Dr' Antonis CONSTANTINOU

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EU Rural development policy in perspectiveThe
role of LEADER

• Dr. Antonis CONSTANTINOU
• Director for Rural Development E.II
• TAIEX Workshop on LEADER, Prague, 14-16 June 2007

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Content

• 1. EU Rural development policy in the course of
  time (short historical overview)
• 2. Why is rural development policy so important?
• 3. The policy framework for 2007 2013
• 3.1. The role of LEADER
• 4. What is the future? Trends as regards content
• 5. What is the future? Trends as regards the
  financial aspects

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1. Rural development policy in the course of time
(1)
From a structural policy for agriculture to a
policy of integrated rural development

• 1992 Accompanying measures of the CAP reform
• 1996 Vitality of rural areas as a central
  theme
• 96 99 European model of agriculture
• The farmer as entrepreneurial producer of safe
  quality food guardian of the environment and
  producer of public goods
• 1999 Rural development raised to the status
  of 2nd pillar of the CAP
• 1999-2002 WTO context
• Non-trade concerns introduced in the debate (5
  Conferences)
• Rural development a universally acceptable
  objective
• 04-06 Further development of the policy
• Clear objectives and priorities for rural
  development (31 Axes)
• Territorial and multi-sectoral aspects (Axis 3,
  Axis 4)
• Strategic approach to maximize value
• Mainstreaming of LEADER

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1. Rural development policy in the course of time
(2) The EU agricultural policy model after 2003

• 1st pillar
• Market organisations (sugar, wine, olive oil)
• Direct payments (decoupled from production)
• Cross Compliance Standards

2. pillar Rural development policy

food production
environment
rural development
Multifunctional agriculture
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1. Rural development policy in the course of time
(3)

• In addition
• Separate new funds for agricultural guarantees
  (first pillar) and for rural development (EAFRD)
• One single system for rural development
  prgramming, financial management and control

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2. Why is rural development policy so important
(1)?

• Predominantly and significantly rural areas make
  up
• 92 of surface area of the EU
• 53 of employment
• 45 or cross value creation
• Albeit great diversity and variety serious
  structural
• deficits in many parts of Europe

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2. Why is rural development policy so important ?
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2. Why is rural development policy so important
(2)?
Because rural areas in Europe are very special!

• Rural areas and communities spread across the
  whole EU.
• A multiplicity of landscapes, activities and
  functions.
• Economic, social and community structures (the
  rural fabric).
• Relationships with urban areas, amenity
  functions, food production.
• Cultural and natural (environmental) heritage.

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2. Why is rural development policy so important
(3)?
Stronger orientation towards efficiency and
effectiveness more sustainable

• Based on a strategic analysis at national and
  regional level to maximize value
• Allows for better targeted, pro-active and
  integrated measures to promote restructuring,
  modernisation and innovation both in agriculture
  and the wider rural economy
• Activates farmers and other local actors in the
  area of environment, nature protection and
  maintenance of traditional landscapes and
  compensates them for the production of public
  goods
• Contributes to the development of new employment
  opportunities and sources of income in rural
  areas and is more in line with the EUs
  overarching goals for growth and employment

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2. Why is rural development policy so important
(4)?
Partnership of Commission, Member States and
Regions

• Allows for the preparation of targeted programmes
  better adjusted to national and regional
  specificities and problems
• Mobilizes additional funds through co-financing
• Helps to utilize the endogenous development
  potential of rural areas at the national,
  regional and local level by promoting local
  initiatives and bottom-up approaches and by
  empowering local actors and legal and natural
  persons.

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2. Why is rural development policy so important
(5)?
Responds to legitimate expectations of consumers
and society

• Food safety and quality
• Environment protection of natural resources
  maintenance of traditional landscapes and high
  nature value areas
• Organic farming and animal welfare

? The farmer as a partner of society legitimate
demand for compensation
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2. Why is rural development policy so important
(6)?
Compatible with WTO rules ? long term
sustainability of the policy

• Green-box-compatible no obligation to reduce
  payments
• Rural development is important almost everywhere
  in the world
• EU RD models and concepts such as LEADER attract
  growing interest in developing countries

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3. The rural development policy framework for
2007-2013 (1)
Rural Development 2007-2013
LEADER Axis
Axis 1 Competi-tiveness
Axis 2EnvironmentLand Management
Axis 3Economic Divers. Quality of Life
Single set of programming, financing, monitoring,
auditing rules
Single Rural Development Fund
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3. The rural development policy framework for
2007-2013 (2)
Strategic Priorities 2007-2013
LEADER Axis 4 Local capacities for
diversification and employment
Axis 1 - Human capital - Innovation - Knowledge
transfer - IT technologies - RD of new products
Axis 3 Employment opportunities in
diversification and quality of life

• Axis 2
• - Biodiversity
• Water
• Climate Change
• (Win-Win)

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3. In search for win-win situations between
agriculture, the environment and the wider rural
economy

• Agriculture and tourism
• A symbiosis based on sustainability and better
  economics
• Axis 1
• Agriculture and life on the farm an attraction
• Local specialities and traditions an asset
• Axis 2
• Traditional landscapes, Natura 2000 sites and
  other high nature value areas a major asset
• Biodiversity, organic food, clean environment,
  clean water an image that attracts
• Axis 3
• Direct financial support for rural tourism under
  
