European Commission Agriculture and Rural Development Rural Development Policy in the period and in the Future Financial Perspectives Pedro TARNO, Zbigniew FAFARA, Jonathan BAKER Rural Development Programmes : Denmark, Lithuania, Poland Directorate General for Agriculture and Rural Development European Commission Visit of Podlaskie and Warnia Mazury Voivodeship - POLAND Brussels 15th June 2011

European Commission Agriculture and Rural Development Importance of agriculture in the EU territory Agriculture and Forest = 78 % of the territory 13.7 million farms (70% with less than 5 ha) The agrifood sector has 17.5 million employees (7.7% of total employment) 2

3 The CAP today A substantially reformed policy … –Role of market intervention mechanisms is significantly reduced –Rural Development policy is strengthened with funds and policy instruments –Farm support is mainly decoupled and subject to cross-compliance

4 CAP expenditure and CAP reform path (2007 constant prices) EU-10EU-12EU-15EU-25EU-27

5 Financing the CAP * Budget of the European Union is currently around 141 billion € per year Some 41% of the EU budget is currently devoted to the Common Agricultural Policy (63% in 1990, 39% foreseen for 2013) Direct payments and market measures (1st pillar) = 44 billion/year Rural development (2 nd pillar) = 14 billion/year Total : 58 billion/year * Based on commitment appropriations – current prices

6 The two Pillars of the CAP Pillar 1 (76% of the CAP budget) – Direct Payments (90% of the Pillar 1 budget) – Market Measures –100 % EU financing Pillar 2 (24 % of the CAP budget) –Rural Development –4 axes –Cofinanced with the Member States

7 RD policy principles Strategic programming (7 year period) Partnership/shared responsibility (with Member States; cofinancing; stakeholder involvement) Complementarity and coherence with other EU instruments (eg regional and social policy, environmental policy)

8 Rural development Priorities To enhance competitiveness of the agri-food and forestry sectors with emphasis on restructuring/modernisation, knowledge transfer and innovation, and quality in the food chain To promote environment/land management with emphasis on biodiversity, water and climate change To create employment opportunities and growth conditions through diversification of the rural economy and enhancing the quality of life in rural areas To improve governance and local development through bottom up approaches

9 Rural Development Axis 1: Improving the competitiveness of the farm and forestry sector through support for restructuring, modernisation/innovation and quality production (investment aids, modernisation, processing, quality production, training, young farmers,…) Axis 2: Enhancing the environment and land management through support for land management (agri-environmental schemes, LFA payments,…) Axis 3: Improving the quality of life in rural areas and promoting diversification of economic activity (agritourism…)

10 Axis 4 : Leader Implementation of local development strategies through a Leader approach (public-private partnerships or Local Action Groups) to contribute to the achievement of the objectives of one or several of the three other axes Inter-territorial and trans-national cooperation between LAGS Capacity building and functioning of LAGs

11 Rural Development « LEADER Approach » (5%) Objective 1 Competitiveness (10%) Objective 2 Environment + Land Management (25%) Objective 3 Economic diversification Quality of Life (10%) National Co-financing Rural Development Fund Rural Development/Overall architecture

12 Planned spending on RD policy, EAFRD (EU funding):€ 96 billion Total public and private spending: € 232 billion

13 Division of spending between axes

European Commission Agriculture and Rural Development COMMON AGRICULTURAL POLICY (CAP) POST 2013 INSTITUTIONAL CONTEXT -LISBON TREATY : CO-DECISION PROCEDURE -NEW FINANCIAL PERSPECTIVES ( ) -NEED TO ALIGN CAP POST 2013 TO EUROPE 2020 STRATEGY -COMMISSION‘S COMMUNICATION OF 18TH NOVEMBER 2010 ON THE FUTURE OF THE CAP : „Meeting the food, natural resources and territorial challenges of the future“ 14

