Rural development policy from an EU perspective

Thomas Dax, Vienna, Austria

XXI Summer Course – XIV European Courses
”Desarollo rural y gestión territorial”
University of the Basque Country,
Donostia - San Sebastián, 1-2 August 2002

 

1. Introduction

With structural adjustment and integration of agriculture into the rural economy the concern for the development of rural areas in general has risen considerably over the last decades. Rural policy is no more primarily about agriculture but has to address specifically all different economic sectors and actors in the area. With fundamental changes in the market structures and relations programmes targeted at specific rural areas cannot neglect the emerging interrelations to other areas. Hence a rural policy has to address directly its insertion into the regional framework and its relation to regional policy.
It is rural policy which has received over recent years increasing political attention although there remain quite divergent views on the different concepts to be used and policy processes to serve the target of integration of sector approaches. The rural approach, albeit often alluded to as being similar to agricultural development, is in its core a territorial approach, applying regional policy measures for specific regions, the rural areas. Hence the following short introductory presentation focuses on both (a) the various policies with distinctive territorial dimensions and impact on rural areas and (b) rural development policy as addressed by EU policy reform and targeted at through EU agricultural policy via establishing a "second pillar" to Common Agricultural Policy (CAP). Before presenting the relevant EU regulations, the relevance of the concept of rural areas is revealed through the international comparison achieved by the OECD rural indicators project.

2. Rural diversity

In public discussion of regional development the term rural area is generally used as an expression for non-urban or peripheral regions. As the differentiation between rural and urban areas as opposite types of spatial structure is vague, attempts to define the spatial category of rural area are bound to create methodological problems. Views on the issue and the indicators to be dealt with vary ac-cording to specific social groups, national contexts and personal attitudes.
The term rural is used in many contexts without necessarily defining the concept or its spatial implications. Many practitioners of rural development work would share Newby's (1986, p. 209) opinion that “there is now ... a general awareness that what constitutes ‘rural’ is wholly a matter of convenience and that arid and abstract definitional exercises are of little utility”. Recently the diversity of rural areas is stressed and the disaggregation into different types is increasingly requested.
Amongst international attempts to classify the rural areas, definitions vary significantly. In some OECD (Organisation for Economic Cooperation and Development) countries no official definition of rural exists; or it is treated as a residual category, defined negatively in the sense of not being ‘urban’ or agglomerated, rather than explicitly specified by its own properties. The range of different criteria for designation of rural areas is reflected in the most commonly used ones: size of population; population density; commuting intensity; and proportion of labour force involved in agriculture. Furthermore, thresholds for the one criteria may vary considerably, e.g.

OECD Rural Indicators – the concept

Increased concern with rural development problems in the industrialised world as well as deficits of international comparability have led OECD member countries to work on rural development issues in a more systematic way and to attempt to bridge the gap between varying concepts of 'rural'. For the OECD Rural Development Program, launched in 1991, one of the primary tasks has been to develop a common definition of the notion of rural area. The main task of the project an Rural Indicators has therefore been to elaborate a common geographical framework for rural areas; to explore possibilities for the collection and aggregation of comparable rural information at different territorial levels; and to identify a set of basic rural indicators. Information was to be provided an sub-national areas with a sufficiently high degree of differentiation and yet comparability to make international communication meaningful.

Key elements of the territorial scheme are illustrated at Figure 1 and include:

Through this working definition the specificity of rural areas (communities) was reduced to just one dimension - a relatively low density. In reality, rural areas in the OECD reflect numerous and heterogeneous problem patterns and it was an important task of the project to understand and communicate this diversity better.
Division of communities into rural and urban by the simple criterion of population density was then used as basis for the second, regional, level. As regions usually comprise rural as well as urban communities, the degree of rurality was calculated by the share of people living in rural communities. Three types of regions were thus distinguished:

Divergence of rurality

About one third of the total OECD population live in rural communities, occupying over 95% of the territory. National shares differ considerably, ranging from a rural population of less than 10% in the Netherlands and Belgium to about 60% in Finland, Norway and Turkey.

