materiality threshold and no reservation is
entered in respect of 2016 expenditure, no
further specific reservation is considered
necessary. DG AGRI is monitoring the
situation and conformity clearance
procedures are ensuring that the financial
risk to the EU budget is covered.
The final accounts of the paying agencies
not listed will be subject to future clearance
of accounts decisions and the balance
payments will then be treated as those
done in 2016.
Table: Annex 10-3.3.17
agri_aar_2016_annexes Page 171 of 273
2015 Reservations not carried forward in the 2016 AAR (10 paying agencies):
Paying
Agency
Adjusted
error rate Justification
Austria 1.44% The Member State has taken the necessary actions to remedy the deficiencies
found in investment support that aims to restore forestry potential. DG AGRI will
closely monitor the situation.
On organic farming, the Member State has taken corrective actions, although part
of the expenditure in financial year 2016 is still affected. The financial risk to the
EU budget for financial year 2016 is covered by ongoing conformity clearance
procedures.
Germany N/A DG AGRI audits detected deficiencies in the checks performed on public
procurement procedures. The contradictory procedure concluded that only
individual errors were concerned. The Member State accepted the errors and
implemented several corrective actions in relation to public procurement. The
financial risk for the individual errors where recovery has not yet been made by
the Member State is covered by ongoing conformity clearance procedures.
Germany
Mecklenburg-
Vorpommern
0.16% DG AGRI audits detected deficiencies in the checks performed on public
procurement procedures. The contradictory procedure concluded that the
individual errors did not affect this Paying Agency.
Spain N/A DG AGRI audits detected deficiencies in the checks performed on public
procurement procedures. The contradictory procedure concluded that only
individual errors were concerned. The Member State accepted the errors and
implemented several corrective actions in relation to public procurement. The
financial risk for the individual errors where recovery has not yet been made by
the Member State is covered by ongoing conformity clearance procedures.
Spain
Madrid
1.03% The Paying Agency has implemented an action plan covering all beneficiaries of
the measure concerned. Corrective actions are being implemented to correct
deficiencies identified, although certain IACS deficiencies still need to be
addressed. DG AGRI will closely monitor the situation.
The financial risk to the EU budget for financial year 2016 is covered by ongoing
conformity clearance procedure.
Spain
Valencia
0.79% The Paying Agency has implemented an action plan correcting previous
deficiencies.
The financial risk to the EU budget for financial year 2016 is covered by ongoing
conformity clearance procedures.
United
Kingdom -
England
0.56% The Member State has taken the necessary actions to remedy the deficiencies
found. The Action Plan established by the Paying Agencies was also reviewed by
the Certification Body. DG AGRI will monitor the situation.
Italy
Toscana
0.08% The high error rate reported by the Member State in 2015 has been addressed in
the concerned measure through corrective actions.
Italy
Emilia-
Romagna
0.81% The deficiencies identified in IACS measures during previous audits, namely
cross-checks with the animal database, have been corrected from claim year
2015.
The Paying Agency has informed that an updated reference price list for assessing
the reasonableness of costs will be fully operational in 2017. In the meantime, an
external reference price list is used to compare offers and for building works. DG
AGRI will closely monitor the situation.
The financial risk to the EU budget for financial year 2016 is covered by ongoing
conformity clearance procedures.
Latvia 0.88% Previously identified deficiencies in investment operations have been duly
addressed and corrected in financial year 2016.
Table: Annex 10 – 3.3.18
agri_aar_2016_annexes Page 172 of 273
3.3.6 Conclusions for ABB04
3.3.6.1 Expenditure under the Rural Development Programmes
Total expenditure for the Rural Development Programmes in 2016 amounted to EUR 11 305 053 961 of which EUR 4 495 770 025 were financed by the budget for the 2007-
2013 programming period (budget item 05040501), and EUR 6 809 283 936 were financed by the budget for the 2014-2020 programming period (budget item 05046001).
DG AGRI's assessment results in an adjusted error rate for the total expenditure (without prefinancing) of 3.86%48.
25 out of the 72 Paying Agencies have an adjusted error rate above 2% (10 of which
were above 5%: Belgium (Wallonie), Bulgaria, the Czech Republic, France (ASP), the United Kingdom (Scotland), Italy (Trento), Lithuania, Portugal, Slovakia and Sweden.
In line with its materiality criteria in Annex 4, 9 cases where the error rate is above 5% were automatically subject to a reservation (Belgium (Wallonie), Bulgaria,
Czech Republic, France (ASP), United Kingdom (Scotland), Lithuania, Portugal, Slovakia and Sweden). In all of these cases, the high adjusted error rate was determined further
to assessment and adjustment of the error rate by DG AGRI, based on its own audits and on the assessment of the Certification Bodies, or due to the system assessment given by
the ECA. In one case (Trento (IT)), the amount at risk is below DG AGRI's de minimis
threshold of EUR 1 million as established in Annex 4 (materiality criteria) therefore no reservation was necessary.
For 16 Paying Agencies with an error rate between 2% and 5%, DG AGRI examined the situation for each Paying Agency concerned to determine if risk mitigation
conditions existed rendering it unnecessary to make a reservation. In 3 cases (Germany, United Kingdom – North Ireland and Estonia) it was considered that, given the mitigating
factors present it would not be necessary to make reservations. For 2 Paying Agencies (Germany 21 and France 18) the amount at risk is below DG AGRI's de minimis threshold
of EUR 1 million as established in Annex 4 (materiality criteria) therefore no reservation
was necessary. For the remaining 11 Paying Agencies a reservation was deemed necessary.
As regards reservations from 2015, in 10 cases (Austria, Germany (MS, Mecklenburg-Vorpommern), Spain (MS, Madrid, Valencia) Italy (Toscana, Emilia-Romagna), United
Kingdom - England and Latvia it was not considered necessary to carry over reservations from the 2015 AAR with regard to 2016 expenditure.
In total 16 reservations from 2015 are repeated in 2016 as the remedial action plans are still underway while 4 new reservations are introduced (Germany-Niedersachsen,
Lithuania, Poland and Slovakia).
The overall outcome of this exercise is that 20 reservations are necessary at Paying Agency level:
Belgium
Bulgaria
Czech Republic
Germany (Niedersachsen)
Denmark
Spain (Andalucía)
48 The adjusted error rates (based on the control data following a validation and adjustment process) do
not apply to the pre-financing. The assessment of the risk for the entire chapter 05 04 is assessed in the
following section.
agri_aar_2016_annexes Page 173 of 273
France (ASP)
The United Kingdom (Scotland)
Greece
Hungary
Ireland
Italy (AGEA, Calabria)
Lithuania
The Netherlands
Poland
Portugal
Romania
Sweden
Slovakia
3.3.6.2 Risk assessment for other budget items within ABB04
While budget item 05040501 and 05046001 concern the Rural Development programmes
for 2007-2013 and 2014-2020 and thus accounts for most of the expenditure for ABB04,
it is also necessary to assess the risk for the entire expenditure under chapter 0504. The following table sets out the budget items in question and the error rates which have been
used to assess the amounts at risk.
Management
typeChapter
Budget
itemDescription
Payments
(EUR)
Error rate
(%)
Amount at risk
(EUR)
05040114 Completion of rural development financed by the EAGGF
Guarantee Section - Programming period 2000 to 2006
-1 048 601 0.00% -
05040201 Completion of the European Agricultural Guidance and
Guarantee Fund, Guidance Section - Objective 1 regions (2000
to 2006)40 410 348 0.00% -
Rural development programmes 2007-20134 495 770 025 3.48% 156 601 319
Interim payments 2007-2013
1 833 639 985 4.11% 75 419 738
Final balance2 662 130 040 3.05% 81 181 581
Promoting sustainable rural development, a more
territorially and environmentally balanced, climate-
friendly and innovative Union agricultural sector7 809 874 920 3.59% 280 073 741
Interim payments for promoting sustainable rural development,
a more territorially and environmentally balanced, climate-
friendly and innovative Union agricultural sector 2014-2020
6 809 283 936 4.11% 280 073 741
Pre-financing for promoting sustainable rural development, a
more territorially and environmentally balanced, climate-friendly
and innovative Union agricultural sector 2014-20201 000 590 984 0.00% -
05040206 Completion of Leader (2000 to 2006)7 437 218 1.00% 74 372
05046002 Operational technical assistance 2014-202012 554 730 1.00% 125 547
12 364 998 639 3.53% 436 874 979
Direct
Management
Shared
Management
Total
Payments reimbursed by DG AGRI to the Member States in 2016
0504
05040501
05046001
agri_aar_2016_annexes Page 174 of 273
The adjusted error rate for ABB04 is 3.53% and the total amount at risk is EUR 436.9 million.
The assessment of the risk for the entire chapter 0504 covers all payments to Member States in 2016 including pre-financing. Note that the adjusted error
rate for amounts reimbursed to Member States for payments to beneficiaries and the closure balance is 3.86%.
The average amount of net financial corrections per year for the five year period 2012-2016 (excluding corrections made for cross-compliance) is
EUR 162.2 million for ABB0449 while recoveries from Member States from
beneficiaries amounted to EUR 109.3 million.
3.3.7 Root causes of the error rate in Rural Development – what is DG AGRI doing about it?
Since its AAR for 2007 and apart from 2010, DG AGRI has made a reservation on all or part of the expenditure covering Rural Development.
Because of the specific nature of the Rural Development measures, in particular the conditions and eligibility criteria that have to be met, as well as the high number of
beneficiaries of the policy, it has proven very difficult to keep the level of error below a
materiality threshold of 2%. However, since 2011, when it first began reporting separately on the error rate for Rural Development, the level of error found by the
European Court of Auditors (ECA) has regularly decreased: from 7% in year 2013, to 6% in 2014 and 5.3% in 2015.
As a result of a then considerable divergence between the levels of errors estimated by the ECA and by DG AGRI as well as growing concerns within the Commission as to the
reliability of Member States' control statistics, in the 2012 AAR a general reservation was placed on rural development expenditure as a whole. For the 2013 and 2014 AARs, DG
AGRI adjusted Member States' control statistics to reflect undetected and thus
unreported error and estimated an adjusted error rate of 5.19%. As this work was carried out at Paying Agency level, a targeted approach was possible with regard to
reservations and this resulted in the Director General being able to issue specific reservations for 31 Paying Agencies in the 2013 AAR and for 28 Paying Agencies in the
2014 AAR, instead of for the whole of Rural Development expenditure. DG AGRI estimated that the adjusted error rate for the year 2015 further decreased to 4.16%,
with 24 Paying Agencies placed under reservation for that year and 2 reservations at Member State level for public procurement deficiencies.
The positive trends reported above reflect a number of initiatives. First, a specific process
to address the high error rate in rural development has been undergoing since the year 2012, when DG AGRI and the Member States undertook a joint screening of the root
causes for errors. As a result of this screening, as from 2013 Member States are reporting regularly on relevant actions carried out to reduce the level of errors ("action
plans"). As from the year 2016 those action plans have been requested only to Paying Agencies subject to serious audit findings (from DG AGRI, ECA and/or
national/Certification Body audits), and/or where a reservation has been placed in the AAR, provided that the reservation has ongoing effects.
Furthermore, as from 2015, DG AGRI has further improved the system of reporting by
Member States concerned, including a reinforced focus on audit findings as well as improved indicators and milestones for monitoring purposes. The action plans are
expected to address the identified deficiencies by describing, for each of them, the
49 See section 2.4.1.5.1 of the main body of the report on 'corrective capacity'.
agri_aar_2016_annexes Page 175 of 273
corrective actions to be taken and the established benchmarks and timetable for implementing their actions. As from 2016 the request for regular reporting on action
plans is made once a year, but could be increased depending on the gravity of the audit findings.
Since 2013, six seminars on error rate have been organised, of the latest took place in March 2016. The seminars aim at presenting the state of play in the implementation of
the action plans, share good practices, and provide guidance. These seminars are organised jointly in the framework of the Rural Development Committee and the
Agricultural Funds Committee in order to ensure the involvement of both Managing
Authorities and Paying Agencies. In the meantime, the geographical desks ensure regular monitoring of the action plans and carry out follow up activities in annual and ad-hoc
meetings with Member States, monitoring committees and if relevant in the context of programme amendments.
In parallel, the audit capacity of DG AGRI has been reinforced. The number of audit missions has been increasing from the level in 2013 and the audits target specific issues
related to error rates.
Furthermore, the legal framework provides for interruption and reduction/suspension of
payments in case of serious deficiencies in the management and control systems for the
expenditure committed under EAFRD during the 2007-2013 and the 2014-2020 programming periods. In 2016, 9 quarterly declarations of expenditure by Member States
had been subject to interruption and/or reduction/suspension (see section on interruptions, reductions and suspensions). In addition, the new requirements introduced
by the legal framework for Rural Development in terms of verifiability and controllability have likely contributed to the observed reduction in the level of errors.
Finally, many activities have been going on in terms of capacity building:
The European Network for Rural Development is playing an enhanced role in
disseminating good practices and guidance related to the reduction of errors, and
improving overall RDP implementation. In 2016, workshops and other events for Managing Authorities and Paying Agencies have been carried out in relation to the
following topics: simplified cost options in LEADER/CLLD, definition and use of selection criteria, the design and implementation of result-based agri-environment climate
measures, and more general events aiming to unlock the potential and improve overall implementation of RDPs.
DG AGRI is encouraging cross-regional cooperation and promoting training on specific topics related to better implementation of programmes and the reduction of errors. In
2016, workshops have been carried out in London for British and Irish Managing
Authorities and Paying Agencies, and in Paris, for French regional and national administrations. Those workshops have touched issues related to audits and error rates
and involved representatives of the Commission, including audit units, policy and operational units, and the European Court of Auditors The overall goal of such events is
to facilitate a constructive and open dialogue between relevant actors, in view of exchanging good practices and establishing clear guidelines.
Part 3.4: Error Rate and corrective capacity
In order to preserve comparability with the reports from previous years, the table below
presents the error rates, amounts at risks and corrective capacity calculated using the same methodology as in the annual activity report of DG AGRI for 2015.
agri_aar_2016_annexes Page 176 of 273
Table: Annex 10 – 3.4.1
financial corrections recoveries total
m EUR m EUR m EUR m EUR m EUR
0501 Administrative expenditure 20.74 0.04% 1.000% 0.207 -
0502 Interventions in Agricultural Markets 3 127.90 5.51% 2.850% 89.145 168.759
0503 Direct Aids 40 808.73 71.85% 1.996% 814.395 626.497
EAGF 43 936.63 77.36% 2.056% 903.540 795.255 106.564 901.819 2.05%
0504 Rural Development 12 365.00 21.77% 3.533% 436.875 162.226 109.334 271.560 2.20%
0505 Pre-accession Measures 339.24 0.60% 0.069% 0.234 -
0506 International Aspects 4.40 0.01% 1.000% 0.044 -
0507 Audit 102.32 0.18% 0.000% 0.000 -
0508 Policy Strategy and Coordination 25.62 0.05% 1.000% 0.256 -
0509 Horizon 2020 - Research & Innovation 0.00 0.00% 0.000% 0.000 -
CAP Total 56 793.96 100.00% 2.361% 1 341.156 957.481 215.898 1 173.38 2.07%
Corrective capacity
as % of 2016
expenditure
Title 05 Agriculture and Rural DevelopmentDG AGRI annual
accounts (Annex 3)
% of CAP
budgetAmount at riskAdjusted error rate
agri_aar_2016_annexes Page 177 of 273
4. The Conformity Clearance Procedure and net
financial corrections
4.1 What is "Clearance "?
While it is the Member States which have the responsibility for managing and controlling
the various aid schemes provided for by the CAP legislation, there must be a mechanism in place which enables the Commission to ensure that they carry out their work properly
and, if they fail to do so, draw the necessary financial consequences. This mechanism consists of the clearance procedures operated by the Commission, which include an
annual financial clearance of the accounts of each Paying Agency and a multi-annual
conformity clearance covering the conformity of the expenditure with EU rules, and as regards the EAFRD in conformity with the applicable EU and national rules.
The legal basis for the Clearance of Accounts procedures in place is provided by Regulation (EU) No 1306/201350, Commission Delegated Regulation (EU) No 907/201451
and Commission Implementing Regulation (EU) No 908/201452.
4.1.1 Financial clearance of accounts – Completeness, accuracy and
veracity of the annual accounts
The financial clearance is based on an examination by the Certification Body, an audit
body which is independent from the Paying Agency. This body draws up a certificate stating whether it has reasonable assurance that the accounts of the Paying Agency are
true, complete and accurate, that the internal control procedures have operated satisfactorily and whether the expenditure for which reimbursement has been requested
from the Commission have been in conformity with the applicable rules (see above Part
2). They also give an opinion on the management declaration signed by the head of the Paying Agency, i.e. stating whether the examination puts in doubt the assertions made in
the management declaration.
The financial clearance covers the annual accounts of each Paying Agency and the control systems set up by these. Within this framework, particular attention is paid to the
Certification Bodies’ conclusions and recommendations (where weaknesses are found),
following their reviews of the Paying Agencies’ management and control systems. This review also covers aspects relating to the accreditation criteria for the Paying Agencies.
Commission's audits under the annual financial clearance procedure may lead to opening a conformity clearance procedure when errors are found in the annual accounts and
and/or findings from certification/accreditation missions require that a financial correction is proposed.
The Commission adopts an annual clearance of accounts decision, by which it conveys that it accepts the Paying Agencies annual accounts on the basis of the certificates and
reports from the Certification Bodies, but without prejudicing any subsequent decisions to
recover expenditure which proves not to have been effected in conformity with the applicable rules (this is reserved for the conformity clearance). The Commission must
adopt this decision by 31 May of the year following the financial year in question (for agricultural expenditure a financial year starts on 16 October of one year and ends on 15
October of the next year).
50 Regulation (EU) No 1306/2013 of the European Parliament and of the Council on the financing, management
and monitoring of the common agricultural policy (OJ L 347 of 20.12.2013) 51 Commission Delegated Regulation (EU) No. 907/2014 of 11 March 2014 supplementing Regulation (EU) No.
1306/2013 with regard to paying agencies and other bodies, financial management, clearance of accounts,
securities and use of euro (OJ L 255 of 28.08.2014). 52 Commission Implementing Regulation (EU) No 908/2014 of 6 August 2014 laying down rules for the
application of Regulation (EU) No 1306/2013 with regard to paying agencies and other bodies, financial
management, clearance of accounts, rules on checks, securities and transparency (OJ L 255 of 28.08.2014).
agri_aar_2016_annexes Page 178 of 273
4.1.2 Conformity clearance – checking the system
In contrast to the financial clearance, the conformity clearance is designed to exclude
expenditure from EU financing which has not been paid in conformity with EU rules, thus shielding the EU budget from expenditure that should not be charged to it. These "net
financial corrections" are recovered from the Member States. The conformity clearance is, therefore, not a mechanism by which irregular payments are recovered from the final
beneficiaries, which according to the principle of shared management is the sole responsibility of the Member States.
However, net financial corrections are a strong incentive for the Member States to improve their management and control systems and thus to prevent or detect and
recover irregular payments to final beneficiaries. The conformity clearance thereby
contributes to the legality and regularity of the transactions at the level of the final beneficiaries.
Financial corrections
Financial corrections relate to expenditure which as regards the EAGF has not been spent by the Member States in conformity with EU rules or as regards the EAFRD has not been
spent in conformity with the applicable EU and national rules, and which are therefore recovered to the EU budget. Please note that financial corrections cannot be qualified as
"penalties" or "fines". A penalty or fine implies a sanction over and above the undue
expenditure which is not the case for DG AGRI's financial corrections.
Explanatory Box: Annex 10 - 4.1
While the financial clearance is an annual exercise, conformity clearance does not follow
an annual cycle. It covers expenditure incurred in more than one financial year, with the
exception of expenditure made more than 24 months before the Commission officially notifies the Member State of its audit findings.
Every year, the Commission‘s Directorate General for Agriculture and Rural Development carries out over 250 audits, more than half of which include on-the-spot missions to the
Paying Agencies in the Member States. The Paying Agencies to be visited are selected on the basis of a detailed risk analysis, and the audit work normally concentrates on the
functioning of the Paying Agencies‘ management and control systems (see explanatory box 1.1 in Annex 10 – part 1 for more information on the Central Risk Analysis (CRA)).
agri_aar_2016_annexes Page 179 of 273
Diagram: Annex 10-4.2
4.1.3 How does the conformity procedure work in practice?
If an audit reveals deficiencies in the functioning of the national systems, the Commission initiates a conformity clearance procedure with a view to determining
whether to impose a net financial correction on the Member State in question and, if so, what the amount of that correction that needs to be excluded from Union financing
should be. Such a procedure comprises the following steps (see diagram Annex 10 –
4.4):
The Commission officially notifies the Member State of its audit findings and
indicates the corrective measures which the Member State should take to remedy the deficiencies found. The Member State then has two months to reply to the
Commission‘s findings.
The Commission arranges a bilateral meeting with the Member State where
both parties shall endeavour to reach an agreement on the corrective measures to be taken as well as on the gravity of the infringement and the financial damage caused
to the EU budget. The Member State has fifteen working days after having received
the minutes of the meeting to react and provide further information (if requested, two more months).
CLEARANCE OF ACCOUNTS
Two independent procedures
Financial Clearance Conformity Clearance
Completeness, accuracy and veracity of the annual accounts of the Paying Agency
Annual exerciseafter the end of the financial year N
Starting on 16 October N-1 and ending on 15 October N
Compliance with Union law and, in respect of the EAFRD, with the applicable Union and national law
Ad hoc compliance decisions cover up to 24 months prior to Commission's notification of audit findings to the Member
States
Audit to check:Whether the Paying Agency's annual accounts are kept as
requiredWhether the internal control procedures have operated
satisfactorilyOn legality and regularity of the expenditure for which
reimbursement has been requested from the Commission
System-based and risk based auditscheck:
Whether the expenditure is effected in compliance with Union law and, in respect of the EAFRD, with the applicable
Union and national lawWhether the Paying Agency has carried out the checks
required to a satisfactory standard
Financial clearance decision by the Commission covering expenditure of financial year N
Without prejudice to conformity clearance decisions
Annually, by 31 May of the year following the financial year
Conformity clearance decisions by the Commission covering expenditure effected over several financial years
2-4 times per year
agri_aar_2016_annexes Page 180 of 273
The Commission formally communicates its conclusions to the Member State, including the financial correction which it envisages to impose on the Member
State.
Within 30 working days following receipt of these conclusions, the Member State
may submit the case for conciliation to the "Conciliation Body"(see Explanatory Box below). The Conciliation Body has four months to try to reconcile the positions of
the Commission and the Member State and, at the end of this period, to draw up a report on the results of its efforts and any recommendations it may wish to make to
the parties.
After having examined the Conciliation Body‘s report, the Commission notifies the Member State of its final conclusions.
What is the role of the Conciliation Body?
The conciliation procedure was set up in order to reconcile the divergent positions of the
Commission and the Member State, occurring during the conformity clearance procedure.
The Conciliation Body is composed of five members, who are highly qualified in matters regarding the financing of the CAP or in the practice of financial audit and originate from
different Member States. The chairman and the four other members are nominated by the Commission, after having consulted the Committee on the Agricultural Funds. They
are appointed for three years (renewable for a year at a time only). The secretariat of the Body is provided by the Commission.
Only reasoned requests from the Member States are accepted by the Conciliation Body. A request for conciliation is only admissible when the correction proposed by the
Commission services either exceeds 1 million EUR or accounts for more than 25 % of the
Member State‘s total annual expenditure under the budget headings concerned or, if these thresholds are not reached, if the request concerns a matter of principle relating to
the application of EU rules.
