EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT

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1 EUROPEAN COMMISSION DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT Directorate G. Economic analysis, perspectives and evaluations G.1. Agricultural policy analysis and perspectives Brussels, 20 May 2008 D(2008) MC/15338 CAP HEALTH CHECK IMPACT ASSESSMENT NOTE N 10 Subject: Modulation 1. BACKGROUND Modulation is a means of budgetary transfer by which a percentage reduction is applied to farmer direct payments (Pillar I) and the budgetary resources released are reassigned to rural development (Pillar II) measures. Though was first discussed in the context of the 1992 Reform, it was not until the Agenda 2000 reforms that permission was granted to Member States to modulate up to 20% of the total amount of a farmers direct payments. Only UK, France, Germany and Spain chose to apply these voluntary measures. With the 2003 Reform, compulsory for all EU-15 Member states was finally agreed, starting in 2005 with a rate of 3% and increasing to 4% in 2006 and to 5% from 2007 onwards. A EUR franchise was also introduced, below which no reduction of direct payments is applied. The released funds are re-distributed according to a common key, based on certain criteria (see Annex 1) and the new EU-10+2 Member States were exempted until the transition to the full level of direct payments is achieved (i.e. in 2013). In the context of the Financial Perspectives, the Heads of State decided in December 2005 to introduce further voluntary, up to a maximum of 20%. The Commission s proposal to enact this decision met with substantial opposition from the European Parliament until a presidency compromise formula was found, which restricts de facto the possibility to apply voluntary to UK and PT 1, and led to the adoption of Council Regulation (EC) No 387/2007 on 27 March An analysis of the impacts of the current is found in Tables A1-A3 in Annex 2. It can be seen that in EU-15 the average direct payment per holding is reduced from EUR to EUR , that is by -5% compared to the 2003 level. Besides the UK and Portugal, which are applying voluntary, the most affected Member States are Denmark, Germany and France (-4.1% reduction). In budget terms, EUR Portugal intend to apply from % voluntary with a EUR franchise. In the UK the voluntary is applied without franchise and the rates foreseen in 2012 are the following: 14% in England, 6.5% in Wales and 9% in Scotland and Northern Ireland.

2 billion was released for re-distribution, as indicated in Table A2. In farmer income terms, Farm Net Value Added (FNVA) per Annual Working Unit (AWU) is calculated to have fallen from EUR to EUR , that is by -1.7% (Table A3). Figure 1 below shows the evolution of Rural Development expenditure, which has gradually increased since 1992 and, under current policy, is set to stabilise as from 2007 at around 20% of the total CAP budget. Figure 1. Evolution of CAP Expenditure 70 billion % GDP 0.7% % % % % % % 0 0.0% Export subsidies Market support Direct aids Decoupled payments Rural development % of EU GDP Rural Development plays an increasingly important role in helping rural areas to achieve growth, innovation and job creation in line with the Lisbon Strategy and improving sustainability, environmental benefits and rural landscapes in line with the Göteborg sustainability goals. As a means of transferring resources from Pillar I to Pillar II, thus becomes a key mechanism for the strengthening of Pillar II and helping in the achievement of CAP objectives. 2. PROBLEM DEFINITION Insufficiency of Pillar II budget in the current Financial Perspectives The constraints that Member States are facing, due to the cut in the expected Rural Development support following the 2005 decision on the Financial Perspectives, present an obstacle to the realisation of Pillar II objectives in the current budgetary period. Additional demand on Pillar II measures In addition to the restrictions posed by this tight budgetary framework, reinforcement of the budgetary resources is necessary in order to: 2

3 Address the new challenges stemming from horizontal issues identified in the Health Check Communication (namely climate change, water management and risk management) Respond to the need for increased efforts to address new productivity and environmental challenges (for example, biofuels and improved competitiveness in market sectors) 3. OBJECTIVES Modulation, though not, in itself, a policy instrument but rather a means by which budgetary resources may be transferred to rural development measures, works towards the realisation of the following policy objectives: Reinforce Rural Development funding, in order to address the shortfall in the current budgetary period and meet the extra budgetary resources necessary to respond to new challenges. Respect the agreement on the exemption of new Member States from basic until they reach the same level of payments with the EU-15. Find an appropriate balance for allocating funds generated through additional to MS 4. POLICY OPTIONS Four options are analysed in comparison to status quo. The first three assumed the same overall level of increase in, 8%, achieved with annual 2% steps from 2009 onwards, but took into account different assumptions for new MS and re-distribution of the fund released: 4.1. Option 0: Status quo - baseline Under the status quo, no change would be made to the present set of measures. Currently, reduction in payments under the CAP is made through the linear, 5% reduction of payments above from compulsory Option 1: Increasing basic compulsory across EU-15 by 8% Increasing the existing (basic) compulsory with a higher level of compulsory would be one possibility. This could be done to replace or complement the latest voluntary agreement. The current EU-15 distribution key method would be employed, using updated data from The schema would thus be the following: 3

4 Calendar Year Table 1: Option 1 Increasing basic compulsory across EU-15 Budget Year EU-15 EU-10 EU-2 Extra Total Extra Total Extra % 7% 0% 0% 0% 0% % 9% % 11% % 13% Total 4.3. Option 2: Increasing basic compulsory across EU-25 by 8% Limiting the increase in the basic compulsory to EU-15 fails to offer the new Member States the opportunity to address the new challenges of the CAP through increased rural development. A second option could be to increase the basic compulsory, as in option 1, including the new Member States (EU-25). Romania and Bulgaria would be excluded because they do not reach high levels of direct payments until late in the period. Furthermore, since data are currently not available, they cannot be included in the simulations at this stage. Under this option, the current criteria used for the EU-15 Member States distribution key method would be applied to EU-25, using data from This option is presented here more as a basis of comparison than an option since it would imply a re-opening of the ground rules for the calculation of, with few realistic chances of adoption. The schema would thus be the following; Table 2: Option 2: Increasing basic compulsory across EU-25 Calendar Year Budget Year EU-15 4 EU-10 Extra Total Extra % 7% +2% 2% % 9% +4% 4% % 11% +6% 6% % 13% +8% 8% Total 4.4. Option 3: Increasing for EU-25 with different re-distribution criteria The limitations of applying more basic only to EU-15 Member States with the existing key (option 1) and the difficulties of opening up the current agreement on the exemption of new Member States from basic (option 2) could be potentially avoided by proposing changes to the re-distribution criteria. The range of different re-distribution criteria is very broad. At one extreme, there might be no re-distribution (i.e. Member States would keep their own modulated funds). Such an option could be criticised for breaking with the cohesion element underlying the current re-distribution criteria and for ignoring the very uneven distribution of payments between Member States. An alternative approach would be the following (see Table 3):

