EU Rural Development Policy: Architecture and Implementation Josefine Loriz-Hoffmann DG AGRI G.1 Consistency of Rural Development, European Commission Conference Introduction to EU regional and sectoral support: Strategic planning, Operating Structures and Lessons learned, 15-16 April 2010
To be discussed today Part of the CAP Why does Europe need a rural development policy? History Architecture Implementation Available funds and targets Implementing mechanisms Examples Leader approach Debate: post-2013 2
Why does Europe need a rural development policy? In the EU-27 rural areas (predominantly rural and intermediate regions) represent 90% of the territory Home to more than 56 % of the EU's population Significant diversity of the EU s rural areas 3
Why does Europe need a rural development policy? Rural areas face specific difficulties and challenges Average income per head is lower in rural regions than in towns and cities Skills base is narrower and the service sector is less developed Caring for the rural environment often carries a financial cost Insufficient infrastructure 4
Part of the CAP: History Productivity The changing CAP Competitiveness Sustainability The Early Years The Crisis Years The 1992 Reform Agenda 2000 Cap Reform 2003 Food security Improving productivity Income support Over production Exploding expenditure International friction Structural measures Reduced surpluses Environment Income stabilisation Budget stabilisation Deepening the reform process Marketstabilisation Competitiveness Rural Development Market orientation Consumer Concerns Farm income Rural development Environment 5
Common Agricultural Policy (CAP) Direct payments (decoupled from production) Cross Compliance Standards 1st pillar: Market organisations (dairy, sugar, wine, etc.) minimum safety net 2nd pillar: Rural development policy Multifunctional agriculture food production environment rural development Modulation
Rural development policy 2007-2013: Measures LEADER Axis (5%): all types of measures under axes 1, 2 & 3 Axis 1: Competitiveness (10%)*: - Farm modernisation - Processing - Infrastructure - Natural disaster aid - Training, etc. Axis 2: Environment and Land Management (25%): - Less favoured areas - Natura 2000 - Agri-environment - Forestry measures, etc. Axis 3: Diversification and quality of life (10%): - Diversification, tourism - Micro-enterprises - Village renewal - Basic services, etc. EAFRD: European Agricultural Fund for Rural Development * Figures in brackets indicate legal minimum spending requirements per Axis; Leader axis: new Member States - 2.5% 7
Architecture of EU RD Policy: Axis 1 Competitiveness Measures aiming at promoting knowledge and improving human potential: vocational training/information; setting up of young farmers; early retirement; management, relief and advisory services, Measures aiming at restructuring physical potential and promoting innovation: investments to improve production, processing and marketing structures (and infrastructures), Measures aiming to improve the quality of agricultural production and products: adaptation to new EU standards; participation in food quality schemes; promotion for quality products 8
Architecture of EU RD Policy: Axis 2 Environment/Land Mng. Measures targeting the sustainable use of: Agricultural land: mountain areas; other areas with handicaps; Natura 2000 areas; agri-environment; animal welfare; support for nonproductive investments Forestry land: first afforestation; first establishment of agro-forestry systems, Natura 2000 areas; forest-environment; restoring forestry potential and introducing prevention actions; support for non-productive investments N.B.: Agri-environment measures are compulsory for each programme Cross compliance sanctions apply 9
Architecture of EU RD Policy: Axis 3 Diversification Diversification of the rural economy: diversification to non-agricultural activities; support for microenterprises; tourism Improvement of the quality of life: basic services; village renewal; conservation and upgrading of the rural heritage (natural and cultural) Training and capacity building 10
Architecture of EU RD Policy 1. EU Strategic Guidelines establish the Community Priorities for the period 2007-2013 A strategic approach 2. National Strategies reflect EU-priorities according to the situation in the Member State concerned 3. Establishment of national or regional programmes on the basis of SWOT analysis 4. Programme implementation accompanied by monitoring and evaluation ( ongoing evaluation ) based on a Community framework 11
Architecture of EU RD Policy: main features Strategic approach to programming Single fund EAFRD, one set of rules to simplify and improve planning and implementation Territorial and multi-sectoral approach Leader to strengthen governance and local initiatives in rural areas Complementarity with Structural Funds to allow best use of EU support Common framework for monitoring and evaluation (CMEF) to maximize added value 12
