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Agricultural Policy
and Rural Development

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Support for rural development
Eligible measures

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) n° 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.

Commission Regulation (EC) n° 1750/1999 of 23 July 1999, laying down detailed rules for the application of the previous regulation.

The factsheet L.1.1 "Support for rural development - general guidelines" presents the operational framework of this regulation.


Eligible measures

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

  • measures financed by the EAGGF/Guarantee throughout the Community territory: the accompanying measures of the 1992 CAP reform (early retirement, agri-environmental and afforestation measures) and the compensatory scheme for less favoured areas and areas subject to environmental constraints;

  • other measures, financed by the EAGGF/Guidance (Objective 1 areas) or by the EAGGF/Guarantee (other areas): investment in farm holdings, setting-up of young farmers, training, investment aid for processing and marketing facilities, additional assistance for forestry, promotion and conversion of rural areas.

This range of measures can be presented in 7 main fields.

1) Agri-environmental measures

The agri-environmental measures are the only compulsory measures for Member States, although they are optional for farmers.

Support can be granted to farmers who, for at least five years, use agricultural production methods designed to protect the environment and maintain the countryside. This involves promoting farming methods which are compatible with the protection of the environment, environmental planning in farming practice, extensification, the conservation of farmed environments of high natural value, the upkeep of the countryside, the safeguarding of local breeds and the conservation of plant genetic resources under threat.

This aid is calculated on the basis of income forgone, additional costs and the financial incentive needed to encourage farmers to make agri-environmental undertakings. However, such aid may not exceed EUR 600 per hectare for annual crops and EUR 900 per hectare for specialised perennial crops. Aid for all other land uses may not exceed EUR 450 per hectare per year.

2) Human resource measures

a) Setting-up of young farmers
The aid for young farmers targets heads of holdings who are under 40 years of age, possess adequate competence and are setting up in farming for the first time. Their holdings must be viable and comply with minimum standards regarding the environment, hygiene and animal welfare.
The aid consists either of a single premium of up to
EUR 25 000, or an interest subsidy on loans of up to EUR 25 000 taken on with a view to covering the costs of setting up.

b) Vocational training.
Support for vocational training is intended to improve the occupational skill and competence of persons involved in agricultural and forestry activities, to help them redeploy production, apply production practices compatible with the environment, landscape maintenance, hygiene and animal welfare, and to manage their holdings better.

c) Early retirement
Support may be granted to farmers over 55 years of age but not yet of retirement age, who decided to stop all commercial farming activity definitively after having practised farming for at least 10 years before stopping. Support is also available for farm workers (family helpers or paid farm workers) of the same age, belonging to a social security scheme, who have devoted at least half of their working time to farm work during the five years before stopping, or have worked for at least the equivalent of two years full-time during the four-year period preceding the early retirement of the transferor.

The aim of this support is to ensure that older farmers have enough income and can be replaced (provided the holding is profitable) or their land reassigned to non-agricultural uses (eg, forestry, the creation of ecological reserves, etc). Farmers who retire early in this way can receive up to EUR 15 000 per year (maximum EUR 150 000 in all) up to the age of 75. If they already received a pension from a Member State, the support becomes a pension 'top-up'. Farms workers can receive up to EUR 3 500 per year (maximum EUR 35 000) up to normal retirement age.

If the retiring farmer is replaced, the farmer taking over the holding must take over all or part of the land released, possess adequate competence and continue to improve the viability of the holding for at least five years.

3) Support for less favoured areas and areas subject to environmental constraints

Farmers in less-favoured areas, ie, mountain areas, areas in danger of abandonment of land-use, areas affected by specific handicaps, may be supported by compensatory allowances to ensure continued and sustainable agricultural land use, preservation of the countryside, and the fulfilment of environmental requirements.

To that end, farmers undertake to pursue their farming activity for at least five years, applying usual good farming practice which is compatible with the requirements of the protection of the environment, landscape maintenance and sustainable farming. In this spirit, no aid will be paid where residues of substances prohibited under Directive CE 96/22 or substances authorised but used illegally, under the same directive, are found on the holding.