The Conciliation Body has four months to reconcile the positions of the Commission and
the Member State. At the end of its work – which takes place as informal and rapid as possible – the results are to be reported to the Member State concerned, to the
Commission and to the other Member States through the Committee on the Agricultural Funds.
The Conciliation Body is completely independent; it carries out its duties neither seeking
nor accepting any instructions from Member States or other body.
Explanatory Box: Annex 10 - 4.3
Once this procedure has been completed, any resulting financial correction is included in a formal decision adopted by the Commission (referred to as ad-hoc decision) after
having consulted the Member States through the Committee on the Agricultural Funds. Such a conformity decision can then be challenged by the Member States before the
Court of Justice of the European Union. Throughout the procedure Member States have the right to a fair contradictory procedure. Also because Member States have the right
(which they regularly exercise) to challenge conformity decisions in the Court of Justice
of the European Union, the Commission is very vigilant that it fully respects the Member States' rights under the conformity procedure. Failure to do so would expose the EU
budget to the risk that financial corrections would have to be reimbursed to the Member States.
agri_aar_2016_annexes Page 181 of 273
4.1.4 Shortening the conformity clearance procedure
Carrying out a contradictory procedure is legally indispensable before making financial
corrections. Prior to implementing any net financial correction, the Commission must therefore offer the Member States the opportunity to provide evidence and arguments
that may contradict its initial findings. Indeed both Regulation (EC) No 1290/2005 (in
application up to end of 2014) and the new CAP Horizontal Regulation, Regulation (EU) No 1306/2013, provide that "Member States shall be given the opportunity to
demonstrate that the actual extent of the non-compliance is less than the Commission's assessment". The principle of a contradictory process between the auditor and the
auditee is also an essential element of audit quality standards.
In addition to the contradictory procedure, the legislation (Article 52(3) of the CAP
Horizontal Regulation) provides for a "procedure aimed at reconciling each party's position" if an agreement is not reached at the end of the contradictory procedure. The
duration of the conciliation as such is limited to four months. But the whole process from
the request of the Member State concerned to the final result of the analysis by the Commission of the recommendations of the Conciliation Body takes at least six months53.
The Commission has streamed the procedure to the extent possible. Firstly, the Horizontal Regulation describes precisely the nature, scope and sequence of the
successive steps, as well as the different types of financial corrections. Secondly, provisions in the delegated act (method and criteria for calculating the financial
correction) and implementing act (details of the conformity procedure, with deadlines for each step of the procedure) are intended to further streamline the legal framework and
limit the risk of unnecessary delays. Thirdly, on that stronger basis, DG AGRI intensified
its monitoring of the progress of the conformity procedures to ensure a strict respect of the deadlines. Furthermore, for conformity procedures dating from earlier years,
particular action was taken with regard to the procedures open from before 2013 to ensure a close follow-up with clear indicators with a view to clearing all such files by end
of 2016. 285 audits that were carried out before 1 January 2013 were identified as "backlog" and DG AGRI set the objective of their complete closure by the end of 2016. In
addition, 73 audits carried out in 2013, which were still ongoing in June 2015 had as closure target also end of 2016. These 358 audits have been all closed by the end of
2016.
The following diagram describes the successive steps of a conformity clearance procedure leading to a net financial correction carried out under the new implementing act.
53 It can take even longer if the whole case has to be re-examined.
agri_aar_2016_annexes Page 182 of 273
Diagram: Annex 10 – 4.4
Year Month Procedural steps Procedural PhaseCoverage of the
financial correction
Preparatory Phase
2014 S Audit MissionO
N
D
2015 J Notification of audit finding to MSF
M MS reply to the Letter of FindingsA
M
J
JBilateral meeting with MS to discuss the deficiencies
identified, action to be taken and the risk to the EU Budget
A Minutes of Bilateral Meeting
S Member State's reply to the minutes of bilateral meeting
O
N
D
2016 J
F Notification of financial correction to MS
MMS submission of reasoned request for conciliation
- optional to MS -
A
M
J
J
A
S
O
N
D
2017J
Final Letter to MS with definitive financial correction
F
M
A Commission decision on financial corrections
M
J
J Actual reimbursement to EU Budget by MS
Co
ntr
adic
tory
ph
ase
wit
h M
S
START OF CONFORMITY PROCEDURE
Fin
anci
al c
orr
ecti
on
may
co
ver
exp
end
itu
re in
curr
ed f
or
24
mo
nth
s
pri
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MS
Conciliation procedure (if requested by MS)
The Conciliation Body is independent from the COM and the MS.
Its role is to conciliate the positions of both parties.
Its conclusions are not binding on the COM.
Preparation of the Final Letter
Conformity Clearance Procedure
DG AGRI Conformity Clearance Procedure for Net Financial Corrections
Example of the timing of the procedure for an audit mission carried out on-the-spot at the end of September 2014 (standard procedure)
Mission report & preparation of the Letter of Findings
agri_aar_2016_annexes Page 183 of 273
4.2 Net financial corrections
4.2.1 How does the Commission calculate net financial corrections?
Financial corrections are determined on the basis of the nature and gravity of the infringement and the financial damage caused to the EU budget. Where possible, the
amount is calculated on the basis of the loss actually caused (Article 12(2) of
Commission Delegated Regulation (EU) No 907/2014) or on the basis of an extrapolation (Article 12(3) of Commission Delegated Regulation (EU) No 907/2014).
Where this is not possible, flat-rates (Article 12(6) of Commission Delegated Regulation (EU) No 907/2014) are used which take account of the severity of the deficiencies in the
national management and control systems in order to reflect the financial risk for the EU budget. In order to ensure equal treatment of all cases of this kind, the Commission has
adopted guidelines54 which provide for standard correction rates of 2%, 3%, 5%, 7%, 10% or 25% of the expenditure at risk, depending on whether the deficiencies concern
key or ancillary control requirements which are determined for each aid schemes.
What are key and ancillary controls?
- Key controls are the administrative and on-the-spot checks necessary to determine the
eligibility of the aid and the relevant application of reductions and penalties. It concerns those physical and administrative checks required to verify substantive elements, in
particular the existence of the subject of the claim, identification of duplicate claims for
the same subject, the quantity, the qualitative conditions including the respect of time limits, harvesting requirements, retention periods, etc. in order to ensure the accurate
calculation of the amount due to the beneficiary. They are performed on-the-spot, and by administrative cross-checks with independent data (such as a land parcel identification
system).
- Ancillary controls involve all other administrative operations required to correctly
process claims, such as a risk analysis and appropriate supervision of the procedures.
- When assessing the administrative and on-the-spot (OTS) process (the authorisation of
claims) for a given population, the Certification Body's assessment should be based on the key and ancillary controls. The Certification Bodies are also using the key and
ancillary controls when they assess the legality and regularity of the expenditure (under
their compliance and substantive testing).
Explanatory Box: Annex 10 - 4.5
On this basis, the guidelines provide that:
• When a Member State has adequately performed the key controls, but completely failed to operate one or two ancillary controls then a correction of 2% is justified in
view of the lower risk of financial damage to the Union's budget, and in view of the
lesser gravity of the infringement;
• When one or two key controls are not applied, in the number, frequency, or depth
required by the regulations, then a correction of 5% is justified, as it can reasonably be concluded they do not provide sufficient level of assurance of the regularity of
claims, and that the risk to the Funds was significant;
• When one or more key controls are not applied or applied so poorly or so
infrequently that they are completely ineffective in determining the eligibility of the claim or preventing irregularities, then a correction of 10% is justified, as it can
reasonably be concluded that there was a high risk of wide-spread financial damage
to the Union's budget;
54 Guidelines on the calculation of the financial corrections in the framework of the conformity and financial
clearance of accounts procedures C(2015) 3675 final
agri_aar_2016_annexes Page 184 of 273
• When three or more deficiencies are detected with respect to the same control system, a financial correction of 3% is justified if the deficiencies concern only
ancillary controls which have completely failed;
• When three or more deficiencies are detected with respect to the same control
system, a financial correction of 7% is justified if these deficiencies include maximum two key controls not being carried out in the number, frequency, or depth required
by the regulations;
• When a Member State’s application of a control system is found to be absent or
gravely deficient, and there is evidence of wide-spread irregularity and negligence in
countering irregular or fraudulent practices", then a correction of 25% is justified as it can reasonably be assumed that the freedom to submit irregular claims with
impunity will occasion exceptionally high financial damages to the Union's budget.
The rate of correction may be fixed at an even higher rate to exclude all expenditure
when weaknesses are so serious that they constitute a complete failure to comply with EU rules.
4.2.2 Net financial corrections in 2016
Table Annex 10 – 4.6 below sets out the net financial corrections (excluding cross-
compliance corrections) reimbursed to the EU budget for ABB02, ABB03 and ABB04 over the past five years and its average (i.e. corrective capacity from net financial
corrections):
Table: Annex 10 – 4.6
In its calculation of corrective capacity for net financial corrections, DG AGRI excludes corrections in respect of cross-compliance infringements as these are not considered to
be “errors” as regards eligibility and therefore are not included in the estimates of the
error rates. These amounts are, however significant, and are therefore disclosed separately in the table below:
Table: Annex 10 – 4.7
4.2.3 Instalments and Deferrals
Net financial corrections do put a real strain on the national budgets of Member States.
Therefore, an option was introduced according to which corrections of a certain volume can be executed in three annual instalments on request of the Member State
concerned. Execution in instalments was so far accepted for Bulgaria, Czech Republic,
France, Greece, Hungary, Lithuania, Poland, Portugal, Romania, Spain and Slovenia.
million EUR
ABB02 ABB03 ABB04 Total
2012 222.595 352.851 50.766 626.212
2013 100.425 297.861 227.639 625.925
2014 102.245 533.356 62.342 697.943
2015 205.255 756.932 243.985 1 206.172
2016 213.272 1 191.485 226.396 1 631.153
Total 843.793 3 132.484 811.128 4 787.405
5-year average 168.759 626.497 162.226 957.481
DG AGRI corrective capacity from financial corrections executed 2012- 2016
million EUR
ABB02 ABB03 ABB04 Total
2016 0.591 156.700 10.415 167.706
5-year average 0.134 103.842 6.313 110.289
Cross-compliance executed in 2016 and 5-year average
agri_aar_2016_annexes Page 185 of 273
The following table (Annex 10- 4.8) sets out the financial impact of the instalment decisions, showing when they were adopted and when the various instalments are
actually reimbursed by the Member States.
Corrections adopted for which payment was posposed via instalment decision
(in million EUR)
Note: The amounts highlighted above were included in the deferral decision for the Member States in question.
These amount can be found below in the deferral summary tables for Greece and Portugal.
Table: Annex 10 – 4.8
In addition, Member States under EU financial assistance could request the Commission to defer the execution of financial corrections for a period of up to 18 months subject to
the implementation of targeted remedial action plans. After the expiry of the deferral period the corrections were required to be executed in three annual instalments.
Deferrals were granted to Portugal and Greece. The deferrals granted expired on 31 December 2013 for Greece and on 31 May 2014 for Portugal.
The following tables (Annex 10 – 4.9 and 4.10) set out respectively for Greece and
Portugal financial corrections by conformity clearance decisions which were included in the deferral decision and, the schedule for reimbursement by instalment at the expiry of
the deferral period.
Table: Annex 10 – 4.9
Ad-hoc
decision
Decision
adoption
year
Amount
paid in
instalments
2011 2012 2013 2014 2015 2016 2017 2018 2019
AD-HOC 34 2010 446.623 148.874 148.874 148.874
deferral -129.561
AD-HOC 35 2011 358.836 119.612 119.612 119.612
deferral -86.465 -86.465
AD-HOC 38 2012 131.300 43.766 43.767 43.767
AD-HOC 40 2013 19.955 6.651 6.652 6.652
AD-HOC 41 2013 3.449 1.149 1.150 1.150
AD-HOC 43 2013 92.489 30.829 30.830 30.830
AD-HOC 44 2014 16.560 5.520 5.520 5.520
AD-HOC 46 2014 96.829 32.276 32.277 32.277
AD-HOC 47 2015 1,279.173 426.391 426.391 426.391
AD-HOC 48 2015 177.366 59.122 59.122 59.122
AD-HOC 49 2015 7.099 2.366 2.366 2.366
AD-HOC 50 2016 103.476 34.492 34.492 34.492
AD-HOC 51 2016 340.069 113.356 113.356 113.356
AD-HOC 52 2016 219.177 73.059 73.059 73.059
Total 3,292.398 268.486 225.787 104.027 87.918 561.940 704.354 741.063 223.273 73.059
Year of reimbursement
Greece m EUR
2014 2015 2016
2010 114,564
ad hoc 35 2nd instalment 2011 86,465
ad hoc 35 3rd instalment 2011 86,465
ad hoc 38 2012 104,935
ad hoc 39 2012 0,016
ad hoc 40 2013 8,936
ad hoc 41 2013 122,571
ad hoc 42 2013 5,191
Total Deferred 529,143
25,151
Deferred amount to be reimbursed 503,992 167,997 167,997 167,998
ad hoc 34 3rd instalment
Less amounts for which deferral was
revoked
Reimbursement scheduleAd hoc decision Year adopted Amount deferred
agri_aar_2016_annexes Page 186 of 273
Table: Annex 10 – 4.10
In 2015 a new deferral decision under Reg. 908/2014 Art. 34(8a) was adopted for
Greece. This decision allows deferring the execution date for financial corrections for a period of 24 months from the date of the adoption. After the expiry of the deferral period
the corrections are required to be executed in five annual instalments. The deferral granted to Greece will expire on 22 of June 2017. So far the following amounts were
deferred:
Ad-hoc 48 Ad-hoc 49 Ad-hoc 50 Ad-hoc 53
Decision number 2015/1119/EU 2015/2098/EU 2016/418/EU 2017/264/EU
Adoption
date 22/06/2015 13/11/2015 17/03/2016 14/02/2017
EAGF -321,119,141.03 -12,647,843.53 -167,956,763.16 -143,228.19
EAFRD -1,028,485.21 0.00 -3,880,460.50 -23,037,389.65
TOTAL -322,147,626.24 -12,647,843.53 -171,837,223.66 -23,180,617.84
Table: Annex 10 – 4.11
4.2.4 Amounts of financial corrections decided each year
Section 2.1.1.3 of this report provides further information on financial impact of financial
corrections and how they protect the EU budget. Three conformity clearance decisions were adopted by the Commission in 2016:
Commission Conformity Clearance
Decisions EAGF EAFRD Total
ad-hoc 50 2016/417/EU 506.337 203.541 709.878
ad-hoc 51 2016/1059/EU 553.546 8.093 561.639
ad-hoc 52 2016/2018/EU 248.711 68.701 317.412
Total (mil. EUR) 1,308.59 280.33 1,588.93
Table: Annex 10 -4.12
Impact of net financial corrections on Member States
In all Member States the national and regional authorities responsible for implementing
the CAP are directly affected by EU net financial corrections. Such corrections which relate to expenditure made by Member States in previous budget years lead to a
reduction of EU financing in the current budget year. This requires Member States in many cases to find the financial means necessary to fill the gap by making budget
transfers or amending budgets.
Explanatory Box: Annex 10 - 4.13
Portugal m EUR
2014 2015 2016
ad hoc 34 3rd instalment 2010 14,997
ad hoc 39 2012 93,528
ad hoc 41 2013 0,031
Deferred amount to be reimbursed 108,556 36,185 36,185 36,186
Reimbursement scheduleAd hoc decision Year adopted Amount deferred
agri_aar_2016_annexes Page 187 of 273
4.2.5 Legal Mechanisms for net financial corrections were strengthened from 2015
4.2.5.1 Focus on more risky expenditure
DG AGRI audit activities are driven by risk analysis, i.e. more audits focus on Member States, measures and programmes affected by higher risks. Formerly, DG AGRI
conducted an annual Central Risk Analysis (CRA) covering all CAP expenditure in all Member States in order to produce an annual audit work programme. In mid-2014, in
line with its audit strategy, DG AGRI developed a rolling three-year audit programme.
(Explanatory boxes 1.1 and 1.2 in Annex 10 - part 1 set out the elements which comprise the risk analysis.) The risk assessment for this multi-annual plan has been conplimented
by risk mapping ( see Part 1 of this Annex) and it was decided to carry it out mid-year in order to exploit the opinions of the Certification Bodies (which are available in March) and
to take into account any follow up work resulting from the AAR (in particular action plans which have to be followed up with the Member States). This new approach will ensure
sufficient audit coverage of the overall expenditure while taking into account DG AGRI's audit capacity. Where the risk is considered to be high, the Paying Agency concerned will
continue to be subject to intense audit supervision by DG AGRI in order to ensure that
remedial actions are undertaken in line with an agreed schedule of work.
4.2.5.2 The Commission is legally bound to correct
Any identified risk to the EU budget systematically triggers a net financial correction. The Commission has no discretion to not correct as it is legally bound to exclude any
identified illegal expenditure from EU financing. For both EAGF and EAFRD financial corrections for audit enquiries launched up from 2015 onwards are governed by the
legislation referred to in section 4.1 above55.
This new legislation frames the procedure even more tightly with the method and the
criteria for fixing the amount of financial corrections now set out in the delegated act. In
the case of flat-rate corrections, it is specified how the severity of deficiency shall be assessed, taking into account its nature (key or ancillary control) but also its recurrence
(repetition from a previous year without improvement) and the accumulation with other deficiencies (the risk of errors is likely to be higher when there are several deficiencies).
The Commission guidelines56 on how it determines financial corrections fully reflect the changes.The implementing act sets out mandatory legal deadlines for both Member State
and Commission for the various steps of the conformity clearance procedure.
4.2.5.3 Less recourse to flat-rate corrections
Both the Financial Regulation and the new CAP Horizontal Regulation provide for a
ranking of types of financial corrections where flat-rate corrections may only be used if calculated or extrapolated corrections cannot be established with proportionate efforts.
55 Up until the end of 2014, the clearance of accounts procedures were governed by Council Regulation (EC) No
1290/2005 and Commission Regulation (EC) No 885/2006. 56 Guidelines on the calculation of the financial corrections in the framework of the conformity and financial
clearance of accounts procedures C(2015) 3675 final.
agri_aar_2016_annexes Page 188 of 273
5. Debt management by the Member States
5.1 Legal Framework
Regulation (EU) No 1306/2013 on the financing of the CAP requires the Member States to recover sums lost as a result of irregular payments detected. However, the recovery
procedures, in accordance with the principle of subsidiarity, are the whole responsibility of the Member States concerned and, thus, subject to their individual administrative and
judicial procedures. Therefore, while some procedures deliver rapid results, others take more time.
In order to address delays by some Member States in recovering undue payments, the
legislator introduced an automatic clearing mechanism under which 50% of any undue payments which the Member States have not recovered from the beneficiaries within 4
years or, in the case of legal proceedings, 8 years, would be charged to their national budgets (50/50 rule).
Even after the application of this mechanism, Member States are still obliged to pursue their recovery procedures and, if they fail to do so with the necessary diligence, the
Commission may decide to charge the entire outstanding amounts to the Member States concerned. Moreover, pursuant to Article 28 of Regulation (EU) No 908/2014, Member
States are required to off-set any outstanding debts against future payments to the
debtor (compulsory compensation).
From financial year 2014, the 50/50 rule is applied to EAFRD in the financial year when it
occurs and not at the closure of the programme. Consequently, the Member States are required to indicate amounts to be charged under the 50/50 rule also for EAFRD 2007-
2013 as well as for EAFRD 2014-2020 programmes57.
Undue payments that are the result of administrative errors committed by the national
authorities also have to be deducted from the annual accounts of the Paying Agencies concerned and, thus, excluded from EU financing.
57 Article 54(2) of Regulation (EU) No 1306/2013.
agri_aar_2016_annexes Page 189 of 273
5.2 Amounts recovered by the Member States in financial year
2016 for the EAGF
Table Annex 10 – 5.1 below sets out the amounts recovered in 2016 from the
beneficiaries by the Member States as reported in their debtors' ledger for the EAGF58.
Table Annex 10 – 5.1
For the purpose of calculating corrective capacity (see Table Annex 10 – 5.2 below and section 2.4.2.1 of the main body of the report), amounts recovered from the beneficiaries
by the Member States and reimbursed to the Commission as assigned revenue (67 02) for the EAGF in 2016 are taken into account. These amounts slightly differ from the
debtors' ledgers as reported by the Member State as it accounts for recovered amounts
58 Since the entry into force of Regulation 908/2014 (implementing Regulation for Regulation 1306/2013),
Paying Agencies are required to record the budget code of the amounts recovered. However, this requirement
is only applicable to new debt cases (as per Article 41 (5) of regulation (EU) No 907/2014). Consequently, since
Paying Agencies are still presently reporting old debts cases, it is still not possible to provide a breakdown of
recovered amounts at ABB level and this is why the corrective capacity is still reported at Fund level.
MS EAGF recoveriesEAGF recoveries
cross-compliance
EAGF recoveries
Total
AT 1 635 271 462 660 2 097 931
BE 9 194 114 19 701 239 28 895 353
BG 420 367 2 065 501 2 485 869
CY 37 218 1 701 132 1 738 350
CZ 181 153 435 891 617 044
DE 4 015 271 3 434 453 7 449 724
DK 470 528 707 230 1 177 758
EE 34 709 1 927 912 1 962 621
ES 12 758 653 2 991 283 15 749 936
FI 401 759 388 705 790 464
FR 13 168 796 7 051 818 20 220 615
GB 1 809 444 386 866 2 196 309
GR 12 516 159 6 255 847 18 772 006
HR 150 047 836 830 986 877
HU 1 082 816 5 549 372 6 632 188
IE 587 702 1 100 367 1 688 069
IT 18 627 613 34 983 629 53 611 242
LT 334 698 100 842 435 539
LU 11 845 87 036 98 882
LV 140 802 297 029 437 831
MT 7 777 6 453 14 229
NL 1 105 436 2 160 786 3 266 222
PL 1 640 890 379 958 2 020 848
PT 2 808 839 1 132 850 3 941 689
RO 4 929 132 14 602 389 19 531 521
SE 486 152 163 432 649 584
SI 151 966 168 929 320 895
SK 429 991 1 187 745 1 617 737
Total 89 139 147 110 268 186 199 407 333
agri_aar_2016_annexes Page 190 of 273
subject to the retention of a 20% flat rate recovery cost, as well as recovered amounts of recovery cases that were subject to the 50/50 rule in the financial clearance of accounts
for financial year 2016 and assigned revenue from (disjoined) financial clearance decisions of previous financial years.
The total amount recovered and reimbursed to the EU budget is 118.4million EUR. This corresponds to the amount declared by DG AGRI in the consolidated accounts for 2016.
Amounts recovered in respect of cross-compliance infringements (i.e. 35.8 million EUR) are indicated separately and deducted to show the amount of recoveries for 2016 which
DG AGRI considers to be relevant for its corrective capacity, i.e. 82.6 million EUR for
2016.
