Christine MeisingerChristine Meisinger

DG AGRI (E.II.4), January 2006DG AGRI (E.II.4), January 2006

EU Rural Development EU Rural Development Policy 2007-2013Policy 2007-2013

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RD policy for 2007-13:RD policy for 2007-13:

New Council Regulation (EC) No 1698/2005 on New Council Regulation (EC) No 1698/2005 on support for rural development by the European support for rural development by the European Agricultural Fund for Rural Development (EAFRD) Agricultural Fund for Rural Development (EAFRD) adopted September 2005 adopted September 2005

3 detailed Commission implementing rules under 3 detailed Commission implementing rules under preparationpreparation

Two major changes in RD acquis as compared to Two major changes in RD acquis as compared to the current 2000-06 period:the current 2000-06 period:– Simplification (of delivery structures)– Strategic approach (programming and reporting)

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For all rural areas in the EUFor all rural areas in the EU

2000-06 period:2000-06 period:

2 sources of finance (funds)2 sources of finance (funds)

3 systems for financial 3 systems for financial management and controlsmanagement and controls

5 types of programming5 types of programming

In future 2007-13:In future 2007-13:

1 fund (EAFRD)1 fund (EAFRD)

1 system for financial 1 system for financial management and controlsmanagement and controls

1 programming system1 programming system

SIMPLIFICATION

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Programming steps (strategic approach)Programming steps (strategic approach)1.1. Community strategic guidelines setting out the EU priorities for Community strategic guidelines setting out the EU priorities for

the period 2007-2013the period 2007-2013

2.2. National strategy plans translating the EU priorities to the National strategy plans translating the EU priorities to the

member state situation and ensuring complementarity with member state situation and ensuring complementarity with

Cohesion policyCohesion policy

3.3. National or regional rural development programmes articulating National or regional rural development programmes articulating

the four axesthe four axes

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Regulation and GuidelinesRegulation and Guidelines

Reg. 1698/2005 => purpose and scope of Reg. 1698/2005 => purpose and scope of assistance from EAFRD (the RD fund)assistance from EAFRD (the RD fund)

Community Strategic Guidelines => EU level Community Strategic Guidelines => EU level priorities within the framework of Reg. priorities within the framework of Reg. 1698/2005, in particular focus on 1698/2005, in particular focus on sustainability (Gsustainability (Gööteborg) and growth and teborg) and growth and jobs (Lisbon)jobs (Lisbon)

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Policy contentPolicy content

→ → What the EU supports under rural What the EU supports under rural development:development:

3 core objectives3 core objectives 4 priority axes4 priority axes 41 detailed measures41 detailed measures

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Three core objectives:

Improving the competitiveness of the farm and forestry sector through support for restructuring, development and innovation

Improving the environment and the countryside through support for land management

Improving the quality of life in rural areas and encouraging diversification of economic activity

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Four axes to implement the objectives:Four axes to implement the objectives:

Axis 1: Axis 1: Improving the competitiveness of the Improving the competitiveness of the farm and forestry sectorfarm and forestry sector

Axis 2: Axis 2: Improving the environment and the Improving the environment and the countrysidecountryside

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

Axis 4: Axis 4: LEADER (local development in rural LEADER (local development in rural areas)areas)

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Programme balanceProgramme balance Axis 1: at least 10% of EU programme Axis 1: at least 10% of EU programme

fundingfunding Axis 2: at least 25%Axis 2: at least 25% Axis 3: at least 10%Axis 3: at least 10% Axis 4: LEADER at least 5% (but counts for Axis 4: LEADER at least 5% (but counts for

the other axes), phasing in for the new MS – the other axes), phasing in for the new MS – average of 2.5%.average of 2.5%.

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Rural Development

2007-2013

« LEADER » Axis

Axis 1 Competi-tiveness

Axis 2Environment

+Land

Management

Axis 3Economic

Divers.+

Quality of Life

Single set of programming, financing, monitoring, auditing rules

Single Rural Development Fund

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Axis 1 : Improving CompetitivenessAxis 1 : Improving Competitiveness

Axis built up of 16 measures in 4 blocks:Axis built up of 16 measures in 4 blocks:

Human capitalHuman capital

Physical capitalPhysical capital

QualityQuality

Transitional measuresTransitional measures

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Axis 1: Improving Competitiveness (1)Axis 1: Improving Competitiveness (1)

1.1. Measures aimed at promoting Measures aimed at promoting knowledgeknowledge and improving and improving human potentialhuman potential: :

vocational training, vocational training,

setting up of young farmers, setting up of young farmers,

early retirement, early retirement,

provision of advisory services; provision of advisory services;

setting up farm management, farm relief and setting up farm management, farm relief and advisory advisory services.services.

