1. The Implementation of Rural Development Policy in the New Member States: Constraints and Lessons for Romania
Dr Robert Ackrill (Nottingham Trent University)
Irina Râmniceanu (ASE and European Institute of Romania)

2. The budgetary constraints that affect EU policies
Goal of my talk:
To provide context and a broad introduction to Rural Development policy in an enlarged European Union
Two main themes:
The budgetary constraints that affect EU policies
Review some of the features of how the NMS8 have implemented Rural Development policy thus far
24 February 2019

3. EU Budget Constraints:
1980s: a series of budget crises, breaching the Balanced Budget Rule
1988: Major budgetary reforms, including multi-annual Financial Perspectives (transparency and control)
1992: CAP reforms, introducing direct payments with in-built spending limits
24 February 2019

4. Overall spending limit:
Impossible for every country to maximise their budgetary gains
Also – consensus/unanimity decision-making
Total EU and CAP spending represent zero-sum games
Result: Countries will defend their existing spending shares
24 February 2019

5. Implications for New Member States?
1999 budget agreed for six New Member States
2002 accession agreement – more countries, no more money
Option 1 – reform policies (CAP) to maintain equitable shares
Option 2 – give the new member states less
1 is consistent with a Common Agricultural Policy, but 2 is consistent with the EU15 defending their budget shares
Need for spending restraint? Pass that onto the NMS…….
24 February 2019

6. (VERY) Approximate Shares of EU Budget Spending, 2004
24 February 2019

7. Average ‘Base’ Yields, NMS10 and EU9
24 February 2019

8. Treaty of Rome – respects the letter if not the spirit
This set the tone for Romania’s (and Bulgaria’s) negotiations
Clear differentiation on direct income payments
…..but Rural Development spending?
“Non-Compulsory Expenditure” – so amounts are determined directly
24 February 2019

9. Rural Development Spending, € per Hectare, EU23
24 February 2019

10. Rural Development Spending, € per Worker, EU23
24 February 2019

11. No clear evidence of discrimination over Rural Development funding
But what about co-funding demands?
Martin Hallet (European Commission):
Generally, less than 1% of projected GDP
Never more than 25% of projected EU budget receipts
Never more than 50% of net budget transfers
But evidence from the EU15?
24 February 2019

12. Implementing Rural Development: the choices of the NMS
Pre-accession, SAPARD offered 15 measures
Now – Rural Development, 31 measures
This offers targeted support to domestic needs, but is complex
Is there a pattern to SAPARD/Rural Development implementation?
Environmental/competitiveness orientation?
Rural Development supports “multifunctionality”
Promotes the “European Model of Agriculture”
24 February 2019

13. Environmental Competitiveness
The Basis of Classification of Measures as Environmentally- or Competitiveness-Oriented
Environmental
Competitiveness
Explicitly agri-environmental
Investment in holdings
Water resources
Land re-parcelling
Forestry
Producer groups
Less Favoured areas
Processing and marketing
Renovation and rural heritage
Early retirement
Semi-subsistence farming
Compliance with EU standards
Training and infrastructure
24 February 2019

14. Comparison of Environmental-Oriented and Competitiveness-Oriented Policy Take-up, SAPARD, NMS8 + Romania
24 February 2019

15. Comparison of Environmental-Oriented and Competitiveness-Oriented Policy Take-up, NRDPs, NMS8
24 February 2019

16. Why might pre- and post-accession implementation be so different?
Copenhagen Criterion – Ability to compete in the Single Market
Bias towards measures that were easier to gain approval for
Measures where there was domestic experience or a reference-point
But once in the EU:
The measures adopted tend to attract higher EU co-financing rates
Wider experience had slowly been gained through SAPARD
But still limited, given the importance of agri-environmental measures in the Rural Development Regulation
24 February 2019

17. Thus far, we have seen:
Flexibility is an important element of Rural Development, given widely-varying national needs
But, so far the Rural Development policy menu has been unstructured and has been biased towards competitiveness-measures
The structure of budgetary support has been very complex, with different sources, co-financing rates and documentation
There are concerns over the ability of the NMS to co-finance measures and also to utilise the available funds
24 February 2019

18. But Rural Development post-2007?
Single funding source (European Agricultural Fund for Rural Development)
Single document (National Strategy Plan), to be implemented through the National Rural Development Programmes (NRDPs)
The available measures will be more structured:
Sectoral Competitiveness (minimum 15% of budget, 75% EU co-financing for ‘convergence regions’)
Environmental Measures (minimum 25% of the budget, 80% EU co-financing for ‘convergence regions’)
Diversification and Quality of Life (minimum 15% of budget, 75% EU co-financing for ‘convergence regions’)
24 February 2019

19. But therefore greater demands on national administrations
This adds up to:
Clearer structure
More choice
But therefore greater demands on national administrations
So, Romania needs to focus on gaining as much experience as possible between now and 2007 implementing Rural Development, but especially environmental and diversification measures
24 February 2019