At the regional level the degree of rurality is described by the distribution of the three types of regions within each OECD member country (Figure 2). In some OECD countries, in particular the Scandinavian countries and Austria, more than three quarters of population live in either predominantly rural areas or significantly rural areas, reflecting the high degree of rurality at the regional level in these countries. For Japan and the north-western European countries, in particular the Netherlands, Belgium, Germany, the UK and Switzerland, the opposite is the case.

France, Portugal, Canada and the USA have a rather balanced structure, while Italy, Spain and the EU as a whole are characterised by a greater population share in urbanised regions. Ireland, Iceland, and to some extent Australia and Canada, have a dual structure with greater shares of their population inhabiting the rural and urban extremes and only a smaller fraction living in the intermediate regions. In Australia, in particular, the share of population living in the predominantly urbanised regions reaches 55% and the share in predominantly rural regions 23%. Moreover, the significance of this latter type can be underlined by the fact that 92% of Australia's total area belongs to the latter category.

The appropriate level for territorial analysis therefore depends on the question under review. If, for example, territorial differences in employment opportunities are to be assessed in an economic policy perspective, information should be analysed at the regional level. The premise is that within reasonable distances workers should be prepared to commute between their place of residence and the place of work. This may imply commuting from a rural to an urban area. It would not be a realistic rural policy objective to provide jobs for rural citizens only in their own (rural) community. A reasonable aim would be for rural citizens to find jobs within an acceptable commuting distance from where they live. The place of work could well be urban but it should be within the same region or labour market area. The distinction between three types of region allows an analysis of job opportunities under the different regional conditions.

The further analysis of the economic performance of rural regions in the OECD countries could provide a number of indicators that rural must not be equated with economic backwardness. In all the OECD countries there are also dynamic rural regions to be found. Nevertheless one has to admit that the majority of regions and the overall impression of rural areas is determined by the economic weak regional situation and the threat of out-migration. The difference at the regional level is experienced within the states observed and shows in some countries (like in Spain) an especially high disparity between leading and lagging rural regions (Figure 3) when calculating the employment changes as indicator for economic success.


3. Regional policy’s history – basic foundations to rural policy

In many countries of Western Europe regional and rural policy are closely interrelated and a sharp distinction between the two policy concepts cannot be drawn easily. It is therefore interesting to present here some remarks on the background of broader territorial schemes as expressed under the term regional policy.

In countries of Western Europe regional policy was introduced during the 1920s as a reaction to the strengthening of spatial disparities and the emergence of the first depressed regions, induced by sectoral crises (Artobolevskiy 1997, p. 32). All over the period since then social objectives have been the most important ones for regional policy. Though it was not officially established in all west European countries, in most countries key words depicting the main problems and regions of a country had been created by the start of the 1960s (e.g. Mezzo-giorno in Italy, Northern peripheral areas in Scandinavia, mountain regions). Many of these regional problem areas implicitly had a strong rural bias since large regional support areas covered regions with deeply rural characteristics. With rising criticism of regional policy in the 1970s and 1980s focus shifted towards policy priorities for increasing economic efficiency of the country. In many developed countries this led to a partial curtailment of regional policy and a reorientation from social to economic objectives.
It was only in the 1980s that the European structural policy which had previously just complemented national policies developed into a substantial Community structural policy. With the start of the reform of the Structural Funds the investment and volume had to correspond to the following 3 regional priority objectives since 1 January 1989:

Objective 1: promoting the development and structural adjustment of regions whose development is lagging behind

Objective 2: converting the regions or parts of regions seriously affected by industrial decline

Objective 5b: facilitating the development and structural adjustment of rural areas