European Commission Agriculture and Rural Development Communication on the future of the CAP The Policy instruments Better targeted to objectives Based on two pillar structure Direct payments Market measures Rural development Market orientation Streamline and simplification Improved food chain functioning Environment, climate change and innovation as guideline themes Improved coherence with other EU policies More effective delivery mechanisms Address risk management and income stabilisation tool New distribution of funds (Europe 2020) Redistribution (MS and farmers) Better targeting Redesign: Greening of direct payments Capping of payments Small farmers support Areas with specific natural handicaps First PillarSecond Pillar 15

European Commission Agriculture and Rural Development How does the future of the CAP relate with Europe 2020 Strategy ? The CAP contributes to : - SMART growth by supporting innovation, technology and skills, improving uptake of research and developing high value added and quality products; -SUSTAINABLE growth by promoting resource efficiency, increasing competitiveness, providing environmental public goods, fighting climate change and biodiversity loss; -INCLUSIVE growth by unlocking local potential, diversifying rural economies, developing local markets and opening alternative opportunities to accompany agricultural restructuring 16

17 RURAL DEVELOPMENT OBJECTIVES POST 2013 Competitiveness of agriculture Sustainable management of natural resources Balanced territorial development Long-term strategic objectives Interpreted in the light of Europe 2020: smart, sustainable, inclusive growth Operational priorities with: areas of intervention improved target indicators All MS / regions must address these in their RD programmes

18 RURAL DEVELOPMENT OPERATIONAL PRIORITIES POST 2013 (1) 1.Knowledge transfer in agriculture and forestry (Cross-cutting priority) Human capital and smart networking in agriculture & forestry Innovation, knowledge base in agriculture & forestry Strengthening links between agriculture & forestry / research & development 2.Competitiveness of agriculture, farm viability Restructuring of farms facing major structural problems Generational renewal in agricultural sector

19 RURAL DEVELOPMENT OPERATIONAL PRIORITIES POST 2013 (2) 3.Food chain organisation, risk management in agriculture Integrating primary producers into food chain Supporting farm risk management 4.Preserving & enhancing ecosystems dependent on agriculture & forestry With regard to: biodiversity / landscapes water management soil management carbon sequestration

20 RURAL DEVELOPMENT OPERATIONAL PRIORITIES POST 2013 (3) 5.Resource efficiency & transition to low-carbon economy in agri-food and forestry sectors With a focus on water & energy Production of (feedstocks for) renewable energy in ag & forestry Cutting nitrous oxide & methane emissions from agriculture 6.Realising jobs potential & development of rural areas Diversification & job creation Social inclusion & poverty reduction Local development in rural areas

21 SOME LESSONS FOR THE FUTURE (1) FUND COORDINATION: FROM DEMARCATION TO STRATEGIC INTEGRATION UNDER EU 2020 EU2020 STRATEGY FOR SMART SUSTAINABLE AND INCLUSIVE GROWTH Proposed: COMMON EU STRATEGIC FRAMEWORK FOR ALL FUNDS Corollary: COMMON NATIONAL STRATEGIC FRAMEWORK FOR ALL FUNDS COORDINATED INTEGRATED LOCAL DEVELOPMENT INITIATIVES (e.g. local strategies by LAGs and PPPs) STRATEGICALLY COORDINATED AND COHERENT EU FUND INTERVENTIONS Reduce/eliminate the need for complex demarcations between EU funds in the rural space; improve strategic coordination

22 What measures will be needed? Current measures ( ) Streamline measure menu Adjust conditions, scope New measures? RURAL DEVELOPMENT POST 2013

23 Delivery mechanisms: key elements Abolition of the axis system Strengthening strategic approach and ex-ante evaluation Quantified target levels against common indicators (“target indicators”) for each of the priorities Measures used more flexibly in combination RURAL DEVELOPMENT POST 2013

European Commission Agriculture and Rural Development THANK YOU FOR YOUR ATTENTION ! For further information The CAP after The Communication on the future of the CAP index_en.htm EU rural development policy Agricultural Policy Analysis and Perspectives