5 For EU-15, an extra would be applied progressively from 2009, reaching 6% as from 2011 and being allocated among the EU-15 using the existing rules and based on the current distribution key method, with updated data from 2005 The new EU-10 Member States would be exempted from this basic until the transition to the full level of direct payments is achieved (i.e. in 2013) However, an additional 2% points of special for EU-15 and the new Member States would be applied as from The funding released from this special would be returned in its entirety to the Member State, in which they were generated, thus avoiding the redistribution effects. As for the previous option, Romania and Bulgaria would be excluded because they do not reach high levels of direct payments until late in the period. The schema would be: Table 3: Option 3: Increasing compulsory across EU-25 Calendar Year Budget Year EU-15 EU-10 Extra Total Special % 7% 0% 0% % 9% 0% 0% % 11% 0% 0% %+2% special 13% +2% 2% 4.5. Option 4: Progressive Total Another option, which also considers that the economic size of the farm should be an element to be taken into account, would be to apply progressive. Such a proposal has been made by MEP Goepel, rapporteur on the CAP Health Check for the COMAGRI, with the following parameters, as given Table 4: Table 4: Option 4: Progressive across EU-25 Calendar Year Budget Year EUR EUR EUR EUR Above Extra Mod'n Extra Mod'n Special Mod'n Extra Mod'n Special Mod'n Extra Mod'n Special Mod'n % 1% 1% 1% 2% 1% 3% % 1% 1% 1% 2% 1% 3% % 1% 1% 1% 2% 1% 3% % 1% 1% 1% 2% 1% 3% According to Mr Goepel's proposal, there is an effective franchise on this extra of EUR and the funds from the basic amount of 1% are to be distributed in accordance with the prevailing rules governing funds; the additional amounts are to remain in the Member States in which they accrue, referred to here as "special ". A variant of this option would be to double the percentage increases in of the Goepel proposal i.e. up to 8% for large beneficiaries. This would 5

6 have the advantage of being more coherent with the 8% increase proposed by the Commission and would go further to meeting the call for greater reduction in the payments to large beneficiaries. In this analysis, it would also be necessary to assess the impact of keeping the existing franchise of EUR 5 000, instead of the implicit EUR franchise of the Goepel proposal. The Commission analysis of Mr. Goepel's proposal will apply progressive on top of the current 5% level of compulsory applied in EU- 15, and progressive will also apply to EU-10. However, Romania and Bulgaria would be excluded for the same reasons as for the two previous options. 5. ANALYSIS OF IMPACTS The options under consideration were analysed and evaluated according to economic and budgetary impacts (effect on farmer direct payments, potential economic return to farmers through Pillar II, link to competitiveness and broader economic impacts on rural areas, and net budget impact by Member States), social impacts (income impact on farmers, link to broader rural society issues, and governance issues such as administrative consequences) and environmental impacts. The baseline for comparison of the options under examination is the current level of 5% compulsory in EU-15, and no in EU-10. Considerations of voluntary are made on the basis that such decreases, in the Member States applying it, as the compulsory increases, in order not to go beyond the current total rate. Voluntary is treated apart in the budget analysis but included in the estimated impact of the scenarios on farmer direct payments and income. The data used for the simulations of budget effects were the Estimated Direct Aids 2 including sugar reform and increase in energy crop maximum guaranteed area but not fruit and vegetable reform. For direct payments per holding and income impacts, the Farm Accountancy Data Network (FADN), which is representative of the commercial farm EU population, and covers around 90 % of EU agricultural production and 93% of total direct payments was used. (See annex 3 for methodological summary). Estimates of the impact on Rural Development spending were made using the latest data on the allocations made by Member State 3 and estimates of the average co-financing rate. For each option, the impact on Member State financing of RD measures was calculated assuming no change to that average co-financing rate. 2 3 DG Agri Working Document of 4 July 2007 Commission Decision 2006/626/EC 6

7 5.1. Option 1: Increasing basic compulsory across EU-15 by 8% Economic impacts Table 5 shows the percentage reduction of direct payments in EU-15, resulting from the application of the 5% basic plus the 8% extra considered in this option, compared to the rising level of EU-10 direct payments, which will reach 90% by Table 5. Option 1: Comparison of Direct Payment Level in EU-15 after extra and EU-10 without Calendar Year Budget Year Basic Rate Extra Modulation EU-15 Extra Rate Total Rate EU-15 Payment Level EU-10 Payment Level (phasingin) % 0% 4% 96% 35% % 0% 5% 95% 40% % 0% 5% 95% 50% % 2% 7% 93% 60% % 4% 9% 91% 70% % 6% 11% 89% 80% % 8% 13% 87% 90% It will be noted that, under this option, by calendar year 2012 EU-15 direct payment levels would have been reduced by a total of 13%, that is, to 87% of their full level. Since EU-10 are excluded from this option and are experiencing rising direct payment levels, as a result of the phasing-in of payments, they would be at 90% of the full level in This means that the same level of direct payments between EU-15 and EU-10 farmers would be achieved at an extra rate for EU-15 farmers of 5%. Transferring support from Pillar I to Pillar II results in cuts of the direct payments that EU-15 farmers receive. However, because of the franchise of EUR 5 000, the average cut of the direct payment farmers receive is lower than the actual level of. For this option, applying up to 8% to EU-15 by 2012, the average direct payment per holding would be cut from EUR to EUR This is equivalent of an average cut of 5% of direct payments, compared to the 2008 level. The range between Member States is from -3% in Greece, to -7% in Denmark, Germany and Sweden. This reveals, among other things, that the franchise effect is greater in Greece than in EU-15 on average. However, transfer from Pillar I to Pillar II does not necessarily imply a cut in the payments farmers receive. An indirect income effect, through the potential rural development returns, may also take place, even if a redistribution effect among farmers and Member States may occur. 7

