Memorandum submitted by
the Rural Development Commission (H15)
INTRODUCTION
1. This paper sets out the Rural Development
Commission's views on the support for Rural Development proposed
in the European Commission's Agenda 2000 proposals for the reform
of the Common Agricultural Policy (CAP) which were published in
March 1998.
2. The Rural Development Commission (RDC)
is the government agency responsible for promoting the well being
of those who live and work in the rural areas of England. The
Commission has a statutory duty to advise the government on the
economic and social development of rural areas and, where necessary,
to promote such development, in partnership with others as appropriate.
3. The views in this paper should be read
in conjunction with the RDC's evidence to the Committee's earlier
inquiry in November 1997.
CONTEXT
4. Our comments on the proposals are set
in the context of the changes affecting rural areas and the people
who live and work in them. First, a number of changes have been
taking place in the English rural economy over several years,
in particular structural adjustments in agriculture and other
traditional sectors, eg mining, quarrying and seaside tourism.
Employment in agriculture, whilst still important in many areas,
has been declining for some time (employment in agriculture in
England declined by 14 per cent in the 10 years 1986 to 1996).
The rural economy is diverse and buoyant in many, more accessible
areas, but in others the economy is fragile and still dependent
on traditional industries. These areas will need help to adjust
to structural change. Even in more prosperous areas there are
pockets of economic and social disadvantage. In our view there
is likely to be a continuing decline in agricultural employment,
especially full time jobs, although probably at a slower rate
than in the last 10 years or so. More importantly, employment
in associated industries up and downstream from agriculture is
likely to be affected by changes in agriculture and agricultural
support. This has been well demonstrated by the impact of the
problems relating to BSE on associated businesses.
5. Second, the support proposed for rural
development under CAP reform needs to be looked at alongside the
proposed changes to the Structural Funds and in particular the
likely reduction in the number of needy rural areas in England
receiving support in future.
6. Third, the proposals need to be seen
in the context of the Government's plans to establish Regional
Development Agencies in England from April 1999 which will have
responsibility for rural regeneration in their areas and will
play a major part in co-ordinating support from the EU.
7. These factors emphasise the need for
broadly-based measures aimed at diversifying the rural economy
to increase the range and number of job opportunities off the
farm and which support the social fabric of rural communities.
GENERAL COMMENTS
8. There is much to welcome in the draft
regulation for rural development, in particular the proposals
place rural development at the heart of the CAP. We consider they
offer a useful starting point and a possible framework for future
action to support broadly-based rural development. We welcome
the moves to bring together and simplify a number of existing
measures and the intention to give a greater degree of flexibility
and discretion to Member States.
9. However, we have some concerns on the
detail. There is still considerable complexity and ambiguity in
the proposals and there is a need for further clarification. Whilst
we welcome the proposals to strengthen agri-environmental measures
in the CAP, we are disappointed that equal weight is not given
to the need to strengthen and diversify the rural economy. It
is important that rural development is seen by the European Commission
and by Member States not just in the context of agriculture. In
England in particular there is a need for a more broadly-based
approach to rural economic and social development.
HORIZONTAL MEASURES
10. We are not in a position to comment
in detail on the proposals on ceilings for support payments, modulation
and cross-compliance. Our interest is their potential impact on
the wider rural economy and rural communities. We have some concerns
that the proposals for ceilings on payments to individual farmers
would penalise large farms which are more common in England. This
would not only affect income levels of farmers and their families,
but would be likely to have an adverse effect on on-farm employment
and wider economy.
11. We are concerned that the proposals
to strengthen agri-environmental measures take precedence over
measures to strengthen and diversify the rural economy. From an
economic perspective agri-environmental measures can make a useful,
but limited, contribution to rural economic and social development
and employment. However, they will not in themselves provide sufficient
additional job opportunities for those no longer employed, or
who might have been employed, in agriculture. We believe it is
important that the final regulation give proper weight to more
broadly-based rural employment measures and encourages Member
States to look at the economic and social needs of their rural
areas, as well as environmental needs. For this reason we would
not wish to see agri-environmental measures as the only compulsory
measures in the regulation.
12. We have doubts about the proposed Labour
Unit Modulation measure and how it would work in practice. However,
if it were introduced, we consider that Member States should be
able to redirect any savings towards broader rural development
support, not just agri-environmental schemes, especially since
the purpose of the arrangements is to protect employment. Similarly,
given that cross-compliance measure could have adverse impacts
on the profitibility of rural agricultural businesses, there is
also a case for Member States being able to use the proceeds from
the implementation of this measure into rural development projects,
if they wish, rather than restricting them to agri-environmental
purposes. Giving more discretion to Member States on these lines
would fit well with the more general theme of the proposals to
decentralise.
