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Agricultural Policy
and Rural Development

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Support for rural development
General guidelines

Introduction of a sustainable and integrated rural development policy


Official title

"Support for rural development from the European Agricultural Guidance and Guarantee Funds"


Legal references

Council Regulation (EC) No 1257/1999 of 17 May 1999, on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations.

This Regulation introduces the Community support framework for sustainable rural development from 1 January 2000. It accompanies and complements the other Common Agricultural Policy (CAP) instruments and Community structural policy, and repeals prior regulations concerning: the EAGGF-Guidance section (4256/88); Objective 5a (950/97, 951/97, 952/97 and 867/90); the measures accompanying the 1992 reform of the CAP (2078/92, 2079/92 and 2080/92); and the development and enhancement of forests (1610/89).

Commission Regulation (CE) n°1750/99 of 23 July 1999, lays down the guidelines for implementing the afore-mentioned regulation.



  • Make rural development the second pillar of the Common Agricultural Policy (CAP)

  • Introduce a sustainable and integrated rural development policy governed by a single legal instrument to ensure greater coherence with the prices and market policies of the CAP and to promote the competitiveness of farm holdings as well as the diversification on and outside of such holdings.

  • Promote all aspects of rural development by encouraging the involvement of local players, thus respecting the principle of subsidiarity.

In this spirit, the new rural development policy, relating to farming and conversion of activities, aims

  • to improve the structure of farm holdings as well as the structures for processing and market farm produce;

  • to guarantee the safety and quality of foodstuffs;

  • to ensure fair and stable incomes for farmers;

  • to ensure that environmental issues are taken into account;

  • to develop complementary or alternative activities that generate employment, with a view to slowing the depopulation of the countryside and strengthening the economic and social fabric of rural areas;

  • to improve living and working conditions and equal opportunities.


Eligible measures

The rural development measures eligible under this Regulation fall into two groups:

  1. the accompanying measures of the 1992 CAP reform: early retirement, agri-environment and afforestation, as well as compensatory payments for less favoured areas and areas subject to environmental constraints;

  2. the measures to modernise and diversify agricultural holdings (farm investment, setting-up of young farmers, training, investment aid for processing and marketing facilities, additional assistance for forestry) and to adapt and develop rural areas.

All measures in bold are described in more detail in factsheet L.1.2 "Support for rural development - eligible measures"


Geographic coverage and programming

Rural areas throughout the European Union are covered by the rural development policy. The programming of rural development measures can be summed up in the following three categories:

a) Rural development plans
These programmes cover initiatives supported by the EAGGF/Guarantee section throughout the Community (except those in "C" which Member States have chosen to include in Objective 2 programming) and do not include measures arising from the EAGGF/Guidance section in Objective 1 regions (see "B").

They are established at the geograhphic level deemed most appropriate by each Member State for a period of 7 years (2000-2006).
These programmes present the current situation, proposed stategy, expected results, financial plan, description of the measures envisaged, needs in terms of studies and technical assistance, designation of competent authorities and steps to be taken to ensure effective implementation, as well as the results of the consultations conducted during programme preparation.

b) Programmes in Objective 1 regions
Rural development measures, apart from the CAP accompanying measures set out in paragraph 1, in the rural areas of the regions lagging in development are co-financed by the EAGGF/Guidance section. These measures are compulsorily integrated within Objective 1 regionalised programmes, in the form of an operational programme aimed at rural development

c) A contribution towards the reconversion of Objective 2 rural areas
The rural areas concerned are those which face particular reconversion difficulties. Over and above funding from the EAGGF/Guarantee section for rural development, they receive support from two structural funds: the European Regional Development Fund (ERDF) and the European Social Fund (ESF).
Member States can choose between two options when programming measures in these areas:

  • either to integrate rural development measures into the Objective 2 regionalised programmes;
  • or to include them in the horizontal programmes (see point A)


Implementation, monitoring and evaluation

Member States must sumbit their Rural Development Plans to the Commission within six months of the entry into force of the Regulation. The Commission assesses and adopts the programmes within six months of the plans being presented.

Responsibility for selecting actual projects falls exclusively to the competent national and regional authorities, following the best schedule they are able to devise. Those wishing to run the projects must therefore present their proposals to these authorities.

After the projects have started, the Member State and the Commission will monitor the initiatives together; where necessary, monitoring committees can be set up.

The programmes are subject to annual implementation reports and mid-term and ex-post evaluations carried out by independent monitors.



The CAP accompanying measures, arising from the 1992 reform (early retirement, agri-environment and afforestation), and the compensatory payments for less favoured areas and areas subject to environmental constraints, are co-financed by the Guarantee section of the EAGGF throughout the Community.

For other rural development measures, the source of Community funding varies according to the regions concerned:

  • in Objective 1 regions, the source of funding is the EAGGF/Guidance section;
  • outside Objective 1 regions, the source of funding is EAGGF/Guarantee.

The EAGGF also covers measures for the development and structural adjustment (renovation and development of villages, protection and conservation of the rural heritage, diversification of farm activities and improvement of the infrastructure relating to the development of farming) which are not financed by the ERDF in areas eligibile under Objectives 1 and 2 or "phasing-out".
The average annual allocation to Member States for financing rural development by the EAGGF/Guarantee amounts to EUR 4 339 million (1999 prices).

As for the rate of co-financing, the European Union must contribute at least 25% of eligible public expenditure and not more than 50% of total eligible costs in areas outside Objectives 1 and 2.

Regarding agri-environmental measures, this contribution should amount to 75% in Objective 1 regions and 50% in other areas. Specific provisions also exist for income-generating investments.


Compatibility and coherence

Rural development measures must be compatible with Community law and coherent with other Community policies. This coherence is especially important in the case of the other CAP provisions (common market organisations, measures relating to the quality of farming and health).

In addition, measures receiving financial assistance under this Regulation may not receive aid under any other Community support scheme. Moreover, any measure which is incompatible with a specific condition laid down in this Regulation will not be eligible for support under other Community support schemes.


  • State aid for investments in farm holdings which exceed the percentages laid down for Community aid are prohibited, except in the case of investments relating to areas of public interest (conservation of traditional landscapes, relocating farm buildings), to environmental improvements, hygiene and animal welfare;

  • Aid to compensate natural handicaps must always comply with Community rules;

  • Agri-environment aid must comply with Community conditions and limits, although these may be exceeded where necessary to properly cover the loss of incomé, additional costs, etc.


Additional sources of information

European Commission
Directorate General for Agriculture
Unit A II.I
Eugène Leguen de Lacroix
103 rue de la Loi
B-1049 Brussels
Tel: +32 2 295 29 63
Fax: +32 2 299 17 61


date of publication: 03/01

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