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Axis 1: Improving Competitiveness (2)Axis 1: Improving Competitiveness (2)

2. Measures aimed at restructuring 2. Measures aimed at restructuring physical potentialphysical potential and and promoting promoting innovationinnovation: :

farm modernisation, farm modernisation,

improving the economic value of forests, improving the economic value of forests,

processing and marketing of agricultural and forestry processing and marketing of agricultural and forestry products, products,

improving and developing of infrastructure, improving and developing of infrastructure,

natural disasters and prevention actions.natural disasters and prevention actions.

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Axis 1: Improving Competitiveness (3)Axis 1: Improving Competitiveness (3)

3.3. Measures aimed at improving the Measures aimed at improving the qualityquality of agricultural of agricultural production and products: production and products:

adaptation to new EU standards,adaptation to new EU standards,

participation in food quality schemes,participation in food quality schemes,

promotion for quality products.promotion for quality products.

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Axis 1: Improving Competitiveness (4)Axis 1: Improving Competitiveness (4)

4.4. Transitional measuresTransitional measures for the new Member States: for the new Member States:

support for semi-subsistence farms undergoing support for semi-subsistence farms undergoing restructuring,restructuring,

setting up of producer groups,setting up of producer groups,

provision of advisory services (only for Bulgaria provision of advisory services (only for Bulgaria and Romania for the period of 3 years)and Romania for the period of 3 years)

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Measure example: Measure example: Farm modernisation (art. 26)Farm modernisation (art. 26)

Maximum grant of: Maximum grant of:

- 50% of the eligible costs for all farmers- 50% of the eligible costs for all farmers

- 60% of the eligible costs for farmers in LFA- 60% of the eligible costs for farmers in LFA

- - conditionsconditions: improve the overall performance of the : improve the overall performance of the

agricultural holding; respect Community standards relevant to agricultural holding; respect Community standards relevant to

the investment; the investment;

Grace period for investments needed to implement newly Grace period for investments needed to implement newly

introduced Community standards: up to 3 years from the date introduced Community standards: up to 3 years from the date

on which the standard becomes compulsory on the farm on which the standard becomes compulsory on the farm

holding.holding.

Axis 1: Increasing CompetitivenessAxis 1: Increasing Competitiveness

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Measure example: Measure example: Investment aids for processing and marketing Investment aids for processing and marketing (adding value) (art. 28)(adding value) (art. 28)

Support for processing, marketing or development of “Annex I” Support for processing, marketing or development of “Annex I” (agricultural) and/or forestry products (NB fishery products excluded)(agricultural) and/or forestry products (NB fishery products excluded)

Maximum grant 50% of the eligible costs for SMEMaximum grant 50% of the eligible costs for SME Aid intensity halved for bigger enterprises (i.e. max 25%):Aid intensity halved for bigger enterprises (i.e. max 25%):

- with less than 750 employees or- with less than 750 employees or- with a turnover of less than 200 Mio €- with a turnover of less than 200 Mio €

No aid for enterprises larger than thisNo aid for enterprises larger than this- - conditionsconditions: improve the overall performance of the : improve the overall performance of the

enterprise; respect the Community standards relevant to the enterprise; respect the Community standards relevant to the investment; investment;

In the case of forestry, support only for micro-enterprisesIn the case of forestry, support only for micro-enterprises

Axis 1: Increasing CompetitivenessAxis 1: Increasing Competitiveness

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Measure example: Measure example: Establishment of Producer groups (art. 35)Establishment of Producer groups (art. 35) Annual flat rate aid for setting up and administrative operation of producer Annual flat rate aid for setting up and administrative operation of producer

groups.groups.

Objectives:Objectives: - Improved market presence,- Improved market presence, - joint marketing,- joint marketing, - better information.- better information.