8 In this context, rural development measures can be considered to be positive for farmers for several reasons, e.g. by promoting investments rural development provides solid grounds for increasing farmers' competitiveness by improving the farm's productivity and efficiency and therefore also the farm's income in the long run. The rural development programmes also include measures (e.g. agrienvironmental support) which provide alternative means of income in as far as farmers are paid for the services they provide to the public by voluntarily meeting production obligations which go beyond what they are legally required. Furthermore some rural development measures can also be considered to have multiplier effects on the agricultural sector (even though the measures are not directly targeted at farmers). Finally, rural development measures contribute to the overarching aim of creating employment opportunities and conditions for growth in rural areas. Thereby, 2 nd pillar instruments help to promote the overall economic development of rural areas which is also positive for farmers. DG Agriculture has carried out a preliminary exercise to assess the associated indirect effects on farmers' income of rural development measures. This exercise shows that the income effectiveness of Rural Development measures over the period is somewhat below 100% over the short/medium term, and higher over the long term. Budget impacts In budgetary terms, under option 1, the extra funding available at EU level for Pillar II measures would amount to EUR million in budget year 2013 (column A), with the largest transfers occurring in France (EUR 542 million) and Germany (EUR 359 million) (see Table 6 below). Table 6: Option 1: Increasing compulsory across EU-15 by 8% Net budget impact by MS, situation in budget year 2013 EU-15 Distribution of savings in 2013 mio EUR Net modn of 8% 12.5% direct Additional direct Distribution Key Total Net loss/gain Percentage 'return' Allocation key A B C D E F=E-A G=E/A 2005 data Belgium 36,1 4,5 7,9 16,5 28,9-7,2 80,0% 1,2% Denmark 63,1 7,9 17,3 25,2 50,5-12,6 80,0% 1,8% Germany 358,6 44,8 91,4 186,5 322,8-35,9 90,0% 13,0% Greece 66,7 8,3 0,0 114,9 123,2 56,6 184,8% 8,0% Spain 249,4 31,2 0,0 265,6 296,7 47,4 119,0% 18,6% France 542,0 67,8 147,5 218,3 433,6-108,4 80,0% 15,3% Ireland 66,3 8,3 0,0 67,7 76,0 9,7 114,6% 4,7% Italy 164,9 20,6 0,0 181,1 201,7 36,8 122,3% 12,7% Luxembourg 2,3 0,3 0,9 0,7 1,9-0,5 80,0% 0,0% Netherlands 51,9 6,5 2,4 32,6 41,5-10,4 80,0% 2,3% Austria 25,9 3,2 0,0 37,2 40,4 14,5 155,9% 2,6% Portugal 17,5 2,2 0,0 83,8 86,0 68,4 490,2% 5,9% Finland 23,6 2,9 0,0 25,5 28,4 4,8 120,5% 1,8% Sweden 44,0 5,5 0,0 29,8 35,3-8,7 80,2% 2,1% United Kingdom** 272,7 34,1 39,3 144,8 218,1-54,5 80,0% 10,1% EU ,1 248,1 306,8 1430,2 1985,1 0, ,0% 8

9 2013 mio EUR EU RD spending foreseen* % increase from 8% modn Effect on RD spending Current avg cofinancing rate % Increase in MS RD spending Total Increase in RD spending H I=E/H J K=(H/J)*(1-J) L=E+K Belgium 54,5 53% 37% 50,1 78,9 Denmark 61,6 82% 54% 43,8 94,3 Germany 1.131,1 29% 61% 203,0 525,7 Greece 619,2 20% 73% 45,6 168,8 Spain 1.041,1 29% 52% 275,4 572,2 France 905,7 48% 54% 370,4 804,0 Ireland 307,2 25% 54% 63,6 139,6 Italy 1.258,2 16% 50% 205,7 407,4 Luxembourg 11,8 16% 24% 5,8 7,6 Netherlands 66,6 62% 50% 41,5 83,0 Austria 511,1 8% 50% 40,4 80,9 Portugal 564,1 15% 79% 23,2 109,1 Finland 271,6 10% 31% 62,9 91,3 Sweden 239,2 15% 47% 40,5 75,8 United Kingdom** 267,4 82% 50% 218,1 436,2 EU ,0 18% 51% 1689,8 3674,9 * Commission Decision 2006/626/EC (including already 5% basic EU-15 modn and transfers for cotton/tobacco). ** Note that RD expenditure for UK with voluntary was revised to EUR for 2013 The redistribution effect for this option, in terms of the net effect of gain to Pillar II less the loss to Pillar I (column F), implies that the main net beneficiaries would be Portugal (EUR 68 million), Greece (EUR 57 million) and Spain (EUR 47 million), The main net contributors would be France (EUR 108 million) and Germany (EUR 36 million). The net position of the UK and Portugal is conditioned by the amount of voluntary applied. In principle, in order to simplify the calculations, the extra amounts would be deducted from the projected voluntary amounts and the resulting percentage of voluntary adjusted to give the same total amount. The UK voluntary amounts have been set at EUR 482 for This implies that, under this option, the voluntary rate for the UK would be adjusted down to yield EUR 264 million in 2013 (i.e. EUR million from the extra from this option). The amounts for Portugal have not yet been established. In relation to the current allocation of funding foreseen for Pillar II measures in 2013 (column H, not including the co-financing), the increase of funding available for Pillar II measures by Member State is presented in column I. the average EU increase of Pillar II funding would be 18%. In Denmark it would be 82% and in the Netherlands (62%). The resulting impact on the total increase in financing of RD measures would rise to EUR million. 4 Commission Decision 2006/410/EC 9

10 Social impacts One way of measuring the social impact caused by increased is to look at the effects on farmers' income. Each percentage point of results in an actual reduction of the income per AWU 5. This reduction will be less than the effect on the amounts of direct payments received, since farmers have other incomes than solely the direct payments. When compulsory is increased by 8% in EU- 15, the average income per AWU falls from EUR to EUR This is equivalent to a -1.7% income cut for the average EU-15 farm. The range between Member States is from -6% in Sweden to -1% in Belgium, Greece, Spain, Italy, the Netherlands, and Austria. This reveals, among other things, that the income reliance among Swedish farmers on the EU direct payments is high. However, it should be noted that this calculation does not take into account the potential returns from rural development. As noted in the previous section, funds transferred from Pillar I to Pillar II can be considered to have higher income efficiency for the broader rural society, at least in a long-term perspective, than the direct transfers received only by farmers through Pillar I. Hence, by increasing the level of, the potential benefits stemming from EU funding, for the rural society as a whole, including the farming sector, increase. In terms of administrative consequences, applying an extra 8% compulsory across EU-15, rather than the current situation of 5%, with the same distribution key as today, would not be expected to have any considerable impact on the administrative burden of the Member States. Environmental impacts By applying a higher level of compulsory across EU-15 more funding would be available for Member States to target environmental concerns through Pillar II. The increased level of would however not affect the environmental benefits generated through Pillar I funding, since cross compliance applies to all farmers receiving direct payments, regardless of what it amounts to. Hence, a higher level of can be expected to have positive impacts on the environment Option 2: Increasing basic compulsory across EU-25 by 8% Economic impacts Table 7 shows the percentage reduction of direct payments in EU-15 and EU-10, resulting from the application of the 5% basic for EU-15 plus the 8% extra for EU-25 considered in this option, compared to the rising level of EU-10 direct payments, which would reach 90% by As an income indicator, Farm Net Value Added per Annual Work Unit is used because it is the most comparable between Member States. The FNVA is the difference between the output plus current subsidies and the intermediate consumption and depreciation. With this amount of money the farmer still needs to pay the external factors (wages, rent and interest). 10

