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30/08/2016

How EU rural development money is actually being spent

Agriculture & Food

How EU rural development money is actually being spent

Preparing the land in Transylvania. Oszdola, 2009.

Ensuring the long-term viability of the farming sector is a major challenge for central and eastern European countries. The EurActiv network looks at how EU money is being spent in five key countries — Greece, Romania, Poland, Slovakia and the Czech Republic.

The European Union has turned the focus of the reformed Common Agricultural Policy towards employment creation.

Promoting local jobs and supporting young farmers has become a key objective under the rural development pillar of the new CAP, which runs for the period 2014-2020.

The EurActiv network provides an overview of main challenges for the Czech Republic, Slovakia, Poland, Romania and Greece in the implementation of rural development programmes.

Employment and ageing

All these countries view employment as a key objective for rural development, and consider the ageing population in agriculture a major challenge.

According to a recent Eurostat survey, of the 10.8 million farms in the EU, almost 3.5 million (31.1%) were managed by people aged 65 or over, and a further 2.6 million (24.7%) by managers aged between 55 and 64.

Commission hopes new CAP grants will boost number of young farmers

The new Common Agricultural Policy for the period 2014-2020 is expected to provide nearly 180,000 young farmers with an installation grant, an EU spokesman has told EurActiv.

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Farmers younger than 35 accounted for just 6% – a figure that raises questions over the long-term viability of the sector.

Nearly 180,000 young farmers are expected to get an installation grant in the current programming period, which runs until 2020, according to Daniel Rosario, the spokesperson for Agriculture and Rural Development at the Commission.

Eurostat figures show that the number of holding managers aged less than 35 is low across the five countries reviewed by EurActiv.

Poland is in the lead, with 12.1% young farmers, followed by Slovakia (8.1%), Greece (5.2%), Romania (4.7%), and the Czech Republic (4.6%).

The Czech Statistical Office has repeatedly warned that the population living in rural areas and working in the agricultural sector is aging.

“A lot of these people are at retirement age and it is hard to find their successors,” said Miroslav Toman, the President of the Czech Agrarian Chamber, citing low salaries as a major deterrent for young people.

Agricultural analyst Petr Havel stressed that the Czech government should focus more on local development in rural areas. “Infrastructure is the key, but also services – which must be provided by local people who are living in rural areas and who, at the same time, are users of those services,” he stated. Over 80% of residents of rural areas commute to work, and this reduces the demand for products and services in countryside areas.

In Slovakia, rural areas are getting older and less populated. Since 2001, the pre-productive population decreased by 4%. The rural population is less educated, which effectively impedes the uptake of the tertiary sector.

The transfer of applied research results into practice has been insufficient. According to the modified Rural Development Programme, labour productivity in urban areas is 58% higher than in other areas.

In the Slovak case, the Commission says that generational renewal will be enhanced by providing start-up aid support to 600 young farmers and development aid for 330 small family farms.

In Greece, the low number of young farmers partly explains the low level of skills in the profession, which is a huge obstacle for the growth of the local economy.

The Greek government has planned to enhance “agricultural training” by using over 6% of the EU money for the creation of 86,640 training places for farmers and rural businesses.

But in addition to the young farmers question, these member states are also faced with a number of other challenges.

Poland: Focus on spending efficiency

Poland will use €13.5 billion of EU rural development money, and has as an objective to enhance farm viability and competitiveness.

EurActiv Poland reports that the new government wants to focus much more on the ‘hard’ aspects of EU funds such as investment in infrastructure, and direct contributions to the farmers. In its adjustments to the Rural Development Programme (RDP), Warsaw clearly takes the focus away from ‘soft’ development such as skill training.

But the main remaining challenge is to increase the efficiency of spending and changing the long-standing “agri-mindset”.

A report by the European Court of Auditors has shown that while Poland is enthusiastic about spending EU money in rural areas, it is struggling to measure the effects of that spending. Beneficiaries are often late in reporting data to the government, which makes Poland’s own reporting to EU authorities patchy or incomplete.

Slovakia: Addressing regional disparities

For Bratislava, €2.1 billion of public money is made available under the new CAP.

Smallholders represent a huge share of producers compared to only a few large-scale producers. This results in lesser diversification, with only two crops produced in many cases, and low levels of production.

Most of the funds are spent on addressing regional disparities, which are caused by uneven access to finance, EurActiv Slovakia reports. Small communities have to deal with frequently inadequate infrastructure and difficult access to basic services.

Romania: Poverty in rural areas

The amount of money earmarked for Romania is €9.5 billion, and the government is focussing on fighting poverty.

Poverty affects most rural areas in Romania, which has the highest rate of subsistence agriculture in the EU. Labour productivity in agriculture is four times lower than the European average.

The primary factor of underdevelopment in Romania’s agricultural sector is the poor level of investment and working capital, which leads to low production.

Czech Republic: Getting “local”

The RDP for the Czech Republic is €3.1 billion and the main priorities set by the government is to increase the competitiveness of agriculture and forestry, including the modernisation of farms.

EurActiv Czech Republic reports that the government wants to focus on ensuring the sustainable management of natural resources and encouraging climate-friendly farming practices.

“The Czech Republic has a long term problem with soil erosion and a lack of water in some parts of the landscape,” President of the Association of Private Agriculture of Czech Republic Josef Stehlík told EurActiv.cz.

Reports indicate that soil erosion endangers 40% of agricultural land. “One of the main challenges is the ability to deal with changing weather conditions bringing dry and strong rainy season,” Miroslav Toman, stressed.

Agricultural analyst Petr Havel noted that the Czech government should focus more on local development in rural areas.

“Infrastructure is the key, but also services which must be provided by local people who are living in rural areas and who, at the same time, are users of those services.”

Background

In June 2013, politicians approved the first major reform of the Common Agricultural Policy (CAP) in a decade, following months of haggling over quotas, subsidies and measures to improve environmental accountability.

But when the new rules took full effect in 2015, a year behind schedule, some of the same leaders who approved it were calling for changes to policies they said were too cumbersome to administer.

CAP: Still a work in progress

In June 2013, politicians approved the first major reform of the Common Agricultural Policy (CAP) in a decade, following months of haggling over quotas, subsidies and measures to improve environmental accountability.

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Further Reading