Table Annex 10 – 5.2
MS EAGF recoveries
EAGF recoveries
cross-
compliance
EAGF recoveries
Total
AT 1 735 414 380 244 2 115 658
BE 8 022 815 1 235 595 9 258 410
BG 2 277 142 126 230 2 403 372
CY 152 047 124 314 276 361
CZ 300 471 261 497 561 967
DE 3 510 849 6 391 231 9 902 080
DK 486 196 395 609 881 805
EE 114 194 399 789 513 984
ES 11 332 756 1 799 751 13 132 507
FI 487 650 267 707 755 357
FR 10 172 082 994 669 11 166 751
GB 1 683 389 2 811 551 4 494 940
GR 3 926 337 1 051 017 4 977 354
HR 837 068 139 293 976 361
HU 2 554 868 448 820 3 003 688
IE 1 346 990 3 108 908 4 455 898
IT 16 223 047 1 539 067 17 762 114
LT 299 392 940 380 1 239 772
LU 11 845 126 027 137 873
LV 330 083 71 033 401 116
MT 209 055 4 153 213 207
NL 1 562 858 842 064 2 404 922
PL 2 407 195 1 641 609 4 048 804
PT 4 596 428 413 151 5 009 579
RO 6 729 161 9 320 778 16 049 939
SE 430 508 114 154 544 663
SI -146 384 151 407 5 023
SK 1 010 510 667 431 1 677 941
Total 82 603 967 35 767 480 118 371 447
agri_aar_2016_annexes Page 191 of 273
5.3 Amounts recovered by the Member States in financial year
2016 for the EAFRD
Table Annex 10 – 5.3 below sets out the amounts recovered in 2016 from the beneficiaries by the Member States as reported in their debtors' ledger for the EAFRD.
Table: Annex 10 – 5.3
For the purpose of calculating the corrective capacity, (see section 2.4.2.1 of the main body of the report), recoveries in respect of SAPARD and TRDI are excluded as they are
not relevant to EAFRD. Recovered amounts in respect of cross-compliance infringements
are also deducted. The resulting amount of recoveries for 2016 which DG AGRI considers relevant for its corrective capacity is 135.6 million EUR.
MS EAFRD recoveriesEAFRD recoveries
cross-complianceEAFRD recoveries Total
AT 4 127 665 50 732 4 178 397
BE 614 952 91 533 706 484
BG 1 806 811 2 081 838 3 888 649
CY 30 650 71 330 101 980
CZ 1 111 117 190 889 1 302 007
DE 6 114 761 477 909 6 592 670
DK 2 018 645 42 198 2 060 843
EE 677 965 345 504 1 023 468
ES 26 123 735 289 681 26 413 416
FI 755 415 123 614 879 029
FR 4 399 872 277 418 4 677 290
GB 5 073 900 160 802 5 234 702
GR 3 107 510 11 849 614 14 957 124
HR 0 122 216 122 216
HU 3 781 331 1 149 075 4 930 406
IE 2 175 556 149 942 2 325 498
IT 5 134 121 49 004 869 54 138 990
LT 812 432 501 466 1 313 898
LU 12 168 65 115 77 283
LV 655 799 182 631 838 430
MT 3 056 892 16 429 3 073 321
NL 798 366 235 604 1 033 970
PL 18 383 894 340 226 18 724 120
PT 14 953 268 355 450 15 308 718
RO 24 837 360 3 359 242 28 196 602
SE 885 125 8 134 893 260
SI 374 096 103 495 477 591
SK 3 790 013 383 336 4 173 349
Total 135 613 417 72 030 293 207 643 710
agri_aar_2016_annexes Page 192 of 273
5.4 Application of the 50/50 Rule
The financial consequences of non-recovery for cases dating from 2012 (4 year deadline for recovery) or 2008 (8 year deadline in case of legal proceedings) will be determined
for 2016 in accordance with the 50/50 rule mentioned above by charging approximately 33.6 million EUR to the Member States concerned59. Moreover, around 25.9 million EUR
will be borne by the EU budget for cases reported irrecoverable during financial year 201660. The final figures will be established in May 2017 when the financial clearance
decision for financial year 2016 will be adopted. Due to the application of the 50/50 rule,
important non-recovered sums have already been charged to the Member States for EAGF, EAFRD and TRDI expenditure.
The overall outstanding amount still to be recovered from the beneficiaries at the end of that financial year was 1 369.2 million EUR (1 044.9 million EUR of old cases and 324.3
million EUR for new cases). Of this amount, 1 222.6 million EUR is outstanding to the EU budget (the difference, 146.6 million EUR, having already been charged to the Member
States via the 50/50 mechanism).
The clearance mechanism (50/50 rule), referred to above, provides a strong incentive for
Member States to recover undue payments from the beneficiaries as quickly as possible.
As a result, the recovery rate of the new EAGF debts from 2007 and thereafter is still increasing over the time and by the end of financial year 2016, 50% of these new debts
had already been recovered, which is a significant improvement compared to the past. The detailed breakdown of this recovery rate has developed as follows:
59 Please note that these amounts relate to EAGF, EAFRD and TRDI. 60 For EAFRD, based on the new legal regime, from financial year 2014 the Member States have to report as
well the irrecoverable cases established during financial year in question.
agri_aar_2016_annexes Page 193 of 273
Rate of recovery from beneficiaries of irregularities detected since 2007 - EAGF:
Table: Annex 10 – 5.5
Recovery rate until
end
of
2007
until
end of
2008
until
end of
2009
until
end of
2010
until
end of
2011
until
end of
2012
until
end of
2013
until
end of
2014
until
end of
2015
until
end of
2016
year o
f d
isco
very o
f th
e i
rreg
ula
rit
y
2007 33% 47% 50% 53% 60% 68% 69% 69% 69% 69%
2008 - 24% 40% 47% 49% 58% 59% 60% 61% 61%
2009 - - 24% 33% 42% 44% 46% 48% 50% 59%
2010 - - - 29% 39% 44% 45% 47% 47% 48%
2011 - - - - 23% 37% 39% 43% 49% 50%
2012 - - - - - 34% 60% 64% 67% 69%
2013 - - - - - - 23% 30% 34% 37%
2014 - - - - - - - 14% 28% 32%
2015 - - - - - - - - 44% 58%
2016 - - - - - - - - 39%
2007-
2015 - - - - - - - - 50%
agri_aar_2016_annexes Page 194 of 273
It is worth noting that some of these new debt amounts were already written off by Member States in the period 2007-2016 (153.7 million EUR) and therefore they will most
likely not be recovered. For more details on the recovery rates at Member State level, see Table Annex 10 – 5.6 below.
Recoveries (EUR) from beneficiaries for cases detected since 2007 – EAGF
MS New cases since 2007 Adjustments Recoveries Recovery rate
AT 50.062.890,97 -1.166.163,39 -60.212.535,87 123%
BE 80.970.352,22 -29.391.790,83 -28.385.222,16 55%
BG 2.097.427,27 388.099,42 -78.246,49 3%
CY 3.050.086,94 -82.253,22 -2.214.326,51 75%
CZ 2.977.281,46 -128.682,69 -2.583.766,27 91%
DE 84.820.214,58 -3.080.751,55 -72.891.802,18 89%
DK 34.221.443,75 8.561.539,74 -26.789.498,37 63%
EE 2.514.240,00 -1.022.542,20 -1.344.446,82 90%
ES 267.859.111,78 -38.894.984,19 -157.923.623,10 69%
FI 10.936.399,41 222.467,02 -10.652.121,02 95%
FR 409.952.699,60 -79.557.741,05 -87.472.902,64 26%
GB 55.899.410,33 -9.457.630,30 -43.487.140,45 94%
GR 143.651.112,81 -38.193.987,22 -33.138.953,80 31%
HR 427.180,57 6.117,85 -200.689,58 46%
HU 89.614.153,77 -62.171.411,56 -17.636.739,91 64%
IE 29.356.005,13 -2.762.091,18 -25.925.944,56 97%
IT 311.241.362,51 50.579.890,91 -140.162.379,97 39%
LT 7.157.707,84 -2.633.249,10 -4.216.014,33 93%
LU 1.099.152,45 -496.946,54 -351.675,11 58%
LV 2.128.424,29 -29.364,85 -1.688.458,56 80%
MT 1.116.933,10 94.318,76 -649.956,02 54%
NL 73.868.287,93 2.615.991,87 -25.785.238,86 34%
PL 88.812.147,50 -80.552.713,58 -25.008.235,01 303%
PT 77.985.864,93 -18.663.764,94 -36.396.288,92 61%
RO 57.077.152,74 -231.065,79 -21.892.057,37 39%
SE 27.895.959,38 -4.206.419,43 -20.230.026,87 85%
SI 17.444.760,13 -2.368.431,42 -5.648.013,17 37%
SK 3.887.835,13 -736.774,49 -1.343.945,23 43%
Totals 1.938.125.598,53 -313.360.333,96 -854.310.249,14 52,6%
Table: Annex 10 – 5.6
agri_aar_2016_annexes Page 195 of 273
5.5 DG AGRI Audits
Materiality: In general, based on the annual accounts of FY 2016, the global amount at risk in the area of debt management is approximately 1.7 billion EUR.
During the period 2008-2016, DG AGRI audited the correct application of the new clearance mechanism through 34 audit missions in 21 Member States. These audits were
performed in the context of conformity clearance procedures (Article 52 of Regulation (EU) No 1306/2013).
Based on the results of the whole audit work carried out by DG AGRI and on those ones
coming from the work of external audit bodies (Certification Bodies, European Court of Auditors, OLAF), the consolidated assessment that DG AGRI has at the end of 2016 as
regarding the effectiveness of irregularities and debt management and control systems (IDMCS) per Paying Agency is as follows:
Effectiveness of the Irregularities and Debt Management and Control Systems
Key parts of the IDMCS
Code Paying agency Recognition
and registration Recovery
Annexes II and III
Overall assessment
AT01 AMA
AT03 Zollamt Salzburg
BE02 ALV
BE03 Rég. Wallonne
BG01 State Fund Agriculture
CY01 CAPO
CZ01 SZIF
DE01 BLE
DE02 Hamburg-Jonas
DE03 Baden-Württemberg MLR
DE04 Bayern StMLF
DE07 Brandenburg MLUV
DE09 Hamburg
DE11 Mecklenburg-Vorpommern MELFF
DE12 Niedersachsen
DE15 Nordrhein-Westfalen
DE17 Rheinland-Pfalz
DE18 Saarland AAL
DE19 Sachsen
DE20 Sachsen-Anhalt
DE21 Schleswig-Holstein
DE23 Thüringen
DE26 Helaba
DK02 DFE
EE01 PRIA
ES01 Andalucia FAGA
ES02 Aragón
ES03 Asturias
ES04 FOGAIBA
ES05 Islas Canarias
ES06 Cantabria
ES07 Castilla La Mancha
ES08 Castilla y Léon
agri_aar_2016_annexes Page 196 of 273
Key parts of the IDMCS
Code Paying agency Recognition
and registration Recovery
Annexes II and III
Overall assessment
ES09 Cataluña
ES10 Extremadura
ES11 Galicia
ES12 Madrid
ES13 Murcia
ES14 Navarra
ES15 País Vasco
ES16 La Rioja
ES17 Comunidad Valenciana
ES18 FEGA
FI01 MAVI
FR05 ODEADOM
FR18 ODARC
FR19 ASP
FR20 France Agrimer
GB05 DARD
GB06 SGRPID
GB07 WAG
GB09 RPA
GR01 OPEKEPE
HR01 APPRRR
HU01 ARDA
IE01 DAF
IT01 AGEA
IT02 SAISA
IT03 ENR
IT05 Veneto (AVEPA)
IT07 Toscana (ARTEA)
IT08 Emilia-Romagna (AGREA)
IT10 ARPEA
IT23 OPR Lombardia
IT24 OPPAB
IT25 APPAG
IT26 ARCEA
LT01 NMA
LU01 Min. Agric.
LV01 RSS
MT01 MRRA
NL04 RVO
PL01 ARMA
PL02 AMA
PT03 IFAP
RO01 PARDF
RO02 PIAA
SE01 SJV
SI01 AAMRD
SK01 APA
Table: Annex 10 – 5.7
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Colour code Conclusion
Green
Effective functioning and, where applicable, minor improvements are necessary
Yellow
Effective functioning but some improvements are necessary
Orange
Partly effective functioning, substantial improvements are necessary
Red Ineffective functioning
Explanatory Table: Annex 10 – 5.8
It was found that the IDMCS implemented in the following Paying Agencies is partially
effective and some substantial improvements are necessary: BG01 , DE17 , ES05 , ES16
, FR19 , FR20 , IT01 , PL01 , RO01 , RO02.
Concerning the Italian Paying Agency AGEA (IT01), DG AGRI audit carried out in 2014
confirmed the serious concerns regarding the management of irregularities and other debts for financial year 2010 and earlier, and more generally all irregularities and debts
for which the payment of origin was made in financial year 2007 or before. A number of weaknesses concerning the accreditation criteria for debts were noted (improper internal
environment; insufficient control activities and monitoring mechanisms). Based on its findings, DG AGRI considered that the non-recovery of the debts in financial year 2010
and earlier was attributable to the negligence of the Italian authorities in the recovery
procedure and therefore proposed financial corrections for the debt cases relating to these financial years.
As regarding the other risky paying agencies mentioned above, DG AGRI, taking into consideration its audit capacity and its priorities, has focused during the period 2016-
2019 its audit activities on debt management on the following paying agencies which represent 36 % of the total amount at risk: FR19, FR20, RO01, RO02, BG01 and PL01.
agri_aar_2016_annexes Page 198 of 273
6. Cross Compliance Cross-compliance is a mechanism by which farmers are penalised when they do not respect a series of rules which stem in general from policies other than the CAP and
apply to EU citizens independently of the CAP.
The respect of cross-compliance obligations does not constitute an eligibility criterion for
CAP payments and, therefore, the checks of these requirements do not pertain to the legality and regularity of the underlying transactions. Thus, penalties imposed for non-
compliance with cross-compliance requirements are not taken into account for the
calculation of the error rates for the CAP.
The control statistics referred to below do not therefore correspond to errors in
underlying transactions. See also part 2.3.3 European Court of Auditors reports, under "2014 Annual Report".
The results of the checks on cross-compliance are shown in Table: Annex 10 – 6.1 for claim year 2015 (financial year 2016). It shows that 2.79% of all claimants were checked
as regards their compliance with cross-compliance requirements in claim year 2015, and thereby the minimum control rate of 1% was globally respected. The rate of farmers
checked on-the-spot and subject to a subsequent sanction for cross-compliance was
23.7% of all farmers checked in claim year 2015.
According to the control statistics, total cross-compliance sanctions in respect of claim
year 2015 amounted to 72.9 million EUR. Sanctions following regulatory on-the-spot-checks amounted to 60.0 million EUR in total.
A further analysis allows identifying the sanctions applied in case of negligence of the farmer, i.e. excluding the sanctions for repetition and intentional non-compliance. Those
sanctions amount to 53.7 million EUR (2.81% of the aid covered by OTSC). An additional 18.9 million EUR was applied as sanctions following repetition and intentional non-
compliance.
It should be noted that at the time of the drafting of the report neither France nor Sweden had submitted their statistics.
agri_aar_2016_annexes Page 199 of 273
Financial/claim year: 2016/2015
Member State
Population Subject to on-the-spot
checks Results of on-the-spot
checks
Total number of
beneficiaries
Number of beneficiaries
As share of total number of
beneficiaries
Beneficiaries sanctioned for
non-compliances
As share of total number
of on-the-spot-checks
Number number % number %
A B C=B/A D E=D/B
AT 88,145 2,119 2.40% 432 20.39%
BE 36,708 3,490 9.51% 696 19.94%
DE 297,593 9,312 3.13% 3,431 36.84%
DK 41,229 406 0.98% 97 23.89%
EL 392,638 4,000 1.02% 1,271 31.78%
ES 548,466 8,369 1.53% 2,092 25.00%
FI 53,063 2,183 4.11% 338 15.48%
FR
IE 126,056 1,382 1.10% 755 54.63%
IT 450,401 35,400 7.86% 2,313 6.53%
LU 1,853 247 13.33% 95 38.46%
NL 51,293 812 1.58% 224 27.59%
PT 111,156 2,625 2.36% 808 30.78%
SE
UK 154,670 5,837 3.77% 1,029 17.63%
EU-15 2015 2,353,271 76,182 3.24% 13,581 17.83%
EU-15 2014 4,347,753 116,872 2.69% 21,928 18.76%
CY 32,692 328 1.00% 153 46.65%
CZ 30,067 2,287 7.61% 89 3.89%
EE 20,972 737 3.51% 75 10.18%
HU 127,141 6,253 4.92% 987 15.78%
LV 46,677 1,167 2.50% 1,198 102.66%
LT 138,679 3,429 2.47% 1,666 48.59%
MT 652 90 13.80% 133 147.78%
PL 600,512 17,637 2.94% 4,013 22.75%
SK 18,395 612 3.33% 240 39.22%
SI 57,126 914 1.60% 325 35.56%
EU-10 2015 1,072,913 33,454 3.12% 8,879 26.54%
EU-10 2014 1,905,854 37,430 1.96% 14,943 39.92%
BG 75,877 1,156 1.52% 343 29.67%
RO 944,071 14,507 1.54% 5,703 39.31%
EU-2 2015 1,019,948 15,663 1.54% 6,046 38.60%
EU-2 2014 1,156,882 17,292 1.49% 12,213 70.63%
HR 99,295 1,682 1.69% 1,300 77.29%
EU-1 2015 99,295 1,682 2% 1,300 77.29%
EU-1 2014 95,862 1,450 1.51% 1,200 82.76%
EU-28 2015 4,545,427 126,981 2.79% 29,806 23.47%
EU-28 2014 7,506,351 173,044 2.31% 50,284 29.06%
Table: Annex 10 – 6.1
agri_aar_2016_annexes Page 200 of 273
ANNEX 11: Specific annexes related to "Assessment of the effectiveness of the internal control
systems" (not applicable)
agri_aar_2016_annexes Page 201 of 273
ANNEX 12: Performance tables
Commission general objective 1: A New Boost for Jobs, Growth and Investment
Commission Impact indicator: Percentage of EU GDP invested in R&D (combined public and private investment)
Source of the data: Eurostat
Baseline (2012)
Target (2020)
Europe 2020 target
Latest known value (2014 - provisional)
2.01% 3% 2.03%
Commission Impact indicator: Employment rate population aged 20-64
Source of the data: Eurostat
Baseline (2014)
Target (2020)
Europe 2020 target
Latest known value (2015)
69.2% At least 75% 70.1%
Commission general objective 2: A Connected Digital Single Market
Impact indicator: Aggregate score in Digital Economy and Society Index (DESI) EU-28 Explanation: DESI is a composite index that summarises relevant indicators on Europe's digital
performance and tracks the evolution of EU Member States in digital competitiveness. The closer the value is to 1, the better. The DESI index is calculated as the weighted average of the
five main DESI dimensions: 1 Connectivity (25%), 2 Human Capital (25%), 3 Use of Internet (15%), 4 Integration of Digital Technology (20%) and 5 Digital Public Services (15%).
Source of the data: DESI
Baseline
(DESI 2015)
Target
(2020)
Latest known value
(DESI 2016)
0.50 Increase 0.52
Commission general objective 3: A Resilient Energy Union with a Forward-Looking
Climate Change Policy
Commission Impact indicator: Greenhouse gas emissions
Index 1990=100 Source of the data: European Environmental Agency
Baseline (2013) Target (2020)
Europe 2020 target Latest known value
(2014)
80.2 At least 20% reduction (index
≤80)
77.1
Commission general objective 6: A Reasonable and Balanced Free Trade Agreement
with the U.S.
Impact indicator: Share US in total EU FDI stocks (US trade / extra trade) Source of the data: Eurostat
Baseline (2014)
Target (2020)
Latest known value (2015)
Inwards 35.0% Outwards 32.4%
Total 33.3%
The figures were calculated
subtracting "Special Purpose
Entities" FDI from "Total" FDI in
order to have "non-SPE" FDI
figures that can be comparable with
other international data.
Increase Inwards 43.5% Outwards 35.0%
Total 38.4%
agri_aar_2016_annexes Page 202 of 273
Common CAP objective 1: Viable food production
Common CAP objective 1: Viable food production
CAP Impact indicator: Agricultural factor income61 Definition: Agricultural factor income (net value added at factor costs) per annual work unit
(in real terms)62 Source of the data: Eurostat – Economic Accounts for Agriculture
Baseline (2012 - EU-28)
Target Latest known results (2015 – EU-28)
14 585 €/AWU
(in real prices)
To increase
Article 39 (1)(b) TFEU
14 803 €/AWU
Provisional data for 2016
CAP Impact indicator: Total factor productivity in agriculture
Definition: Total factor productivity (TFP) compares total outputs relative to the total inputs used in production of the output (both output and inputs are expressed in term of volumes)
Source of the data: DG AGRI calculation based on Eurostat data
Baseline
(2012-2014, average)
Target Latest known results
(2015)
106.2 (index 2005 = 100)
To increase Article 39 (1)(a) TFEU
108.7 (average 2013-2015)
61 Values have changed for the previous years because Eurostat has updated figures. 62 Agricultural factor income is defined as the net value added at factor costs, calculated according to the
following equation:
Value of agricultural production
- variable input costs (fertilisers, pesticides, feed, etc.)
- depreciation
- total taxes (on products and production)
+ total subsidies (on products and production)
= factor income (net value added at factor costs)
An annual work unit is the work performed by one person who is occupied on an agricultural holding on a full-
time basis.