In many respects the reform of the EU Structural Funds in 1988 was accompanied by the rise of the debate on the ”The Future of Rural Society”. Through the commission paper under this title (CEC 1988) rural policy gained momentum as a specific European issue. Its underlying concept contributed to trigger the ensuring discussion addressing a much wider scope of functions for rural areas than had been considered before. The concept of an integrated approach for rural development programmes were reflected especially under the objective 5b-programmes but also in the objective 1 areas. With the ongoing discussions of the subject both the funds of the regional programmes enlarged (compare 1st and 2nd period of Structural Funds programmes) and new initiatives developed.
The second reform of Structural Funds in 1993 confirmed the approach taken and EU-commitment for regional policy has been deepened continuously over the 1990s. Moreover, the Cohesion Fund, established with the Maastricht Treaty, has provided since 1993 an additional instrument to support the 4 lagging EU-countries Greece, Spain, Ireland and Portugal in the preparation for the Monetary Union, and simultaneously to the economic growth process. With the EU-accession of the Scandinavian countries Finland and Sweden in 1995 the situation of sparsely populated areas was acknowledged as a distinct problem pattern and led to a further regional priority objective:

Objective 6: development and structural adjustment of regions with an extremely low population density

In the last decade the EU-measures to strengthen the cohesion and structures in less-developed regions have gained a substantive portion of the EU-budget. Since the second half of the 1990s the four Structural Funds and the Cohesion Fund together account for one third of the EU-budget which will induce an additional growth of GDP in the Cohesion countries of 0.5 to 1.5% in the current period 2000-2006 (EC2001a, p.148). The four Structural Funds are:

Besides the European Union has two more major financial instruments to implement its structural policies, the Cohesion Fund and loans from the European Investment Bank (EIB) which are both based on a project-financing approach and are governed by their own specific rules.

The major part is covered by the first four instruments which operates within an integrated programming framework according to a set of principles defined in implementing regulations. The outline of the objectives of the first programming period (1989-1993) have been prolonged, in general, for the second period. The programmes of this second period (1994-1999) have addressed specific regional problems under the above mentioned objectives and focused their activities on objective 1 areas, accounting for almost 68% of total resources, a share which has been raised for the period 2000-2006 to about 70%.
In addition to the mainstream programmes there were separate Community Initiative programmes to support transnational, cross-border and inter-regional actions organised under 13 different themes, including the LEADER (and INTERREG) programme which focus on innovative actions in rural areas and building a European network of rural actors. In addition, a small proportion of total resources, some 1%, is reserved for technical assistance, pilot projects and innovative measures.

As analyses by the European Commission (2001a) pointed out there is now evidence available for actual convergence of lagging regions: From 1988 to 1998 GDP per head of the poorest regions with 10% of the EU population increased from 55.1% of the EU average to 61.0%, and in the poorest regions with 25% of the EU population it rose slightly from 66.6% to 68.3%. This trend can also be seen at the national level, as GDP per head in the three poorest Cohesion countries (Greece, Spain and Portugal) went up from 68% of the EU average to 79% (1999; EC 2001a, p.xi). Much of these regional shifts have a direct impact on rural areas, although the actual performance of regions is quite diverse. Depending on the territorial level of analysis further in-depth studies and inter-regional comparisons are needed to provide an advanced assessment on the impact for (specific) rural areas.

The most interesting element of Structural Funds from the conceptual point of view is the Community Initiative LEADER (Liaison entre Actions de Développement de l’Economie Rurale). It aimed at establishing local action groups, raising their awareness for rural development action and initiating this long-termed learning process. As the focus is on innovative actions and methods an important element is seen in the networking function of this Community Initiative.

The link between agricultural structural policy and a broader territorial approach was deepened for the regions targeted during the former periods by Objective 1 and 5b (and later 6) of the Structural Funds. Incorporating all actions envisaged under the different Structural Funds into a single programming schedule, pointed to the rising role of rural areas for the aim of ”economic and social cohesion”. It is in particular some of the remote rural areas which suffer under the most weak economic performances.