11 Table 7. Option 2: Direct Payment Level in EU-15 and EU-10 after Extra Modulation Calendar Year Budget Year Basic Rate Extra Modulation EU-25 Extra Rate Total Rate EU-15 Payment Level EU-10 Payment Level (phasingin) % 0% 4% 96% 35% % 0% 5% 95% 40% % 0% 5% 95% 50% % 2% 7% 93% 58% % 4% 9% 91% 66% % 6% 11% 89% 74% % 8% 13% 87% 82% Under this option, by 2012 EU-15 direct payment levels would have been reduced by a total of 13%, that is, to 87% of the 2003 level, while for EU-10 payments in 2012 would be 82% of the 2003 level. A lower extra rate for EU-10 farmers of 3% would give the same payment level for EU-15 farmers of 87%. When applying 8% across EU-25 6 the average drop of direct payments received by farmers is from EUR to EUR This is equivalent to an average direct payment cut of -5% in EU-25. The range between Member States is from -8% in the Czech Republic and Slovakia (reflecting the high number of large farms in these Member States), -7% in Denmark, Germany and Sweden and -1% in Slovenia, -2% in Poland. However, as discussed for option 1, the economic impact is not limited to the receipt of direct payments by farmers, but rather has to be considered from a broader point of view, in particular considering the potential returns from Pillar II. As concluded in the discussion under option 1, the potential returns from Pillar II measures are likely to be, at least in the long-term, of greater magnitude than the immediate returns from direct payments. Budget impact Table 8 below outlines the budgetary impacts from increasing basic compulsory across EU-25 by 8%, hence phasing in 13% compulsory in EU-15 by 2013, and phasing in 8% compulsory in EU Results are presented for EU-24, because Malta could not be included at this stage. 11

12 Table 8: Option 2: Increasing compulsory across EU-25 by 8% Net budget impact by MS, situation in budget year 2013 EU-25 Distribution of savings in 2013 Distribution mio EUR Net modn of 8% 12.5% direct Additional direct Key Total Net loss/gain percentage 'return' Allocation key A B C D E F=E-A G=E-A 2005 data Belgium 36,1 4,5 13,0 11,4 28,9-7,2 80% 0,8% Danmark 63,1 7,9 24,6 18,0 50,5-12,6 80% 1,3% Deutschland 358,6 44,8 147,3 130,7 322,8-35,9 90% 9,3% Ellas 66,7 8,3 0,0 74,9 83,2 16,6 125% 5,3% España 249,4 31,2 0,0 189,5 220,7-28,7 89% 13,4% France 542,0 67,8 203,0 162,9 433,6-108,4 80% 11,5% Ireland 66,3 8,3 0,0 44,9 53,2-13,2 80% 3,2% Italia 164,9 20,6 0,0 125,8 146,4-18,5 89% 8,9% Luxembourg 2,3 0,3 1,1 0,4 1,9-0,5 80% 0,0% Nederlands 51,9 6,5 13,4 21,6 41,5-10,4 80% 1,5% Österreich 25,9 3,2 0,0 25,7 29,0 3,0 112% 1,8% Portugal 17,5 2,2 0,0 56,0 58,2 40,6 332% 4,0% Suomi/Finland 23,6 2,9 0,0 17,8 20,8-2,8 88% 1,3% Sverige 44,0 5,5 8,4 21,3 35,2-8,8 80% 1,5% United Kingdom 272,7 34,1 79,7 104,4 218,1-54,5 80% 7,4% Cyprus 1,3 0,2 0,0 1,8 2,0 0,6 149% 0,1% Czech Rep 59,1 7,4 7,6 32,3 47,3-11,8 80% 2,3% Estonia 4,6 0,6 0,0 7,3 7,8 3,3 171% 0,5% Hungary 68,6 8,6 0,0 46,8 55,3-13,2 81% 3,3% Latvia 4,2 0,5 0,0 19,0 19,5 15,3 463% 1,3% Lithuania 8,1 1,0 0,0 31,0 32,0 23,9 393% 2,2% Malta 0,2 0,0 0,0 0,2 0,3 0,0 117% 0,0% Poland 25,8 3,2 0,0 243,1 246,3 220,5 956% 17,2% Slovak Rep 23,5 2,9 0,0 18,5 21,4-2,1 91% 1,3% Slovenia 3,0 0,4 0,0 7,5 7,8 4,8 257% 0,5% EU ,6 273,0 498,1 1412,6 2183,6 0, ,0% EU ,1 248,1 490,5 1005,2 1743, Effect on RD spending mio EUR EU RD Spending foreseen* % increase from 8% mod'n Current avg cofinancing rate % Increase in MS RD spending Total Increase in RD spending H I=E/H J K=(H/J)*(1-J) L=E+K Belgium 54,5 53% 37% 50,1 78,9 Danmark 61,6 82% 54% 43,8 94,3 Deutschland 1.131,1 29% 61% 203,0 525,7 Ellas 619,2 13% 73% 30,8 114,0 España 1.041,1 21% 52% 204,9 425,6 France 905,7 48% 54% 370,4 804,0 Ireland 307,2 17% 54% 44,5 97,7 Italia 1.258,2 12% 50% 149,3 295,6 Luxembourg 11,8 16% 24% 5,8 7,6 Nederlands 66,6 62% 50% 41,5 83,0 Österreich 511,1 6% 50% 28,9 57,9 Portugal 564,1 10% 79% 15,7 73,8 Suomi/Finland 271,6 8% 31% 45,9 66,7 Sverige 239,2 15% 47% 40,4 75,6 United Kingdom** 267,4 82% 50% 218,1 436,2 Cyprus 21,0 9% 50% 2,0 4,0 Czech Rep 418,0 11% 78% 13,4 60,7 Estonia 113,3 7% 77% 2,3 10,2 Hungary 578,7 10% 74% 19,7 75,0 Latvia 151,2 13% 76% 6,0 25,5 Lithuania 253,6 13% 77% 9,5 41,5 Malta 10,7 2% 76% 0,1 0,3 Poland 1.850,0 13% 77% 74,2 320,6 Slovak Rep 317,3 7% 77% 6,4 27,9 Slovenia 112,0 7% 78% 2,3 10,1 EU ,0 20% 1628,8 3812,4 EU ,2 24% 1492,8 3236,7 * Commission Decision 2006/626/EC ** Note that RD expenditure for UK with voluntary was revised to EUR for