11.087 11.486
12.705 12.374 11.199
13.485
14.856 14.579 15.407 15.151 14.803 14.503
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
16.000
18.000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EU
R/A
WU
agri_aar_2016_annexes Page 203 of 273
Total Factor Productivity and partial productivity growth in the EU-28 (3-year moving average)
Source: DG AGRI, https://ec.europa.eu/agriculture/sites/agriculture/files/mp-mb-010_en.pdf
Specific objective: To improve the competitiveness of the agricultural sector and enhance its value share in the
food chain
Related to spending programme: EAGF
Result indicator: Share of EU agricultural exports in total value of production
Definition: Agricultural primary products: value of annual exports in agricultural primary products
(source Eurostat, Comext) as a percentage share of total value of production in agricultural products
Source of data: Eurostat, agricultural accounts
Processed food products: value of annual exports in processed food products as a percentage of total value of production by the food industry
Source of data: Eurostat, Prodcom
Baseline (2011)
Target (2020)
Latest known results (2015)
Primary products: 9.8%
Processed food products 8.9%
Agricultural Primary products: 14%
Processed food products: 11.5%
Agricultural Primary products: 11.9%
Processed food products: 10.1%
80
85
90
95
100
105
110
115
120
125
130
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
TFP Labour Land Capital Int. cons.
agri_aar_2016_annexes Page 204 of 273
Result indicator: Share of value added for primary products in the food chain
Definition: The indicator looks at the value added of the primary production in comparison to other stages of the food chain (mainly food manufacturing, food distribution and food service
activities). Source of data: Eurostat – National Accounts, Structural Business Statistics
Baseline
(2010)63
Target Latest known results
(2014)
EU-28
Value
added (in billion €)
%
Primary 196 23%
Processing 211 24%
Retail 382 44%
Higher share of value
added for primary products in the food
chain Regulation n°
1308/2013
EU-28
Value
added (in billion €)
%
Primary 215 25%
Processing 224 26%
Retail 425 49%
Result indicator: Ratio between EU and World agricultural commodity prices
See below under the specific objective "To better reflect consumer expectations"
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Alignment of the
market measures
(leading to reduction of Commission
Adoption of delegated and
implementing acts
Example: Delegated and Implementing acts on
2016
Adoption planned 2nd Q 2017
63 Baseline updated with EU 28 figures (instead of EU 27 data).
agri_aar_2016_annexes Page 205 of 273
regulations from more than 200 to no
more than 40)
notifications resulting to simplification of nil
notifications, reduction of number of notifications
and incorporation of notification obligations in
one regulation instead of 18 regulations today
(2015/AGRI/067 and
2015/AGRI/068)
Delegated and Implementing Acts
for market measures
Adoption Ongoing
Examples: 2016/AGRI/048 on the new School
Milk, Fruit and Vegetables scheme
Adopted in January 2017:
Commission Implementing Regulation (EU) 2017/39 and
Commission Delegated Regulation (EU) 2017/40
2015/AGRI/061 and 2015/AGRI/062 Review of TRQs managed by DG
AGRI with licences
Adoption planned 2nd Q 2017
2015/AGRI/060 Public intervention and aid for private storage
Adoption on 18 May 2016: Delegated Regulation (EU)
2016/1938 and Implementing
Regulation (EU) 2016/1940
2015/AGRI/063 and 2015/AGRI/064 System of import and export
licences
Adoption on 18 May 2016: Delegated Regulation (EU)
2016/1937 and Implementing Regulation (EU) 2016/1939
2015/AGRI/100 Opening and implementing an autonomous import
TRQ for olive oil originated in Tunisia
Adopted on 19 April 2016: Commission Implementing
Regulation (EU) 2016/605
2016/AGRI/35 Amendment of Annex
IX to CMO Regulation (EU) 1308/2013 in relation to reserved
terms in olive oil
Adopted on 4 May 2016:
Commission Delegated Regulation (EU) 2016/1226
2016/AGRI/27 Amending olive oil marketing standard methods to
adapt terms used in the sensory
analysis
Adopted on 27 July 2016: Commission Implementing
Regulation (EU) 2016/1227
2016/AGRI/79 Delegated Regulation amending olive oil standard as
regards some fatty acid limits, ethyl esters and K270 ultraviolet
absorption coefficient
Adopted on 26 September 2016: Commission Delegated
Regulation (EU) 2016/2095
2016/AGRI/80 Amending Olive oil
marketing standard in relation to peroxide determination method
Adopted on 30 September
2016: Commission Implementing Regulation (EU)
2016/1784
2016/AGRI/068 Fixing the limit for
out-of-quota sugar exports
Adopted on 20 September
2016: Commission Implementing Regulation (EU)
2016/1713
2016/AGRI/024 Rules on purchase
terms for beet in the sugar sector as from October 2017
Adopted on 17 May 2016:
Commission Delegated Regulation (EU) 2016/1166
2016/AGRI/039 Extension of
deadline for surplus stocks disposal
Adopted on 23 March:
Commission Implementing
agri_aar_2016_annexes Page 206 of 273
in Croatia in the sugar sector Regulation (EU) 2016/442
2015/AGRI/097 and 2015/AGRI/098
Proposals of Council Decisions on the
signature and the conclusion of the
International Olive Agreement 2015
COM adoption Planned 2nd quarter 2016
Council Decision (EU) 2016/1892 of
10 October 2016 (signature,
2015/AGRI/097)
The second Decision
(conclusion,
2015/AGRI/098) should be adopted
during 1st semester 2017
2016/AGRI/034
Report on the
development of the market situation in
the milk and milk products sector and
the operation of the Milk Package
Adoption 2016 Report adopted
by the
Commission on 24/11/2016
(reference COM(2016)724)
2016/AGRI/044 Report to the
European Parliament and the Council on
the implementation of the market
measures concerning the apiculture sector
Adoption 2016 Report adopted by the
Commission on 07/12/2016
(reference COM(2016)776)
Apiculture sector Approval of national programmes 2017-2019
2016 Done: Commission
Implementing Decision (EU)
2016/1102 of 5 July 2016
approving the
national programmes to
improve the production and
marketing of apiculture
products submitted by the
Member States
under Regulation (EU) No
1308/2013 of the European
Parliament and of the Council
Main expenditure outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Fruit and vegetables Several indicators mainly concentration of % of production
agri_aar_2016_annexes Page 207 of 273
about EUR 900 million
Total % of production marketed by Fruit &
vegetables producer organisations and
associations of producer organisations: 48.1%
supply and joint marketing
therefore making stronger the
bargaining position of
farmers, increasing their
income and
incentivising investments
marketed by Fruit & vegetables
producer organisations and
associations of producer
organisations:
54,3% in 2015
Wine sector
EUR 1105 million
Several indicators like
Number of promotion projects in the wine sector
(1.089 projects), Number
of projects of investment and innovation measures
(5 183 projects) , Number of hectares of restructured
vineyards (85 266 Ha) or share of vineyard area
restructured (e.g. 2.6% in 2014)
strengthen
competitive structures,
promotion and
marketing of Union wines,
support investments and
innovation geared towards improving
the economic performance of
the enterprises
which increases the marketability
and competitiveness of
Union grapevine products.
Restructuring and conversion
activities continue
to be covered on account of their
positive structural effects on the
wine sector. Support for by-
product distillation is used as an
instrument to
ensure the quality of wine, while
protecting the environment.
Preventive instruments such
as harvest insurance, mutual
funds and green
harvesting encourage a
responsible approach to crisis
situations.
Number of
promotion projects in the wine sector
(1.725 projects)
Number of projects of investment and
innovation measures (5.654
projects) Number of hectares
of restructured vineyards: 79.220
Ha
Share of vineyard area restructured:
2.5% in 2014
School Scheme
EUR 150 million annually
School Fruit Scheme
Several indicators like Number of final
encourage
healthier eating habits amongst
More recent figures
not yet available
agri_aar_2016_annexes Page 208 of 273
beneficiaries (schools and children)
10,2 million children annually
68 000 schools (figures for school year
2014/2015)
school children as they are more
likely to become lifelong habits if
developed at an early age.
Improved nutrition plays an important
role in combating
health problems related to poor
nutrition, such as child obesity
Olive oil and table
olives working
programmes EUR 48 million
Several quantitative and
qualitative efficiency
indicators are set by Member States for each
work programme in function of the nature of
concrete actions included there in.
improve market
orientation
through market knowledge,
improve environmental
impact and competitiveness of
the olive cultivation, and
quality and
traceability improvements
For the financial
year 2016, eligible
amount was EUR 46 026 264,14
Specific objective: To maintain market stability Related to spending
programme: EAGF
Result indicator: Public intervention Definition: Ratio of volume of the products bought in the intervention storage and the total EU
production of those respective products
Source of data: DG AGRI
Baseline 2012
Target Latest known results
0% Used only in case of need
(seen against market
developments) Regulation n° 1308/2013
23.4% for Skimmed Milk Powder
Result indicator: Private storage
Definition: Ratio of volume of the products placed into the publicly aided private storage and the total EU production of those respective products
Source of data: Market monitoring data DG AGRI
Baseline
2013
Target Latest known results
Butter: 4% Olive oil: 0%
Used only in case of need (seen against market
developments)
Regulation n° 1308/2013
6.2% for Skimmed Milk Powder 7.2% for butter
0.6% for cheese
0.4% for pigmeat 0% for Olive oil
agri_aar_2016_annexes Page 209 of 273
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Temporary exceptional
support measures for producers of certain
fruit and vegetables (2016/AGRI/051)
Adoption Mid-2016 Adopted on 10 June
2016: Commission Delegated
Regulation (EU) 2016/921
Adoption of Delegated and Implementing
Acts in different sectors according to
the market situation (notably Milk and Pig
meat sectors)
adoption 2016 A whole series of exceptional
measures were taken over the year
to stabilise the difficult market
situation of the milk and other livestock
sectors.
.
Examples: Extension of the safety net for dairy products
Regulations 2016/1619 and 2016/1614 of 8 September
2016
Exceptional adjustment aid Regulation 2016/1613 of 8
September 2016
Possibility for producers to plan jointly production
Regulation 2016/558 and Regulation 2016/559 of 11
April 2016
Regulation 2016/1615 of 8 September 2016
Aid for the voluntary reduction of
milk production
Regulation 2016/1612 of 8
September 2016
For pigmeat, the private storage
aid was operated during January 2016.
Regulation 2015/2334 of 14
december 2015
To maintain a robust
system of control and
monitoring to ensure the sound and efficient
shared financial management and the
monthly reimbursement of
Member States' eligible expenditure of
the European
Agricultural Guarantee Fund (EAGF) and to
account for it.
Correct and timely
monthly payments
(12 payments + 1 complementary)
3rd working day of
every month
All payments made
in time.
Correct and timely
regularisation in ABAC
2 months after the
monthly declaration of expenditure
(Article 171(1) of
the Financial Regulation.
Correct and timely
regularisation in ABAC.
Control of clear-cut
eligibility criteria, ceilings and
deadlines.
Monthly and bi-
annual (deadlines) controls
respectively
Correct and timely
controls of eligibility, ceilings
and deadlines.
Public Storage
expenditure management (12
monthly declarations + 1 annual
declaration from
Member states
Declarations
received by the 12th each month.
Continuous follow up required.
Public Storage
expenditure declarations timely
received and reimbursed.
agri_aar_2016_annexes Page 210 of 273
holding stocks)
Main expenditure outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Exceptional support
measures for producers of certain
fruit and vegetables
Share of volume
withdrawn in support of market (0.91%)
Maintain market
stability
Share of volume
withdrawn in support of market:
0.50%
Specific objective: To sustain farmers' income stability by providing direct income support
Related to spending programme: EAGF
Result indicator: Share of direct support in agricultural entrepreneurial income (family farm income)
Definition: The indicator gives the share of direct support (coupled and de-coupled payments) in entrepreneurial income.
Source of data: EAGF Financial Report and EEA - EUROSTAT
Baseline
2013
Target Latest known results
41% To maintain the ratio Regulation n° 1307/2013
46% (2015)
Main outputs in 2016:
Policy–related outputs
Description Indicator Target Latest known results
(situation on 31/12/2016)
Follow-up of the implementation of
Direct Payments in the different MS
(update of notifications and
new notifications on 2015
implementation /
exchanges with MS, including by
the organisation of workshops on
policy issues / legal
interpretations and guidance),
including the
revision of Voluntary Coupled
Support mid-2016 Reporting and
communication activities, as
regards the different schemes
Organisation of Expert groups and Committees
All along the year 20 meetings organised in 2016
Reports on 2015
implementation
5 draft reports
ready end of 2016
Preparation of
AGRI internal notes on the 2015
implementation of
DP schemes, based on notifications
and control data combined in "BO"
reports. + Analytical work
based on these findings.
Delegated Acts and Implementing Acts
Financial ceilings: second quarter
Simplification: depending on
needs
- First wave of simplification of
the Delegated act (adoption in
February 2016, Reg. 141/2016)
and preparation of
a second wave (adoption foreseen
in February 2017) - Financial ceiling:
adopted on 10 May
agri_aar_2016_annexes Page 211 of 273
and their
implementation Preparation of
legal acts (financial ceilings
for 2016), and
possible further simplifications
Contribution to policy analysis /
provision of an expertise on Direct
Payments in various exercises
(DG AGRI level or
other)
2016: Regulation
(EU) 2016/699
Assessment notes for
each concerned MS of the revision of Voluntary
Coupled Support - VCS (potentially 27 MS)
December 2016 19 assessment
notes for each concerned MS of
the revision of VCS (19 MS actually
concerned)
About 8 thematic
reports / informative notes posted on Europa
Along the year 7 new thematic
informative notes posted on Europa,
and update of the overview of MS
decisions for direct payments 2015-
2020
Preparation of
legal acts and guidelines to
review, amend and simplify the IACS
legislative framework
Providing
interpretation to Member States
with regard to the implementation of
direct payments, in particular from
an IACS perspective
Follow-up and
support of the implementation of
Direct Payments in particular as
regards IACS, including the
dissemination of good practices and
exchange of
experience Monitoring the
implementation of direct payments
and ensuring that action is taken
when implementation is
lacking/failing
Analysing and reporting on MS
Quality Assessment of
their LPIS (LPIS QA)
Delegated/Implementing acts for IACS and
guidelines to be amended
(2015/AGRI/090, 2016/AGRI/036)
All along the year
Delegated
Regulation (EU) No 2016/1393 of
04/05/16 (yellow card/administrative
penalties), Implementing
Regulation (EU) No
2016/1394 (yellow card) of 16/08/16.
Delegated Regulation on the
softening of the greening
reductions passed the feedback-
mechanism-stage.
LPIS and OTSC guidelines updated
Replies to
MS/stakeholders questions in a timely
manner
All along the year
80 bilateral replies
to MS + 30 replies to MEPs and
citizens
Organisation of
workshops/expert groups facilitating MS
exchange of experience
and of good practices [number undetermined
yet]
All along the year
3 workshops ( 2 on
GSAA (Geo-spatial Aid Application), 1
on force majeure and circumvention)
+ 1 workshop on
eligibility of agricultural areas
used for non-agricultural
activities
Organisation of
missions/visits to MS and bilateral meetings
with MS in Brussels, mostly upon MS request
[number undetermined yet]
All along the year
6 missions and24
bilateral meetings
Contribution to DG AGRI By 15.04.2016 for 3 action plans
agri_aar_2016_annexes Page 212 of 273
Annual Activity Report
and assessing whether reservations, and
subsequently action plans are necessary –
preparation of
reduction/suspension decisions whenever
necessary
the AAR
All along the year
initiated
Assessing the MS reports/scoreboards and
reporting through the
direct payments committee / LPIS
workshops. Giving feedback to MS in
writing as to potential weaknesses identified in
the exercise
By 31 March 2016
43 ETS reports analysed. Results
presented in LPIS
workshop in Baveno (05/16),
13 e-mails and 12 follow-up letters to
MS
To maintain a robust
system of control and monitoring to ensure
the sound and efficient shared
financial management and the monthly
reimbursement of
Member States' eligible expenditure
of the European Agricultural
Guarantee Fund (EAGF) and to
account for it.
Correct and timely
monthly payments (12 payments + 1
complementary)
3rd working day of
every month
All payments made
in time.
Correct and timely
regularisation in ABAC (accounting)
2 months after the
monthly declaration of
expenditure (Article 171(1) of
the Financial Regulation.
Correct and timely
regularisation in ABAC.
Control of clear-cut eligibility criteria,
ceilings and deadlines.
Monthly and bi-annual (deadlines)
controls respectively
Correct and timely controls of
eligibility, ceilings and deadlines.
Specific objective: To promote a more market oriented
agriculture by ensuring a significant level of decoupled
income support64
Related to spending
programme: EAGF
Result indicator: % of total direct payments which is decoupled Source of data: Budget
Baseline (Calendar year 2013 /
Budget year 2014)
Target Latest known results
93.54% To maintain
Regulation n° 1308/2013
Calendar year 2014/budget year
2015: 92.7% Calendar year 2015/budget year
2016: 88.9%65
Calendar year 2016/budget year 2017: 88.7%66
64 The wording of this objective was adapted to take into account the provisions of the Regulation (EU) No
1307/2013 of the European Parliament and of the Council 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, as regards their
application as of 2015. 65 Execution of the Budget 2016 provisional figures. 66 Based on the Budget 2017 estimated needs, excluding the crisis reserve. The figure takes into account that in
accordance with the methodology for implementation of the small farmers scheme, as chosen by the Member
agri_aar_2016_annexes Page 213 of 273
Specific objective: Enhancing farm viability and
competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and
sustainable management of forest (Priority 2)
Related to spending
programme: EAFRD
Result indicator: % of agricultural holdings with RDP support for investment in
restructuring or modernisation (Focus area 2A: improving the economic performance of all farms and facilitating farm restructuring and modernisation notably with a view to increase
market participation and orientation, as well as agricultural diversification) Source: Rural development programmes
Baseline67
Target (2023)
Latest known results
0 2.7%68
Aggregated value from the RDP which have programmed
the relevant Focus Area.
0.1%
Result indicator: % of agricultural holdings with RDP supported business
development plan/investments for young farmers (Focus area 2B: facilitating entry of adequately skilled farmers into the agricultural sector and in particular generational renewal)
Source: Rural development programmes
Baseline Target
(2023)
Latest known results
0 1.5% Aggregated value from the
RDP which have programmed the relevant Focus Area.
0.06%
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on
31/12/2016)
Events of the European Network for
Rural Development (Number of events)
1 EU rural networks' Assembly meeting
3 EU rural networks' Steering Group
meetings
2 Thematic work themes completed
10 Workshops
2016 1 EU rural networks' Assembly
meeting 3 EU rural
networks' Steering
Group meetings 1 LEADER/CLLD
meeting 2 Thematic work
themes completed 11 Workshops
Publications and communication of the
European Network for Rural Development
(Number)
2 EU Rural Reviews 2 Rural Connections
magazines 2 Project Brochures
12 ENRD newsletters ENRD website (page
views per month) 60
2016 2 EU Rural Reviews 2 Rural Connections
magazines 2 Project Brochures
12 ENRD Newsletters
1 Photo exhibition
States, part of the expenditure under that scheme is "decoupled". 67 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period. 68 Target level has been updated to reflect relevant changes introduced by programmes modifications.
agri_aar_2016_annexes Page 214 of 273
000
Social media presence:
Twitter followers: 1
500
Facebook page likes:
2 500 LinkedIn Group
members: 400
Special publications:
ENRD presentation Cork Declaration
ENRD website (page views per
month) 46 000
Social media presence:
•Twitter followers: 1 678
•Facebook N° of
fans: 3 229 LinkedIn Group
members: 456
Assessment of Annual Implementation
Reports
118 reports 2016 118
Assessment of
proposals for programmes
amendments
120 modifications
(estimate)
2016 143
Meetings with Member
States (Monitoring Committees, Annual
Review Meetings, etc.)
280 meetings
(estimate)
2016 389
Specific objective: Promoting food chain organisation, including processing and marketing of agricultural
products, animal welfare and risk management in agriculture (Priority 3)
Related to spending programme: EAFRD
Result indicator: % of agricultural holdings receiving support for participating in quality schemes, local markets and short supply circuits, and producer
groups/organisations (Focus area 3A: improving competitiveness of primary producers by better integrating them into the food chain through quality schemes, promotion in local
markets and short supply circuits, producer groups and inter-branch organisations) Source: Rural development programmes
Baseline69
Target (2023)
Latest known results
2.6%
Aggregated value from the RDP which have programmed
the relevant Focus Area.
0.01%
Result indicator: % of agricultural holdings participating in risk management
schemes (Focus area 3B: supporting farm risk management) Source: Rural development programmes
Baseline Target (2023)
Latest known results
0 7.6%
Aggregated value from the
0.04%
69 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period.
agri_aar_2016_annexes Page 215 of 273
RDP which have programmed
the relevant Focus Area.
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Registration of names
as PDO/PGI/TSG/GI following scrutiny of
applications from EU Member States and
from third countries.
Number of
applications examined
(dependent on submissions made to
the Commission)
Within 6 months for
agricultural products and
foodstuffs; within 12 months for wine,
spirit drinks, aromatised wine
Commission
services scrutinised:
73 agricultural products and
foodstuffs, 46 wines,
94 spirit drinks’
applications.
Management of the Community registers
and lists of PDO/PGI/TSG/GI.
Registers kept updated
Ongoing Registers updated on regular basis.
2016/AGRI/001 and 2016/AGRI/002
Delegated and implementing act for
wine GI
Adoption By end 2016 Postponed to 2017 due to a decision to
have delegated and implementing acts
for wine GIs merged with rules
on labelling and
presentation of wines, and
traditional terms for wines.
2011/AGRI/039
Alignment proposal for
spirit drinks
Adoption of
Commission proposal
By end 2016 Commission
Proposal adopted
on 1 December 2016
(COM(2016)750)
Monitor supervision of the control systems
put in place by the
Member States for registered
PDO/PGI/TSG/GI and exchange best practice
Participation in FVO audits
Verification of annual
reports on controls by MS
Completion of seminars
Ongoing By end 2016
By end 2016
Participations in all audits ensured.
Control seminar organised on 10
November 2016.
Contribute to the
protection of EU GIs in
third countries.
Third country GI
examined
Ongoing task
All contributions
provided on time.
See also the outputs related to the Rural Development programme management and ENRD under the previous Specific objective: Enhancing farm viability and
competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and sustainable management of forest (Priority 2).
agri_aar_2016_annexes Page 216 of 273
Common CAP objective 2: To promote a sustainable management of natural resources and climate action
Common CAP objective 2: To promote a sustainable management of natural resources
and climate action
CAP Impact indicator: Net greenhouse gas emissions from agriculture
Definition: The indicator measures net GHG emissions from agriculture including agricultural soils.
Source of the data: Annual European Union GHG inventory. The inventory is based on national submissions to the UNFCCC and to the EU Monitoring Mechanism of CO2 and other
GHG emissions. It is compiled and held by the European Environment Agency (EEA) and the
European Topic Centre on Air and Climate Change (ETC/ACC)
Baseline (2012)
Target Latest known results (2014)
521 799
(in 1000 t of
CO2 equivalent)
To decrease
EU2020
516 184
(in 1000 t of CO2 equivalent)
400.000
450.000
500.000
550.000
600.000
650.000
700.000
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
kt C
O2
eq
uiv
ale
nt
Average annual rate of decline (1990-2014): -1.13%
agri_aar_2016_annexes Page 217 of 273
CAP Impact indicator: Nitrate levels in freshwater
Definition: Nitrates in freshwater (Context indicator.40 – Water quality) consists of: 2.a) Groundwater quality: % of monitoring sites in 3 water quality classes (high, moderate and
poor); 2.b) Surface water quality: % of monitoring sites in 3 water quality classes (high, moderate
and poor).
The three water quality classes are defined as follows: - High quality: concentration close to natural values or within the threshold
indicated in the legislation for low-polluted water. - Moderate quality: concentration above natural standard but still below
hazardous level. - Poor quality: concentration above hazardous level.
The actual concentration classes are the following: Groundwater
- High ("<10 mg/l NO3 " + ">=10 mg/l NO3 and <25 mg/l NO3 ")[1]
- Moderate (">=25 mg/l NO3 and <50 mg/l NO3 ") - Poor (">=50 mg/l NO3 ").
Surface water - High ("<0.8 mg/l N " + ">=0.8 mg/l N and <2.0 mg/l N ")[2]
- Moderate (">=2.0 mg/l N and <3.6 mg/l N " + ">=3.6 mg/l N and >5.6 mg/l N ")
- Poor (">=5.6 mg/l N and <11.3 mg/l N " + ">=11.3 mg/l N ") Source of the data: European Environmental Agency (EEA) – Nutrients in freshwater: Data
voluntary reported by MSs via the WISE/SOE data flow annually.
Baseline
EU-28, 2012
Target Latest known results
Freshwater: - High: 56.9 %
- Moderate: 31.7%
- Poor: 11.4% Groundwater:
- High: 74.1% - Moderate: 14.2%
- Poor: 11.7%
To decrease Regulations n° 1305, 1306 and
1307/2013
No more recent data available
80
85
90
95
100
105
110
115
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rivers - EU (17 countries) Groundwaters - EU (13 countries)
agri_aar_2016_annexes Page 218 of 273
Impact indicator: Farmland bird index
Definition: The indicator is a composite index that measures the rate of change in the relative abundance of common bird species at selected sites: trends of index of population of farmland
birds (base year 2000 = 100). Source: EBCC/RSPB/BirdLife/Statistics Netherlands: the European Bird Census Council (EBCC)
and its Pan-European Common Bird Monitoring Scheme (PECBMS); data are published on
Eurostat database
Baseline (year & value) Target Latest known results
2012: 88.4 (index 2000=100)
To increase 2013: 84.4
0
20
40
60
80
100
120
140
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Ind
ex
valu
e
Farmland Bird Index (2000=100; EU aggregate changing according to the context)
agri_aar_2016_annexes Page 219 of 273
Specific objective: To better reflect consumer
expectations
Related to spending
programme: EAGF-EAFRD
Result indicator: Ratio between EU and World agricultural commodity prices
Definition: Weighted average, covering beef, pig meat, poultry, soft wheat, maize, barley, sugar, butter, cheddar, WMP and SMP. World price references are mainly based on US prices
for meat and crops and Oceania for dairy products, except for beef (Australia), Barley (Black Sea) and Sugar (London white sugar 05)70.
