Regulation 2005/1698 - Support for rural development by the European Agricultural Fund for Rural Development (EAFRD) - Main contents

European Agricultural Fund for Rural Development (EAFRD)

Utilisation of the European Agricultural Fund for Rural Development (EAFRD) is in accordance with the objectives and strategic framework of Community rural development policy as defined in this Regulation.

ACT

Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) [See amending acts].

SUMMARY

The reforms of the Common Agricultural Policy (CAP) of June 2003 and April 2004 focus on rural development by introducing a financial instrument and a single programme: the European Agricultural Fund for Rural Development (EAFRD). This instrument, which was established by Regulation (EC) 1290/2005, aims at strengthening the EU’s rural development policy and simplifying its implementation. In particular, it improves the management and controls of the rural development policy for the period 2007-2013.

Objectives and general rules on assistance

This Regulation lays down the general rules governing Community support for rural development, financed by the EAFRD. It also defines the aims of rural development and the framework governing it.

The Fund contributes to improving:

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  the competitiveness of agriculture and forestry;
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  the environment and the countryside;
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  the quality of life and the management of economic activity in rural areas.

The Fund complements national, regional and local actions, which contribute to Community priorities. The Commission and the Member States are also to ensure that the Fund is consistent and compatible with other Community support measures.

Strategic approach

Each Member State will draw up a national strategy plan in line with the strategic guidelines adopted by the Community. Each Member State will then submit their national strategy plan to the Commission before presenting their rural development plans. The national strategy plan covers the period from 1 January 2007 to 31 December 2013 and will include:

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  an assessment of the social, economic and environmental situation and the potential for development;
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  the strategy chosen for joint action by the Community and the Member State, in line with the Community strategic guidelines;
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  the thematic and territorial priorities;
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  a list of the rural development programmes implementing the national strategy plan and an indicative EAFRD allocation for each programme;
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  the means to ensure coordination with the other common agricultural policy instruments, the ERDF, the ESF, the CF, the European Fisheries Fund and the European Investment Bank;
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  if appropriate, the budget for achieving the Convergence Objective *;
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  a description of the arrangements and an indication of the amount earmarked for establishing the national rural network which brings together organisations and administrations working in the field of rural development.

Implementing the national strategic plans is carried out through rural development programmes containing a package of measures grouped around 4 axes *.

Axis 1: Improving the competitiveness of the agricultural and forestry sector

Aid for promoting the competitiveness of the agricultural and forestry sector includes:

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  measures aimed at promoting knowledge and improving human potential through:

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    vocational training and information actions,
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    schemes promoting the establishment of young farmers (people under 40 years of age setting up for the first time as the head of a holding) and the structural adaptation of their holdings,
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    early retirement for farmers deciding to cease activities with the aim of transferring their holding to other farmers, and agricultural workers who decide to definitively cease all agricultural activities. In general, beneficiaries must be at least 55 years old, but below the regular age of retirement in the Member State concerned,
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    the use of advisory services by farmers and forest holders and the establishment of advisory services, farm relief and farm management support services. The use of these services should help assess and improve the performance of their holdings;

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  measures aimed at restructuring and developing physical potential:

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    the modernisation of agricultural and forestry holdings and the improvement of their commercial performance by, for example, bringing in new technology,
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    adding value to primary agricultural and forestry production. This means supporting investments aimed at enhancing the efficiency of the processing and marketing stages of primary production whilst simplifying the eligibility criteria for investment support compared to the criteria applicable at present,
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    improving and developing infrastructure related to the development and adaptation of agriculture and forestry,
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    restoring agricultural production potential damaged by natural disasters and introducing appropriate prevention schemes;

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  measures aimed at improving the quality of production and products:

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    assist farmers in adapting to the demanding rules laid down in EU legislation, partly offsetting the additional costs or loss of revenue resulting from these new responsibilities,
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    encourage farmers to participate in schemes that promote quality food and that give consumers assurances of the quality of a product or production method, providing added value to primary products and boosting trade opportunities,
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    support producer groups in their information and promotion activities for products covered by food quality schemes;

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  provisional measures are also planned for the new Member States, regarding:

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    aid for semi-subsistence holdings * undergoing restructuring,
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    aid for the establishment of producer groups,
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    aid for agricultural holdings undergoing restructuring, including diversification into non-agricultural activities.