13 In budgetary terms, under this option, the extra funding available at EU level for Pillar II measures would amount to EUR million in budget year 2013 (column A), with the largest transfers occurring in France (EUR 542 million) and Germany (EUR 359 million). The redistribution effect for this option, in terms of the net effect of gain to Pillar II less the loss to Pillar I (column F), implies that the main net beneficiary would be Poland (EUR 221 million). This is due to the weight given in the allocation key to agricultural area, agricultural employment and GDP. Portugal (EUR 41 million), Lithuania (EUR 24 million) and Greece (EUR 17 million) would be the other main beneficiaries. The main net contributors would be France (EUR 108 million) and Germany (EUR 36 million). Under this option, the voluntary effect for UK and Portugal is the same as in option 1. In relation to the current allocation of funding foreseen for Pillar II measures in 2013 the average EU increase of Pillar II funding would be 20%. In Denmark it would be 82% and in the Netherlands (62%) (column I). The resulting impact on the total increase in financing of RD measures would rise to EUR million. Social impact The impact on the average income per AWU in EU-25 7 from 8% (increased) compulsory would be a drop of -1.7% (from EUR to EUR ). The range between Member States would be from -6% in Sweden and Slovakia, to -1% in Belgium, Greece, Spain, Italy, the Netherlands, Austria, and Poland. Increasing compulsory across EU-25 with 8%, using the same distribution key as today is used for EU-15, would potentially increase the administrative burden of the new Member States, where would be a new tool. Environmental impacts By applying compulsory across EU-25 more funding would be available for Member States to target environmental concerns through Pillar II Option 3: Increasing for EU-25 with different re-distribution criteria This option implies increasing compulsory for EU-15 with 8%, where the last 2% of special stays within the Member State, and introducing 2% special in EU-10 calendar year 2012, where EU-10 modulated funds also stays within the Member State. 7 EU-24 since Malta is not included at this stage. 13

14 Economic impacts Table 9 shows the percentage reduction of direct payments in EU-15 and EU-10, resulting from the application of this option. Table 9. Option 3: Direct Payment Level in EU-15 and EU-10 after 6% Extra plus 2% Special Modulation Calendar Year Budget Year Basic Rate Extra Rate Special Modulation EU-25 Special Rate Total Rate (EU-15) EU-15 Payment Level EU-10 Payment Level (phasingin) % 0% 0% 4% 96% 35% % 0% 0% 5% 95% 40% % 0% 0% 5% 95% 50% % 2% 0% 7% 93% 60% % 4% 0% 9% 91% 70% % 6% 0% 11% 89% 80% % 6% 2% 13% 87% 88% By 2012 EU-15 direct payment levels will have been reduced by a total of 13%, that is, to 87% of the 2003 level. Since only 2% special is applied to EU-10 payments in 2012, the payment level would be 88% of the 2003 level. The impact on average direct payment per holding in EU-15 would be no different from that of the option 1 above (i.e. -5%) since the percentage modulated remains at 8%. The impact on EU-10 (from applying 2% ) would be an average reduction of -1% (from EUR to EUR 5 760). As discussed for option 1 and 2, the overall economic impact from cutting Pillar I payments should be considered against the potential returns from Pillar II. Budget impacts Table 10 below outlines the budgetary impacts from this option. The extra funding available at EU level for Pillar II measures would amount to EUR million in budget year 2013 (column C), with the largest occurring in France (EUR 542 million) and Germany (EUR 359 million). However, the redistribution effect for this option, in terms of the net effect of gain to Pillar II less the loss to Pillar I (column G), differs because the special would be retained by the Member State, which generated the savings. The main net beneficiaries would be Portugal (EUR 49 million) and Spain (EUR 37 million). The main net contributors would be France (EUR 81 million) and Germany (EUR 27 million). This option implies that the voluntary amount for UK would be adjusted to EUR 318 million (i.e. EUR million). In relation to the current allocation of funding foreseen for Pillar II measures in 2013 the average EU increase of Pillar II funding would be 19%. In Denmark it would be 87% and in the Netherlands (66%) (column I). The total increase in financing of RD measures would be EUR million. 14