Source of data: DG Agriculture and Rural Development, based on European Commission, USDA, World Bank, IGC, London International Financial Futures and Options Exchange, National
sources.
Baseline Target
(annual)
In 2013, the EU prices were on average 19% above world prices. Prices brought closer to the
world prices
Regulation n° 1308/ 2013
Latest known results:
2016, EU prices were on average 5% above world prices. With the successive CAP reforms, EU prices were brought closer to world prices especially in the
cereal and dairy sectors. In addition, in the last 2 years, the EUR/USD exchange rate favoured EU competitiveness on world markets. In the meat sector, there are several world reference
markets, namely the Atlantic (e.g. Brazil) and Pacific (USA, Australia) markets. For beef, the gap between the EU and the world market prices is closing as illustrated below with Australia,
in addition the US lost competitiveness because of a the surge in beef prices in 2014-15. By contrast, Brazil remained much more competitive. In the poultry sector, the EU gained
competitiveness over the US but lost compared to Brazil (recession). By contrast, after the drop
in 2014-15, the EU pigmeat price increased relatively more compared to the US and Brazil because of Chinese demand (the US and Brazilian pigmeat exports to China are limited because
they use ractopamine).
Note: World price references used for the weighted averages are mainly based on US prices for meat and crops and Oceania for dairy products, except for beef (Brazil is more competitive), Barley (Black Sea) and Sugar (London white sugar 05). Compared to Pacific prices (US and Australia), EU prices were very competitive in 2015 and 2016 because of the exchange rate effect but also because US demand drove price increases. When comparing EU beef prices with Brazil, the increase in EU competitiveness is less pronounced, but visible when comparing with Australia. For pigmeat, the aggregate is calculated using the US price as a longer time series is available, anyhow the difference in prices between Brazil and the US is small.
70 Compared to Pacific prices (US and Australia), EU prices were very competitive in 2015 because of the
exchange rate effect but also because US demand drove significant price increases. If the comparison would be
made with Brazil for meat especially, the increase in EU competitiveness would be less pronounced.
2008 2009 2010 2011 2012 2013 2014 2015 2016
Beef (Australia) 1.50 1.69 1.26 1.21 1.19 1.24 0.98 0.95 1.03
Beef (Brazil) 1.59 1.79 1.36 1.33 1.61 1.72 1.45 1.50 1.49
Pigmeat (US) 1.59 1.59 1.16 1.12 1.19 1.21 0.94 1.02 1.15
Pigmeat (Brazil) 1.22 1.45 1.00 1.13 1.37 1.25 1.02 1.10 1.20
Poultry 1.41 1.25 1.18 1.35 1.18 1.13 1.04 0.82 0.80
Soft wheat 1.11 1.00 0.99 1.07 1.04 1.04 1.02 0.94 0.99
Maize 1.16 1.10 1.19 1.04 0.98 1.04 1.13 1.03 1.11
Barley 1.01 1.04 1.11 1.01 1.00 1.00 0.98 0.99 0.95
Sugar 2.48 1.58 1.04 1.10 1.55 1.90 1.62 1.24 0.98
Butter 1.08 1.47 1.09 1.17 1.19 1.27 1.23 1.06 1.09
Cheddar 1.08 1.17 0.95 1.03 1.14 1.10 1.12 1.03 1.02
WMP 1.04 1.18 1.02 1.07 1.09 0.98 1.11 1.10 1.06
SMP 0.98 1.10 0.93 0.90 0.95 0.90 0.97 0.96 0.99
Weighted average 1.29 1.33 1.11 1.13 1.18 1.19 1.10 1.03 1.05
EU/World price (in EUR)
agri_aar_2016_annexes Page 220 of 273
Note: Weighted average, covering beef, pig meat, poultry, soft wheat, maize, barley, sugar, butter, cheddar, WMP and SMP. World price references used for the weighted averages are mainly based on US prices for meat and crops and Oceania for dairy products, except for beef (Brazil is more competitive), Barley (Black Sea) and Sugar (London white sugar 05). Compared to Pacific prices (US and Australia), EU prices were very competitive in 2015 and 2016 because of the exchange rate effect but also because US demand drove price increases. When comparing EU beef prices with Brazil, the increase in EU competitiveness is less pronounced, but visible when comparing with Australia. For pigmeat, the aggregate is calculated using the US price as a longer time series is available; anyhow the difference in prices between Brazil and the US is small.
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Management of running promotion
programmes
Number of running, partially running or
accepted programmes
December 2016: 250
170
Communication on the
new scheme
Organisation of an
Info Day
Lively Europa website (updated
Q/A section…) Provide legal
interpretation on the new regime
26/02/2016
Done
Call for proposals Publication of 2 annual call for
proposals (1 for Simple + 1 for Multi
promotion programmes)
February 2016 Published on 4 February 2016
Annual Work Programme for 2017
Adoption of an implementing
decision
4th quarter 2016 C(2016)7100 of 9.11.2016
To ensure an appropriate follow-up
of simple programmes
under shared management with the
Member States.
Committee for the Common
Organisation of the
Agricultural Markets established by Article
229 of Regulation
March 2016 and November 2016
9 June 2016 19 October 2016
0,80
0,90
1,00
1,10
1,20
1,30
1,40
1,50
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Ratio between EU and World agricultural commodity prices
agri_aar_2016_annexes Page 221 of 273
(EU) No 1308/2013
Commission
Adoption of simple programmes
November 2016
C(2016)7319 of
18.11.2016
Organisation of high level promotional
events in third countries in 2016
2 high level missions with business
delegation to be assumed by Unit.B.5
First half 2016 - February 2016:
Business delegation in Mexico/Colombia
- April 2016: Business delegation
in China/Japan
30 participants in
Colombia, 33 in Mexico
44 participants in
China, 40 in Japan
1 or 2 high level
missions with business delegation
to be assumed by the executive agency
CHAFEA
Second half 2016
Vietnam, Singapore
and Indonesia in November 2016
Number of
participating stakeholders
35/45 or 60 EU
producer organisations
and/or SMEs involved in
campaigns
42 participants in
Vietnam, 36 in Singapore and 38 in
Indonesia
Statistics Development of a
common tool to be able to follow
simple/multi programmes
managed under the promotion regime
Delivery of statistics
Mid 2016
On request
Done
(Ares(2016)5479083 - 21/09/2016)
Work ongoing
Budget Coordination and
attribution of funds according to political
priorities
1st quarter 2016 Draft budget 2017
(adopted on 18.7.2016)
Coordination with
Agency
Preparation and
decisions of Steering Committees
Continuous task
over the course of 2016
Done
Supervision Call documents,
grant agreement,
procedures' manuals, information to
stakeholder
Continuous task
over the course of
2016
Done
Political coordination with the Cabinet
Priorities to insert in the Annual Work
programme
Determination of the Number of
campaigns and high level missions
Continuous task over the course of
2016
Done
Main expenditure outputs
Description Indicator Target Latest known results
(situation on
31/12/2016)
Expenditure of running programmes
Closure of budget sub-
Execution on 05 02 10 01 budget line
Use budget appropriations
foreseen for 2016
EUR 62.6 million
agri_aar_2016_annexes Page 222 of 273
items for finished
programmes
Number of active
budget sub-items under 05 02 10 01
Closure of programs in good time
December 2016: 86
active budget sub-items
118 active
73 programmes
closed
To ensure sound financial management
Info Day 160 participants 176 participants
Implementing Decision for Simple
programmes selected
97 million EUR foreseen for 2016
EUR 94.232.114
Expenditure Attribution of funds
according to political priorities
According to
priorities agreed by using fully budget
foreseen
Done
To ensure sound financial management
of the 2007-2013
Rural Development Programmes and
timely settlement of the final balances of
these 92 programmes
Number of final balances of the 92
2007-2013 Rural
Development Programmes
communicated to MS
To communicate to MS final balances
for programmes for
which last annual accounts were
cleared and final balances
estimations for the other programmes.
100% of programmes:: 64
final balances
communicated to MS and
28 final balances estimations
communicated to MS
Number of final balances established
in the annual clearance of
accounts decision that have been
executed during the year
To execute payments for
programmes whose annual accounts
were cleared
100% of programmes whose
accounts were cleared (70% of all
programmes)
To ensure sound and efficient shared
financial management and timely processing
of the of the quarterly declarations of
expenditure for the
European Agricultural Fund for Rural
Development 2014-2020
Percentage of commitments,
payments of pre-financing and
reimbursement of quarterly
declarations
processed during the year for the 115
Rural Development programmes
100 % of 115 commitments, 115
pre-financing payments and 460
quarterly payments
100%
Average no of days
from receipt of declaration to the
payment
25 Average time in
2016: 24,69
Providing guidance to MS on financial
management of Rural
Development programmes, if
necessary
Guidance documents issued compared to
the number of
guidance documents requested
Issue a guidance document when
needed
No guidance documents
requested in 2016
agri_aar_2016_annexes Page 223 of 273
Specific objective: Contribute to the enhancement of the
environmental performance of the CAP through the greening component of the direct payments. Contribute
to the development of sustainable agriculture and to making the CAP more compatible with the expectations
of the society through the cross compliance system.
Contribute to preventing soil erosion, maintaining soil organic matter and soil structure, ensuring a minimum
level of maintenance and avoiding the deterioration of habitats, protecting and managing water through the
standards of good agricultural and environmental condition of land
Related to spending
programme: EAGF
Result indicator: Share of area under greening practices71 Source of data: Draft Budget 2015
Baseline
(Calendar year 2015)
Target
Latest known results
75%72 To maintain
Regulation n° 1307/2013
77%
Result indicator: % of CAP payments covered by cross compliance Source of data: DG AGRI
Baseline (2013) Target Latest known results
82.36% Maintain the ratio73
Regulation n° 1306/2013
2014 = 83.5%
2015 = 85.7% 2016 = 81.6%74
Result indicator: Opinion expressed by the public on cross compliance Definition: Aggregate figures on the opinion by the public on cross compliance
Source of data: Eurobarometer
Baseline (2015) Target Latest known results
87% support the reduction of direct payments to
farmers not complying with environmental rules
87% support the reduction for non-compliance of
animal welfare rules 87% support the reduction
for non-compliance of food
safety rules
Maintain the positive opinion With the cross compliance the
CAP is more sustainable and more compatible with the
society's expectations. Therefore if cross compliance
shows an important support by the public opinion, its
impact will be significant.
No new data available
71 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment. 72 For year 2015, DG AGRI has received so far the notification from 27 MS (all excluding France) while for year
2016 the notification was received by 19 MS, so the indicated share is provisional. The share is calculated as
total agricultural area for farms with at least one greening obligation on total agricultural area from Farm
Statistics Survey 2013. 73 In view of the payment profile for rural development, the percentage of payments covered by cross
compliance was higher in the earlier part of the programming period 2007-2013. This reflects the fact that the
rural development measures that are not falling under cross compliance have a different payment profile than
the ones falling under cross compliance: measures not under cross compliance tend to have an increasing
execution over the period and thus the % covered by cross-compliance will decrease over the programming
period. 74 Execution of the 2016 budget (provisional figures)
agri_aar_2016_annexes Page 224 of 273
Result indicator: Control rate for GAEC (Standards of Good Agricultural and Environmental Condition)
Definition: GAECs form part of the requirements under Cross Compliance and apply to anyone
who receives payments under Single Payment Scheme and certain rural development schemes Source of data: IACS statistics
Baseline (2013) Target Latest known results
100% implementation of the minimum regulatory
control rate in all Member
States
100% implementation of the minimum regulatory control
rate
Regulation n° 1306/2013
100% implementation of the minimum regulatory control rate
in all Member States (notifications
from Sweden and France still pending)
Result indicator: The ratio of permanent pasture within a Member State in relation to
the total agricultural area Definition: The maintenance of the ratio of permanent pasture means that there should not
be, at national or regional level, a decrease by more than 5 % of the current ratio of permanent pasture in relation to the total agricultural area by comparison with a reference ratio reflecting
this ratio at a reference period. Source of data: MS annual notification (ISAMM – Information System for Agricultural Market
Management and Monitoring)
Baseline (2015) Target Latest known results
Ratio has not decreased beyond the limit of 5% in
any Member State75
Maintain the ratio within the limit of 5 % in relation to a
reference ratio
Regulation n° 1310/2013
In 2015: 2 MS, a UK region and a French region communicated a
ratio of permanent grassland above the threshold of 5% even
if no MS communicated to have triggered a reconversion
obligation
In 2016: 3 MS and a French region communicated a ratio of
permanent grassland above the threshold of 5%. 2 of these MS
communicated to have also triggered a reconversion
obligation76.
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Follow-up of the implementation of
Greening and Cross-
compliance: update of notifications ,
exchanges with MS including expert
groups, legal interpretations and
guidance
Organisation of experts groups and
Committees
All along the year Organised as planned
Assessment on the
MS notifications on greening: EFA,
equivalence and Permanent Grassland
All along the year Delivered in due
time
Assessment on the MS notifications on
All along the year Delivered in due time
75 The deadline for this notification was 15 December 2015. DG AGRI has received so far the notification from
25 MS and three UK regions and is also assessing the data received which has to be checked with the ratio
2007-2014. For the moment no MS communicated to have triggered a reconversion obligation. 76 Provisional information based on 2015 communications from all MS as the notifications are still under
assessment (MS reactions to comments sent from the Commission). 2016 notifications sent by 19 MS.
agri_aar_2016_annexes Page 225 of 273
cross-compliance:
GAEC notifications
Organisation of
bilateral meetings with MS in Brussels
All along the year Organised on needs
Replies to MS and
stakeholders
All along the year Delivered in due
time
Greening review Staff working
document
Adoption by May
2016
Adopted in June
2016
2016/AGRI/016 Commission Delegated
Regulation amending
delegated regulation 639/2014 on rules for
direct payments to farmers including
greening
Adoption Planned 2nd quarter 2016
Adoption foreseen for February 2017
2016/AGRI/017
Commission Implementing
Regulation amending implementing
regulation 641/2014 laying down on rules
of application of regulation EU n°
1307/2013
Adoption Planned 2nd quarter
2016
Adoption foreseen
for February 2017
Specific objective: Restoring, preserving and enhancing
ecosystems related to agriculture and forestry (Priority 4)
Related to spending
programme: EAFRD
Result indicator77:
a) % of agricultural land under management contracts supporting biodiversity and/or landscapes
b) % of forest area/other wooded land under management contracts supporting
biodiversity (Focus area 4A: Restoring and preserving and enhancing biodiversity, including in Natura 2000
area, areas facing natural constraints and high nature value farming and the state of European landscapes)
Source of data: Rural development programmes
Baseline78
Target
(2023)
Latest known results
0 a) 17.7% b) 3.5%
Aggregated value from the RDP which have programmed
the relevant Focus Area.
a) 6.3% b) 0.2%
Result indicator79:
a) % of agricultural land under management contracts to improve water management
77 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment. 78 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period. 79 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment.
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b) % of forestry land under management contracts to improve water management
(Focus area 4B: improving water management including fertiliser and pesticide management) Source of data: Rural development programmes
Baseline Target (2023)
Latest known results
0 a) 15.1%
b) 4.3% Aggregated value from the
RDP which have programmed the relevant Focus Area.
a) 5.0%
b) 0.4%
Result indicator80: a) % of agricultural land under management contracts to prevent soil erosion and to
improve soil management b) % of forestry land under management contracts to prevent soil erosion and to
improve soil management (Focus area 4C: preventing soil erosion and improving soil management)
Source of data: Rural development programmes
Baseline Target
(2023)
Latest known results
0 a) 14.3% b) 3.6%
Aggregated value from the
RDP which have programmed the relevant Focus Area.
a) 5.1% b) 0.2%
80 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment.
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Result indicator: Share of area under organic farming81
Definition: The number of hectares under organic farming and the share of area under organic farming in the total utilised agricultural area (UAA).
The area under organic farming is the sum of the fully converted area and the area in conversion.
Source of data: Eurostat
Baseline (2012) Target Latest known results
10 104 699 ha
5.6% of total UAA
To increase 11 139 595 ha (2015)
6.2% of total UAA
Area under organic cultivation in the EU
Evolution of the share of the organic area in the UAA in the EU
Source: Data on the basis of Council Regulation (EC) No 834/2007 on organic production (FAOSTAT data until 2011, and Eurostat data org_cropar from 2012 onwards) *Data from DE from Agrarmarkt Informations-Gesellschaft mbH and data from AT from Ministerium für ein Lebenswertes Österreich
In Facts and figures on organic agriculture in the European Union, DG AGRI, December 2016 (https://ec.europa.eu/agriculture/sites/agriculture/files/rural-area-economics/briefs/pdf/014_en.pdf)
81 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment.
0%
1%
2%
3%
4%
5%
6%
7%
8%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
EU-15
EU-28
EU-N13
agri_aar_2016_annexes Page 228 of 273
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
New legislative and political framework on
organic production
Adoption by the European Parliament
and the Council Implementation of
Action Plan for the future of Organic
Production in the European Union
2016
Ongoing
Ongoing discussion with the two co-legislators.
Twelve trilogues(and dozens of preparatory
meetings) took place under the Dutch and the
Slovak Presidency in 2016 (plus additional
two in 2015).
Effective supervision of
the set up and functioning of the
control system for organic production in
Member States,
recognised third countries and
recognised control bodies for import of
organic products
Contribution to FVO
audits in Member States, recognised
third countries and recognised control
bodies for import of
organic products Assessment of
annual reports Follow-up to
irregularities
Continuous Audits in Member
States, Third Countries and
recognised control bodies carried out in
201682.
Irregularities have been continuously followed
and discussed with MS at the COP meetings.
Effective supervision of
MS handling of irregularities and fraud
allegations related to EU organic production
-Timely notification
of irregularities -Timely reply to
notified irregularities' -Timely transmission
of information on circulation of alleged
fraudulent products and on remedial
action
Continuous In 2016, more than 700
notifications of irregularities were
received in the notification system.
These were followed by an analysis to assess
the kind of irregularity and to request further
information to MS and a
discussion in the COP. A couple of cases revealed
to be a manifest fraud to the system.
Fostering organics by
promoting equivalence
with third countries.
Number of
negotiation on
mutual recognition Number of on the
spot mission to check the progress of the
country Concluded
negotiations
Ongoing
Ongoing
Ongoing
Initialling of the trade
agreement with Chile,
preparation of the Council decision on
signature and conclusion of the
agreement scope extension with Canada
and launch of negotiations with
Mexico and Colombia.
For this specific objective, please see also the policy-related outputs provided under Specific objective: Enhancing farm viability and competitiveness of all types of agriculture
82 Latvia, Ireland, and Hungary, Bulgaria moreover 6 audits were also carried out in equivalent Third countries
and on recognised control bodies in third countries.
agri_aar_2016_annexes Page 229 of 273
in all regions and promoting innovative farm technologies and sustainable management of forest (Priority 2).
Specific objective: Promoting resource efficiency and
supporting the shift towards a low carbon and climate
resilient economy in agriculture, food and forestry sectors (Priority 5)
Related to spending
programme: EAFRD
Result indicator: % of irrigated land switching to more efficient irrigation systems
(Focus area 5A: increasing efficiency in water use by agriculture) Source of data: Rural development programmes
Baseline83
Target (2023)
Latest known results
0 15.3%
Aggregated value from the RDP which have programmed
the relevant Focus Area.
0.2%
Result indicator: Total investment for energy efficiency (Focus area 5B: increasing
efficiency in energy use in agriculture and food processing) Source of data: Rural development programmes
Baseline Target (2023)
Latest known results
0 2 893 660 214 EUR84
Aggregated value from the RDP which have programmed
the relevant Focus Area.
66 653 500
Result indicator: Total investment in renewable energy production (Focus area 5C:
Facilitating the supply and use of renewable sources of energy, of by products, wastes, residues and other non food raw material for purposes of the bio-economy)
Source of data: Rural development programmes
Baseline Target
(2023)
Latest known results
0 2 667 704 017 EUR85 Aggregated value from the
RDP which have programmed the relevant Focus Area.
2 173 000
Result indicator86: a) % of LU concerned by investments in livestock management in view of reducing greenhouse gas and/or ammonia emissions b) % of agricultural
land under management contracts targeting reduction of greenhouse gas and/or ammonia emissions (Focus area 5D: Reducing greenhouse gas and ammonia emissions from
agriculture) Source of data: Rural development programmes
Baseline Target (2023)
Latest known results
0 a) 2.04%87
b) 7.7% Aggregated value from the
RDP which have programmed the relevant Focus Area.
a) 0.2
b) 2.4
83 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period. 84 Target level has been updated to reflect relevant changes introduced by programmes modifications. 85 Target level has been updated to reflect relevant changes introduced by programmes modifications 86 Indicator contributing to the KPI Minimum share of agricultural land with specific environmental
practices/commitment. 87 Target level has been updated to reflect relevant changes introduced by programmes modifications
agri_aar_2016_annexes Page 230 of 273
Result indicator: % of agricultural and forest area under management contracts contributing to carbon sequestration and conservation (Focus area 5E: Fostering carbon
sequestration in agriculture and forestry) Source of data: Rural development programmes
Baseline Target (2023)
Latest known results
0 1.8%
Aggregated value from the RDP which have programmed
the relevant Focus Area.
0.5%
For this specific objective, please see the policy-related outputs provided under Specific objective: Enhancing farm viability and competitiveness of all types of agriculture in all
regions and promoting innovative farm technologies and sustainable management of forest (Priority 2).
agri_aar_2016_annexes Page 231 of 273
Common CAP objective 3: To promote a balanced territorial development
Common CAP objective 3: To promote a balanced territorial development
CAP Impact indicator: Rural employment rate Definition: Employment rate for the population aged 15-64 in rural areas
Source of the data: Eurostat – Labour Force Survey
Baseline
(2012 – EU-28)
Target Latest known results
63.4% To increase Article 110 (2)(c) of Regulation
n° 1306/2013
65.0% (2015)
Specific objective: Promoting social inclusion, poverty
reduction and economic development in rural areas (Priority 6)
Related to spending
programme: EAFRD
Result indicator: Number of jobs created through supported projects (not LEADER) (Focus area 6A: Facilitating diversification, creation of new small enterprises and job creation)
Source of data: Rural development programmes
Baseline88
Target (2023)
Latest known results
0 79 37089 Aggregated value from the
RDP which have programmed the relevant Focus Area.