Although the regional objectives of the structural funds directly addressed rural features particularly in the case of objective 5b (”The economic diversification of fragile rural areas”) rural areas occur under all regional categories of structural funds. The greatest relevance for rural areas has therefore not been bound to objective 5b-areas but is attributed to the great share of rural areas in objective 1 regions. The assessment of economic development of rural areas in the EU in general is therefore largely related to the lagging regions in objective 1-areas: As has been mentioned previously there is evidence for convergence, as shown by figures for the poorest regions. However, at the same time disparities at the regional and particularly local levels persist (in particular, comparing poorest and richest regions) and call for ongoing Structural Funds programmes.
With Agenda 2000 reform the Structural Funds programmes have been concentrated and proposals for future reforms point in the same direction. The territorial and programme concentration intended to reach particularly regions and people most in need of support and to avoid overlapping activities. Moreover, the period for Structural Funds programmes has been extended to seven years (2000 – 2006) which should allow to achieve longer-term targeting of the programmes through the continued commitment for objective areas. Actually the share of EU population covered by the regional objectives has been decreased to about 41% (and for national support areas to 35%). The objectives of the Structural Funds have been reduced to the three following ones:

Objective 1: Development and structural adjustment of regions whose development is lagging behind

Objective 2: Economic and social conversion of areas facing structural difficulties

Objective 3: Adaptation and modernisation of policies and systems of education, training and employment

Figure 4: Objective Areas of Structural Funds, 2000-2006

Also the Community Initiatives have been restructured and limited to the four prime Initiatives INTERREG, LEADER+, URBAN and EQUAL. For rural development policy it seems important to have an Initiative like LEADER+ with a large scope for innovative actions, networking activities and, what is essential for the future perspectives, relying on a structure which allows an experimental character in its measures.
The actual rural development policy of the EU can therefore not be assessed easily by analysing one type of programme, but has to include elements from the following different EU-programmes, inter-linkages between these programmes, and further territorial actions provided by other programmes:

What has been said above, seems to be even more relevant to this period. The host of measures for rural areas have to be seen within Objective 1-programmes, and horizontal programmes (like Objective 3); moreover, other Community Initiatives, like INTERREG and partly also EQUAL, as well as local action group work, e.g. local AGENDA 21 and environment actions is of outmost concern to rural development. Having outlined the wide field of actions impacting on rural development it becomes clear that such a wide concept is not captured by the actual policy but lends itself heavily to the discussion of territorial development policy. It seems, however, promising that over the last years the preparation of the European Spatial Development Perspective - ESDP (CEC 1999) has shown the readiness for addressing such viewpoints at a European level and, particularly, the high relevance of rural issues and its territorial implications on the agenda.

4. Evolution of EU Policies for Rural Development

Most EU documents state that the main means of support for rural areas of the European Union was the Common Agricultural Policy (CAP) and this still remains the case to some extent. This reflects also the public opinion where rural is still strongly equalled with agriculture or, at least, primarily agriculture driven.