15 Table 10: Option 3: Increasing for EU-25 with different re-distribution criteria: Net budget impact by Member State, situation in budget year Net Modulation Distribution EUR million Extra 6% Special 2% Total From extra 6% (EU-15 key) From special 2% (no key) Total Net loss/gain Percentage 'return' A B C=A+B D E F=D+E G=F-C H=F/C Belgium 27,1 9,0 36,1 21,6 9,0 30,7-5,4 85% Danmark 47,3 15,8 63,1 37,9 15,8 53,6-9,5 85% Deutschland 269,0 89,7 358,6 242,1 89,7 331,7-26,9 92% Ellas 50,0 16,7 66,7 91,6 16,7 108,2 41,6 162% España 187,0 62,3 249,4 223,6 62,3 285,9 36,5 115% France 406,5 135,5 542,0 325,2 135,5 460,7-81,3 85% Ireland 49,8 16,6 66,3 57,3 16,6 73,9 7,6 111% Italia 123,7 41,2 164,9 151,8 41,2 193,1 28,1 117% Luxembourg 1,8 0,6 2,3 1,4 0,6 2,0-0,4 85% Nederlands 38,9 13,0 51,9 31,1 13,0 44,1-7,8 85% Österreich 19,5 6,5 25,9 30,2 6,5 36,7 10,7 141% Portugal 13,2 4,4 17,5 62,9 4,4 67,3 49,7 384% Suomi/Finland 17,7 5,9 23,6 21,4 5,9 27,3 3,7 116% Sverige 33,0 11,0 44,0 27,1 11,0 38,1-5,9 87% United Kingdom 204,5 68,2 272,7 163,6 68,2 231,8-40,9 85% Cyprus 0,0 0,3 0,3 0,0 0,3 0,3 0,0 100% Czech Rep 0,0 14,8 14,8 0,0 14,8 14,8 0,0 100% Estonia 0,0 1,1 1,1 0,0 1,1 1,1 0,0 100% Hungary 0,0 17,1 17,1 0,0 17,1 17,1 0,0 100% Latvia 0,0 1,1 1,1 0,0 1,1 1,1 0,0 100% Lithuania 0,0 2,0 2,0 0,0 2,0 2,0 0,0 100% Malta 0,0 0,1 0,1 0,0 0,1 0,1 0,0 100% Poland 0,0 6,4 6,4 0,0 6,4 6,4 0,0 100% Slovak Rep 0,0 5,9 5,9 0,0 5,9 5,9 0,0 100% Slovenia 0,0 0,8 0,8 0,0 0,8 0,8 0,0 100% EU ,8 545, , ,8 545, ,7 0,0 EU ,8 496, , ,8 496, , Effect on RD Expenditure EUR million EU RD Expenditure foreseen* % increase from 6% extra +2% special mod'n Current avg co-financing rate % Increase in MS RD spending Total Increase in RD spending I J=F/I K L=(G/K)*(1-K) L=E+K Belgium 54,5 56% 37% 53,2 83,9 Danmark 61,6 87% 54% 46,5 100,1 Deutschland 1.131,1 29% 61% 208,6 540,4 Ellas 619,2 17% 73% 40,0 148,3 España 1.041,1 27% 52% 265,4 551,3 France 905,7 51% 54% 393,5 854,2 Ireland 307,2 24% 54% 61,9 135,8 Italia 1.258,2 15% 50% 196,8 389,9 Luxembourg 11,8 17% 24% 6,1 8,1 Nederlands 66,6 66% 50% 44,1 88,2 Österreich 511,1 7% 50% 36,7 73,4 Portugal 564,1 12% 79% 18,1 85,4 Suomi/Finland 271,6 10% 31% 60,4 87,7 Sverige 239,2 16% 47% 43,7 81,8 United Kingdom** 267,4 87% 50% 231,7 463,5 Cyprus 21,0 2% 50% 0,3 0,7 Czech Rep 418,0 4% 78% 4,2 19,0 Estonia 113,3 1% 77% 0,3 1,5 Hungary 578,7 3% 74% 6,1 23,2 Latvia 151,2 1% 76% 0,3 1,4 Lithuania 253,6 1% 77% 0,6 2,6 Malta 10,7 1% 76% 0,0 0,1 Poland 1.850,0 0% 77% 1,9 8,4 Slovak Rep 317,3 2% 77% 1,8 7,7 Slovenia 112,0 1% 78% 0,2 1,0 EU ,0 18% 1.722, ,4 EU ,2 27% 1.706, ,9 * Commission Decision 2006/626/EC (including already 5% EU-15 basic mod'n and transfers for cotton/tobacco). ** Note that RD expenditure for UK with voluntary was revised to EUR for

16 Social impacts The impact on the average income per AWU in EU-15 would be no different from that of option 1 above (i.e. -1.7%) since the percentage modulated remains at 8%. The impact on the average income per AWU in EU-10 8 is a drop from EUR to EUR (-0.5%), with the major negative impact (-1%) felt by the Czech Republic, Estonia, Hungary, and Slovakia). In terms of administrative consequences of this option, increasing compulsory for EU-15 with 8%, where the last 2% stays within the Member State, and introducing 2% in EU-10 calendar year 2012, where EU-10 modulated funds also stays within the Member State, would potentially increase the administrative burden of the new Member States, where would be a new tool. Furthermore, the possibility that the budget released through the special would stay in the same Member State, where it was generated, implies changes to financial management, in relation to the transfers between the EU and Member States. To calculate the level of the special, however, should not lead to any further complexity than is already the case with the current system of financial control used to manage modulated funds. Environmental impacts By increasing compulsory across EU-15 and applying to EU-10 more funding would be available for MS to target environmental concerns through Pillar II Option 4: Progressive An illustrative example of the Goepel proposal is given below: EUR Payment after total reduction = EUR (97,5%) 1% 2% 3% 4% Total cut = EUR (2,5%) EUR In this example, the payment of a farmer receiving EUR would be modulated by 1% on the first EUR to In the tranche of EUR to , 1% would be modulated (i.e. the funds would be re- 8 EU-9, since Malta is not included at this stage. 16

17 distributed across the EU through the distribution key). A further 1% would be reduced, but the funds would remain available within the Member State of origin (i.e. analogous to the "special" of option 3). Similarly, within the tranche EUR to , 1% would be modulated and 2% subject to "special". In the example given above, the direct payment of the farmer is reduced in total by EUR , that is, by 2.5%. The two main features of the Goepel proposal are: The formula combines both the concepts of (i.e. the flat rate elements) and individual limits (i.e. the increasing special rate as the payment level rises). It therefore has a more re-distributive nature than the other options yet minimises the potential impact of splitting of farms to avoid payment limitations. The currently proposed levels yield much lower amounts of funding for transfer to Pillar II measures. Consequently, a variant of Goepel proposal which could be of interest would be to double the percentage (i.e. 2%, 4%, 6%, 8%) of reduction of direct payment and increase the percentage which goes to to 2%. Economic impacts For ease of comparison, Table 11 below outlines the budgetary impacts from a "double" progressive (i.e. 2%, 4%, 6%, 8%) in Table 11: Option 4: Progressive for EU-25 Net budget impact by Member State, situation in budget year Net Modulation Distribution EUR million Extra 2% Special Progressive Total From extra 2% (EU-25 key) From special progressive (no key) Total Net loss/gain Percentage 'return' A B C=A+B D E F=D+E G=F-C H=F/C Belgium 9,0 0,0 9,1 7,2 0,0 7,2-1,8 80% Danmark 15,8 0,9 16,7 12,6 0,9 13,6-3,2 81% Deutschland 89,7 38,2 127,9 82,3 38,2 120,5-7,4 94% Ellas 16,7 0,0 16,7 19,9 0,0 20,0 3,3 120% España 62,3 8,0 70,3 60,6 8,0 68,5-1,8 97% France 135,5 4,8 140,3 108,9 4,8 113,7-26,6 81% Ireland 16,6 0,1 16,7 15,2 0,1 15,4-1,3 92% Italia 41,2 7,6 48,8 40,1 7,6 47,7-1,1 98% Luxembourg 0,6 0,0 0,6 1,2 0,0 1,2 0,6 210% Nederlands 13,0 0,1 13,1 15,2 0,1 15,3 2,2 117% Österreich 6,5 0,0 6,5 7,2 0,0 7,3 0,7 111% Portugal 4,4 0,8 5,2 10,9 0,8 11,7 6,5 225% Suomi/Finland 5,9 0,0 5,9 5,7 0,0 5,7-0,2 97% Sverige 11,0 0,3 11,3 8,8 0,3 9,1-2,2 80% United Kingdom 68,2 11,2 79,4 61,9 11,2 73,2-6,2 92% Cyprus 0,3 0,0 0,3 0,4 0,0 0,5 0,1 134% Czech Rep 14,8 18,5 33,3 12,4 18,5 30,9-2,4 93% Estonia 1,1 0,3 1,4 1,7 0,3 2,0 0,6 139% Hungary 17,1 12,8 29,9 15,8 12,8 28,6-1,3 96% Latvia 1,1 0,0 1,1 3,5 0,0 3,5 2,4 324% Lithuania 2,0 0,6 2,6 5,8 0,6 6,4 3,8 244% Malta 0,1 0,0 0,1 0,1 0,0 0,1 0,0 0% Poland 6,4 3,5 10,0 40,9 3,5 44,4 34,5 446% Slovak Rep 5,9 6,5 12,4 5,8 6,5 12,4-0,1 99% Slovenia 0,8 0,0 0,8 1,5 0,0 1,5 0,8 201% EU ,9 114,4 660,3 545,9 114,4 660,3-0,00 EU ,3 72,1 568,4 457,9 72,1 530,0 17

