Latvia: Targeting Development Policies for Lagging Rural Areas

Transcription

1 Latvia: Targeting Development Policies for Lagging Rural Areas Daina Saktiņa & William H. Meyers, Latvian State Institute of Agrarian Economics University of Missouri-Columbia The diversity of rural areas in the enlarged EU: Characterisation, typology and modelling Seville, December

2 Area- 64,58 thou km2; rural area -98% Some information about Latvia... Population- 2,3 mil. inhabitants: 1/3 in rural area, 1/3 in capital Riga 1500 inhabitants per local municipality (approx. in 60% of 530 local municipalities) Population density av.36 inh/km2; in rural area- av. 11 inh/km2 ; min 2,9 inh/km2 Policy implementation Strongly centralised Demographic structure Youth=17%: working=63 %: retirees=23 % Agricultural land - 38%; min 25%- max 80 % of territory Forest- 55 %; min 25% -max 75 % of territory in districts Employed in agriculture ave. 13%; in rural area ave.45 %; min 5%- max 80% in districts

3 Content of presentation Existing typologies and rural area in Latvia Identification of appropriate types for Latvia: Socio- economic Agro- economic Rural typology and policy design Targeting of measures/funding for typical regions

4 EUROSTAT approach -degree of urbanisation Densely populated zones: municipalities with a population density above 500 inhabitants/km², and a total population for the zone of at least 50,000 inhabitants. Intermediate zones: municipalities with a density above 100 inhabitants/km², not belonging to a densely populated zone. The zone s total population must be at least 50,000 inhabitants, or it must be adjacent to a densely populated zone. Sparsely populated zones: municipalities not classified as either densely populated or intermediate.

5 Latvian rural area by population density

6 OECD approach - degree of rurality in administrative unit Criteria -share of the region s population living in rural communities: predominantly rural regions: over 50% of the population living in rural communities; significantly rural regions: 15 to 50% of the population living in rural communities; predominantly urban regions: less than 15% of the population living in rural communities.

7 Latvian rural area by OECD types Dark is predominately rural Light is significantly rural

8 Scientific approach -according to degree of three standard problems in rural area integrated rural areas, with growing population, an employment base in the secondary and tertiary sectors; farming still being a key use of land. Facing potential threats to their environmental, social and cultural heritage, some of these areas, relatively close to big cities, risk becoming dwelling areas only and not working areas ("rurbanization") intermediate rural areas, relatively distant from urban centres, with a varying mix of primary and secondary sectors; remote rural areas, with the lowest population densities/ lowest incomes, and an older population which depends heavily on agricultural employment. OECD :"The Future of Rural Society : (EC, CAP 2000, OECD, 1993,1996)

9 Development of Latvian rural typology Choice of territorial level for: identification of types in NUTS 5 (local) Policy implementation from NUTS 5 to NUTS 4 or 3 (regional) Identification and use of variables (approx. 20 variables) Demographic Socio economic Economic/ Agriculture Land resources Choice of methodology Factor and Cluster analysis Identification of regions

10 Identification of appropriate rural types (1999)

11 Socio- economic types (5) of rural area in Latvia 1. Agricultural region 2. Intermediate rural areas 3. Rural area lagging behind 4. Sparsely populated area 5. Rural area with urban impact

12 Identification (2005) of agro-economic types (TERA project: EC)

13 Agro- economic types (5) identified in Latvia group 1- agricultural region with comparatively active economy and a high potential for resources group 2- extreme cases - cities group 3- extreme cases with a comparatively high impact of forestry group 4- economically less developed region where the agricultural sector has a greater impact and a poorer quality of resources group 5- average case

14 Theoretical methods for more appropriate policy design and targeting of measures/ funding for typical regions Identification of potentials and constraints Development possibilities/needs comparing with other regions (Comparative analysis) Internal problems/constrains in regions (Comparative analysis) Wishes of people in regions (Analytical hierarchy process) Development objectives defined by regional/municipal governments (Expert method) Identification of support measures and fund allocations Exiting measures in support policy RDP, NDP, etc new and unimplemented