The distribution of CAP aid within the farming community, in general, does hardly address territorial aspects and is often described as being quite regressive: “the main beneficiaries have not been the smaller farmers and poorer regions but the larger farmers and more prosperous agricultural regions” (Lowe et al. 1999, p. 57). The original EC member states were not concerned with regional inequalities and only the British Government saw regional assistance as a counterweight to CAP spending, and in 1975 the European Regional Development Fund (ERDF) and the Less Favoured Areas (LFA) scheme were set up. The LFA programme authorised member states to pay financial compensation to farmers operating in mountains and other “less favoured areas” in order to ensure the continuation of farming, thereby maintaining a minimum population level, or conserving the countryside. The programme operated very early through direct income payments to farmers and directly indicated through its aims the tight inter-relationship of agriculture and environment, particularly in such areas. However, from the introduction of LFA support to the appreciation of its impact on environmental performance under Agenda 2000 decisions was a rather long way (Dax and Hellegers 2000). At first, possibilities of support were broadened through the introduction of “integrated development programmes” (in 1979), particularly shaped to the need of Southern European countries through the Integrated Mediterranean Programmes (in 1985). After the commission paper on “The Future of Rural Society” in 1988 rural development has been seen largely on the way to be stronger integrated into Structural Funds programmes (see above). The designated “rural areas” under objective 5b and the LEADER Initiative are strong indication of this. The LFA scheme was drawn into the new Objective 5a combining together the horizontal measures for the improvement of agricultural structures. With the Agenda 2000 rural development is attached again more closely to agricultural administration and regulations, but on the other hand searches for some continuation of the concept of rural development going beyond agriculture. Yet, one can raise doubts about the opportunities for rural policies under these circumstances. These doubts relate both to the scope of activities being eligible or implemented as well as to the contents, e.g. with relation to its integrative capacity (c.f. Dax 1999, Lowe and Brouwer 2000) and the financial capacity for measures including non-agricultural activities. The up-take of measures has been very different in the previous periods and hence the distribution between the Member States reflects the priorities attached to rural development measures. For example, Austria, due to its ambitious agri-environmental programme and the highly developed less-favoured areas policy, receives a share of 10% of respective EU funds. In comparison the proportion for Spain is hardly exceeding this amount.

Integration approach of rural development

There is concern and discussion on the widening of the concept, including the difficulties of acceptability in society and implementation in administration structures (e.g. Buckwell et al. 1997). In many different fields the interest for rural specificity has evolved and lead to intensified debate. This concerns both the territorial dimension, and in particular regional policy which has extended its field of interest to local development processes and the interactions between different parts of the territory, in particular rural and urban areas. Besides the insertion of the discussion in the conceptualisation and implementation of the new Structural funds programmes for the period 2000 – 2006 these issues have been outlined and agreed upon in the ESDP. Following this document a common research activity on the spatial development of an enlarging European Union has been agreed upon and is now undertaken in the form of the European Spatial Planning Observation Network (ESPON), which includes rural areas as an important dimension of future spatial development. which is now being investigated. Other policies, like environment, tourism, traffic etc. have to deal with their territorial impacts, and hence an assessment of the rural dimension. This wide concept has been particularly discussed over the last decade within OECD which tried to develop a common framework to provide orientation for the diverse national approaches towards advancing in the direction of a comprehensive rural policy in the interest of the society as well as rural people. Analysing the challenge of rural policy with a territorial perspective which allowed for recognition of individual place specific needs and underlined by the importance of exchange with other areas, this phase of OECD work on rural development provided momentum to the international debate and strongly influenced the understanding of EU development of rural areas as well. Both the conceptual framework (OECD 1993) and the implications of the diversity of rural areas (OECD 1996a) could underline that rural areas are not doomed to failure but that policy actually matters.

Whereas previously actions for rural development had focused on its backwardness and were restricted mainly to the agricultural sector, empirical studies at the international level have confirmed that there is no uniform development trajectory. In particular, this means that rurality in itself does not automatically mean lagging economic development. In particular OECD (1996b) has revealed through the establishment of a territorially disaggregated data set that for a series of countries employment increase (in the 1980s, and some recent data suggest also for the 1990s) was higher in rural than in urban regions, an argument which was taken up largely in the international discussion and by EU Commission (e.g. CEC 1997).