• On-farm diversification
• Development of micro-enterprises
• Encouragement of tourism activities
• Conservation and upgrading of the rural heritage
• Training and skills acquisition

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3.1. The rural development policy framework for
2007-2013 The role of LEADER (1)
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Axis 4 actions eligible for support
3.1. The rural development policy framework for
2007-2013 The role of LEADER (2)

• a) Implementing local development strategies to
  achieve the objectives of one or more of the 3
  axes
• b) Co-operation 
• c) Running the local action group, acquisition
  of skills and animating the territory

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Field of application of Leader
3.1. The rural development policy framework for
2007-2013 The role of LEADER (3)

• The LEADER method is applicable and useful to
  the whole range of development measures from both
  the territorial and the sectorial viewpoint
• Territorial training, agri-environment,
  forestry, diversification, village renewal
• Sectorial training, marketing and processing,
  forestry, diversification, infrastructures, farm
  investments,
• But
• The Leader method requires permanent support
  structures for capacity building, networking and
  administrative cross-coordination.

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5. RD policy What is the future? Trends as
regards content (1)

• Since its communication on Rural Society
  (1988), the European Commission has not ceased
  underlining the importance of a wider and more
  integrated approach to rural development.
• By definition such an approach is
• multi-disciplinary
• multi-sectoral
• territorial

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5. RD policy What is the future? Trends as
regards content (2)
Multi-disciplinary, multi-sectoral and
territorial means at present

• Minimum of 10 of the funds for Axis 3
  Diversification and quality of life (in
  reality 15-20)
• LEADER-Mainstreaming minimum of 5 for
  bottom-up-approaches and integrated local
  development strategies
• Synergies and coherence with other EU policies

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5. RD policy What is the future? Trends as
regards content (3)
Multi-disciplinary, multi-sectoral and
territorial what does this mean for the future?

• More importance for the integration of
  territorial and economic aspects of rural
  development, but also a number of open questions
• We need a clearer definition of rural areas and
  LFAs
• We need to understand better
• the specificities of different rural areas
• the wider economy of rural and peri-urban areas,
  the relationship with urban centres and the role
  of small and medium rural towns and
  municipalities
• the demographic, socio-economic and environmental
  changes in rural and peri-urban areas

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5. RD policy What is the future? Trends as
regards content (4)
We must continue to reflect on

• How could we maximize the synergies between
  agriculture and forestry on the one hand and the
  rest of the rural economy on the other?
• How could we promote more actively mutually
  profitable initiatives, e.g. in
• Bioenergy and bioheat production and distribution
• Production and marketing of quality products and
  local specialities
• Agro-tourism and communication technologies

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Trends as regards content (4)

• A competitive, market-oriented agro-food sector
  is more imporant than ever

• In the future
• Competitiveness still more important due to
  elimi-nation of export refunds and drastic
  reduction of import tariffs
• Market segmentation, quality products of special
  character training and further education
  entrepreneurship and the use of new technologies

• At present
• 30-40 of the funds for axis 1
• Restructuring and modernization of farm holdings
  more important for the new MS
• Innovation, human capital and entrepreneurship
  more important for the old MS

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Trends as regards content (5)

• Multifunctionality of agriculture and the
  environment

• In the future
• Clearer demonstration of the environmental
  benefit
• Clearer connection with priority areas of EU
  environmental action (e.g. biodiversity, climate
  change, water)
• Continuous search for win-win situations

• At present
• 40-50 (partly up to 75) of the funds for axis 2
• In some EU-15 MS old AE obligations absorb
  considerable funds
• GAEC and CC standards are obligatory and cannot
  be compensated

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6. RD policy What is the future as regards the
financial aspects (1)
Experience from the 2005 negotiations on the
Financial Perspectives 2007-2013

• A number of important MS insisted on a reduction
  of the total EU budget. This pressure is likely
  to continue
• 2002 Brussels ceiling for 1st pillar (293 billion
  Euro) respected, but not likely to be repeated
• Romanian and Bulgarian accession covered within
  the Brussels ceiling
• RD funding was reduced from 89 to 69 billion Euro
  (EU-10 16, EU-15 -35) with obligatory
  modulation 78 billion Euro
• But modulation was introduced in 2003 to
  increase funding for the 2nd pillar, not to
  compensate for cuts in the overall budget

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6. RD policy What is the future as regards
financial aspects (2)
Transfer of funds from the 1st to the 2nd pillar?

• Voluntary modulation existed also in the period
  2000-2006, but was hardly taken up
• EP rejects voluntary modulation ? Recent Council
  decision only for UK and Portugal
• An increase in the obligatory modulation on the
  agenda of the 2008  Health Checks 

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Conclusions

• High acceptance of rural development policy
  concepts very high hopes and expectations
• Future legitimacy of the policy depends on a
  clear evidence of a real contribution to economic
  growth and employment and a tangible contribution
  to the environment and sustainable development
  goals
• A territorial approach, more innovation and
  competitiveness, a search for new sources of
  income and employment, stronger connection and
  synergy between agriculture and the wider rural
  economy and between environment and the provision
  of recreational services and tourism are becoming
  more and more important for the future of
  agriculture.

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• Thank you very much
• for your attention!