15 Practically - How to get money to differently developed regions? The available finance for support policy is limited to cover all Latvian regions needs The regions with different potential/problems must compete with other regions, which are not problematic If the support policy is strongly centralised and not stable, a ranking system could be less effective The educational level and competitiveness of entrepreneurs in regions are different On average, farmers financial possibilities for attraction of investments are very different in each region

16 Use of typology for policy design in Latvian regions Enlargement of classified local territories for policy implementation from NUTS 5 to NUTS 4 or 3 according to established policy administrations system. (use of area s and population s share as variables) Use of spatial development plans as instrument for combination of support measures and support rate Horizontal measures/rates for whole of country rural Specific measures and rates for specific types of regions More decentralization of administrative responsibilities and funding to typical regions for: Stability of financial support availability for potential beneficiaries Regionally internal competition among support beneficiaries Regionally internal competition among important sectors or development possibilities in region Development of monitoring and evaluation system in order to keep up with changes in regions and to catch policy problems

17 Example for Lagging region in Latvia Result of combination of typologies is: Region (NUTS 3 level) Latgale - remote, economically and socially lagging behind with low income in agrarian sector, comparatively worse conditions for agricultural production More emphasis in policy design and implementation on potential and uniqueness in region, what to develop: Tourism activity and infrastructure Non-agricultural business and infrastructure Maintenance and development of natural and historical heritage Organic farming as more important branch in agriculture Agro environment as important land management system

18 Calculating of funding allocation for each region To provide: stability of support availability in order to increase interest of low motivation people implementation of territorially differentiated support policy: measures and rates Main instruments are: to set financial envelope system for support measures (like at the level of EU) to set different support rate system for horizontal measures to design specific measures for each region and implement them in addition to horizontal measures

19 Policy measures used for regions envelopes calculation All horizontal investment measures, excluding: measures for training and consultation measures, which could be implemented only in specific regions These formulas can t be used for area payments

20 Calculation of envelopes (scenario 1: Weighted shares) NUTS 3 and NUTS 4 level Criteria used variables as share of regional/district : GDP population (rural or total) land (agricultural al total) SPD project costs Formula District/region allocated share = a*rural population share + b*land share + c*(100-gdp share)/(n-1) + d*(100-share of SPD/RD investments)/(n-1) where a, b, c are the weights on primary factors and a+b+c=1 And n... is the number of districts/regions.

21 Calculation of envelopes (scenario 2: Development Index formula) NUTS 4 level Criteria used variable: Development index (Dev. Ind.) calculated for each district and parish in Latvia» Development index amplitude is (-2 up to +2) and used method- Ranking Formula: District/region allocated share = District (2-Dev. ind) *100/total (2-Dev.ind)

22 Financial envelopes for districts (NUTS 4) for implementation of horizontal investment measures Weighted shares Development index approach SPD projects costs, % of total ( ) 18,0 16,0 14,0 12,0 10,0 8,0 6,0 4,0 2,0 0,0 mill EUR Liepājas Kuldīgas Saldus Ventspils Talsu Tukuma Dobeles Jelgavas Bauskas Rīgas Ogres Aizkraukles Limbažu Valmieras Cēsu Valkas Madonas Jēkabpils Gulbenes Alūksnes Balvu Rēzeknes Ludzas Preiļu Daugavpils Krāslavas

23 The financial differences between calculations scenarios for NUTS 3 summarised from NUTS 3 envelopes Scenario Kurzeme Pierigas Zemgale Vidzeme Latgale Dev Index formula 100% 17% 9,3 % 19 % 22,1% 32,6 % Weighted shares 100 % 18,3% 16,3% 19,2% 22,7% 23,5% SPD rural development projects 20,9% 32,3% 19,6% 18,3% 8,9%

24 Thanks for attention Merry Christmas