This heterogeneity of performance of rural areas cannot be explained sufficiently by standard economic theory. It appears that in many cases intangible aspects are the most important in ”making the difference” (OECD 1998, p. 12f.). Thus the reason for (economic) success does not just lie with physical capital but often must be sought in human capital (the ability of people to participate in the economy) and social capital (the capacity of communities to organise themselves). Hence the aim of rural policies consists in far more than simply compensating disadvantaged areas/people. It is realised that it is central to initiate development processes and to focus on the institutional framework for relevant initiatives. In such a context the contribution of the LEADER initiative, albeit small from its financial resources, might be crucial for the kind of discussion and processes required to overcome regional inertia which was prevailing in many rural areas (Saraceno 1999). Its innovative character and its intention to foster inter-regional co-operation seems to be at the core of the development process. From its outset it has combined these elements with the notion of ”bottom-up” approach, including a wide variety of local stakeholders and interests.

5. The Rural Development Regulation (2000-2006)

The Agenda 2000 reform provided a new framework for rural development policy. As an essential part of the ‘European agricultural model’, it aimed to put in place a consistent regulatory scheme for guaranteeing the future of rural areas and promoting the maintenance and creation of employment. In striving for greater commitment of national and regional authorities for rural development, it mainly provided guidelines and had the intention to incorporate the rural measures in the agricultural policy. Thus it referred to the following principles:

The main innovation in the policy is that measures now have to be included in a Rural Development Plan which follows programming methods, previously known from the Structural Funds programmes. It is the national authorities task how they are applying the regulation and which geographical determinations they select. In many countries a number of “horizontal” programmes have been prepared, but there are also many regional programmes available. At any rate, the plans have to define its contribution to objective areas of Structural Funds (and they are compulsorily integrated within objective 1 regionalised programmes). They have also to follow the usual programming steps, including presentation of plans, adoption of programming documents, and decisions on implementation, and rules for monitoring and evaluation.

Until October 2001 all 68 Rural Development Plans presented by the Member States which have started from their experiences with different approaches and have selected very different priorities have been approved. Out of the measures available (see the survey under figure 6) the main activities differ from country to country considerably (figure 7). About 50% of funds of all programmes are planned for the four accompanying measures of GAP (agri-environment, early retirement, afforestation of agricultural land and LFA measures). This share of the total Rural Development Programmes various considerably between Member States (from more than 90% in Ireland to just 13% in the Netherlands). Austria has concentrated its programme, like Sweden, on the agri-environmental measures and LFA scheme. As the only compulsory part of the programme the agri-environmental measures meanwhile have achieved the biggest proportion. In comparison to the former period 1994-1999 they should also rise by 68% (from 2.2 to 3.7 bio. € per year).

Without going into too much detail on the scope of the measures it is important to show that with the Art. 33 measures countries have instruments at their disposal to increase the scope of action of farmers and people in rural areas. The following list of measures, detailed in the Regulation 1257/99 provides the prime basis for this part of the programme:

On average only about 10% of funds are foreseen for these measures in the EU. Some countries like Austria have an even much lower funding of about 4% for these measures, and additionally most measures are only eligible for the farm sector.

Figure 7

Source: EC 2001c

6. Assessment of programmes

Although a series of evaluation studies have been carried out, the impact of the previous programmes can hardly be assessed through such analyses. What makes conclusions more difficult is the considerable time lag of the programmes execution and the corresponding evaluation provided. In general, one has to refer to the intermediate evaluations of Objective 5b programmes and national ex-post evaluations which are now analysed for synthesis studies at the EU-level. These mentioned interim evaluations, carried out around the years 1997 and 1998, provide nevertheless some interesting insights from the European perspective. Also the general assessment of the regional programmes of the first two Structural Funds periods (Europäischer Rechnungshof 1998) and the EU evaluation of the LEADER I outcome (Dethier et al. 1999) is interesting in this regard. The thrust of evaluation studies for rural development programmes had to fulfil requirements concerning the quantitative assessment of programmes progress. The financial performance, aspects of coherence and effectiveness, quantitative impacts and issues of efficiency have been the focus of the evaluations prepared for objective 5b programmes for some countries, and most of these commissioned by the European Commission DG VI; UK (PACEC 1998), Finland (Malinen et al. 1997), Germany (Tissen and Schrader 1998), Spain (Isla and Soy 1998) and Italy.