18 2013 Effect on RD Expenditure EUR million EU RD Expenditure foreseen* % increase from 6% extra +2% special mod'n Current avg cofinancing rate % Increase in MS RD spending Total Increase in RD spending I J=F/I K L=(G/K)*(1-K) M=F+L Belgium 54,5 13% 37% 12,6 19,8 Danmark 61,6 22% 54% 11,8 25,3 Deutschland 1.131,1 11% 61% 75,8 196,3 Ellas 619,2 3% 73% 7,4 27,3 España 1.041,1 7% 52% 63,6 132,2 France 905,7 13% 54% 97,2 210,9 Ireland 307,2 5% 54% 12,9 28,2 Italia 1.258,2 4% 50% 48,6 96,3 Luxembourg 11,8 10% 24% 3,8 5,0 Nederlands 66,6 23% 50% 15,3 30,6 Österreich 511,1 1% 50% 7,3 14,5 Portugal 564,1 2% 79% 3,1 14,8 Suomi/Finland 271,6 2% 31% 12,7 18,4 Sverige 239,2 4% 47% 10,4 19,5 United Kingdom 267,4 27% 50% 73,1 146,3 Cyprus 21,0 2% 50% 0,5 0,9 Czech Rep 418,0 7% 78% 8,8 39,7 Estonia 113,3 2% 77% 0,6 2,6 Hungary 578,7 5% 74% 10,2 38,7 Latvia 151,2 2% 76% 1,1 4,6 Lithuania 253,6 3% 77% 1,9 8,3 Malta 10,7 1% 76% 0,0 0,1 Poland 1.850,0 2% 77% 13,4 57,8 Slovak Rep 317,3 4% 77% 3,7 16,1 Slovenia 112,0 1% 78% 0,4 2,0 EU ,0 6% 496,0 1156,2 EU-15 * Commission Decision 2006/626/EC (including already 5% EU-15 basic mod'n and transfers for cotton/tobacco). ** Note that RD expenditure for UK with voluntary was revised to EUR for 2013 Under this option, funding available at EU level for Pillar II measures would amount to 660 million, of which 114 million would be retained by MS. All impacts are thus considerably below the previous three options. The main net beneficiaries would be Poland ( 34 million), Portugal ( 6 million) and Lithuania ( 4 million), and the main net contributors once more France ( 27 million) and Germany ( 7 million). The current allocation of funding foreseen for Pillar II measures in 2013 would increase by 6%, with Denmark and the Netherlands showing the biggest gains, and the total increase in RD expenditure would be million. Social impacts Due to its progressive nature, this option has more modest impacts on average farmer income. The average income in EU-25 declines from EUR to EUR per AWU (-0.3%). The average cut in income is most significant in the Czech and Slovak Republics, Sweden and Hungary. Administrative consequences Introducing progressive could prove a complex and complicated tool. Applying progressive where the first modulated percentage point is to be redistributed in accordance with the current redistribution rules, whereas the additional amounts are to remain in the regions in which they accrue could cause an administrative burden. 18

19 Furthermore, the possibility that part of the budget released through the progressive would stay in the same Member State, where it was generated, implies changes to financial management, in relation to the transfers between the EU and Member States. To calculate the level of the 1%, however, should not lead to any further complexity than is already the case with the current system of financial control used to manage modulated funds Finally, although the progressive levels considered here are low, there would still be some the risk of farmers splitting up their holdings in order to avoid being targeted by. Environmental impacts Since this option would generate fewer funds for Pillar II measures than the other options evaluated, the financing available to address environmental issues would be more limited. 6. COMPARISON OF THE OPTIONS Table 12, presented below, gives the main budgetary impacts for the four options. It can be seen that the options differ in the total amount of funding made available for Pillar II: Option 2 generates the highest level at EU-25 level, followed by option 3. Progressive releases significantly lower amounts of funding for Pillar II While the re-distributive effects option 2 could encounter difficulties for its adoption, which are avoided by option 3, special has the disadvantage of setting up a precedent for modulated funds being retained by the Member State where they are generated. Progressive is a hybrid option, in that it has features of both and individual limits. Its biggest disadvantage is that it is limited in ambition. All options increase available funds in Pillar II. As a result, they positively benefit the availability of funds for agri-environmental programmes, and the higher the level of transfer to the second pillar, the higher this benefit for RD will be. However, the impact per farm will depend not just on the impact of an eventual income drop on production, which is general is minimal, but also on the capacity of each farm to absorb funds for rural development programmes. All these effects are difficult to quantity, but they generally move in the same direction. They would tend to support more environmentally friendly methods, while crosscompliance would guarantee existing standards do not deteriorate. In terms of administrative consequences, applying an extra 8% compulsory across EU-15 (option 1), rather than the current situation of 5%, with the same distribution key as today, would not be expected to have any considerable impact on the administrative burden of MS, or farms. The options affecting new MS would potentially increase their administrative burden, but not with respect to the existing baseline; new MS will enter into the system anyway (EU- 10 by 2012). 19