17
88 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period. 89 Target level has been updated to reflect relevant changes introduced by programmes modifications
64,8
62,8 62,7 62,5
63,4 63,5
64,3
65,0
61,0
61,5
62,0
62,5
63,0
63,5
64,0
64,5
65,0
65,5
2008 2009 2010 2011 2012 2013 2014 2015
% Employment rates in rural areas, EU-28
agri_aar_2016_annexes Page 232 of 273
Result indicator: a) % of rural population covered by local development strategies
b) Number of jobs created through supported projects (LEADER) c) % of rural population benefiting from improved services / infrastructures
(Focus area 6B: Fostering local development in rural areas) Source of data: Rural development programmes
Baseline Target (2023)
Latest known results
0 a) 54.4%90
b) 44 057 c) 22.6%
Aggregated value from the
RDP which have programmed the relevant Focus Area.
a) 21
b) 8 c) 1
CAP Indicator: % of rural population benefiting from improved IT
infrastructures/services (Focus area 6C: Enhancing accessibility to use and quality of information and communication technologies (ICT) in rural areas)
Source of data: Rural development programmes
Baseline Target
(2023)
Latest known results
0 13.8%91 Aggregated value from the
RDP which have programmed
the relevant Focus Area.
0%
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Broadband Competence Office
Brussels-based Broadband
Competence Office is
operational
2016 100% (Brussels-based Support
Facility for the
network of Broadband
Competence Offices (BCOs) is
operational)
For this specific objective, please see also the policy-related outputs on ENRD provided
under Specific objective: Enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and sustainable
management of forest (Priority 2).
90 Target level for a) and b) has been updated to reflect relevant changes introduced by programmes
modifications 91 Target level has been updated to reflect relevant changes introduced by programmes modifications
agri_aar_2016_annexes Page 233 of 273
Specific objective: To promote local agricultural production and to ensure a fair level of prices for
commodities for direct consumption and for processing by local industries in the Outermost Regions of the EU
and in the Aegean Islands
Related to spending programme: EAGF
Result indicator: Support to the Local Production to maintain/develop the agricultural
production Definition: Utilised agricultural area (variation with respect to the previous year)
Source: MS Annual Reports
Baseline (Calendar year
2013 / Budget year 2014)92
Target Latest known results
POSEIDOM: Mainland France: 26 888
215 ha
Guadeloupe: 31 401 ha Martinique: 24 445 ha
Guyane: 28 626 ha Réunion: 43 833 ha
POSEICAN:
Mainland Spain: 23 523 000 Canaries: 84 950 ha
POSEIMA:
Mainland Portugal 3 641 592 Madeira: 5 262 ha
Azores: 118 589 ha
Smaller AEGEAN ISLANDS:
333 107 ha
To at least maintain local agricultural production
Objective of the regulation 228/2013, Article 2 (1c)
POSEIDOM: Mainland France: 26 807 867 ha
(-0.2%)
Guadeloupe: 30 965 ha (0%) Martinique: 23 472 ha (-1.5%)
Guyane: 31 268 ha (+6.3%) Réunion: 43 061 ha (-0.8%)
POSEICAN93:
Mainland Spain: 23 404 800 ha (-0.5%)
Canaries: 85 736 ha (+2.9%)
POSEIMA94:
Mainland Portugal 3 641 592 ha Madeira: 5 262 ha (-3.1% with
respect to 2009) Azores: 118 589 ha (-1.5% with
respect to 2009)
Smaller AEGEAN ISLANDS: 299
135 ha (-7.5%)
For this specific objective, please see the outputs provided under the following Specific objective: Specific Supply Arrangements (SSA) to ensure the supply of essential
products: SSA coverage rate (relation between quantities of products benefiting from SSA support and total quantities of the same products introduced in the respective
outermost region).
92 Baseline updated from 2012 to 2013 as it provides consolidated data for all outermost regions for that year,
given that Portugal data collection is done every five years, 2013 being the latest survey.
93 Data from 2014. Data from 2015 not yet available. Variation is calculated with respect to 2013.
94 Portugal's farm structure data are collected every five years (data are available for 2009 and 2013), thus
the latest known data refer to year 2013. Nevertheless, the variation is calculated with respect to the previous
available data, i.e. 2009.
agri_aar_2016_annexes Page 234 of 273
Specific objective: Specific Supply Arrangements (SSA)
to ensure the supply of essential products: SSA coverage rate (relation between quantities of products benefiting
from SSA support and total quantities of the same products introduced in the respective outermost region)
Related to spending
programme: EAGF
Result indicator: Percentage of SSA products coverage of local needs Source: MS Annual Reports
Baseline (2013 – variations
with respect to 2012)95
Target Latest known results
POSEIDOM96 (all products):
39% (-4%) POSEICAN: (cereals only):
99.64% (+0.6%)
POSEIMA: Madeira (cereals only):
98.6% (+3,6%)
Azores (cereals only): 85.3% (EU) (-3.3%)
Smaller Aegean Islands
(animal feed): 100.8% (+1.2%)
100%
The objective included in Article 2 (1a) of regulation
228/2013 and 229/2013 is the "guaranteed supply to the
outermost regions of products essential for human
consumption (…)". This target
contributes to achieving this objective.
POSEIDOM (all products): 37%97
POSEICAN: (cereals only):
97.3%
POSEIMA: Madeira (cereals only): 99.2%
Azores (cereals only): 85.7%98 (EU)
Smaller Aegean Islands (animal
feed): 99.4%
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
2016/AGRI/005 General report to be
presented to the European Parliament
and to the Council showing the impact of
the action taken under
Regulation (EU) No 228/2013 (art.32 of
this Regulation). This report will be partially
based on the results of the external evaluation
launched in 2015.
Transmission from the Commission to
EP and Council of the Report
4th quarter 2016 Report approved on 15/12/2016
(COM(2016)797). Possibly subject to
discussion at the EP and Council.
2016/AGRI/006
General report to be presented to the
European Parliament and to the Council
showing the impact of
Transmission from
the Commission to EP and Council of the
Report
31st December 2016 Report approved on
15/12/2016 (COM(2016)796).
Possibly subject to discussion at the EP
and Council.
95 Baseline is set to 2013 in coherence with baseline of previous indicator. 96 The French authorities used in their annual report for 2013, 2014 and 2015 a different methodology and data
source to calculate this indicator (calculation based on value and not quantities, data taken from customs
sources and not from SSA operators).
97 This result refers to all French outermost regions, including Mayotte since 2014.
98 Data for 2014. Data for 2015 not available yet.
agri_aar_2016_annexes Page 235 of 273
the action taken under
Regulation (EU) No 229/2013 (art.20 of
this Regulation). This report will be partially
based on the results of
the external evaluation launched in 2015.
2016/AGRI/007
Modification of Commission
Implementing
Regulation (EU) No 180/2014.
Adoption by the
College and published in EUOJ
2016 Adoption foreseen
in 2017
2016/AGRI/008
Modification of Commission
Implementing
Regulation (EU) No 181/2014.
Adoption by the
College and published in EUOJ
2016 Adoption foreseen
in 2017
Commission decisions
and DG letters for amendments
approvals (according
to kind of modifications)
Date of notification to
the MS
2016 Foreseen in 2017
Main expenditure outputs
Description Indicator Target99 Latest known
results (situation on
15/10/2016)
Measures to Support
Local Agricultural Products
Executed budget by
MS
FR: 251.9 MEUR
ES: 202.5 MEUR PT: 89.1 MEUR
EL: 18.460 MEUR
FR: 248.11 MEUR
ES: 200.46 MEUR PT: 87.98 MEUR
EL: 16.06 MEUR
Specific Supply
Arrangements
Executed budget by
MS
FR: 26.51 MEUR
ES: 65.85 MEUR PT: 17.1 MEUR
EL: 5.47 MEUR
FR: 26.87 MEUR
ES: 66.09 MEUR PT: 15.17 MEUR
EL: 5.67 MEUR
99 The target figures for these expenditure outputs correspond to the financial allocation stated by each Member
State in their 2016 programme, which shall be confirmed by the Member State in February 2016, according to
Article 32(1) of Regulation 228/2013 (POSEI) and Article 20(1) of Regulation 229/2013 (Smaller Aegean
islands). In addition, Member States have the possibility to notify adjustments of financial allocations and
quantities of products concerning both measures to Support Local Products and Specific Supply Arrangements
within the 2016 programme, in conformity with Article 40(3) of Commission Implementing Regulation 180/2014
(POSEI) and Article 32(3) of Commission Implementing Regulation 181/2014 (Smaller Aegean islands).
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The following objectives contribute to all 3 common CAP objectives
Specific objective: Fostering knowledge transfer and
innovation in agriculture, forestry and rural areas (Priority 1)
Related to spending
programme: EAFRD
Result indicator: % of expenditure for the three measures Knowledge transfer &
information action, advisory services and cooperation in relation to the total
expenditure for the RDP (Focus area 1A: Fostering innovation and the knowledge base in rural areas)
Source of data: Rural development programmes
Baseline100
Target (2023)
Latest known results
3.9% Aggregated value from the
RDP which have programmed the relevant Focus Area.
0%
Result indicator: Number of cooperation operations planned under the cooperation
measure (groups, networks/clusters, pilot projects) (Focus area 1B: strengthening the
links between agriculture and forestry and research and innovation) Source of data: Rural development programmes
Baseline Target
(2023)
Latest known results
15 260101
Aggregated value from the RDP which have programmed
the relevant Focus Area.
105
Result indicator: Total number of participants trained (across all focus areas) (Focus area 1C: fostering lifelong learning and vocational training in agriculture and forestry sectors)
Source of data: Rural development programmes
Baseline Target
(2023)
Latest known results
3 848 363 Aggregated value from the
RDP which have programmed
the relevant Focus Area.
12 333
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
EIP-AGRI events
5 New Focus Groups
launched 10 Focus Group
meetings 4 workshops
1 Seminar
3 meetings of the Innovation Subgroup
2016
5 New Focus Groups launched
10 Focus Group
meetings 4 workshops
1 Seminar 3 meetings of the
Innovation Subgroup
100 Baseline is 0 at the start of the programming period and all the targets are cumulated over the period. 101 Target level has been updated to reflect relevant changes introduced by programmes modifications.
agri_aar_2016_annexes Page 237 of 273
EIP-AGRI publications 1 magazine
(Agrinnovation) 10 factsheets
4 brochures 12 newsletters
24 press articles
2016 1 magazine
(Agrinnovation) 12 factsheets
5 brochures 12 newsletters
18 press articles
Specific objective: Societal challenges - to secure
sufficient supplies of safe and high quality food and other bio-based products, by developing productive and
resource-efficient primary production systems, fostering related ecosystem services and the recovery of
biological diversity, alongside competitive and low carbon supply, processing and marketing chains
Related to spending
programme: Horizon 2020
Result indicator: Publications in peer-reviewed high impact journals in the area of food security
Definition: This indicator measures the number of publications in peer-reviewed high impact journals in a specific societal challenge per 10M€ of EC-funding102. High impact journals are
defined to be the top 10% (in terms of Scimago Journal Ranking (SJR) index) of all journals within a given scientific category.
Source of data: Horizon 2020 common IT system, i.e. CORDA (Common Research Datawarehouse) and RESPIR (SESAM Research Performance and Impact Reports)
Baseline103 (2013)
Milestone 2019 Target (2020)
Latest known results
22.7 publications per 10
million € funding (baseline FP7, January
2015)
On average, 20 On average, 20
publications per 10 million € funding
No known result at this
stage
Result indicator: Patent applications in the area of food security104
Definition: This indicator measures the number of patent applications in a specific societal challenge per EUR 10 M€ funding105.
Source of data: Horizon 2020 common IT system, i.e. CORDA (Common Research Datawarehouse) and RESPIR (SESAM Research Performance and Impact Reports)
Baseline (2013)
Milestone 2019 Target (2020)
Latest known results
For FP7 Cooperation
projects finished by January 2015: 1.2
patent applications per
10 million € funding
On average, 2 On average, 2
patent applications per 10 million €
funding
No known result at this
stage
102 From the launch of the programme and until a critical mass of finished projects (ca. 10 % of all funded
projects) has been reached, information about the two indicators below will be provided in the form of absolute
number by the funded projects. On the basis of FP7 data it is considered that this critical mass of finished
projects should be reached by 2019. 103 The reference for all the targets is the year when the last actions financed under Horizon 2020 will be
finished, i.e. several years after the formal end of the programming period. 104 The result indicator was aligned with the respective indicator provided for in the Management Plan 2014 of
DG RTD, i.e. reporting on patent applications only but not on patents awarded (as stated in the Programme
Statement DB2014) since no meaningful information (or none at all) can be expected before 2019-2020. 105 See footnote in the previous indicator.
agri_aar_2016_annexes Page 238 of 273
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Proposal submission
for 2016 calls
Number of proposals
submitted (first and second stage)*
September 2016 292 proposals
submitted
Proposals selected for
funding from 2016
calls
Number of proposals
selected for funding*
December 2016 38 proposals
selected
2017 Call publication Number of topics published
July 2016 27 topics published
Strategic analysis for 2018-2020
programming
Adopted scoping paper
November 2016 adopted in November
Main expenditure outputs
Description Indicator Target Latest known results
(situation on
31/12/2016)
Grants Budget committed to grants (€)
218.665.454 221.510.795
* Numbers do not include instruments to which DG AGRI contributed through a central taxation (SME-instrument and Fast Track to Innovation) and thus are implemented
centrally across Horizon 2020.
agri_aar_2016_annexes Page 239 of 273
IPARD The following 3 objectives also contribute to IPA objective "support
candidate countries and potential candidates (‘beneficiary countries’) in
implementing the political, institutional, legal, administrative, social and
economic reforms required by those beneficiaries in order to comply
with the Union's values and to progressively align to Union rules, standards, policies and practices with a view to Union membership."
Specific objective: To contribute to the sustainable
adaptation of the agricultural sector and rural areas and
to the new Member State Croatia's and Candidate Countries' preparation for the implementation of the
acquis communautaire concerning the CAP and related policies under IPARD 2007-2013 (IPARD I) by:
1. improving market efficiency and implementation of Union standards,
2. preparatory actions for the implementation of the agri-environmental measures and local rural development
strategies,
3. development of the rural economy.
Related to spending
programme: IPARD 2007-
2013 (IPARD I)
1. Improving market efficiency and implementation of Union standards (AXIS 1)
Result indicator: Number of applications received
Source: IPARD programmes 2007-2013, annual106 and bi-monthly107 reports
Baseline (2014) Target Latest known results
HR: 656 applications fYRoM: 1557 applications
TR: 3394 applications
833 in HR 2890 in fYRoM
4818 in TR108
HR: 398 fYRoM: 1351
TR: 2942
Result indicator: Number of applications approved
Source: IPARD programmes 2007 – 2013, annual and bi-monthly reports
Baseline (2014) Target Latest known results
HR: 234 applications fYRoM: 559 applications
TR: 2023 applications
514 in HR 2330 in fYRoM
3084 in TR109
HR: 398 fYRoM: 1351
TR: 2942
Result indicator: Number of farms/enterprises supported (paid by the IPARD Agency) Source: IPARD programmes 2007 – 2013, annual and bi-monthly reports
Baseline (2014) Target Latest known results
177 projects in HR 248 projects in fYRoM
1479 projects in TR
414 in HR 2330 in fYRoM
n/a in TR110
HR: 336 fYRoM: 730
TR: 2141
Result indicator: Total volume of investment (paid) Source: IPARD programmes 2007 – 2013, annual and bi-monthly reports
Baseline (2014) Target Latest known results
€96.8m in HR
€3.4m in fYRoM
€72.6m in TR
€220m in HR
€75.7m in fYRoM
Target in TR111 - n/a
€71m in HR
€7.7m in fYRoM
€721m in TR
106 Throughout this specific objective: baseline – end of 2014 – based on the respective annual reports. 107 Throughout this specific objective: current – end of 2015 – based on the bi-monthly reports, data still
provisional. 108 Updated target based on the latest programme modifications. 109 Updated target based on the latest programme modifications. 110 Updated target based on the latest programme modifications. 111 No target agreed at the time when programme was set up.
agri_aar_2016_annexes Page 240 of 273
Result indicator: Increase on gross value added (GVA) in supported holdings
Source: IPARD programmes 2007 – 2013 and annual reports
Baseline (2014) Target Latest known results
For the time being information not available in
HR, fYRoM and TR
5% in HR 5-8% in fYRoM
Target in TR by €152m112
For the time being information not available in HR, fYRoM and
TR
Result indicator: Number of farms/enterprises introducing Union standards
Source: IPARD programs 2007-2013 and annual reports
Baseline (2014) Target Latest known results
For the time being information not available in
HR and fYRoM TR: 1479
290 in HR Target in fYRoM (100%)
Target in TR: 2776113
HR: n/a fYRoM: 120
TR: n/a
Result indicator: Economic growth in agriculture – net additional added value in PPS (Purchase Power Standards = purchasing power of the same goods with different currencies)
Source: IPARD programmes 2007 – 2013 and annual reports
Baseline (2014) Target Latest known results
For the time being information not available for
any of the countries
5% in HR For the time being information not available for any of the
countries
Result indicator: Labour productivity in agriculture – change in gross value added
(GVA) Source: IPARD programmes 2007 – 2013 and annual reports
Baseline (2014) Target Latest known results
For the time being
information not available in HR, fYRoM and TR
To increase For the time being information
not available in HR, fYRoM and TR
2. Preparatory actions for the implementation of the agri-environmental measures and local rural development strategies (AXIS 2)
Result indicator: Local rural development strategies
A) Number of applications received
B) Number of applications approved C) Number of recognised LAGs
D) Total population of LAGs Source: IPARD programmes 2007 – 2013 and annual and bi-monthly reports
Baseline (2014) Target Latest known results
In HR
A) 71 applications received B) 42 LAGs contracted
C) 41 LAGs D) 1 321 155
Leader measure has not been
accredited in TR and fYRoM under IPARD I.
In HR
A) 40 B) 25
C) 25 D) 1 055 000
In HR
A) 71 B) 42
C) 41 D) 1 321 155
3. Development of the rural economy (AXIS 3)
Result indicator: Improvement of rural infrastructure A) Number of applications received
B) Number of applications approved C) Number of beneficiaries
D) Total volume of investment Source: IPARD programmes 2007-2013 and annual and bi-monthly reports
Baseline (2014) Target Latest known results
A) HR: 210 A) 205 in HR A) HR: 199
112 Updated target based on the latest programme modifications. 113 Updated target based on the latest programme modifications.
agri_aar_2016_annexes Page 241 of 273
B) HR: 106
C) HR: 33 D) HR: €10m
This measure has not been accredited in TR and fYRoM
under IPARD I.
B) 174 in HR
C) 148 in HR D) €59m in HR
B) HR: 106
C) HR: 66 D) HR: €21.6m (EU
contribution only)
Result indicator: Diversification of rural economy
E) Number of applications received F) Number of applications approved
G) Number of beneficiaries supported and paid H) Total volume of investment (data from Monitoring Tables)
Source: IPARD programmes 2007-2013 and annual and bi-monthly reports
Baseline (2014) Target Latest known results
E) HR: 329
fYRoM: 276 TR: 8322
F) HR: 171
fYRoM: 17 TR: 5991
G) HR: 41
fYRoM: 1
TR: 5618
H) HR: €5.3m fYRoM: €0.01m
E) 380 in HR
229 in fYRoM 5697 in TR
F) 350 in HR
95 in fYRoM 5127 in TR
G) 329 in HR
95 in fYRoM
n/a in TR114
H) €39m in HR €7.2m in fYRoM
€395m in TR115
E) 326 in HR
362 in fYRoM 11810 in TR
F) 167 in HR
38 in fYRoM 8319 in TR
G) 101 in HR
8 in fYRoM
7817 in TR
H) €5.7m in HR €275 240 in fYRoM
€128m in TR
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Management of the
implementation of three IPARD
programmes 2007-2013.
Percentage of the
relevant IPARD allocation116
contracted and paid
2016 HR: 71%
fYRoM: 40% TR: 81%
Main expenditure outputs
Description Indicator Target Latest known results
(situation on 31/12/2016)
Improving market
efficiency and
implementation of Union standards (AXIS
1)
Number of
applications received
833 in HR
2890 in fYRoM
4818 in TR117
HR: 640
fYRoM: 2727
TR: 4764
Improving market efficiency and
Number of applications
514 in HR 2330 in fYRoM
HR: 398 fYRoM: 1351
114 Updated target based on the latest programme modifications. 115 Updated target based on the latest programme modifications. 116 Based on adjusted commitment figures. 117 Updated target based on the latest programme modifications.
agri_aar_2016_annexes Page 242 of 273
implementation of
Union standards (AXIS 1)
approved 3084 in TR118 TR: 2942
Preparatory actions for the implementation of
the agri-environmental measures and local
rural development strategies (AXIS 2)
Local rural development
strategies A) Number of
applications received B) Number of
applications approved
C) Number of
recognised LAGs D) Total population
of LAGs
In HR A) 40
B) 25 C) 25
D) 1.055.000 Leader measure has
not been accredited in TR and fYRoM
under IPARD
In HR A) 71
B) 42 C) 41
D) 1 321 155
Development of the rural economy (AXIS
3)
Development119 of rural economy
A) Number of
applications received B) Number of
applications approved
A) 380 in HR 229 in fYRoM
5697 in TR
B) 350 in HR 95 in fYRoM
5127in TR
A) 326 in HR 362 in fYRoM
11810 in TR
B) 167 in HR
38 in fYRoM 8319 in TR
Specific objective: Supporting the development of management and control systems which are compliant
with good governance standards of a modern public administration and where the relevant country structures
apply standards equivalent to those in similar
organisations in the Member States of the European Union.
Related to spending programme: IPARD 2014-
2020 (IPARD II)
Result indicator: Number of measures for which entrustment of budget
implementation tasks granted to the IPA II Beneficiaries under rural development programmes
Source: Estimate, based on experience gained under Sapard and IPARD I
Baseline (2014) Target 2020 Latest known results
0 32 Entrustment procedure for
fYRoM (4 measures) and Turkey (5 measures) in last
stages is in final stages.
Result indicator120: Financing Agreements (FA) concluded Source: DG AGRI
Baseline (2014) Target Latest known results
No FA signed. Financing Agreements are to be concluded once and will be
updated in order to reflect new budgetary allocations
and entrustments of budget implementation tasks for new
measures
Procedure for signature/conclusion of the
Financing Agreements with fYRoM and Turkey launched.
118 Updated target based on the latest programme modifications. 119 Wording adapted: the indicator is per axis and not just per measure. 120 New indicator; new types of Financing Agreements must be prepared and concluded reflecting the new IPA
2014-2020 legal base.
agri_aar_2016_annexes Page 243 of 273
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known
results (situation on
31/12/2016)
Smooth transition
between IPARD I and IPARD II programmes
in Turkey and former Yugoslav Republic of
Macedonia
Contracting under
IPARD I continues and TK and the
former Yugoslav Republic of
Macedonia ready to start contracting
under IPARD II.
2016 Respective countries
will be able to start contracting under
IPARD II early in 2017.
Main expenditure outputs
Description Indicator Target Latest known
results (situation on
31/12/2016)
Legal framework for
implementation of IPARD 2014-2020
finalised
Entering into force of
the Sectoral Agreements between
the Commission and the beneficiary
countries (except for Bosnia and
Herzegovina and
Kosovo)
Sectoral
Agreements with Turkey, the former
Yugoslav Republic of Macedonia,
Serbia, Albania and Montenegro
concluded and
enter into force in 2016
Expected output
achieved
Management and
control systems ready to start
implementation of the
programmes
Entrustment of
budget implementation tasks
granted on a number
of measures under individual country
IPARD programmes
Entrustment at
least for some measure under the
four programmes
(except for Albania). Expected
total by 2020 – 32 entrustments
Entrustment
procedure for fYRoM (4 measures) and
Turkey (5
measures) in final stages. Respective
countries will be able to start
contracting under IPARD II early in
2017
All legal and
institutional arrangements in place
to start implementation of
IPARD 2014-2020
Conclusion of the
Financing Agreements with
IPARD Beneficiary countries
Financing
Agreements concluded each
year with all IPA II Beneficiary
countries having received
entrustment of
budget implementation
tasks under indirect management
Procedures for
signature/conclusion of the Financing
Agreements with fYRoM and Turkey
launched
agri_aar_2016_annexes Page 244 of 273
Specific objective: To increase the food-safety of the IPA
II beneficiary and the ability of their agri-food sector to cope with competitive pressure as well as to
progressively align the sector with Union standards, in particular those concerning hygiene and environment,
while pursuing balanced territorial development of rural
areas.
