Abstract
This chapter considers the evolution of policy for rural areas within the European Union since the 1950s. It does so largely within the context of the Common Agricultural Policy (CAP) but gives some consideration to the wider EU regional (including cohesion) policies as these have helped shape rural development policy under the CAP. National policies for rural development are not taken into account. The chapter starts by describing the characteristics of rural areas. Next it gives an overview of policy-making for rural areas from the late 1950s to 2000. The third section describes rural development policy/programming since 1999/2000 to date. The chapter concludes with discussion and conclusions on current policy for rural development and the EC proposals for changes from 2021 onwards.
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Notes
- 1.
Regional policy refers to the policy delivered through the various so-called Structural Funds. These broadly comprise the European Fund for Regional Development, the European Social Fund and the Cohesion Fund. The Guidance part of the European Agricultural Fund for Guidance and Guarantee is also a Structural Fund.
- 2.
In the early days of European policy-making, it was felt that European agricultural policy should address two main challenges, adaptation of agricultural structures and creation of a common market. See Hofreither (2007).
- 3.
The Guidance section of the EAGFF financed rural development measures, and the Guarantee section financed the expenditure of the common organisations of the markets.
- 4.
The most lagging rural regions fell under Objective 1, while Objective 5b covered other lagging rural areas. Objective 2 was applied in regions with high unemployment compared to the EU average. Objective 3 (unemployment), 4 (youth unemployment) and 5a (adapting farm structures) applied throughout the Union.
- 5.
Also, regional policy tended to focus on funding large infrastructure projects and had a significant urban focus. Simultaneously worries about the multifaceted small-scale rural development started to increase, these worries grew gradually (manifested in Cork 1996) and were finally translated in Agenda 2000 in 1999.
- 6.
The area-oriented measures of Objective 1 and 5b were only cofinanced by the EU in selected rural regions, and the business-oriented measures (Objective 5a and the accompanying measures) were cofinanced throughout the Union.
- 7.
Member States were given the option to transfer up to 20% of Pillar 1 funds to their rural development programme budgets, which then had to be co-funded. The use of these funds was limited to certain measures: early retirement, agri-environment, Less Favoured Areas and afforestation.
- 8.
Objective 1 for the development and adjustment of regions whose development is lagging behind; objective 2 for the economic and social conversion of regions experiencing structural difficulties. Objective 3 for the adjustment and modernisation of education, training and employment policies and systems was financed through the ESF.
- 9.
The Structural Funds were also restructured with the aim to concentrate funds on areas most in need and to simplify their implementation. Around 80% of the Funds were geared at convergence, focusing on regions with an average income less than 75% compared to the EU average. The remainder of the funds was available throughout the Union to stimulate competitiveness, employment and territorial cooperation.
- 10.
The final agreement allowed for an additional increase in modulation rates, over and above the existing rate, for the EU-15, of 5% by 2012 for all farms receiving more than €5000 in direct payments (rising from 2% in 2009, followed by a 1% increase in subsequent years). In addition, farms receiving over €300,000 in direct payments were subject to an additional 4% modulation.
- 11.
For Pillar 1, the overall budget was reduced from around €305 billion to €278 billion for 2014–2020 (a reduction of €27 billion or 8.8%). For Pillar 2 the reduction was smaller in absolute terms, but far greater proportionately (a 13% reduction) with the budget reduced from €98 billion to approximately €85 billion.
- 12.
BG, CZ, IE, CY, LT, HU, AT, PL, SI, SK and SE.
- 13.
European Structural & Investment Funds (ESIF) consist of five funds including European Regional Development Fund (ERDF), European Social Fund (ESF), European Agricultural Fund for Rural Development (EAFRD), the Cohesion Fund and the European Maritime and Fisheries Fund (EMFF). Together these funds contribute to the Cohesion policy of the EU, to the benefit of all regions but with higher co-financing from the EU-funds for regions with higher development needs. Funding is restricted to projects that help achieve one of the 11 thematic objectives for the period 2014–2020.
- 14.
The Regional Development and Cohesion Policy for the post 2020 period will also be maintained, investing in all regions, with a focus on regions most in need in terms of relative wealth. Priorities for investment have been reduced to 5, compared to the 11 priority themes in the 2014–2020 period.
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Berkhout, P., Hart, K., Kuhmonen, T. (2019). EU Rural Development Policies: Present and Future. In: Dries, L., Heijman, W., Jongeneel, R., Purnhagen, K., Wesseler, J. (eds) EU Bioeconomy Economics and Policies: Volume II. Palgrave Advances in Bioeconomy: Economics and Policies. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-28642-2_12
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