The common agricultural policy (CAP) supports the vibrancy and economic viability of rural communities through rural development measures (the so-called second pillar).
The rural development measures reinforce the market measures and income supports of the CAP with strategies and funding to strengthen the EU’s agri-food and forestry sectors, environmental sustainability, and the wellbeing of rural areas in general.
The three long-term rural development objectives for the EU include:
- fostering the competitiveness of agriculture;
- ensuring the sustainable management of natural resources, and climate action;
- achieving a balanced territorial development of rural economies and communities including the creation and maintenance of employment.
European agricultural fund for rural development
The European agricultural fund for rural development (EAFRD) is the funding instrument of the CAP that supports rural development strategies and projects. It also forms part of the European structural investment funds (ESIF).
The EAFRD budget for the 2014-20 period amounts to around €100 billion. The budget will be spent over the course of this period, through the implementation of rural development programmes which run until the end of 2023.
It is distributed according to six priorities:
- fostering knowledge transfer and innovation in agriculture, forestry and rural areas;
- enhancing the viability and competitiveness of all types of agriculture, and promoting innovative farm technologies and sustainable forest management;
- promoting food chain organisation, animal welfare and risk management in agriculture;
- promoting resource efficiency and supporting the shift toward a low-carbon and climate resilient economy in the agriculture, food and forestry sectors;
- restoring, preserving and enhancing ecosystems related to agriculture and forestry;
- promoting social inclusion, poverty reduction and economic development in rural areas.
Each of these priorities shall contribute to the cross-cutting objectives of innovation, environment and climate change mitigation and adaptation.
Rural development programmes
In order to address these priorities, EU countries are implementing rural development programmes (RDPs) tailored to fit their own unique challenges and capabilities. These are funded through the EAFRD.
These programmes can be prepared on a national or regional basis, and must work towards at least four of the six priorities of the EAFRD. Countries must set targets according to specific focus areas, identifying the measures they will use and the funding they will need in order to achieve these targets.
Thus, while the European Commission, approves, and monitors RDPs, decisions regarding the selection of projects and the granting of payments are handled at national or regional levels.
Examples of projects funded by the EAFRD and implemented through RDPs include:
- providing investment funds for a small family pepper growing business in Hungary using exclusively renewable energy;
- setting up a house location system in Formentera, Spain that has helped emergency services to respond quickly to people in need;
- restoring the damaged forests of Nizna Boca, Slovakia, through funding the clearing, afforestation and preservation of young forest stands.
The projects database of the European network for rural development (ENRD) contains a comprehensive list of projects.
At least 30% of funding for each RDP must be dedicated to measures relevant for the environment and climate change, much of which is channelled through grants and annual payments to farmers who switch towards more environmentally friendly practices.
At least 5% of RDP funding must go to actions based on the LEADER method. LEADER is a “bottom up” approach, bringing together farmers, rural businesses, local organisations, public authorities and individuals from different sectors to form a local action groups (LAGs). LAGs prepare their own local development strategies, on the basis of which they manage their own respective budgets.
Rural development programmes can also support smart villages. This initiative aims at providing a versatile toolbox to foster, enable and help scale up innovation in rural areas around Europe, addressing the common challenges faced by citizens living in rural territories.
Furthermore, through financial instruments, the EAFRD acts as a source for loans, microcredits, guarantees and equities, available to recipients in agriculture, forestry and rural areas who are undertaking financially viable projects that support the priorities of the EAFRD.
Fi-Compass includes further information on EAFRD financial instruments.
European network for rural development
The European network for rural development (ENRD) acts as a hub of information on how rural development policy, programmes, projects and other initiatives are working in practice and how they can be improved to achieve more. Its aims to engage and reach anyone with an interest in and commitment to rural development in Europe.
The ENRD supports the effective implementation of EU countries' rural development programmes by generating and sharing knowledge, as well as through facilitating information exchange and cooperation across rural Europe.
These activities are facilitated by two support units: the ENRD contact point and the European evaluation helpdesk for rural development.
European innovation partnership for agriculture
The European innovation partnership for agricultural productivity and sustainability (EIP-Agri) also supports the goals of rural development by encouraging innovation in agriculture and rural communities.
The EIP-Agri was created to bridge the gap between the innovative solutions created by researchers and the uptake of new technologies by those living and working in rural areas. By creating partnerships between those who will eventually use new technology and those that create them, EIP-Agri aims to accelerate the uptake of change.
The future of rural development
In view of the future programming period 2021-27, the European Commission presented in June 2018 its legislative proposals on the CAP beyond 2020.
These proposals aim to make the CAP more responsive to current and future challenges, such as climate change and generational renewal, while continuing to support European farmers for a sustainable and competitive agricultural sector.
EU regulation 1303/2013 – presents common rules applicable to the European structural and investment funds (ESIF)
EU regulation 1305/2013 – support for rural development by the European agricultural fund for rural development (EAFRD)
EU regulation 1306/2013 – on the financing, management and monitoring of the common agricultural policy
EU regulation 1310/2013 – support for rural development by the European agricultural fund for rural development (EAFRD)
EU regulation 807/2014 – support for rural development by the European agricultural fund for rural development (EAFRD) and introducing transitional provisions
EU regulation 640/2014 – the administration, withdrawal of support or conditions of penalties applicable to direct payments, rural development support and cross compliance
EU regulation 809/2014 – how EU regulation 1306/2013 on the administration and control system, rural development measures and cross compliance should be applied