A more comparative work is available through the EU-wide ex-post evaluation of the LEADER I Community Initiative (1989 – 1993). This evaluation, conducted by the Commission, was realised by independent experts, included around 60 experts from 12 countries. The final report published in March 1999 (Dethier et al. 1999) allows a thorough insight into the achievements of the first generation of LEADER programmes and also can serve as starting reference for evaluation of rural development programmes with more complex methods. Although the work was based on a number of quantitative techniques the report has drawn in its conclusion the attention towards the importance of a more qualitative evaluation approach. In many aspects LEADER I was a pilot scheme and can be “considered as provider of a precious stock of knowledge about rural Europe utilised for a better targeting of rural policy actions” (Dethier et al. 1999, p. 166). The demonstration effect that was an objective of LEADER did influence rural policy ideas and led to a “reconsideration of traditional delivery systems for rural development support” (Dethier et al. 1999, p. 179) also at national and regional levels.

However, the lessons learned for rural policy are not always clear-cut. Although the experience of LEADER initiatives was highly appreciated, particularly in Southern Member States and in Ireland where LAGs were significant in number, the innovative aspects of LEADER “did not really affect the implementation of mainstream rural policy" (Dethier et al. 1999, p.179). Even when in LEADER II the number of LAGs has risen substantially and implementation affected a number of areas almost five times greater than in the first period the link to mainstream policies remained weak. There is scope to investigate the lack in the transfer of experiences to general rural policy.

Some of the obstacles might be seen in the fact that an experimental programme induces processes which need time. Positive returns become visible only in the long run and a minimum degree of continuity is needed. Meanwhile much greater priority has been laid on networking and participation, as core factors of rural development. Representation of local actors will still have to be extended and LAGs should not remain the single specific focus of activity but insure also the inclusion of other innovative actors.

The mid-term review of the CAP is the present assessment of the EU Commission and seeks to address the need to prepare for the integration of Member States during envisaged EU enlargement. Although there is concern about the issue of the timing of reform steps, the message is clear that a further reform shift towards rural development should be initiated through the current discussion process. The Commission proposals aim at “strengthen(ing) rural development by transferring funds from the first to the second pillar of the CAP via the introduction of an EU-wide system of compulsory dynamic modulation and expanding the scope of currently available instrument for rural development” (CEC 2002, p.3). There are only few additional instruments proposed, i.e. a new food quality chapter, a chapter “meeting standards” to help farmers to adapt to demanding standards based on the Community legislation, and the introduction of the possibility for animal welfare payments under the agri-environmental schemes. However, the main element of the reform is the decoupling of direct aids and the establishment of a farm income payment which alters the philosophy of agricultural support. The slow changes in the overall budgetary allocation between first and second pillar already reflect the opposition of agricultural interest groups against any shift towards rural development measures.

7. Future issues for rural development

In the long-term, rural development in its broad concept will continue to gain in influence for policy implementation. The mid-term review cautiously addresses this need and also points to the Second Report on Economic and Social Cohesion (EC 2001a) to respect issues of territorial cohesion increasingly and analyse the spatial impacts of rural development in more depth. Some core issues relating to rural development are discussed in the following.