Implementation of EU RD Policy: Mechanisms Basic management rules Common elements with Structural Funds Multiannual programming. Co-financing, Partnership Managing authority, monitoring Committee, evaluation Differentiated commitments and payments (n+2 rule) Similar to EAGF (old EAGGF-Guarantee) A set of predetermined axis and measures Paying agencies Clearance of accounts 13
Implementation of EU RD Policy: Mechanisms The Managing Authority In charge of rural development policy and definition of the RD strategy and the RD programme Chairs the monitoring committee and ensures the participation of local, economical and social partners Responsible of project selection in accordance with selection criteria Collects information on execution, output and impact indicators Responsible of preparation and submission of annual reports and evaluations 14
Implementation of EU RD Policy: Mechanisms The Paying Agency Accredited at MS level following standard criteria, review of accreditation every 3 years Annual statement of assurance signed by the Director of the Paying Agency Responsible for: Paying and declaring the EU contribution Control (internal and on the spot) of eligibility Documents accessibility and bookkeeping Annual accounts, pursue and recovers irregularities 15
Implementation of EU RD Policy: Mechanisms The Certifying Body Private or public legal entity independent of the Paying Agency and Coordinating Body Annually issues an audit opinion on the accuracy of the annual accounts of the paying agency Examination of the administrative structure and control procedures within the paying agencies Report on the compliance with the accreditation criteria 16
Implementation of EU RD Policy: Distribution of funds Total indicative RD expenditure (2007-2013) with Health Check and Recovery Package EAFRD: 96.2 billion* 41.4% National co-financing: 57.3 billion** 24.7% Private expenditures: 66.2 billion** 28.5% National top-ups : 12.4 billion** 5.3% TOTAL: 232.1 billion 100.0% * This figure includes the additional amounts from Health Check and Recovery Package ** These figures are based on the revised programmes approved end of December 2009. 17
Implementation of EU RD Policy: Distribution of funds Indicative expenditure per axis (without Health Check and Recovery Package) Axis 3 13% Axis 4 6% TA / DP 3% Axis 1 34% Axis 2 44% Axis 1: Competitiveness Axis 3: Diversification Technical Aid & DP Axis 2: Environment Axis 4: Leader 18
Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom EU-27 EU-15 EU-12 Implementation of EU RD Policy: Distribution of funds The three 2007-2013 RD thematic axes in the MS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Axis 1: Competitiveness Axis 2: Environment and land management Axis 3: Quality of life and diversification Source: European Commission DG AGRI Share of each axis of total EAFRD expenditure EU-27* Axis 1: 35.8% Axis 2: 45.4% Axis 3: 18.8% * Including funds allocated for Technical Aid and DP ROM 19
Implementation of EU RD Policy: Targets Targets (results/impacts) for rural development 2007-2013 defined by Member States* Results/impact indicator Targets 2007-2013 Increase in gross value added (GVA) in supported holdings/enterprises supported by EAFRD Population in rural areas benefiting from improved services Employment creation (net additional full time equivalent jobs created) Climate Change (increase in production of renewable energy from agriculture and forestry (ktons oil equivalent)** Maintenance of high nature value farming and forestry areas (change in HNV areas) 25.9 billion 71 million people 346 ths. jobs 60 ths. Ktons oil equivalent 3.4 million ha * Targets are not available for all Member States (70/88 available) ** Preliminary data subject to correction 20
Implementation of EU RD Policy: Examples Axis 1 Member States have devoted an overall EAFRD amount of 9.6 billion to the measure "modernization of agricultural holdings In the case of agricultural holdings, modernization means: introduction of new technologies and innovation, targeting quality, but also on-farm agricultural diversification, including renewable energy The range of possible activities is large: support can be granted for the installation of biogas, wood-pellet or other biomass-heating plants on agricultural holdings, the improvement of irrigation systems and facilities for water treatment and recovery, restoration of derelict land etc. 21
Implementation of EU RD Policy: Examples Axis 2, LFA Less Favoured Areas payments 3 types of areas designated by the MS: Mountain areas (altitude, slope) Other Less Favoured Areas Areas with specific handicaps Beneficiaries: Farmers Eligible areas: Utilised Agricultural Area in LFAs Basic conditions: Farm a minimum area of land to be defined Undertake to pursue their activity in areas designated for at least 5 years from the first payment Respect cross-compliance requirements on the whole holding 22
Implementation of EU RD Policy: Examples Agri-env. measures Agri-Environmental measures Incorporation of grassland into rotations Grass strips Extensive grazing Ecological infrastructures (e.g. hedges) Appropriate mowing dates and methods Reduced tillage Organic farming Extensive use of grasslands Fallow-lands Winter soil cover Buffer strips Conversion of arable land to grassland Reduction of inputs Terraces in areas with steep slopes Green cover during critical periods soil protection with positive effects on water quality biodiversity and habitats 23
