Explanatory Memorandum to COM(2004)490 - Support for rural development by the European Agricultural Fund for Rural Development (EAFRD) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2004)490 - Support for rural development by the European Agricultural Fund for Rural Development (EAFRD). |
|---|---|
| source | COM(2004)490  |
| date | 14-07-2004 |
2. With over half of the population in EU-25 living in rural areas, which cover 90% of the territory, rural development is an important policy domain. Farming and forestry remain of overriding importance for land use and the management of natural resources in the EU's rural areas and important as a platform for economic diversification in rural communities.
3. The problems and challenges to be addressed by rural development policy can be summarised as follows:
- Economic: Rural areas have a significantly lower income than the average, an ageing working population, and a greater dependency on the primary sector.
- Social: There is clear evidence of higher unemployment in rural areas. Low population density and depopulation in some areas, may also increase the risk of problems like poor access to basic services, social exclusion, and a narrower range of employment options.
- Environmental: The need to ensure that agriculture and forestry make a positive contribution to the countryside and the wider environment requires a careful balance to be struck.
4. Agenda 2000 established rural development policy as the 2nd pillar of the Common Agricultural Policy, to accompany the further reform of market policy across the whole of European territory. Rural development policy therefore cannot be divorced from its role as 2nd pillar of the Common Agricultural Policy, with emphasis on the word common, i.e. the choice that has been made to organise the agricultural sector at EU level. This is of particular significance as regards ensuring the coherence of instruments and policy objectives between the two pillars.
5. The EU's rural development policy follows the overall orientations for a sustainable development in line with the conclusions of the Lisbon (March 2000) and Göteborg (June 2001) European Councils. While the Lisbon conclusions set the target of making the European Union the most competitive knowledge-based economic area by 2010, the Göteborg conclusions added a new emphasis on protecting the environment and achieving a more sustainable pattern of development. The latter conclusions also highlighted the fact that in the context of Agenda 2000, European Agricultural policy had "become more oriented towards satisfying the general public's growing demands regarding food safety, food quality, product differentiation, animal welfare, environmental quality and the conservation of nature and the countryside".
6. Further implementation of CAP reform implies a need for a continued sectoral component in EU rural development policy. In addition, the duality of farm structures and sometimes still high share of agriculture in employment in many of the new MS implies a further important need for the policy to accompany restructuring in agriculture and in rural areas.
7. The territorial components of EU rural development policy to respond to the economic, social and environmental challenges facing rural areas, lie in accompanying agriculture and forestry in their important land management function and in embedding agriculture and forestry in a diversified rural economy and contributing to the socio-economic development of rural areas.
8. The complementarity of the two pillars of the CAP has been accentuated by the recent reform of the CAP, introducing decoupling, cross compliance and modulation (i.e. a transfer of funds from the 1st to the 2nd pillar), to be implemented from 2005 onwards. The 1st pillar concentrates on providing a basic income support to farmers, who are further free to produce in function of market demand, while the 2nd pillar supports agriculture as a provider of public goods in its environmental and rural functions and rural areas in their development.
9. Reflecting the Salzburg conference conclusions (November 2003) and the strategic orientations of the Lisbon and Göteborg European Councils emphasising the economic, environmental, and social elements of sustainability, the following three major objectives for RD policy have been set in the Communication on the Financial Perspectives for the period 2007-2013:
- Increasing the competitiveness of the agricultural sector through support for restructuring;
- Enhancing the environment and countryside through support for land management (including RD actions related to Natura 2000 sites);
- Enhancing the quality of life in rural areas and promoting diversification of economic activities through measures targeting the farm sector and other rural actors;
- Accompanying and complementing further CAP reform and ensuring coherence with the instruments and the policies of the first pillar;
- Contributing to other EU policy priorities such as sustainable management of natural resources, innovation and competitiveness in rural areas, and economic and social cohesion.
10. The large number of programmes, programming systems and different financial management and control systems in the current programming period have considerably increased the administrative burden for the Member States and the Commission and decreased the coherence, transparency and visibility of rural development policy.
11. A first important step is to bring rural development under a single funding and programming framework.
12. An important instrument to ensure the focus of rural development programming on EU priorities and complementarity with other EU policies will be the EU strategy document for rural development to be prepared by the Commission and which will serve as a basis for the national rural development strategies and programmes.
13. Clearly set objectives in the light of EU priorities and more emphasis on reporting of programme results through reinforced monitoring and evaluation will ensure more transparency and accountability for the use of EU money, while at the same time leaving member states more freedom in how they wish to implement their programmes through less detailed rules and eligibility conditions and simplified financial management and control arrangements.