Rural development starts from the perception to increase awareness of rural problems, develop region specific strategies and enhance local participation. Many observers, like Lowe et al. (1999) see a wide scope for effective local participation in the economic development and planning of rural areas and regions. This focus on the local population stems from the bottom-up approaches developed since the 1980s. The new paradigm did not any more see rural (and peripheral) areas as just externally-driven locations but paid increased attention to the potential of local actors for endogenous development. The development of rural pilot schemes in Austria, France and Spain at the start of the 1980s particularly centred on accentuating the internal forces of those areas. The development of EU rural policy, and in particular the LEADER initiative, took the same approach and thus has seen participation as central element to the rural development process. However, later on in the 1990s with increasing experience of different regional cases the assessment made of these programmes underlined the need for widening the group of actors. The domination of traditional institutional structures had the effect that processes of participation did evolve slower than anticipated and action remained limited to core representatives of local (rural) society (e.g. Dax and Hebertshuber 2000). Only since short time researchers and practitioners entered into the discussion of how to achieve inclusion of larger parts of population. Recent EU guidelines give scope to not just allow for such considerations but even require them as an integral part of programme formulation and evaluation (e.g. inclusion of young people, women etc. as relevant groups for programme formulation and evaluation in LEADER+).

The shift in discussion can also be seen in contents, as the focus is not any more on the straight forward realisation of programmes and initiatives but increasingly on addressing conflicting positions of different stakeholders, the influence of local and non-local actors, and the appropriate provisions to further strategic decisions and develop institutional changes. This institutional framework is seen as a systems network and the social capital is becoming ever more important for effective rural policies. The rising complexity for the regional work is addressed in many recent practical and theoretical studies (e.g. in the Austrian context, Bratl 1996, Scheer 1998).

Lessons which could be drawn from this approach address the different benefits that different people will gain from participation according to their starting point. It is suggested that for instance “for young people, taking part in sports, arts, social clubs or issue groups can be a way of developing a sense of responsibility and gaining recognition of talent” (Chanan 1999, p. 37). The integration of diverse groups in this process is a long-term objective and a multi-level strategy is needed which would allow for increasingly widening involvement. Participation could therefore be conceived as a pyramid in which all residents of the area have at least one potential entry-point. From “lower” to “higher” levels one could see the following 5 steps (Chanan 1999, p. 38):

It appears important to emphasis that those forms of participation which reflect objectives of excluded people are particularly difficult to achieve but increasingly important for the social and regional cohesion. When addressing the issue of limited options, experienced by many people in rural areas, one sees clearly that agriculture and related measures are just one economic activity available in rural areas. There is urgent need to enhance integrated strategies which take account of the problem pattern and which make also use of the variety of strengths of rural areas.

With the tendency towards global standardisation of cultural paradigms the specificity of regional features does not lose its attractiveness. On the contrary, amenities characterised by scarcity and uniqueness gain increased interest. Rural amenity is highly appreciated by people living outside rural areas, and whatever gains in importance for its provision involves local people as well.

Rural development will have to build on the integration of different sectoral policies and, in particular, on the integration of the local population in the development process. The driving forces underlying the differentiation of rural spaces are far from being harmonious and it seems doubtful whether the repeatedly evoked aim of integration can easily be achieved. Differences in spatial development are strongly influenced by contesting regulatory systems in the regions but also increasingly by powers and authorities from outside. The debate on social exclusion extends to the rural scene and addresses the sifgnificance and distinctiveness of rural problems (Shucksmith 2000). If development processes are to lead to empowerment and inclusion, a more imaginative regional development strategy and use of rural resources is required.

By initiating such activities we have “to give more attention to the combination of local and non-local processes which impact together upon rural areas” (Marsden 1998, p.109), and to assess the emergence of new uses in rural space. The shift from a locally restricted economic base, mostly associated with agriculture, tourism, and the local use of resources, to a much wider activity pattern, in particular addressing the specificity and strengths of the rural regions, has some potential and offers challenges to rural and urban society( Dax 1999b).

Regional identification of rural amenities and an imaginative handling of their supply will be required to increase the positive examples of dynamic rural areas. As many regions have suffered so long from deprivation of their own autonomous capacities for action it is not sufficient to transfer regional development concepts from one region to another. Viable rural initiatives would have to explore new pathways for regions which aim at building capacities for action. This complex task cannot simply be achieved by reiterating the magic formula of ‘integrated development’ but by starting to address the whole scale of interrelations and capturing the dynamics of this process.

References

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