20 The most complicated option would be with progressive, because it would imply a change in the present system of financial management. This burden is similar to the one discussed under the upper payment limitations, while the risk of farm splitting could also occur (although this risk is rather small as ling as the gap between the progressive cuts is also small). 7. SUPPLEMENTARY ANALYSIS The above analysis of the four options considered has demonstrated that option 4 (progressive ) presents the advantages of combining elements of both individual payment limits and and of minimising distributive effects between MS. However, the progressive option, as analysed, has the disadvantage of bringing EU-10 into the system earlier than foreseen, of generating relatively low levels of funding for reinforcing those RD measures needed to address the new challenges to agriculture and of being administratively complex. To address these shortcomings while retaining the advantages of progressive, further analysis has been made of a system of progressive based on the following principles: All receipts from stay within the MS which generates them For EU-15, basic, applying to all payments above 5 000, is increased by 2% annually from 2009 until it reaches 8% in 2012 A progressive element is introduced, whereby payments are reduced by additional steps of 3% for successive payment thresholds levels (0% for 5000 to ; 3% for to ; 6% for to ; and 9% above ) EU-10 become eligible for in 2012 (with a basic rate of 3%) A new system for the financial management of direct aids, establishing net global ceilings per Member State, is introduced The progressive system would apply over time according to the schema below: Table 12. Proposed schema for Progressive Modulation Budget Year Budget Year EU-15 Payment Level Basic Rate EU-15 Payment Level 0 - EUR (Franchise) EUR to EUR EUR to EUR EUR to EUR Above EUR % 4% 96% 0% 0% 0% 0% 0% % 5% 95% 0% 0% 0% 0% 0% % 5% 95% 0% 0% 0% 0% 0% % 5% 95% 0% 2% 5% 8% 11% % 5% 95% 0% 4% 7% 10% 13% % 5% 95% 0% 6% 9% 12% 15% % 5% 95% 0% 8% 11% 14% 17% EU-10 Payment Level Current Modulation Basic Rate EU-10 Payment Level 0 - EUR (Franchise) EUR to EUR Progressive Modulation Rates EUR to EUR EUR to EUR Above EUR % 0% 90% 0% 3% 6% 9% 12% 20

21 The budgetary impacts of the proposed progressive are presented in the table below. In this analysis, the impact on those Member States currently applying voluntary (UK, PT) has been taken into account, on the basis that any increase in compulsory amounts substitutes existing voluntary amounts. However, since it is assumed that the same rate of cofinancing will apply to the new compulsory amounts as is currently the case, for the UK and PT, both applying voluntary, the net increase in MS RD funding will differ where there are different co-financing rates applied under voluntary. 21

22 Table 13. Impact of progressive on EU and MS RD spending Current RD Spending Foreseen ( million) Proposed Progressive Modulation Impact of Proposed Progressive Modulation million % million million % Budget year 2013 EU RD contribution* MS RD contribution Total RD Spending Current average co-financing rate Proposed Progressive Modulation Current Voluntary Adjusted voluntary Increase in EU RD funding Increase in MS RD funding Total increase in RD funding Increase in currently foreseen RD funding A B C D=A/C E F G=F-E H=E+G-F I=(H/D)*(1-D) J=H+I K=J/C Belgium 54,5 94,5 148,9 37% 36,6 0,0 0,0 36,6 63,5 100,1 67% Danmark 61,6 53,4 115,0 54% 69,5 0,0 0,0 69,5 60,3 129,8 113% Deutschland 1.131,1 711, ,4 61% 440,6 0,0 0,0 440,6 277,0 717,6 39% Ellas 619,2 229,0 848,2 73% 71,4 0,0 0,0 71,4 26,4 97,8 12% España 1.041,1 966, ,4 52% 265,7 0,0 0,0 265,7 246,6 512,3 26% France 905,7 773, ,3 54% 537,5 0,0 0,0 537,5 459,1 996,6 59% Ireland 307,2 257,2 564,4 54% 68,2 0,0 0,0 68,2 57,1 125,3 22% Italia 1.258, , ,9 50% 222,4 0,0 0,0 222,4 226,7 449,1 18% Luxembourg 11,8 36,5 48,3 24% 2,2 0,0 0,0 2,2 6,8 9,0 19% Nederlands 66,6 66,6 133,1 50% 54,9 0,0 0,0 54,9 54,9 109,8 82% Österreich 511,1 511, ,0 50% 28,7 0,0 0,0 28,7 28,7 57,4 6% Portugal 564,1 151,9 716,0 79% 32,9 40,8 7,9 0,0 0,0 0,0 0% Suomi/Finland 271,6 601,1 872,7 31% 24,7 0,0 0,0 24,7 54,7 79,4 9% Sverige 239,2 274,0 513,1 47% 43,6 0,0 0,0 43,6 49,9 93,5 18% United Kingdom** 267,4 267,3 534,7 50% 292,1 481,6 190,4 0,9 0,9 1,8 0% Cyprus 21,0 21,0 42,1 50% 0,6 0,0 0,0 0,6 0,6 1,2 3% Czech Rep 418,0 118,8 536,8 78% 49,8 0,0 0,0 49,8 14,2 64,0 12% Estonia 113,3 33,3 146,6 77% 2,1 0,0 0,0 2,1 0,6 2,7 2% Hungary 578,7 205,8 784,5 74% 46,4 0,0 0,0 46,4 16,5 62,9 8% Latvia 151,2 46,6 197,7 76% 2,0 0,0 0,0 2,0 0,6 2,6 1% Lithuania 253,6 75,2 328,8 77% 5,2 0,0 0,0 5,2 1,5 6,7 2% Malta 10,7 3,3 13,9 76% 0,1 0,0 0,0 0,1 0,0 0,1 1% Poland 1.850,0 557, ,7 77% 27,7 0,0 0,0 27,7 8,3 36,0 1% Slovak Rep 317,3 95,6 412,9 77% 20,8 0,0 0,0 20,8 6,3 27,1 7% Slovenia 112,0 32,2 144,2 78% 0,8 0,0 0,0 0,8 0,2 1,0 1% EU , , ,7 60% 2.346,5 522,4 198, , , ,0 20% * EU RD spending as laid down in Commission Decision 2006/626/EC (Note that amounts include already 5% basic and voluntary for EU-15 and transfers for cotton and tobacco). ** Note that RD expenditure for UK with voluntary was revised to EUR for 2013