ConditionsConditions::

Support for the first 5 years after recognition

Group must be officially recognised by competent authority of the Member State during programming period.

Flat rate aid is a percentage of the group's annual marketed production during the first five years of recognition:

Year 1 2 3 4 5

Up to 1,000,000 € 5% 5% 4% 3% 2%More than 1,000,000 € 2,5% 2,5% 2% 1,5% 1,5%Maximum amounts 100,000 € 100,000 € 80,000 € 60,000 € 50,000 €

Axis 1: Increasing CompetitivenessAxis 1: Increasing Competitiveness

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Axis 2 : Environment/Land ManagementAxis 2 : Environment/Land Managementbuilt up of 13 measures in 2 blocksbuilt up of 13 measures in 2 blocks Agricultural land:Agricultural land:

mountain areas; other areas with handicaps; Natura 2000 mountain areas; other areas with handicaps; Natura 2000 areas; agri-environment; animal welfare; support for non-areas; agri-environment; animal welfare; support for non-productive investmentsproductive investments

Forestry land:Forestry land:first afforestation; first establishment of agro-forestry systems, first afforestation; first establishment of agro-forestry systems, Natura 2000 areas; forest-environment; restoring forestry Natura 2000 areas; forest-environment; restoring forestry potential and introducing prevention actions; support for non-potential and introducing prevention actions; support for non-productive investmentsproductive investments

N.B.:N.B.: Agri-environment measures are compulsory for each programmeAgri-environment measures are compulsory for each programme Cross compliance sanctions (under 1st Pillar of CAP) applyCross compliance sanctions (under 1st Pillar of CAP) apply

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Axis 2: Land management/environmentAxis 2: Land management/environmentMeasure example: Less Favoured AreasMeasure example: Less Favoured Areas Designation of areas – mountain areas, other less-favoured, and Designation of areas – mountain areas, other less-favoured, and

areas affected by specific handicapsareas affected by specific handicaps

Aid Amounts: minimum €25/ha, maximum € 250/ha (mountain Aid Amounts: minimum €25/ha, maximum € 250/ha (mountain areas), €150/ha (other handicaps) areas), €150/ha (other handicaps)

Calculation of allowance: compensate for additional costs/income Calculation of allowance: compensate for additional costs/income foregone related to handicap; avoid overcompensationforegone related to handicap; avoid overcompensation

For other (intermediate) LFA: current 2000-06 regime continued For other (intermediate) LFA: current 2000-06 regime continued until 2010, report and proposal by the Commission in 2008, until 2010, report and proposal by the Commission in 2008, Council decision in 2009, new regime enters into force in 2010Council decision in 2009, new regime enters into force in 2010

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Axis 2: Land management/environmentAxis 2: Land management/environmentExample measure: Agri-environmentExample measure: Agri-environment

The only compulsory measure (at programme level)The only compulsory measure (at programme level) Beneficiaries: Farmers and other land managersBeneficiaries: Farmers and other land managers 5 to 7 year contracts (on a voluntary basis)5 to 7 year contracts (on a voluntary basis) Annual payments for commitments going beyond the baseline Annual payments for commitments going beyond the baseline

covering additional costs, income foregone and transaction covering additional costs, income foregone and transaction costs costs

Maximum aid rates: €600/ha - annual crops, € 900/ha- Maximum aid rates: €600/ha - annual crops, € 900/ha- specialised perennial crops, € 450 other land uses, local specialised perennial crops, € 450 other land uses, local breeds €200/LUbreeds €200/LU

Baseline = cross compliance + minimum requirements Baseline = cross compliance + minimum requirements fertiliser and pesticide + national legislationfertiliser and pesticide + national legislation

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Axis 3 : Diversification, quality of lifeAxis 3 : Diversification, quality of lifebuilt up of 8 measures in 3 blocks:built up of 8 measures in 3 blocks:

Diversification of the rural economy:Diversification of the rural economy:diversification to non-agricultural activities; support for micro-enterprises; tourismdiversification to non-agricultural activities; support for micro-enterprises; tourism

Improvement of the quality of life:Improvement of the quality of life:basic services; village renewal; conservation and upgrading of the rural heritage (natural basic services; village renewal; conservation and upgrading of the rural heritage (natural and cultural)and cultural)