Axis 2: improving the environment and the countryside

Regarding land management, the support is to contribute to sustainable development by encouraging farmers and forest holders to employ methods of land use compatible with the need to preserve the natural environment and landscape and protect and improve natural resources. The main aspects to take into account include biodiversity, the management of NATURA 2000 sites, water and soil protection and climate change mitigation. Against this backdrop, the Regulation provides, in particular, for support for mountain regions with natural handicaps and other disadvantaged areas (defined by the Member States on the basis of common objective criteria) and for agri-environmental or forest-environmental payments, which only cover commitments that go beyond the corresponding obligatory standards. Assistance also covers support for non-productive investments linked to the achievement of agri or forest-environmental commitments or the achievement of other agri-environmental objectives, as well as measures aimed at improving forestry resources with an environmental objective (support for the first afforestation of agricultural land, establishment of agroforestry systems or restoring forestry potential and preventing natural disasters).

All beneficiaries receiving aid in the name of improving the environment and the countryside are required, throughout the whole of the holding, to comply with the regulatory obligations on management (in the areas of health, the environment and animal welfare) and the good agricultural and environmental conditions laid down in the Regulation on the single payment (Regulation No 73/2009).

Axis 3: quality of life in rural areas and diversification of the rural economy

Regarding the diversification of the rural economy, the Regulation contains measures on:

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  diversification towards non-agricultural activities, support for the establishment and development of micro-businesses, promotion of tourism and the protection, development and management of the natural heritage that contributes to sustainable economic development;
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  improving the quality of life in rural areas, with particular focus on renovating and developing villages and preserving and making the best use of the rural heritage; and
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  acquiring skills and running activities in order to prepare and implement the local development strategy.

Axis 4: LEADER

The aid allocated under the LEADER axis relates to:

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  the implementation of local development strategies through public-private partnerships called “local action groups”. The strategies applied to clearly designated rural territories must achieve the objectives of at least one of the three preceeding axes;
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  the local action groups also have the option to implement inter-territorial or transnational cooperation projects.

EARDF Financial participation

The EARDF has been allocated a budget of EUR 96.3 billion (current price) for the period 2007-2013, or 20 % of the funds dedicated to the CAP. At the initiative of the Member States, the Fund may finance, up to a ceiling of 4 % of the total amount for each programme, measures concerning the preparation, management, monitoring, evaluation, publicising and control of programme assistance.

For the period 2007-2013, the amount of Community support to rural development, its annual breakdown and the minimum amount to be concentrated in regions eligible under the Convergence Objective * are determined by the Council. It acts by a qualified majority on a proposal from the Commission, in accordance with the financial perspective for the period 2007 to 2013 and the Interinstitutional Agreement on budgetary discipline and improvement of the budgetary procedure. Member States also take account of the amounts from modulation * in the programming. The Commission also makes sure that the total amount of allocations from the EAFRD and other Community Funds such as the European Regional Development Fund, the European Social Fund and the Cohesion Fund stay within specific economic parameters.

Under the principle of shared management between the Commission and the Member States, the Member States must appoint, for each rural development programme: a management authority, a paying agency and a certification body. They are also tasked with providing information and publicity on co-financed schemes. Each Member State must also set up a monitoring committee to ensure the programme is implemented effectively. In addition, the management authority for each programme must send an annual report to the Commission on the implementation of the programme.

The rural development policy and its programmes are evaluated ex ante, mid-term and ex post. These evaluations aim to improve the quality, efficiency and effectiveness of the implementation of rural development programmes. They also aim to draw lessons for rural development policy by identifying the factors that have contributed to the success or failure of programme implementation, the socio-economic impact and the impact on Community priorities.