14. Stakeholder consultation in the design, implementation and evaluation of national strategies and programmes, the integration of the LEADER bottom up approach, exchange of best practice and networking will all help to ensure the structured dialogue underlying good governance.
15. Together with an increased clarity as regards the responsibilities of member states and the Commission in financial management, the proposed changes should significantly improve the implementation and governance of rural development policy.
16. To achieve a more strategic approach to rural development, a first step in the programming phase will be the preparation by the Commission of a strategy document setting out the EU priorities for the three policy axes. It will identify strengths and weaknesses at EU level and core indicators to measure progress in achieving the EU priorities. The EU rural development strategy would then be adopted by the Council and form the basis for the national rural development strategies of the MS. The national rural development strategy would translate the EU priorities to the national situation after stakeholder consultation, set core result indicators and demonstrate the complementarity of rural development programming with other EU policies, in particular cohesion policy.
17. The programmes will articulate the national strategy into a strategy for each of the three thematic axes corresponding to the main policy objectives under point 9 and for the LEADER axis, using quantified objectives and core result indicators (comprising a minimum set of EU-wide common indicators). To ensure a balanced strategy a minimum funding for axis 1 (competitiveness) and axis 3 (wider rural development) of at least 15% of total EU programme funding will be required and of at least 25% for axis 2 (land management). For the LEADER axis a minimum of 7% of the EU funding is reserved.
18. As building blocks for each thematic axis a range of measures will be available. The conditions under which the measures can be implemented have been streamlined and simplified.
19. For axis 1, competitiveness of farming and forestry, the restructuring strategy would be built on measures relating to human and physical capital and to quality aspects and would allow a phasing out of certain measures currently applicable in the new member states.
20. For the strategy for axis 2, environment and land management, agri-environment is a compulsory component. The existing less-favoured areas measure is redefined as far as the delimitation of the intermediate zones (partly based on socio-economic data which in many cases have become outdated) is concerned. The new delimitation is to be based on soil productivity and climatic conditions and the importance of extensive farming activities for land management, low soil productivities and poor climatic conditions giving an indication of the difficulty of maintaining agricultural activity.
21. A general condition for the measures under axis 2 at the level of the beneficiary is respect of the EU and national mandatory requirements relevant for respectively agriculture and forestry.
22. For axis 3, wider rural development, the preferred implementation method is through local development strategies targeting sub-regional entities, either developed in close collaboration between national, regional and local authorities or designed and implemented through a bottom up approach using the LEADER approach (selection of the best local development plans of local action groups representing public-private partnerships). The horizontal application of certain measures under axis 3 remains possible.
23. Each programme should contain a LEADER axis to finance the implementation of the local development strategies of local action groups built on the three thematic axes, the operating costs of local action groups, the cooperation projects between local action groups, experimental and pilot approaches and the capacity building and animation necessary for the preparation of local development strategies.
24. For technical assistance up to 4% of programme funding can be reserved for the implementation of the programme, including financing of national networks to support the implementation of rural development measures and in particular local action groups and to serve as contact point for the European Network for rural development. An EU rural development Network will assist the Commission in the implementation of the policy.
25. The EU co-financing rates are set at axis level, with a minimum of 20% and a maximum of 50% of total public expenditure (75% in Convergence regions). For axis 2 and the LEADER axis the maximum rate will be 55% (80% in Convergence regions), expressing the EU priority attached to these axes. For the Outermost regions the maximum cofinancing rates are increased by 5 points.
26. Of overall EU RD funding available for the period (excluding modulation), 3% will be kept in reserve to be allocated in 2012 and 2013 to the Member States with the most performing LEADER axes.
27. For the implementation of the programmes a reinforced monitoring, evaluation and reporting system based on a common EU framework agreed between the Member States and the Commission will be introduced. Based on the annual national synthesis reports on the execution of programmes and the progress in the implementation of the national strategies (in terms of results), the Commission reports annually on the progress in implementing the EU priorities for rural development. Where necessary this could lead to a proposal for the adjustment of the EU rural development strategy.
28. The outlined approach would allow to focus the EU cofinancing available for rural development on commonly agreed EU priorities for the three policy axes, while leaving sufficient flexibility at Member State and regional level to find a balance between the sectoral dimension (agricultural restructuring) and the territorial dimension (land management and socio-economic development of rural areas), responding to the individual situations and needs. Moreover, the LEADER model could be applied on a wider scale, while for the EU as a whole continuation and consolidation of the LEADER approach would be safeguarded.