and Rural Development
Support for rural
Introduction of a
sustainable and integrated rural development policy
"Support for rural development from the European Agricultural
Guidance and Guarantee Funds"
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.
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)
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
- 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
The rural development measures
eligible under this Regulation fall into two groups:
- 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
- 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.
in bold are described in more detail in factsheet L.1.2 "Support for rural
development - eligible measures"
Geographic coverage and programming
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
a) Rural development plans
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.
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
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
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.
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
Compatibility and coherence
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
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
- 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
Directorate General for Agriculture
Eugène Leguen de Lacroix
103 rue de la Loi
Tel: +32 2 295 29 63
Fax: +32 2 299 17 61
date of publication: 03/01