Compensatory allowances must be sufficient to contribute effectively to a compensation for handicaps without leading to overcompensation. They therefore range between EU 25 and 200 per hectare, taking account of relevant regional development objectives, the severity of natural handicaps, environmental problems, type of production and, where appropriate, the economic structure of the holding.

Farmers in areas subject to environmental constraints may also receive support of up to EUR 200/hectare to cover the additional costs and losses of income resulting from implementation of Community environmental rules.

The areas covered by this latter measure and areas affected by specific handicaps may not exceed 10% of the area of a Member State.

4) Investments in farm holdings

Support for investments in farm holdings is granted to improve agricultural incomes and living, working and production conditions. Such investments must target reducing production costs, improving or diversifying productive activities (except those for which there are no market outlets), promoting product quality, the natural environment, health and hygiene conditions or animal welfare.

Only economically viable farms which comply with minimum conditions regarding the environment, hygiene and animal welfare, and where the farmer possesses adequate competence, are eligible.

Member States shall set limits for total investment eligible for support. The total amount of aid granted may not exceed 50% of the investment in less-favoured areas and 40% elsewhere. These ceilings may be increased to 55% and 45% respectively in the case of young farmers.

5) Improving the processing and marketing of agricultural products

Firms which are economically viable and which comply with minimum standards regarding the environment, hygiene and animal welfare may receive support for investments to improve the processing and marketing of agricultural products for which new market outlets exist.

The goal is to increase the competitiveness and the value of agricultural products by improving their presentation and preparation, rationalising processing procedures and marketing channels, reorienting production to new outlets, applying new technologies, monitoring quality and health conditions, encouraging innovation and protecting the environment.

Community support may cover up to 50% of eligible investment in Objective 1 regions and up to 40% in other regions. Investment must in all cases contribute to improving the situation of the basic agricultural sector.

Support shall be excluded for investment at the retail level as well as investment in the processing or marketing of products from third countries.

6) Forestry

In the light of the undertakings of the Community and the Member States made at an international level, and the Member States' forest plans, support may be granted to private forest owners or municipalities for the sustainable management and development of forestry, the preservation of resources and the extension of woodland areas, with a view to maintaining the economic, ecological and social functions of woodland in rural areas. Such aid may contribute to:

  • improving non-farm land: afforestation, investments to enhance the value of forests and improve the harvesting, processing and marketing of forestry products, opening up new outlets for forestry products, the creation of forestry owner associations, and the recovery of forestry production as a result of natural disasters or fire;

  • the afforestation of farmland: aid may be granted to cover the costs of planting and maintenance and to compensate farmers for income forgone. Aid may amount to a maximum of EUR 725 per hectare (farmers of associations thereof) or EUR 185 (other private law person);

  • preserving woodlands, where their protective and ecological role is in the general interest and where the cost of preventive measures exceeds income from forestry, and maintaining fire breaks: support for these measures can vary between EUR 40 and 120 per hectare per year.

7) Facilitating the structural adjustment and development of rural areas

Article 33 of Regulation (CE) n°1257/1999 contains a series of measures intended to encourage the structural adjustment and development of rural areas throughout the Community territory. These measures were designed in light of the experience of programmes delivered previously in regions lagging in development and disadvantaged rural areas (former Objectives 1, 5b and 6 of the Structural Funds).

Community support may be granted to measures related to converting farming activities and to rural activities, and which are not covered by the above measures:

  • land improvement,
  • reparcelling,
  • setting-up of farm relief and farm management services,
  • marketing of quality agricultural products,
  • basic services for the rural economy and population,
  • renovation and development of villages and conservation of the rural heritage,
  • diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes,
  • agricultural water resources management,
  • development and improvement of infrastructure connected with the development of agriculture,
  • encouragement for tourist and craft activities,
  • protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare,
  • restoring agricultural production damaged by natural disasters and introducing appropriate prevention instruments,
  • financial engineering.

Additional sources of information

European Commission
Directorate General for Agriculture
Unit A II.1
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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