Section 2

Throughout the budget procedure and the implementation of the budget, appropriations relating to EAGF expenditure shall not exceed the amount referred to in Article 16. All legislative instruments proposed by the Commission and adopted by the European Parliament and the Council, the Council or the Commission and that have an influence on the EAGF budget shall comply with the amount referred to in Article 16. Where Union law provides for a financial ceiling in euro for agricultural expenditure in respect of a Member State, such expenditure shall be reimbursed subject to that limit set in euro, and, where Article 41 applies, with any necessary adjustments. National ceilings for direct payments referred to in Article 7 of Regulation (EU) No 1307/2013, corrected by the adjustments laid down in Article 26 of this Regulation, shall be deemed to be financial ceilings in euro. A reserve intended to provide additional support for the agricultural sector in the case of major crises affecting the agricultural production or distribution ("the reserve for crises in the agricultural sector") shall be established by applying, at the beginning of each year, a reduction to direct payments with the financial discipline mechanism referred to in Article 26. The total amount of the reserve shall be EUR 2800 million with equal annual instalments of EUR 400 million (at 2011 prices) for the period 2014-2020 and shall be included under Heading 2 of the Multiannual Financial Framework as set out in the Annex to Regulation (EU, Euratom) No 1311/2013. In order to ensure that the annual ceilings set out in Regulation (EU, Euratom) No 1311/2013 for the financing of the market related expenditure and direct payments are respected, an adjustment rate for direct payments ("the adjustment rate") shall be determined when the forecasts for the financing of the measures financed under that sub-ceiling for a given financial year indicate that the applicable annual ceilings will be exceeded. The Commission shall present a proposal to the European Parliament and to the Council concerning the adjustment rate no later than 31 March of the calendar year in respect of which that adjustment rate applies. If in any year the adjustment rate has not been set by the European Parliament and the Council by 30 June, the Commission shall adopt implementing acts fixing the adjustment rate and shall inform the European Parliament and the Council immediately thereof. Such implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2). Until 1 December, the Commission may, on the basis of new information in its possession, adopt implementing acts adapting the adjustment rate set in accordance with paragraphs 2 or 3. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2). By way of derogation from the fourth subparagraph of Article 169(3) of Regulation (EU, Euratom) No 966/2012, Member States shall reimburse the appropriations carried over in accordance with Article 169(3) of Regulation (EU, Euratom) No 966/2012 to the final recipients who are subject, in the financial year to which the appropriations are carried over, to the adjustment rate. The reimbursement referred to in the first subparagraph shall only apply to final beneficiaries in those Member States where financial discipline applied in the preceding financial year. The Commission may adopt implementing acts, laying down the terms and conditions applicable to appropriations carried over in accordance with Article 169(3) of Regulation (EU, Euratom) No 966/2012 in order to finance the expenditure referred to in Article 4(1)(b) of this Regulation. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 116(2). When applying this Article, the amount of the reserve for crises in the agricultural sector referred to in Article 25 shall be included in the determination of the adjustment rate. Any amount not made available for crisis measures by the end of the financial year shall be disbursed in accordance with paragraph 5 of this Article. The Commission shall present to the European Parliament and to the Council, at the same time as the draft budget for financial year N, its forecasts for financial years N - 1, N and N + 1. If, on drawing up the draft budget for financial year N, there appears to be a risk that the amount referred to in Article 16 for financial year N will be exceeded, the Commission shall propose to the European Parliament and to the Council or to the Council, the measures necessary to ensure compliance with that amount. At any time, if the Commission considers that there is a risk that the amount referred to in Article 16 will be exceeded and that it cannot take adequate measures to remedy the situation under its powers, it shall propose other measures to ensure compliance with that amount. Those measures are adopted by the Council where the legal basis of the relevant measure is Article 43(3) TFEU or by the European Parliament and the Council where the legal basis of the relevant measure is Article 43(2) TFEU. If, at the end of financial year N, reimbursement requests from the Member States exceed or are likely to exceed the amount referred to in Article 16, the Commission shall: consider the requests presented by Member States pro rata and within the limit of the available budget, and shall, adopt implementing acts, setting provisionally the amount of the payments for the month concerned; determine, for all Member States, at the latest by 28 February of financial year N + 1, their situation with regard to Union financing for the financial year N; adopt implementing acts setting the total amount of Union financing broken down by Member State, on the basis of a single rate of Union financing, within the limit of the budget which was available for the monthly payments; effect, at the latest when the monthly payments are made for March of year N+1, any compensation to be carried out with respect to Member States. The implementing acts provided for in points (a) and (c) of the first subparagraph shall be adopted in accordance with the advisory procedure referred to in Article 116(2). In order to ensure that the budget ceiling referred to in Article 16 is not exceeded, the Commission shall implement a monthly early-warning and monitoring system in respect of EAGF expenditure. To that end, at the beginning of each financial year, the Commission shall determine monthly expenditure profiles based, where appropriate, on average monthly expenditure during the previous three years. The Commission shall periodically present to the European Parliament and to the Council a report examining the development of expenditure effected in relation to the profiles and containing an assessment of the forecasted implementation for the current financial year. When adopting the draft budget, or a letter of amendment to the draft budget which concerns agricultural expenditure, the Commission shall use for EAGF budget estimates the average euro/US dollar exchange rate recorded on the market during the latest quarter ending at least 20 days before adoption of the budget document by the Commission. When adopting a draft amending and supplementary budget or a letter of amendment thereto, the Commission shall, in so far as those documents concern appropriations relating to the measures referred to in point (a) of Article 4(1), use: the average euro/US dollar exchange rate actually recorded on the market from 1 August of the previous financial year until the end of the latest quarter ending at least 20 days before adoption of the budget document by the Commission and at the latest on 31 July of the current financial year, and the average exchange rate actually recorded during the latest quarter ending at least 20 days before adoption of the budget document by the Commission, as a forecast for the remainder of the financial year.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-08 · Text as adopted (Official Journal); later amendments are not incorporated in this text.