Background

The EARDF is, along with the EAGF (European Agricultural Guarantee Fund), one of the two financial instruments of the Common Agricultural Policy (CAP) established by Regulation (EC) No 1290/2005. From 1 January 2007, these two funds replace the EAGGF Guidance section and the EAGGF Guarantee section respectively.

The EARDF supports rural development, the second pillar of the CAP, which has been introduced progressively since the 1970’s and institutionalised in 1997 with Agenda 2000.

Key terms used in the act

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  Convergence Objective: the objective of the action for the least developed Member States and regions according to the Community legislation governing the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the Cohesion Fund (CF) for the period from 1 January 2007 to 31 December 2013.
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  Semi-subsistence farming: agricultural holdings which produce primarily for their own consumption and also market a proportion of their output.
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  Axis: a coherent group of measures with specific goals resulting directly from their implementation and contributing to one or more of the objectives set out in Article 4.
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  Modulation: this involves a progressive mechanism which aims to reduce direct payments to farmers and to transfer corresponding appropriations to rural development.

References

Amending acts and successive corrections to Regulation (EC) No 1698/2005 have been incorporated in the basic text. This consolidated version is for reference only.

RELATED ACTS

Community support for rural development

Commission Regulation (EU) No 65/2011 of 27 January 2011 laying down detailed rules for the implementation of Council Regulation (EC) No 1698/2005, as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures [Official Journal L 25 of 28.1.2011]. This Regulation lays down detailed rules for the application of Regulation (EC) No 1698/2005 as regards principles and general rules for rural development support, specific and common provisions for rural development measures, and eligibility and administrative provisions.

Commission Decision 2008/168/EC of 20 February 2008 setting up the organisational structure for the European Network for Rural Development [Official Journal L 56 of 29.2.2008]. The European Network for Rural Development comprises a Coordination committee, a thematic working group, a LEADER subcommittee and an Evaluation expert committee. These bodies are to comply with the rules laid down by this Decision.

Commission Decision 2006/636/EC of 12 September 2006 fixing the annual breakdown by Member State of the amount for Community support to rural development for the period from 1 January 2007 to 31 December 2013 [Official Journal L 261 of 22.9.2006]. This act lays down the breakdown by Member State of the Community support for rural development for the period 2007 to 2013.

Council Decision 2006/493/EC of 19 June 2006 laying down the amount of Community support for rural development for the period from 1 January 2007 to 31 December 2013, its annual breakdown and the minimum amount to be concentrated in regions eligible under the Convergence Objective [Official Journal L 195 of 15.7.2006]. This act lays down the amount of commitment appropriations for rural development for the period 2007 to 2013.

Community legal and financial framework

Council Decision 2006/144/EC of 20 February 2006 on Community strategic guidelines for rural development (programming period 2007 to 2013) [Official Journal L 55 of 25.2.2006]. This act lays down the Community’s strategic guidelines for rural development.

Rules for implementation and transitional rules

Commission Regulation (EC) No 1975/2006 of 7 December 2006 laying down detailed rules for the implementation of Council Regulation (EC) No 1698/2005, as regards the implementation of control procedures as well as cross-compliance in respect of rural development support measures [Official Journal L 368 of 23.12.2006]. This Regulation lays down detailed rules for the implementation of Council Regulation (EC) No 1698/2005 as regards the implementation of control procedures and cross-compliance in respect of rural development support measures.

Commission Regulation (EC) No 1320/2006 of 5 September 2006 laying down rules for the transition to the rural development support provided for in Council Regulation (EC) No 1698/2005 [Official Journal L 243 of 6.9.2006]. This Regulation lays down specific rules to facilitate the transition of rural development programming under Regulations (EC) No 1257/1999 and 1268/1999 to that provided for in Regulation (EC) No 1698/2005.

See also

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  Rural development policy for the period 2007 to 2013

Last updated: 05.01.2012

This summary has been adopted from EUR-Lex.