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CAP Second Pillar: From structural policies to rural development

CAP Second Pillar: From structural policies to rural development. Lecture 15. Economics of Food Markets Alan Matthews. Lecture objectives. To understand the background to and functioning of the Second Pillar of the CAP

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CAP Second Pillar: From structural policies to rural development

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  1. CAP Second Pillar:From structural policies to rural development Lecture 15. Economics of Food Markets Alan Matthews

  2. Lecture objectives • To understand the background to and functioning of the Second Pillar of the CAP • To trace the (slow) transformation from sectoral policies focused on agriculture to more integrated rural development focus • Questions to think about in next two lectures: • Is there a need for an EU rural development policy? • What should its objectives be? • Should it be funded by EU or national budgets? • Has RD funding been well spent?

  3. Origins in policies to promote agricultural restructuring • Why EU involvement? • The Mansholt Plan 1968 three socio-structural directives • farm modernisation, early retirement, vocation training • Less favoured areas directive 1975 • Mid-1980s – Integrated Mediterranean Programmes

  4. Beginning of EU rural policy • 1988 “Future of Rural Society” report • 1988 Reform of the EU structural funds • Regional, Social, Guidance and Fisheries • Five objectives • Principles of geographical concentration, programming, additionality and partnership • 1991 LEADER programme • Bottom up approach to rural development

  5. MacSharry reforms 1992 • Introduction of accompanying measures • Agri-environment scheme • Afforestation • Early retirement • [Less favoured areas] • Increasing attempt to push rural development up the policy agenda

  6. Agenda 2000 • Introduction of Second Pillar concept • Basic principles • Rural Development Regulation 1999 • Menu of 22 measures in three groups • Restructuring/competitiveness • Environment/land management • Rural economy/rural communities • Complex funding arrangements

  7. Mid Term Review • New Rural Development Regulation • Expanded menu of measures in three Axes • Improving competitiveness of agricultural and forestry sector • Land management (including environmental measures and animal welfare) • Diversification of the rural economy and improving quality of life in rural areas • LEADER • Minimum spending thresholds on each axis • New single Rural Development Fund • European Agricultural Fund for Rural Development

  8. Extended Impact Assessment of the Commission’s RDR proposal 2004 • Option 1: Improved status quo • MS free to draw up RD programmes choosing any combination of measures from the three thematic axes. • Option 2: A more strategic approach • Community would first outline RD priorities • Set minimum levels of spending under each Axis • Option 3: A more territorial approach • As for Option 2, but with territorial targeting in each policy axis • Maximum limit set on Axis 2 agricultural competitiveness

  9. Rural Development Policy 2007-2013 • One single rural development fund • One single programming system • One single set of financial rules • One single control system • For all rural areas in the EU

  10. Rural Development Policy 2007-2013: Foundations 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

  11. Programme balance • Competitiveness objective: total programme funding at least 10% (Commission proposal 15%) • Environment/land management: at least 25% • Quality of life and diversification: 10% (Commission proposed 15%) • Leader approach: at least 5% (Commission proposed 7%)

  12. Programming steps • EU strategy document setting out the EU priorities for the priority axes • National strategy plans translating the EU priorities to the member state situation and ensuring complementarity with Cohesion policy • National or regional rural development programmes articulating the four axes through measures

  13. Community strategic guidelines for rural development • RDR sets out objectives and measures • Guidelines set out priorities and key actions • Six strategic guidelines, three addressed to the thematic axes • Emphasise innovation, R&D, training, entrepreneurship in Axis 1 • Biodiversity and landscape, water and climate change in axis 2 • Capacity building for local strategy development and support for small scale investments in Axis 3

  14. Resources available for Pillar 2 2007-2013 • Despite the rhetoric favouring an expansion of Pillar 2 policies, less funding will be available in the next Financial Perspective for RD policies, particularly in the EU-15 • Compulsory modulation introduced as part of the Luxembourg compromise will contribute relatively small amounts of additional funding (estimated at €1.2 billion per year)

  15. Rural development spendingFinancial Perspective 2007-13 Before compulsory modulation. Voluntary modulation without co-funding requirement for up to 20% of direct payments agreed. Source: Agra Europe

  16. Rural development spendingFinancial Perspective 2007-13

  17. Timetable

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