Related to spending
programme: IPARD 2014-2020 (IPARD II)
Result indicator: Number of economic entities performing modernisation projects in agri-food sector
Source: IPARD programmes 2014-2020 and annual and bi-monthly reports
Baseline (2014) Target 2023121 Latest known results
0 6450 Contracting under IPARD II has not yet started
Result indicator: Number of economic entities developing additional or diversified sources of income in rural areas
Source: IPARD programmes 2014-2020 and annual and bi-monthly reports
Baseline (2014) Target 2023 Latest known results
0 3300 Implementation of programmes has not yet
started
Result indicator: Overall investment in physical capital in agri-food and rural
development (EUR) Definition: Overall investment in machines, equipment, production facilities made by
farmers, food processing and marketing enterprises as well as micro and small enterprises in rural areas
Source: IPARD programmes 2014-2020 and annual and bi-monthly reports
Baseline (2014) Target 2023 Latest known results
0 2.29 billion €
Implementation of
programmes has not yet started
Result indicator: Number of economic entities progressively upgrading towards EU
standards Definition: Number of farmers and food processing and marketing enterprises
progressively upgrading to EU environmental, food safety and hygiene, occupational
standards Source: IPARD programmes 2014-2020 and annual and bi-monthly reports
Baseline (2014) Target 2023 Latest known results
0 4440 Implementation of
programmes has not yet started
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Start of implementation of
IPARD II programmes
First calls for applications carried
out under the four programmes
(Albanian
2016 Implementation of programmes has
not yet started; in fYRoM and Turkey
expected to start
121 All targets under this specific objective have been updated. The old targets were based on the extrapolations
of the IPARD I programmes. Now, that all programmes have been adopted, more reliable estimates stemming
from the programmes can be provided.
agri_aar_2016_annexes Page 245 of 273
programme most
likely will commence in 2017)
early in 2017, in
Albania, Montenegro and
Serbia – by the end of the year
Main expenditure outputs
Description Indicator Target122 Latest known results
(situation on 31/12/2016)
Start of contracting Number of economic entities performing
modernisation projects in agri-food
sector
6450 Implementation of programmes has
not yet started
Start of contracting Number of economic
entities developing additional or
diversified sources of income in rural areas
3300 Implementation of
programmes has not yet started
Start of contracting Overall investment in
physical capital in
agri-food and rural development (EUR)
(investment in machines,
equipment, production facilities
made by farmers, food processing and
marketing
enterprises as well as micro and small
enterprises in rural areas)
2.29 billion € Implementation of
programmes has
not yet started
Start of contracting Number of economic
entities progressively
upgrading towards EU standards
Definition: Number of farmers and food
processing and marketing
enterprises progressively
upgrading to EU
environmental, food safety and hygiene,
occupational standards
4440 Implementation of
programmes has
not yet started
122 All targets for these main expenditure outputs have been updated. The old targets were based on the
extrapolations of the IPARD I programmes. Now, that all programmes have been adopted, more reliable
estimates stemming from the programmes can be provided.
agri_aar_2016_annexes Page 246 of 273
Commission general objective 6: A Reasonable and Balanced Free Trade Agreement
with the U.S.
CAP Impact indicator: Share of agri-food trade with the US in total EU agri-food trade
Source of the data: Comext
Baseline (2011)123
Target (2020)
Latest known results (2016)
10,8% Increase 13.1%
Specific objective: To promote the EU agricultural sector by contributing to successful negotiation and cooperation
within the World Trade Organisation (WTO) and other multilateral organisations such as the Organisation for
Economic Co-operation and Development (OECD) and the Food and Agriculture Organisation (FAO).
Related to spending programme: NA
Result indicator: Timely contribution to negotiations and other ongoing processes in multilateral fora
Source: DG AGRI
Baseline (2015) Target Latest known results
100% of contributions in time.
Examples:
Provision of negotiating lines to take in the context of WTO
DDA negotiations following the 9th Ministerial Conference
(Bali, December 2013). Relevant input to agriculture-
related FAO activities.
100% of contributions in time
This target was agreed within
DG AGRI and is reflected by relevant procedures for
conducting negotiations.
100% of contributions on time
123 Baseline modified to 2011 instead of 2015. It is less relevant to have the current year as the baseline and
the value was based on incomplete results of only Jan-Nov 2015 as available in 2016.
agri_aar_2016_annexes Page 247 of 273
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
WTO Agricultural negotiations
Contributions made to the negotiations
on the post-Nairobi agenda (10th
Ministerial Conference,
December 2015)
running up to the 11th Ministerial
Conference (Buenos Aires, December
2017)
Throughout 2016, notably for each
Special Session of the WTO Committee
on Agriculture
Contributions provided as
appropriate and on time (4 meetings of
the Special Session in 2016)
Negotiations in the WTO on compensatory
adjustments for other WTO Members in
respect of Croatia's accession to the EU
(Article XXIV:6 GATT)
Contributions made to negotiations, and
their conclusion and implementation
End 2016
Contributions provided as
appropriate and on time. Draft
agreement initialled with Brazil in 2016;
agreements with Uruguay and China
concluded and
implemented in 2016.
OECD activities related
to agriculture, food and rural development
Attend all relevant
meetings (minimum, n=8)
Review all OECD
papers and provide comments according
to EU policy objectives
Throughout 2016,
notably for the OECD Agricultural
Ministerial meeting
(7/8 April) and each session of the OECD
Committee for Agriculture and its
working parties
Contributions
provided as appropriate and on
time. Draft
agreement initialled with Brazil in 2016;
agreements with Uruguay and China
concluded and implemented in
2016.
Influence of
agriculture policy in UN (notably FAO),
GFFA (Global Forum for Food and
Agriculture), G-20 (agriculture) and G-7
(agriculture).
a. Number of
committees in which AGRI
participates and speaks in main
FAO and IFAD (International
Fund for
Agricultural Development)
bodies, esp. ERC (European
Regional Conference),
CoAg (Committee on Agriculture),
a. As dates of each
committee.
a. FAO-ERC (May
2016) FAO-COFO (July
2016) FAO-COAG (Sep
2016) FAO-CCP (October
2016)
CFS (October 2016) In all of these DFAO
events AGRI has prepared and
discussed EU interventions)
agri_aar_2016_annexes Page 248 of 273
COFO (Committee
on Forestry), CCP (Committee on
Commodity problems), and
CFS (Committee
on World Food Security)
b. Number of SDG-
indicators for Agenda 2030
affecting
agriculture policy that are adopted.
b. 30/12/2016 b. SDG target on
export subsidies completed by WTO
Nairobi conclusions
c. Extent to which
conclusions of GFFA, G-20, G-7
and other
agricultural ministerials are
compatible with EU policy.
c. As dates of each
ministerial
c. G20 meeting of
agricultural ministers in Xi'an
GFFA conclusions
and recommendations
are compatible with EU policy
Specific objective: To improve market access for
agricultural products by contributing to negotiating, revising bilateral agreements, by resolving trade
irritants, ensuring protection for EU geographical indications in third countries by negotiating relevant
provisions within Free Trade or Associations Agreements
or stand-alone agreements, carrying out dialogues in agriculture and cooperation activities and contributing to
sustainable economic development in particular in developing countries.
Related to spending
programme: NA
Result indicator: Timely preparation of and contribution to bilateral negotiations
leading to the objectives given.
Source: DG AGRI
Baseline (2015) Target Latest known results
100% of timely contributions. Examples:
Contributing to negotiations with WTO partners in the framework of Art XXIV.6
GATT; Contributing to negotiations with Mercosur and the United States (Trans-
Atlantic Trade and Investment Partnership); contributing to the scoping
exercises preceding the modernisation of
existing agreements with Mexico and Chile;
Contributing to ratification and implementation of Economic Partnership
Agreements including built-in agendas on GIs and wines and spirits; facilitating
responsible private sector agri-business investments in ACP;
Contributing to negotiations with Viet Nam
and Japan on the agricultural aspects of
100% of contributions in time
This target was agreed
within DG AGRI and is reflected by relevant
procedures for conducting negotiations.
All contributions prepared in time and
to the required quality.
agri_aar_2016_annexes Page 249 of 273
the respective Free Trade Agreements;
Negotiating a stand-alone agreement with China on cooperation on, and protection
of, geographical indications Steering the process leading to the
protection of EU geographical indications
in Central America, in the framework of the agreement with these countries
Carrying out dialogues on agricultural issues with some third countries (China,
Brazil, India, EPAs) and cooperation activities in the agricultural field
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Canada: CETA Signing by Council and
consent by EP
2016 Council signed. EP consent and entry into force expected in 2017
US: TTIP Continuation of
negotiations
2016 Joint statement issued.
Continuation of the process depends on the stance of the
incoming US administration
Mexico:
modernisation of existing global
agreement
Opening of
negotiations
2016 Two rounds took place
Central America: Free Trade
Agreement
implementation
Continuation of monitoring of
implementation
2016 Committee meetings held
Peru-Colombia-Ecuador: Free Trade
Agreement implementation and
accession of Ecuador
Signing by Council and
consent by EP for Ecuador
accession to the
existing agreement with
Peru-Colombia
2016 Committee meetings held. Ecuador Protocol of accession
approved; provisional entry into force in January 2017
Mercosur Continuation of negotiations
2016 Exchange of new tariffs offers. A full negotiating round and 2 Chief
Negotiators' meetings were held
Chile: modernisation
of existing association
agreement
Opening of
negotiations
2017 Two working groups on the
modernisation and discussion on the Joint Scoping Paper (to be
finalised in 2017). Process to continue with request for
negotiation directives
Monitoring of EU
agri-food trade
Monthly analysis
and publication of latest
developments in EU agri-food
trade
Monthly
publication
12 monthly reports published on
Europa
China: agreement on
protection of
Continuation and
possible
Second
semester
New target for the conclusion of
the negotiations set for first half
agri_aar_2016_annexes Page 250 of 273
geographical
indications
conclusion of
negotiations
2016? of 2017 as expressed during last
meeting in November 2016
Japan: Free Trade Agreement
negotiations
Continuation and possible
conclusion of negotiations
In the course of
2016
Continuation of the negotiations throughout 2016, with
expectations to conclude during first half of 2017
Philippines: Free
Trade Agreement
negotiations
Opening of
negotiations
2016 Negotiations opened in May 2016.
Continuation of the negotiations
throughout 2017
Australia/New Zealand: preparation
in view of Free Trade Agreement
negotiations
Preparatory work in cooperation
with DG TRADE, notably to
produce a robust
impact assessment and
scoping papers to reflect EU
priorities.
2016 Continuation throughout 2016 of the preparatory work in order to
finalise scoping papers in the first half of 2017
India, Thailand,
Malaysia: Free Trade Agreements
Talks towards
possible resumption of
negotiations
2016? Participation to exploratory talks
with Malaysia and India. No decision on resumption of talks.
Korea: Free Trade Agreement
implementation
Continuation of monitoring of
implementation
2016 Follow-up of the GI addition process and of GI infringements
in the GI Working Group.
Monitoring of agri-food trade issues.
China: cooperation
activities in the field of agriculture and
rural development
Continuation of
cooperation resulting in
avoidance of new
trade barriers.
2016 Commissioner high-level visit in
April with some SPS success, GI negotiations resumed with a
round in November, good
cooperation in R&I (JP visit)
Indonesia: Free Trade Agreement
negotiations124
Opening of negotiations
- Negotiations opened in September 2016. Continuation of
the negotiations throughout 2017
Implementation of
full EPAs in: East African Community;
Southern African Development
Community (SADC)-EPA Group; West
Africa; CARIFORUM
(Caribbean Forum of ACP States)
a. Implementa-
tion (or preparation for
implementation) of agricultural
sub-committees/dialo
gues, with
engagement of civil society
30.12.2016
for all
CARIFORUM: Special committee
on Agriculture and Fisheries adopted. 1st meeting in 1st half
2017. Civil dialog committee in place since 2015.
SADC EPA: in force since 10.10.2016. First meeting of the
Trade and Development
Committee to establish subcommittees and dialogues:
February 2017.
b. Value of development
projects that
support EPA implementation
in agricultural and agri-
SADEC EPA: 0 (zero) as the agreement has just entered into
force;
West Africa EPA: 0 (zero) as signature of the agreement has
not been yet finalised; Cariforum: 46,5 Mio € (EDF
124 Target date not foreseen at the time of drafting.
agri_aar_2016_annexes Page 251 of 273
business sector 10) Pacific and other EPA
regions: n/a for 2016 due to multi annual financial approach
c. Monitoring of agreements
CARIFORUM: monitoring system in preparation.
d. Finalisation of
CARIFORUM GI protection.
Postponed to 31.12.2017
Implementation of interim EPAs in
Eastern and Southern Africa; West Africa;
Central Africa; Pacific
Monitoring of agreements and
possible development of
informal agricultural
dialogues.
30.12.2016 Pacific: Fiji still has to ratify the IEPA. Informal dialog foreseen for
2017.
WEST AFRICA: IEPA Ivory Coast 1st Committee 4-5 April 2017.
IEPA Ghana 1st Committee June-
July 2017
CENTRAL AFRICA: IEPA Committee December 2017
Agribusiness
encouragement (Valletta Action Plan,
4th priority)
a. Identification
of success stories of agribusiness
investment; b. Identification
of TBTs (Technical
Barriers to Trade).
30.12.2016 The 1st Australia-EU Agriculture
Ministerial Conference was organised in July 2016. Focus on
the agricultural policy environment for responsible
investments.
Building partnerships with International
Organisations, the AUC (African Union
Commission), ACP Group of States,
funding bodies.
a. Number of formal
understandings with international
organisations b. Number of
projects
supporting AGRI objectives
30.12.2016 EU-Australia Ministerial Conference July 2017
Tunisia: emergency
Autonomous Trade Measures on olive oil
TRQ
Adoption by
Council and Parliament
2016 Measure was implemented in
2016
Tunisia :
contribution to DCFTA (on market
access and GIs)
Continuation of
bilateral negotiations
2018 A first technical discussion took
place in April 2016
Morocco :
conclusion of a GI agreement
Adoption by
Council and Parliament and
implementation of the Agreement
2016-2017 Procedure was suspended in 2016
whilst the ruling of the ECJ was pending
Georgia, Moldova, Ukraine: Association
Agreement including DCFTA
Implementation, approximation
monitoring
2016 Subcommittee meetings on agriculture with the three
countries in 2016. Two special meetings on GIs with Moldova
and Georgia
Ukraine :
contribution to
Adoption by
Council and
2017 Adoption by the Commission of
the ATMs proposal in September
agri_aar_2016_annexes Page 252 of 273
Autonomous Trade
Measures (ATM)
Parliament 2016
Armenia:
negotiation of a new agreement including
a GI agreement
Negotiations to
start in 2016
2017 Continuation of the negotiations
throughout 2016, with expectations to conclude during
first half of 2017
Azerbaijan : negotiations of a new
agreement including
GIs
Opening of negotiations
2017 Council adopted on 14 November 2016 the negotiating mandate
Kirgizstan negotiations of a new
agreement including cooperation on
agriculture and a GIs
TRIPs+ chapter
Adoption by COM of negotiations
directives
2017 Preliminary internal Commission work in 2016
Russia, Turkey : resolving trade
irritants
Contribute to the resolution of
ongoing trade bans
2016 Last meeting with Turkey on the issue of beef ban in December
2016. For Russia, WTO panel by the EU on pigmeat embargo;
results in August 2016
Analysis of
cumulative economic impact of various
Free Trade Agreements
Provide analysis
of economic impact for
publication
September
2016
Study "Cumulative economic
impact of future trade agreements on EU agriculture"
(prepared by Joint Research Centre working together with DG
AGRI) published 15 November
2016125
2015/AGRI/030 and 2015/AGRI/031:
Proposal for a Council Decision on the
conclusion and the
signature of an EU-Iceland agreement
on protection of geographical
indications
COM adoption Planned 1st quarter
2016
Adopted on 25/08/2016 (COM(2016)523 and
COM(2016)524)
2015/AGRI/035 and
2015/AGRI/036: Proposal for a Council
Decision on the conclusion and the
signature of an EU-Iceland Article 19
agreement on further trade liberalisation
COM adoption Planned 1st
quarter 2016
Adopted on 03/10/2016
(COM(2016)563 and COM(2016)564)
2015/AGRI/080 and 2015/AGRI/081
Proposal for a Council Decision on the
conclusion and the signature of an
agreement between
the European Union
COM adoption Planned 1st quarter
2016
Proposal for a Council decision on the signature of the EU-Chile
Agreement was sent on 10/10/2016 (COM(2016)648) and
on the conclusion on 05/12/2016 (COM(2016)771)
125 http://publications.jrc.ec.europa.eu/repository/bitstream/JRC103602/lb-na-28206-en-n_full_report_final.pdf
agri_aar_2016_annexes Page 253 of 273
and Chile on trade in
organic products
2011/AGRI/008 and
2015/AGRI/058 Proposal for a Council
Decision as regards the conclusion and
the signature of an agreement with
China on Geographical
Indications
COM adoption 4th quarter
2016
Postponed to 2017.
2015/AGRI/037 and
2015/AGRI/038 Proposal for a Council
Decision on the conclusion and the
signature of an EU-
Norway Article 19 agreement on further
trade liberalisation
COM adoption 4th quarter
2016
Last round of negotiations held in
November 2016
Specific objective: To promote the EU interests and positions on agriculture and rural development in the
relations with enlargement countries and to assist the enlargement countries in their alignment to the CAP
Related to spending programme: EAGF and
EAFRD
Result indicator: Timely contribution to the Commission's work in the area of enlargement
Source: DG AGRI
Baseline (2015) Target Latest known results
100% of timely contributions Example:
Preparation of screening report for Montenegro.
100% of contributions in time This target was agreed within
DG AGRI and is reflected by relevant procedures for
conducting negotiations.
Screening Report for Montenegro prepared in time
and to the required quality
Main outputs in 2016:
Policy–related outputs
Description Indicator Target date Latest known results
(situation on 31/12/2016)
Turkey : revision of agricultural agreement
Adoption of negotiation directives
by Council
2016 21 Dec 2016 :-Adoption by COM of
negotiating mandate
Montenegro :
negotiations on
agriculture chapter in accession negotiations
Opening of
negotiations on
chapter agriculture
2016 Chapter agriculture
was opened on 13
December 2016
Serbia : negotiations
on agriculture chapter in accession
negotiations
Examination of action
plan prepared by Serbia and
contribution to
opening benchmark's assessment
2016 A draft action plan
was submitted informally by SB in
May 2016 and
commented by COM
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preceding opening of
negotiations
Bosnia and
Herzegovina: negotiations the
adaptation of the Stabilisation and
Association Agreement (SAA), in view of the
accession of Croatia
Agreement on the
adaptation of the SAA
First half of 2016 Protocol on
adaptation of the SAA was signed on
15.12.16
Bosnia and
Herzegovina: accession negotiations
Opinion of the COM
of BIH application for membership
2017 Feb 2016 : BIH
submitted its application
Sept 2016 : Council invited COM to
prepare Opinion on BIH application
Specific objective: To facilitate decision-making on
strategic choices for the CAP and to support other activities of the DG by means of economic and policy
analyses and studies
Related to spending
programme: NA
Result indicator: Timely contribution to the decision-making process for the CAP towards
2020 Source: DG AGRI
Baseline (2015) Target Latest known results
100 % 100 % timely deliveries:
- supporting policy and economic analysis
- publication of key
documents on the CAP
100%
Result indicator: Representativeness of information about the EU farm economic situation collected by the Farm Accountancy Data Network (FADN)
Source: EU FADN
Baseline (2015) Target (2016) Latest known results
Observed coverage of EU agricultural production in the
accounting year 2013:
- 96 % coverage of the Standard Output
- 94 % coverage of the Utilised Agricultural Area
- Farm returns collected: 86 840
Observed coverage of EU agricultural production in the
accounting year 2014:
- 99 % coverage of the EU agricultural production as
expressed in Standard Output - 93 % coverage of the
Utilised Agricultural Area - Farm returns to be
delivered (Reg. 1291/2009 and successive
amendments): 86 755
Targetted coverage of EU agricultural production for
accounting year 2015:
1. 90% coverage of the Standard Output;
2. 90% coverage of the Utilized Agricultural Area
Result indicator: Adequate knowledge of Farm structure
Source: Eurostat – Farm Structure Survey
Baseline (2015) Target (2016) Latest known results
Data from the 2013 Farm Structure Survey are
extensively used in internal
analyses, publications and indicators of the common
Use of the 2013 Farm Structure Survey data in
internal analyses, publications
and indicators of the common monitoring and evaluation
No more recent results available – the 2016 survey
has been conducted, data will
become available in 2018.
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monitoring and evaluation
framework for the CAP 2014-2020
framework for the CAP 2014-
2020 New survey in 2016.
Main outputs in 2016:
Policy–related outputs
Description Indicator Target Latest known
results (situation on
31/12/2016)
AGRICULTURAL POLICY ANALYSIS AND
DEVELOPMENT
• Follow-up of the implementation of
the CAP 2014-2020; • Follow-up of
policy developments in fields relevant for
agriculture and rural development
(environmental and
climate policies, trade negotiations,
employment policies, etc.), both at global
and EU level; • Cross-cutting
policy analyses of support mechanisms,
including with respect
to the long-term perspective of
agriculture and the CAP.
Follow-up of the implementation of
the CAP post 2014-
2020
Updated mapping of MS policy choices
100%
Support to other policy initiatives
(sustainable food, etc.)
On time contributions to
other policy initiatives
100%
Analysis for long-term perspective of
agriculture and the CAP
On time analytical policy documents
100%
COUNTRY
INTELLIGENCE
• Monitoring of agricultural policy
developments in Member States and
policy positions in the field of agriculture;
• Analysis of documents on the
evolution of agriculture
and rural areas from Member States
• Other data collection and analysis
Monitoring of policy
development in MS
Ongoing 100%
Data, analysis, fact
sheets and briefings on MS
Coordination of an
AGRI internal network on country
intelligence
100%
OUTLOOK
To provide short- and
medium-term outlook for EU agricultural
markets and income, to assess the likely
developments in the
Report on medium-
term prospects for
agricultural commodity markets
published paper/electronic
versions
Publish new Report
before end of the
year 2016
Report published on
6 December the
first day of the EU agricultural outlook
conference.
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current policy
framework and under alternative scenarios
Timely publication of
3 reports on short-term outlook for
agricultural commodity markets
Reports to be
published in March, July, October 2016
3 Reports published
timely and regular contribution to the
MMO.
Monthly updates of grains balance
sheets, for management
committee and G20-AMIS
Monthly reporting. Grain balance sheets were
produced every month on time to
be presented at the committee and sent
to AMIS.
Set of internal and
public reports and notes (specific sector
and market/policy developments)
On request One brief on
'Productivity in EU agriculture'
published in December 2016.
Specific internal
reports on dairy were produced.
