Academic journal article Global Economic Observer

Towards a Post-2020 Rural Development Policy in the EU

Academic journal article Global Economic Observer

Towards a Post-2020 Rural Development Policy in the EU

Article excerpt

1. Introduction

The European Union's Rural Development (RD) Policy was introduced by Agenda 2000 reform as the second pillar of the Common Agricultural Policy. Although some changes have been made since then in the Common Agricultural Policy as a whole, the Rural Development pillar continues to remain important, contributing to the implementation of the Europe 2020 Strategy, promoting growth and jobs.

The Common Agricultural Policy (CAP) is a policy adopted by all 28 EU Member States, being funded from the resources of the EU budget and national co-financed. Annual expenditure on agriculture and rural development amounts about 55 billion euro (45% of the total budget of the European Union).

The Common Agricultural Policy (CAP) has undergone successive reforms in the past 25 years that have led to greater market orientation of agriculture, while ensuring support' incomes and safety mechanisms for producers, improving the integration of environment protection requirements and strengthening the support for rural development in all EU Member States. Reforms have been driven by agriculture endogenous factors as well as by exogenous factors like economic, environmental and territorial challenges.

The economic challenges include food security and globalization, the decline in labour productivity growth, price volatility, pressure on production costs caused by high input prices for agriculture (as known as price scissor) and deteriorating farmers' position in the food chain.

Environmental challenges include resource efficiency, soil and water quality, threats to habitats and biodiversity.

Territorial challenges are related to demographic, economic and social developments, including depopulation of rural areas and relocation of businesses.

As a result, in order to achieve the long-term objectives of the CAP, it was necessary to change and to adapt the instruments for improving the competitiveness of agricultural sector and long-term sustainable rural development.

2. Rural Development Policy for 2014-2020

The Reform known as Agenda 2000 was an important moment for the sustainable rural development in the European Union because it introduced a second Rural Development Pillar in the Common Agricultural Policy, in addition to the Agriculture Pillar.

A new major reform of the Common Agricultural Policy (2013) entered into force in January 2014, preserves the basic principles of the Common Agricultural Policy, respects EU animal welfare and environmental regulations, ensuring a normal standard of living for European farmers. Through this latest reform, the two-pillar structure of the CAP has been preserved. Pillar 1 Agriculture includes income support for farmers and market orientation management, and Pillar 2 covers rural development.

2.1 Identifying the elements of continuity for 2014-2020financial framework

The general principles of the Pillar 2 remain the same as in the previous financial multiannual framework. So, the implementation of the new Rural Development Policy is based on the Member States' projects on multiannual rural development programs (RDPs). These programs implement a personalized strategy, designed to simultaneously meet the needs of each Member States in line with the priorities of the European rural development policy (EU Regulation no. 1305/2013). The programs are based on a combination of measures selected from the "Menu of measures" at the EU level, detailed in the EU Regulation no. 1305/2013 and cofinanced by the European Agricultural Fund for Rural Development (EAFRD). Programs must be approved by the European Commission and must include a financing plan and a set of performance indicators.

2.2 Identifying the changes of the Rural Development Policy for 2014-2020

Rural Development Policy for 2014-2020 has been restructured in order to obtain a greater effectiveness. A closer link with the EU structural and investment funds will allow European funds from various sources, cofinanced by Member States to support a wide variety of innovative projects in rural areas, from combined agriculture and aquaculture farms to a larger digital infrastructure in broadband. …

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