Training and capacity buildingTraining and capacity building

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Axis 3Axis 3Example measures: Diversification of rural economyExample measures: Diversification of rural economy

Diversification into non-agricultural activitiesDiversification into non-agricultural activities The beneficiary is a farm-household member The beneficiary is a farm-household member

Micro-enterprises, entrepreneurshipMicro-enterprises, entrepreneurship Less than 10 staff, turnover < €2 million Less than 10 staff, turnover < €2 million Addressed to the wider rural populationAddressed to the wider rural population

Tourism activitiesTourism activities Small scale infrastructure, recreation infrastructure, development and marketing servicesSmall scale infrastructure, recreation infrastructure, development and marketing services Addressed to the wider rural populationAddressed to the wider rural population

GeneralGeneral issues of demarcation with Cohesion Policy e.g. tourism, rural roads..issues of demarcation with Cohesion Policy e.g. tourism, rural roads.. no specific aid ceilings in axis 3 (possible 100% aid intensity subject to state no specific aid ceilings in axis 3 (possible 100% aid intensity subject to state

aid guidelines)aid guidelines)

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Axis 4: LeaderAxis 4: Leader Leader: ‘Links between actions for the development of the Leader: ‘Links between actions for the development of the

rural economy’rural economy’

Specific featuresSpecific features– area-based approach (local development strategies)– public-private partnership (Local Action Group)– bottom-up approach– integrated approach – innovation– cooperation– networking

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Axis 4 : LeaderAxis 4 : LeaderSupport for 3 measures:Support for 3 measures:

Implementation of local development strategies through a Leader approach to Implementation of local development strategies through a Leader approach to contribute to the achievement of the objectives of one or several of the three other contribute to the achievement of the objectives of one or several of the three other axesaxes

Inter-territorial and trans-national co-operation between LAGSInter-territorial and trans-national co-operation between LAGS

Running costs of Local Action Groups (LAGs), capacity building and animationRunning costs of Local Action Groups (LAGs), capacity building and animation

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Social Fund (ESF)

Rural Development Fund(EARDF)

Regional Fund (ERDF)

Agro- Competitiveness

LandManagement

Rural Economy

Employment HumanCapital

Training

PhysicalCapital

Investment

Othermeasures

Mountain areas

Other LFA Natura 2000

Agri-Environ. Afforestation

Economic Diversification

Rural infrastructureBasic services

Urban/Rural Linkage

LEADER Approach

Integration of Environmental Concerns/Objectives

Rural Development Coverage – EU PoliciesRural Development Coverage – EU Policies

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Community cofinancing ratesCommunity cofinancing rates At the level of the axis as share of total At the level of the axis as share of total

eligible public expenditureeligible public expenditure For axis 1 and 3 a maximum cofinancing For axis 1 and 3 a maximum cofinancing

rate of 50% (75% in Convergence regions)rate of 50% (75% in Convergence regions) For axis 2 and 4 a maximum cofinancing For axis 2 and 4 a maximum cofinancing

rate of 55% (80% in Convergence regions)rate of 55% (80% in Convergence regions) (For all axes 85% in outermost regions)(For all axes 85% in outermost regions)

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Implementation structureImplementation structure

→→The structures needed to deliver, control The structures needed to deliver, control and monitor EU rural development support and monitor EU rural development support effectively on the ground.effectively on the ground.

Main components:Main components: PartnershipPartnership Management, control and informationManagement, control and information Monitoring, evaluation (CMEF) and reportingMonitoring, evaluation (CMEF) and reporting Technical assistance and networksTechnical assistance and networks

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Financial Perspective 2007-2013 Financial Perspective 2007-2013 (16 Dec.)(16 Dec.) Heading 2 – agriculture, rural development, Heading 2 – agriculture, rural development,

fish, financial instrument for environment, fish, financial instrument for environment, incl. transfers from heading 1bincl. transfers from heading 1b

for Rural Development Policy: for Rural Development Policy: € 69.75 bn€ 69.75 bn– at least € 33.01 bn to EU12– at least € 18.91 bn to E15– € 4.07 bn: A (1.35), Fi (0.46), Ir (0.5), I (0.5), Lu (0.2), F

(0.1), Sw (0.82), P (0.32)

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Thank you for your attention.Thank you for your attention.