Rural development is the 'second pillar' of the common agricultural policy (CAP), reinforcing the 'first pillar' of income supports and market measures by strengthening the social, environmental and economic sustainability of rural areas.
The CAP contributes to the sustainable development of rural areas through three long-term objectives:
- fostering the competitiveness of agriculture and forestry;
- 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.
CAP support for rural development
The CAP’s contribution to the EU's rural development objectives is supported by the European agricultural fund for rural development (EAFRD). The EAFRD budget for 2021-27 amounts to €95.5 billion, which includes an injection of €8.1 billion from the next generation EU recovery instrument to help address the challenges posed by the COVID-19 pandemic.
The rules for rural development spending during 2021-22 are laid out in the CAP transitional regulation, adopted on 23 December 2020. The regulation largely extends the existing rules (initially in place for the 2014-20 period), with some additional elements to ensure a smooth transition to the new CAP, which is due to begin in 2023.
Rural development programmes
EU countries implement EAFRD funding through rural development programmes (RDPs). RDPs are co-financed by national budgets and may be prepared on either a national or regional basis. While the European Commission approves and monitors RDPs, decisions regarding the selection of projects and the granting of payments are handled by national and regional managing authorities.
Each RDP must work towards at least four of the six priorities of the EAFRD:
- 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.
The EAFRD priorities are in turn broken down into 18 specific focus areas. In their programmes, countries set out targets relating to their chosen priorities and focus areas, as well as a strategy for meeting their targets.
When devising their strategies, countries select from a 'menu' of 20 broad policy measures, which can be tailored around national and regional circumstances to deliver on one or more of the EAFRD’s priorities. Progress on targets is monitored through the common monitoring and evaluation framework (CMEF).
Notable features of RDPs
Spending on climate and environment
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.
Supporting local actions
At least 5% of RDP funding must go to actions based on the LEADER / community led local development approach.
Promoting smart villages
Rural development programmes can also support the smart villages initiative, which aims to provide a versatile toolbox to foster, enable and scale up innovation in rural areas around Europe, addressing the common challenges faced by citizens living in rural territories.
Through financial instruments, the EAFRD acts as a source for loans, microcredit, 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 work in practice and how they can be improved to achieve more. It 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 facilitating information exchange and cooperation across rural Europe. The ENRD provides a wealth of information on the implementation of RPDs across the EU, including:
- projects database: a comprehensive list of projects funded by the EAFRD and implemented through RDPs;
- rural development in figures: statistics and summaries relating to RDPs, focus areas, and monitoring data;
- ENRD thematic work: thematic working groups, seminars and workshops, and publications
- frequently asked questions relating to rural development.
These activities are facilitated by two support units: the ENRD contact point and the European evaluation helpdesk for rural development.
LEADER is a 'bottom up' approach, in which farmers, rural businesses, local organisations, public authorities and individuals from different sectors come together to form local action groups (LAGs). LAGs prepare their own local development strategies and manage their own respective budgets.
The LEADER approach strengthens bonds in local communities, encourages innovations across sectors, and facilitates knowledge sharing amongst LAGs at national and EU-wide levels.
Thanks to its success over 30 years, the LEADER approach has been adopted by the European regional development Fund (ERFD), the European social fund (ESF) and the European maritime and fisheries fund (EMFF) as part of wider community led local development (CLLD). Today LEADER / CLLD groups manage tens of thousands of projects with economic, cultural, social and environmental benefits in rural Europe.
The ENRD provides detailed information on the LEADER approach, including resources, toolkits, and a database of LAGs.
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.
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
Within this framework, the Commission aims to make rural development actions more responsive to current and future challenges such as climate change and generational renewal, while continuing to support European farmers in a sustainable and competitive agricultural sector. Rural development actions will also make a strong contribution to the Commission’s key priorities and strategies, such as the European Green Deal and the long-term vision for rural areas.
EU Regulation 1303/2013 – presents common rules applicable to the European structural and investment funds (ESIF)
EU Regulation 1305/2013 on 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 on support for rural development by the European agricultural fund for rural development (EAFRD)
EU Delegated Regulation 807/2014 on support for rural development by the European agricultural fund for rural development (EAFRD) and introducing transitional provisions
EU Delegated Regulation 640/2014 on the administration, withdrawal of support or conditions of penalties applicable to direct payments, rural development support and cross compliance