NEW RURAL
DEVELOPMENT REGULATION
13. As noted earlier, the RDC broadly welcomes
the integration of rural development policy in CAP reform. The
inclusion of Article 31 which brings into CAP measures previously
supported under Objective 5b, but applied more widely, is a welcome
development. However, we believe it is essential that this is
interpreted widely and is not restricted to farming related development
and payments to farmers. There are several areas where ambiguities
over the scope and purpose of the new rural development measures
need to be clarified. Most importantly, it is not clear the extent
to which rural development measures are to be available to non
farm businesses and projects. There is a contradiction between
Article 2, which states that support is to be aimed at "rural
development related to farming activities and their conversion"
and Article 31 which specifies that: "support shall be granted
for measures, related to farming activities and their conversion
and related to rural actitivies, which do not fall within the
scope of any other measure referred to in this Title". Given
the structure of the rural economy in England, it is important
that rural development policy strengthens and supports the wider
rural economy, rather than the prosperity of individual farm businesses.
Measures to support rural areas must be widely available, therefore,
and not confined to agricultural activities.
14. The measures included in Article 31
could in our view be broadened to include such measures as:
— Grants to bring disused or redundant
rural buildings back into productive use;
— Assistance for the provision of key
services (public transport, community halls, assistance to shops
etc);
— Provision of affordable housing;
— Support for community action, such
as village appraisals;
— Provision for training and business
support services in rural areas.
15. Clarity is also needed on the relationship
between the proposal for a new Community Initiative on Rural Development
under the Structural Funds and the rural development measures
in the CAP, especially those in Article 31. We support the proposed
Community Initiative and are pleased that this instrument will
be available beyond the boundaries of those areas covered by Structural
Fund designation. This would be a welcome extension of the present
LEADER programme, which has been a helpful means of supporting
a bottom up approach to meeting local needs and has encouraged
innovation. There is room for improvement in its management and
we have suggested in our earlier evidence that this could be assisted
by using an intermediate body, such as the RDC, to administer
the programme.
FUNDING
16. The shift in funding of rural development
measures from the Guidance to the Guarantee section of the EAGGF
appears to be helpful. It brings these measures to the core of
the CAP and, given the constraints on the Structural Funds, in
the longer term it may result in greater resources being focused
on broad rural development measures. It will also bring to the
Guarantee funds many procedures, such as programming, subsidiarity,
and co-financing, which should result in improved administration
and greater transparency, responsiveness and flexibility in the
use of the resources. In England it will, however, require MAFF
to take a broader view of its ability to support wider rural development
where match funding is needed.
17. However, in the period covered by the
proposals we are concerned that there may be little additional
funding available to support broader rural development measures.
Indeed the compulsory nature of agri-environmental measures and
the impact of other proposals, such as the change to area payments
to farmers in the Less Favoured Areas could result in less funds
being available at least initially. Coupled with the reductions
in Structural Funding, this could have a severe impact on English
rural areas, where European Union funds are playing an increasingly
important part in supporting rural economic and social development.
PROGRAMMING AND
IMPLEMENTATION
18. The proposal to decentralise much of
the administration of the CAP is a welcome recognition of the
diversity of rural areas and conditions in Member States. We also
support adoption of a programming approach and the development
of rural development plans at an appropriate level. It is important
that these are broad rural development plans and not merely agricultural
plans. What is not clear is the appropriate level for the plans
which will cover a seven-year period. The current programming
level for agri-environmental measures is at a country ie England
level. However, we believe that rural development plans, if they
are to recognise the diversity and particular circumstances of
different rural areas, will need to be drawn up at a regional
or sub-regional level. They will also need to be integrated with
other plans, such as those to be drawn up in future by Regional
Development Agencies for their areas. For this process to be successful
there will need to be close co-operation between the Regional
Development Agencies and the MAFF regional offices and with other
bodies with an interest, such as the new agency to be formed by
the merger of the Rural Development Commission and the Countryside
Commission. We suggest MAFF should take the lead in convening
a meeting of interested bodies to discuss how the plans should
be produced. This is an important issue and preparatory work will
need to start before there is final agreement to the regulations,
if plans are to be ready in time.
CONCLUSION
19. The draft regulation offers an opportunity
to build a strong broadly-based rural development policy within
the EU. It must, however, not be concerned only with agriculture
and farming-related activity if it is to recognise the diversity
of the rural economy and communities within and between Member
States. There is a need for clarification of some of the proposals
and on funding in the shorter term.
May 1998
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