Implementation of EU RD Policy: Examples Axis 3 In financial terms, the most important measures regarding: diversification of the rural economy are: "support for the creation and development of microenterprises" and "diversification into non-agricultural activities quality of life in financial terms are: "basic services for the economy and the rural population" and "village renewal and development 24
Implementation of EU RD Policy: Examples Axis 3 The main aim of support through measures related to diversification of the rural economy is the creation of non-agricultural jobs and off-farm income opportunities and the dissemination of innovative practices and start-ups in EU rural areas EU support can cover, among other activities: the creation of businesses engaged in the second-stage processing of foodstuffs, handicraft enterprises, enterprises providing business services (information technology, marketing etc.), tourism, recreational and social services. It can also fund business networks, as well as marketing and promotion of quality products 25
Implementation of EU RD Policy: Examples climate change Climate change in RD programs Mitigation, adaptation options in all axes Energy-efficient equipment and buildings Investments in manure storage facilities Improve efficiency N fertilizer On-farm biogas production Training Farm advisory services Agri-environmental measures Reduced fertilizer use Extensification of livestock Soil management Land use changes (aforestation) Axis 1 Axis 2 Source: European Commission DG AGRI Processing of agricultural/forest biomass for local renewable energy Installations/infrastructure other renewable energies Axis 3 26
Implementation of EU RD Policy: Examples - broadband Examples of support for ICT development in rural areas Human capital upgrade and e-skills Training in ICT and computer skills Web-portals and web-tools Basic services & infrastructure Setting-up of electronic consultation systems Upgrade of existing and creation of new broadband infrastructure Business creation & development New technologies for bringing the producer and consumer closer, incl. e-booking, marketing, tourism services, etc. Services for connecting and providing internet 27
Implementation of EU RD Policy: Leader approach Leader axis: an approach to implement the rural development policy Offers a possibility to combine all three objectives building on local needs and strengths: reinforcement of territorial coherence and synergies between measures intended for the broader rural economy and population ensuring innovative and experimental RD interventions in an integrated way involving all actors in the design and implementation of actions Horizontal priorities covered with Leader: better governance at the local level endogenous development (local resources for growth and jobs) 28
Implementation of EU RD Policy: Leader approach Key features of Leader 29
Implementation of EU RD Policy: Leader approach How does it work? Acquisition of skills for new LAGs or existing LAGs Selection of local development strategies Grant agreement / confirmation of selection to the LAG Implementation of the local development strategies - cooperation (inter-territorial and transnational) 30
Debate: post-2013 The long-term CAP perspective What do we expect from EU agriculture Ensure food security Provide management for natural resources Keep viable rural areas Be competitive in a global market Respond to climate change Why do we need an agricultural policy Face increasing volatile markets Ensure provision of public goods Keep sustainable rural environment Why do we need a common policy Provide EU value added Keep common level playing field Address trans-national objectives 31
Debate: post-2013 Key challenges for rural areas in the EU Continued globalization of agricultural markets, increasing price volatility and on-going restructuring of the agricultural sector Increasing scarcity of natural resources (e.g. land due to desertification, water, biodiversity) Climate change with extreme weather events accentuating uncertainties between rural areas in EU-27 Lower incomes and important demographic change in rural areas 32
Summary and conclusions Europe needs a rural development policy Countryside provides us with essential elements for life, but also faces significant challenges Architecture EU Rural Development Policy is Thematic, Strategic, Flexible, and Integrated Implementation A total of 232.1 billion during 2007-2013 will reach rural areas in the EU in implementation of the RD policy Follow the debate post-2013 Some of the key challenges: Keep rural areas viable, adaptation to climate change, continue provision of public goods, maintain sustainable rural environment 33
Thank you for your attention! For further information: Rural Development Policy 2007-13 http://ec.europa.eu/agriculture/rurdev/index_en.htm CAP Health Check http://ec.europa.eu/agriculture/healthcheck/index_en.htm EU agriculture and CAP reform http://ec.europa.eu/agriculture/index_en.htm 34