Finnish experience in rural development - Local Action Groups

1. Proiect cofinantat din Fondul Social European prin Programul Operational Sectorial Dezvoltarea Resurselor Umane 2007- 2013 Investeste în oameni! Finnish experience in rural development - Local Action Groups 28.6.2012 Ph.D Jouni Ponnikas

2. Content of the presentation Proiect cofinantat din Fondul Social European prin Programul Operational Sectorial Dezvoltarea Resurselor Umane 2007- 2013 Investeste în oameni! • Development of regions in Finland and regional development of Kainuu • Administration system of rural development in Finland • LEADER method – LEADER principles • Local LEADER action groups in Finland • Benefits of Leader method and LAGs LI

3. Development of regions in Finland and regional development of Kainuu Proiect cofinantat din Fondul Social European prin Programul Operational Sectorial Dezvoltarea Resurselor Umane 2007- 2013 Investeste în oameni!

4. Development of regions in Finland 1970-2007 Areas of highest population are decreasing Centralisation of permanent housing Most sparsely populated areas are losing permanent inhabitants Areas of sparsely population are increasing (Hätälä & Rusanen 2010)

5. Aging of population in Finland • Blue areas: lot of people under 50 years old; especially areas near cities and rural close to urban areas • Red areas on the map: over 67 % of the population are 50 years old or older; lot of employees will retire by the year 2025, especially areas in eastern Finland including Kainuu

6. Land use and Urban-Rural Typology in Europe. Source: Nord-regio 2011.

7. Kainuu Region. Population in Kainuu 2010: 82 073 (total) to compare Oulu = 141 671; Finland = 5 385 633

8. Administration system of rural development in Finland

9. Administration of rural development in Finland • LAGs funding for enterprises and development projects based on the local strategy. • The municipalities fund Leader activities and grant agri-environment payments. • ELY Centres provide funds for business aid and projects and they also grant the payments for special agri-environment measures. • Finnish Agency for Rural Affairs is the national authority responsible for the administration of rural funding. The Agency compiles application forms and instructions and is responsible for paying and supervision of the funds granted.

10. Administration of rural development in Finland • Rural Network (under the Ministry of Agriculture and Forestry) provides links between rural developers. The Rural Network Unit provides services for the LAGs and assists them, for example, in finding international partners. • The Ministry of Agriculture and Forestry is responsible for planning the program (RDP Finland) and any changes in it, for statutory aspects and for state funding and its allocation to the regions

11. LEADER method – LEADER principles

12. Leader principles, common in EU • Area-based local development strategies – A local approach takes a small and socially cohesive territory as the target area for policy implementation. Program based local developing • Bottom-up approach – strategy meets local needs actors participate in decision-making about the strategy and in the selection of the priorities to be pursued in their local area. • Setting up a local partnership, known as a “local action group” (LAG), which is responsible for identifying and implementing a local development strategy

13. Leader principles, common in EU • Innovation facilitation – It may mean the introduction of a new product, a new process, a new organization or a new market. Innovation in rural areas may imply the transfer and adaptation of innovations developed elsewhere, the modernization of traditional forms of know-how, or finding new solutions of persistent rural problems. • Integration and multi-sectoral actions – The strategy must be multi-sectoral, actions and projects linked and coordinated as a coherent whole. • Networking – Exchanging achievements, experiences and know-how • Cooperation –further than networking: LAG undertaking a joint projects (local, regional, national and international)

14. Short history of LEADER in EU: expanding story

15. Local LEADER action groups in Finland

16. The Finnish Leader Local Action Groups • In Finland the Leader local action group (LAG) is a registered association that develops rural areas by funding local rural development projects and granting support for enterprises. There are 56 LAGs in Finland, and their activities cover the whole country. • Finland has a strong culture of village action, to which the Leader activities have were well suited. • Leader: suitable for Finland and it was seen as a productive way of developing rural areas, since it gathers the existing actors together and offers a new kind of opportunity to participate in developing the local area (participatory method)

17. The Finnish Leader Local Action Groups • In the area of one LAG there are on average some 40,000 inhabitants, ranging from 14,000 to almost 100,000 inhabitants. In every LAG there is staff and board (on voluntary base) • The activities of the LAG are steered by the board of the action group. New members are elected in annual general meeting. The tripartite principle is followed in the composition of the board: 1) one third of the board members represent the municipalities in the area, 2) one third represent companies or corporations and 3) one third ordinary residents who are not in the decision-making organs of the municipalities or corporations. All these groups are equally represented in the LAG’s board. The maximum term of office for a board member is six consecutive years.