MODELLING
Development, maintenance and use
of quantitative analysis
tools like partial equilibrium models
both at macro- and micro-economic level,
biophysical models and other forward looking
methods.
Operational platform
of economic and biophysical models
and related
databases
Operational tools
for timely results
Tools were used by
DG AGRI and/or JRC to produce
among others: the
medium-term prospects, the
ECAMPA II report126 for Unit D4 and DG
CLIMA IA and contributions to
trade negotiations as well as a
published study on
'The cumulative effects of trade
agreements on the EU agricultural
sector'
FOOD CHAIN
Analysis of the food supply chain including
price formation, monitoring and
analysis of world agricultural commodity
markets
Monthly dashboard of
EU and world commodity prices
Monthly updates. The dashboard was
published every month on time.
Up-dating and
maintenance of AgriView
Ongoing Agriview was
updated on time with price data.
Reports are now
available with CATS control data for
Claim year 2015 and can be used by
several Units. For the CAP
indicators in Agriview, the work
is ongoing.
126 An economic assessment of GHG mitigation policy options for EU agriculture, JRC report.
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MANAGEMENT AND
DEVELOPMENT OF FADN LEGISLATION
AND INFRASTRUCTURE
• Implementation
of the new typology and Farm Return
regulation (Regulations
1291/2009; 1198/2014; 2015-220)
• Monitoring and development of the IT
system
• Adaptation of the FADN data to the
CAP evolution and requirements/demands
for the analyses • Improve the
efficiency and the performance of the
FADN reporting
Maintenance and
support of the RICA Information Systems
Continuous 100 % availability
of the system to users (outside
maintenance periods)
Enhancement of RICA2 functionality
Continuous All business requirements
implemented as scheduled
ECONOMIC ANALYSES
High quality economic analyses based in
particular on FADN data in line with the
needs of DG AGRI for
the assessment of policy proposals (ex-
ante) and CAP measures (ex-post).
Delivery of relevant
and high quality data for specific analyses
supporting policy development of CAP
after 2020
Ongoing Various analyses
and simulations provided
Delivery of relevant
ad-hoc analysis and special FADN reports
Ongoing
Finalisation of FADN annual reports
Before 30 September 2016
All planned reports have been finalised
and published.
STATISTICAL COORDINATION AND
ANALYSES
Coordinate the information needs of
DG AGRI within DG AGRI and with ESTAT
and ensure their dissemination
Contribute to Commission proposals
on legislation for
agricultural statistics (e.g., Commission
Regulation on land prices and rents; FSS
2020) and to Eurostat's strategy for
agricultural statistics towards 2020 and
beyond
Provide updates of
Contribute to the development of
Eurostat's framework
regulations on integrated farm
surveys and statistics on agricultural inputs
and outputs
Ongoing Proposal for regulation on
integrated farm
statistics has been adopted in
December 2016.
Contribution to the
development and implementation of
Eurostat's work programme in
agricultural statistics, in line with DG
AGRI's data needs
Ongoing Continuous
engagement with Eurostat through
formal and informal channels.
2016 update of
statistical country factsheets
March 2016 Update published in
April 2016
2016 update of CAP
context indicators
December 2016 Update finalised in
December 2016
(publication
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statistical factsheets
and CAP context indicators
Analyse the evolution of farm structures and
agricultural income
based on statistics
pending)
2016 update of
agricultural income developments
December 2016 First estimates for
agricultural income 2016 analysed and
communicated to Commissioner
Hogan
Contribute to the
December Outlook conference with
analyses on farm structural change
November 2016 Poster on farm
structures prepared;
presentation on EU farm structures
given during the
Outlook Conference
Geographic Information System
(GIS) support to statistics and
economic/policy
analysis
Increase the number of DG AGRI units
using the service. Maintain or increase
the number of maps
and data analyses produced.
Ongoing Number of maps produced: 280
(generated by 82 requests); number
of data
management and spatial analyses
requests: 9; clients: 10 occasional + 1
regular. Additional background work
was carried out to maintain and
improve the GIS
service and to raise awareness about it.
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ANNEX 13: Interruptions, reductions and suspensions
EAGF
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ANNEX 14: Court of Auditors' special reports
1) Special Report 1/2016: Is the Commission's system for performance measurement in relation to farmers' incomes well designed and based on
sound data?
The Court points out to the limitations of the performance system and the quantity and
quality of statistical data. The main criticism is that direct payments are paid out to farmers independently of their overall household income.
In order to address the shortcomings, the Court recommended to the Commission and
the Member States to:
develop a more comprehensive framework for providing information on disposable
income and for comparing farmers’ incomes with incomes in other sectors of the economy;
further develop the main farm income measurement tools so their potential can be better achieved;
ensure that the analysis of farmers’ incomes is based on indicators, taking account of the current situation of agriculture, and on sufficient and consistent
data for all CAP beneficiaries. This could be done by developing synergies between
existing administrative data or by developing other suitable statistical tools;
enhance the present quality assurance arrangements for the farm income
statistics established by the Member States.
From the outset of the next programming period, the Commission should:
define appropriate operational objectives and baselines against which the performance of the CAP measures can be compared;
complement its current framework of performance indicators for evaluations with other relevant and
good-quality data in order to measure the results achieved;
assess the effectiveness and efficiency of the measures designed to support farmers’ incomes.
In its response to the Court's findings and recommendations, the Commission made the following observations:
Farmers' incomes and a fair standard of living are set in the Treaty on the Functioning of the EU and the 2013 reform of the Common Agriculture Policy
(CAP). However, income is not the only CAP objective. In fact, the 2013 reform of the CAP specifies three policy objectives: 1) viable food production, 2) sustainable
management of natural resources and climate action, 3) balanced territorial
development. Farmers' incomes and a fair standard of living belong to the first of these objectives (viable food production).
The Commission is of the opinion that it has representative data on the income derived from agricultural activities. These data can be used to assess the
performance of CAP measures in support of farmers' incomes. What has been identified in the Special Report as limitations of the statistical data is in fact the
representation of the main features of the data sources.
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In the Treaty, there is a link between increasing agricultural productivity and ensuring a fair standard of living for the agricultural community, in particular by
increasing the individual earnings of persons engaged in agriculture. It is thus appropriate that the Commission's data focus on the income derived from
agricultural activities, as this income is of primary importance for the CAP.
As regards the direct payments, although financially the most important, they are
not the only instrument that affects farmers’ incomes. At EU level, they are accompanied by rural development measures and a set of market and promotion
measures which aim at specific agricultural sectors. Together with other CAP
instruments, direct payments contribute not just to income support for farmers, but also to other objectives related to land use such as soil protection, biodiversity
enhancement, and climate mitigation.
The Commission places great importance on performance measurement. The new
monitoring and evaluation framework of the CAP aims to capture the combined effects of the different measures as regards different CAP objectives. Each of
these objectives is monitored and assessed using a comprehensive set of common indicators, some specific to measures and some broader ones to reflect combined
effects.
2) Special Report 18/2016: The EU system for the certification of sustainable
biofuels
The Court criticizes that the impact of indirect land-use changes on the sustainability of
biofuels is not covered by a sufficient assessment and that the Commission granted recognition decisions to voluntary schemes with insufficient verification to ensure that the
origin of biofuels produced from waste was indeed waste, or that biofuel feed stocks fulfil the EU environmental requirements for agriculture.
In their recommendations, the Court called on the Commission to ensure that the
certification schemes:
assess how much biofuel production entails significant socioeconomic risks and
indirect land‐use change;
verify that feedstock producers comply with environmental requirements for
agriculture;
provide sufficient evidence of the origin of waste and residues used for biofuels.
The auditors recommended that the Commission itself should:
assess whether the schemes’ governance reduces the risk of conflict of interest
and are sufficiently transparent;
check that the operations of the certified schemes comply with the standards presented at the time of recognition and that the schemes set up transparent
complaints systems;
seek evidence from Member States on the reliability of their biofuels statistics and
harmonise the definition of waste substances.
In its response to the Court's findings and recommendations, the Commission made the
following observations:
The Commission has conducted thorough assessments of all voluntary schemes
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that have been recognised fulfilling all the legal requirements of the Directive. The Commission considers that the voluntary schemes provide assurance that the
certified biofuels comply with the mandatory criteria for which the schemes have been recognised on the basis of thorough assessments of all voluntary schemes
certified. Nonetheless the Commission is always open to promote the further development of standards to improve the system even further, to address
challenges that are encountered during the operation of the system and take into account changes of the legal base.
The Commission considers that the voluntary schemes provide assurance that the
certified biofuels comply with the mandatory criteria for which the schemes have been recognised on the basis of thorough assessments of all voluntary schemes
certified. Nonetheless, the Commission is always open to promote the further development of standards to improve the system even further, to address
challenges that are encountered during the operation of the system and take into account changes of the legal base.
In the view of the Commission it would not be appropriate to oblige voluntary schemes to include non-mandatory sustainability criteria. If inclusion of those
criteria should be obligatory, the legislator would have decided to include them in
the set of mandatory criteria.
The Commission will continue to assess whether the recognition of voluntary
schemes should be extended to non-mandatory sustainability aspects. It is noted, however, that the assessment of schemes with regard to non-mandatory criteria
is complex because those are spelled out in much less detail in the legislative text than the mandatory criteria. Further, the recognition would not have direct legal
consequences.
The Commission is obliged to work within the framework set by legislator. As a
consequence, it has to accept that the Renewable Energy Directive (RED) does not
oblige the Member States to verify compliance with Article 17(6) RED (which is linked to the CAP GAEC standards and other relevant Directives and Regulations)
although they are part of the criteria. The Commission is required to recognise voluntary schemes on other grounds than those included in Article 17(6) RED.
Therefore, it would not have been appropriate to include this element in the assessment of the voluntary schemes
3) Special Report 25/2016: The Land Parcel Identification System: A useful tool
to determine the eligibility of agricultural land – but its management could
be further improved
The Court criticizes Member States' photo-interpretation as not entirely reliable and the
system not being completely adapted for greening.
In order to address the shortcomings, the auditors recommend that the Member States:
increase data reliability by enhancing the update process and, whenever feasible, checking whether land is at the farmer’s disposal;
with the support of the Commission, set up a framework for assessing the cost of running and updating their LPISs to measure performance and the cost-
effectiveness of improvements;
ensure their LPISs reliably identify, register and monitor ecological focus areas, permanent grassland and new categories of land.
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The Commission should:
re-examine the current legal framework to simplify and streamline some of the
rules for the next CAP period;
carry out a cost-benefit analysis to determine whether quality assessment could
be improved to achieve better coverage of parcels;
improve its monitoring of quality assessment results by analysing inconsistencies
in reporting, following them up, providing feedback and ensuring that remedial action is taken.
In its response to the Court's findings and recommendations, the Commission made the
following observations:
The LPIS is a key control mechanism under the CAP designed to verify eligibility
for area-based subsidies. The system also increasingly plays a role in checking compliance with various environmental obligations. Currently, the LPIS which is
operated by 28 MS contains over 135 million reference parcels.
The LPIS is a tool which makes a significant contribution in preventing and
reducing the levels of errors in the aid schemes to which it applies.
The Commission shares the ECA's opinion that the LPIS is a useful tool for
determining the eligibility of agricultural land and that over the recent years many
LPIS-related shortcomings have been effectively addressed.
In particular, the Commission would like to draw attention to the progress made
in upgrading LPISs to meet the 2014-2020 CAP requirements and improvements in guidance, audits, financial corrections and follow-up of Member States’ action
plans, as well as the overall Commission’s performance of its monitoring role acknowledged by the ECA.
The weaknesses set out in the report mainly concern the Member States' management of the LPIS. In particular, it is the Member States’ responsibility to
keep their LPISs up-to-date, ensure data reliability and the cost-effectiveness of
the systems.
For its part, given the importance of the tool in preventing and rectifying errors in
the aid schemes, the Commission has taken further steps in guiding and supervising the Member States. For instance, the Commission will review all LPIS-
related rules in the context of the post 2020 CAP and it has improved its monitoring of the annual quality assessment of the LPIS by the Member States by
providing feedback on the remedial actions or identifying Member States which may have issues with the correct application of the LPIS quality assessment
methodology.
4) Special Report 26/2016: Making cross-compliance more effective and
achieving simplification remains challenging
The Court criticizes the Commission for not disposing of adequate information to assess
the effectiveness of cross-compliance or the costs of its implementation, for having two sets of complementary agricultural practices (cross-compliance and greening) which
target the same objectives and for not harmonising penalties for farmers who do not comply with greening.
In order to address the shortcomings, the Court recommended that the Commission
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should:
further develop its indicators for performance and compliance;
improve information-sharing on infringements amongst its departments and take appropriate measures to address breaches;
propose adapting the rules for on-the-spot checks to allow more effective targeting;
promote synergies between the two systems operating with similar environmental objectives;
develop a methodology by the end of 2018 to measure the costs of cross-
compliance;
encourage more harmonised penalties at EU level after 2020.
In its response to the Court's findings and recommendations, the Commission made the following observations:
Cross-compliance links most CAP payments to farmers’ compliance with rules for protecting the environment, food safety, animal health and welfare, and for
maintaining land in good agricultural and environmental conditions. It currently applies to 7.5 million farmers across the EU.
Cross-compliance is based on two main sets of rules:
1. The statutory management requirements (SMRs) are requirements selected from existing legislation on environment, food safety, plant health, animal
health and welfare.
2. The standards for good agricultural and environmental conditions (GAECs) are
additional rules applicable only to beneficiaries of CAP payments. They impose sustainable practices related to agricultural land and deal with the protection
of water, soil and carbon stock and the maintenance of land and landscape features.
CAP beneficiaries must respect all the cross-compliance rules. Otherwise, they risk
having their CAP payments reduced.
However, cross-compliance is not the implementing tool for other policies, which
have their own objectives. The aim of cross-compliance is to contribute to the development of sustainable agriculture through awareness-raising among farmers
and making the CAP more compatible with the expectations of society.
Cross-compliance is implemented through shared management: the Commission
is responsible for monitoring its implementation, while the MS are responsible for adopting legislative, regulatory and administrative provisions to set-up a national
framework compliant with the EU framework and verifying whether the cross-
compliance obligations are respected.
The Commission considers that the performance indicators used for measuring the
effectiveness of cross-compliance in meeting its objectives are the most appropriate on the basis of the available information.
The Commission shares the ECA's opinion that the cross-compliance rules have been simplified for the 2014–2020. For instance, the number of SMRs has been
reduced from 18 to 13, the number of GAEC standards was reduced from 15 to 7,
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the link between the controllability and agricultural activities has been reviewed and the requirements which were not sufficiently relevant to the farming activity
have been removed.
The Commission considers that the scale of the effort already put into
simplification makes it most unlikely that any further simplification can be achieved without undermining the environmental goals of cross-compliance.
Loosening the rules on on-the-spot checks, as recommended by the Court, would in Commission's opinion ultimately undermine the effectiveness of cross-
compliance. Moreover, MS have a wide margin of maneuver to take into account
the risks and optimize their control systems.
Further efforts will be made in order to improve the sharing of information to
ensure the consistency and a more harmonized application of cross-compliance.
5) Special Report 31/2016: Spending at least one euro in every five from the EU budget on climate action: ambitious work underway, but a serious risk of
falling short
The Court found that ambitious work was underway and that, overall, progress had been
made towards reaching the target of spending 20% of the EU budget on climate action.
However, there is a serious risk that the 20 % target will not be met without more effort to tackle climate change. In particular, in the areas of agriculture and rural development
there has been no significant shift towards climate action and not all potential opportunities for financing climate related action have been fully explored.
In order to address the shortcomings, the Court's recommendations to the Commission concern the need for a robust, multi-annual, consolidation exercise to progress towards
the 20 % target, the need for comprehensive reporting and monitoring of results, and for there to be a realistic and robust assessment of climate change needs. They also
recommend that overestimates in rural development spending be corrected, and that
action plans be drawn up for areas that have fallen behind. Finally, they recommend that all potential opportunities to ensure a further, real shift towards climate action should be
explored.
In its response to the Court's findings and recommendations, the Commission made the
following observations:
The Commission is fully committed to fighting climate change. The EU approach to
transitioning to low carbon and climate resilient economy is driven through policy measures, which seek to also shift investment patterns. Public spending from the
EU and Member States’ national budgets complements and seeks to speed up this
transition.
With the proposal to mainstream climate across the EU budget and to increase
climate spending to 20% of the budget, the Commission aimed to make the EU budget a pioneer in fostering mainstreaming. The European Council and the
European Parliament supported the mainstreaming approach, and confirmed that the 20% is an appropriate level of support.
The European Council explicitly confirmed the Commission’s approach to mainstream climate across the budget as the main objective, supported by the
political objective of making at least 20% of EU spending in the current MFF
climate relevant. In addition to mainstreaming, the Multiannual Financial Framework (MFF) also set out a dedicated programme for addressing climate
action.
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The Commission welcomes the Court’s recognition of the ambitious work undertaken and the need to continue the efforts to further improve
mainstreaming. At the same time, the Commission considers that significant progress has been made both in including climate considerations in programme
development and in developing the unique quantified mainstreaming approach, which now provides a transparent baseline.
The Commission notes, however, that the potential individual contribution of each of the funds varies according to its primary missions, and therefore, it is inevitable
that the systems used to programme and to monitor the contribution differ from
one fund to another. Also, the reform of the Common Agricultural Policy (CAP) has led to a significant increase in the financing of climate action as compared to the
2007-2013 period. The Commission considers that there is a significant shift towards more climate action.
The Commission assessed progress towards the 20% target in the MFF Mid Term Review (MTR), published on 14 September 2016. The latest data, presented in the
Staff Working Document (2016) 299 accompanying the Midterm Review of the Multiannual Financial Framework (COM(2016) 603) show that over the 2014-2020
period, a total of slightly above EUR 200 billion of climate-related spending will be
reached. This is equivalent to around 18,9% for the whole financial programming period.
The Commission has established an innovative and detailed tracking methodology built on the OECD’s Rio markers. The method used by the Commission has been
prepared in a transparent and coordinated manner. The EU approach to assessing levels of climate finance in agriculture and rural development is sound. Likewise,
for green direct payments, the calculation fairly reflects the climate-relatedness of the three farming practices. Also, for nongreening direct payments, the climate
impact of 8% of non-greening direct payments is not overestimated if we look at
the benefits for the climate of cross compliance and direct payments.
The Commission recognises that the innovative approach to tracking climate
spending and its implementation in the EU budget could be further improved, including in respect of increasing granularity with regard to mitigation and
adaptation. At the same time, in light of the unclear administrative impact and the complexity of avoiding double counting while reflecting the frequent associated
co-benefits, the Commission does not currently foresee further disaggregation in its tracking system.
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ANNEX 15: Abbreviations
Abbreviation Full text
A
AAR Annual Activity Report ABB Activity-Based Budgeting
ACP African, Caribbean, and Pacific Group of States DG AGRI Directorate-General Agriculture and rural development
AMIS Agricultural Market Information System
ARES Advanced Records System AT Austria
AWBM Activity Without Budgetary Measure AWU Annual Work Unit
B
BE Belgium BG Bulgaria
BiH Bosnia-Herzegovina
C
CAP Common Agricultural Policy CB Certification Body
CETA EU-Canada Free Trade Agreement CHAFEA Consumers, Health, Agriculture and Food Executive Agency
DG CLIMA Directorate-General Climate Action CMO Common Market Organisation
COMAGRI Committee on Agriculture and Rural Development in the
European Parliament DG COMP Directorate-General Competition
CWP Commission Work Programme CY Cyprus
CZ Czech Republic
D DCFTA Deep and Comprehensive Free Trade Areas
DDA Doha Development Agenda
DE Germany DG Directorate-General
DG DEVCO Directorate-General International Cooperation and Development DK Denmark
E
DG EAC Directorate-General Education and Culture EAFRD European Agricultural Fund for Rural Development
EAGF European Agricultural Guarantee Fund
ECA European Court of Auditors EE Estonia
EFA Environtmental Focus Area EIP European Innovation Partnership
EL Greece DG EMPL Directorate-General Employment, Social Affairs and Inclusion
ENRD European Network for Rural Development DG ENV Directorate-General Environment
EP European Parliament
EPA Economic Partnership Agreement ES Spain
ESIF European Structural and Investment Funds DG ESTAT Eurostat
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Abbreviation Full text EU European Union
EUR (€) Euro
F FADN Farm Accountancy Data Network
FAO Food and Agriculture Organization of the United Nations FI Finland
FI Financial instruments
FTA Free Trade Agreement FR France
FVO Food and Veterinary Office fYRoM Former Yugoslav Republic of Macedonia
G
GAEC Good Agricultural and Environmental Conditions GI Geographical Indications
GR Greece
DG GROW Directorate-General Internal Market, Industry, Entrepreneurship and SMEs
GVA Gross Value Added
H HR Croatia
HR Human Resources HU Hungary
I IACS Integrated Administration and Control System
IAC Internal Audit Capability IAS Internal Audit Service
ICT Information and Communication Technology IE Ireland
IEPA Interim Economic Partnership Agreement IPA Instrument for Pre-accession Assistance
IPARD Instrument for Pre-Accession Assistance Rural Development
IT Italy IT Information Technology
J
JRC Joint Research Centre DG JUST Directorate-General Justice and Consumers
L
LAG Local Action Group
LEADER Liaison Entre Actions de Développement de l'Économie Rurale LPIS Land Parcel Identification System
LT Lithuania LU Luxemburg
LV Latvia
M MAFA Multi Annual Financing Agreement (SAPARD)
DG MARE Directorate-General Maritime Affairs and Fisheries
ME Montenegro MEP Member of the European Parliament
MFA Multi Annual Financing Agreement (IPARD) MFF Multi-annual Financial Framework
MoU Memorandum of Understanding
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Abbreviation Full text MS Member State
MT Malta
N NAO National Authorizing Officer
NIPAC National 'Instrument for Pre-accession Assistance' Coordinator NL Netherlands
NRN National Rural Networks
O
OECD Organisation for Economic Co-operation and Development OJ Official Journal
OLAF Office de Lutte Antifraude OTSC On-the-spot checks
P
PA Paying Agency
PDO Protected Designations of Origin PGI Protected Geographical Indications
PL Poland PMO Office for Administration and Payment of Individual Entitlements
POSEI Programme d'Options Spécifiques à l'Éloignement et l'Insularité PT Portugal
R
RD Rural Development
RDP Rural Development Programme REA Research Executive Agency
DG REGIO Directorate-General Regional and Urban Policy RO Romania
DG RTD Directorate-General Research and Innovation
S DG SANTE Directorate-General Health and Food Safety
SAPARD Special Accession Programme for Agriculture and Rural
Development SAPS Single Area Payment Scheme
SC Societal Challenge (Horizon 2020) SDGs Sustainable Development Goals
SE Sweden SG Secretariat-General of the European Commisison
SI Slovenia SJ Legal Service of the European Commission
SK Slovakia
SPS Single Payment Scheme SR Special Report
T
DG TAXUD Directorate-General Taxation and Customs Union TFEU Treaty on the Functioning of the European Union
ToR Terms of Reference TR Turkey
DG TRADE Directorate-General for Trade
TRIPs Agreement on Trade-Related Aspects of Intellectual Property Rights
TRQ Tariff-Rate Quota TSG Traditional Specialities Guaranteed
TTIP Transatlantic Trade and Investment Partnership
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Abbreviation Full text
U UK United Kingdom
V
VCS Voluntary Coupled Support
W
WTO World Trade Organization