18. Funding for enterpriseand development projects • Through the LAG, it is possible to apply for funding for enterprise or for non-profit development projects. The groups mainly fund small rural enterprises and those that are starting up. Funding may be granted for the company’s investments and development and for the wage costs of the first employees. • Development projects promote the economy of the area, develop villages and the environment, provide training and promote international activities. The registered associations may also apply for the agri-environment payments.

19. Internationalization via LAGs • The LAGs themselves may also implement and coordinate projects. • The LAGs are central actors for internationalization in rural areas (in RDP Finland LAGs are mostly responsible for international actions): they open up an important funding channel for international rural projects and joint business projects. This is behind the target in current program period. • There are LAGs almost in every EU Member State - good network for international rural activity

20. Leader projects by LAGs • In the programming period 2007–2013 the maximum amount of public funding for Leader projects is 150,000 euros per project • In 2007–2013 the amount of public funding available for LAGs is in the range of 2.5 - 6.8 million euros per group • Altogether the Finnish LAGs have 242 million euros of public funding to be allocated to projects

21. Funding of LAGs • The groups are funded from the RDP for Mainland Finland 2007-2013 (funded under the EAFRD) A fifth of the funding comes from the local municipalities of the LAG areas • In addition, funding and work contributions for the Leader projects worth an estimated 128 million euros comes from entrepreneurs, associations and other organizations (private funding). • The work contributions are traditionally voluntary work, for example, repairing a village hall or landscape improvement work (good impacts on social capital) • In addition, the LAGs may apply for funding, for example, from national regional development programs or EU Structural Fund programs or anywhere they want

22. Administration system of LAGs (LAGs and ELY Centres) • When an applicant has submitted its application to a LAG, the board of the action group processes the application and gives a statement on it • After processing by the board, the LAG submits the application together with the statements to the ELY Centre, which is the regional authority operating under the Ministries (15 ELY Centres in Finland) • LAG’s board has decided on the project to be funded, ELY Centre checks the legality of the project, and passes an official decision on the project. If the LAG has supported a project, the ELY Centre can give a negative decision only if the project is illegal. If the LAG has not supported the project, the ELY Centre cannot decide to accept it for funding.

23. Benefits of Leader method and LAGs

24. You need somebody to help you! - LAG can help you

25. Why LEADER is so good method for local developing? Examples from Finland* • Funding for small and micro enterprises (1-10 persons) often LAGs are only source of funding for these firms • Funding for non-profit development projects for voluntary associations, village associations; such funding is hard to get anywhere else • Without Leader many small projects do not start at all • LAGs have reached good results in co-operation with enterprises. LEADER method fits well to co-operation with enterprises LAGs help customers with bureaucracy and customers (frims as well as associations) are happy with service they have got. * (results of recent evaluations in Finland; Ponnikas et.al. 2012)

26. Why LEADER is so good method for local developing? Examples from Finland • The LAGs have succeeded well in the construction of social capital in its various dimensions: projects have fostered co-operation in regions, LAGs have activated local people in general and especially young living in rural areas, voluntary work made as a part of projects has fostered social capital • LAGs have encouraged exploitation of the local potential and they had a complementary, advisory and activating role in their region.

27. Why LEADER is so good method for local developing? Examples from Finland • One problem is LAG`s dependency on ELY centres, to increase the efficiency and effectiveness, • LAGs need larger freedom and larger responsibility (ideas of global grant) overlapping activities of the LAGs and the ELY-centres should be given up • In international activities LAGs have lot to do results are not very good so far and expectations are high., in many cases LAGs are only or very important factors to create international contacts for local developing

28. Story will continue! Thank you!  Jouni.Ponnikas@oulu.fi