The Implementation of Rural Development Policy in the New Member States: Constraints and Lessons for Romania

1
The Implementation of Rural Development Policy in
the New Member States Constraints and Lessons
for Romania

• Dr Robert Ackrill (Nottingham Trent University)
• Irina Râmniceanu (ASE and European Institute of
  Romania)

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• Goal of my talk
• To provide context and a broad introduction to
  Rural Development policy in an enlarged European
  Union
• Two main themes
• The budgetary constraints that affect EU policies
• Review some of the features of how the NMS8 have
  implemented Rural Development policy thus far

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• EU Budget Constraints
• 1980s a series of budget crises, breaching the
  Balanced Budget Rule
• 1988 Major budgetary reforms, including
  multi-annual Financial Perspectives (transparency
  and control)
• 1992 CAP reforms, introducing direct payments
  with in-built spending limits

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• Overall spending limit
• Impossible for every country to maximise their
  budgetary gains
• Also consensus/unanimity decision-making
• Total EU and CAP spending represent zero-sum
  games
• Result Countries will defend their existing
  spending shares

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• Implications for New Member States?
• 1999 budget agreed for six New Member States
• 2002 accession agreement more countries, no
  more money
• Option 1 reform policies (CAP) to maintain
  equitable shares
• Option 2 give the new member states less
• 1 is consistent with a Common Agricultural
  Policy, but 2 is consistent with the EU15
  defending their budget shares
• Need for spending restraint? Pass that onto the
  NMS.

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(VERY) Approximate Shares of EU Budget Spending,
2004
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Average Base Yields, NMS10 and EU9
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• Treaty of Rome respects the letter if not the
  spirit
• This set the tone for Romanias (and Bulgarias)
  negotiations
• Clear differentiation on direct income payments
• ..but Rural Development spending?
• Non-Compulsory Expenditure so amounts are
  determined directly

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Rural Development Spending, per Hectare, EU23
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Rural Development Spending, per Worker, EU23
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• No clear evidence of discrimination over Rural
  Development funding
• But what about co-funding demands?
• Martin Hallet (European Commission)
• Generally, less than 1 of projected GDP
• Never more than 25 of projected EU budget
  receipts
• Never more than 50 of net budget transfers
• But evidence from the EU15?

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• Implementing Rural Development the choices of
  the NMS
• Pre-accession, SAPARD offered 15 measures
• Now Rural Development, 31 measures
• This offers targeted support to domestic needs,
  but is complex
• Is there a pattern to SAPARD/Rural Development
  implementation?
• Environmental/competitiveness orientation?
• Rural Development supports multifunctionality
• Promotes the European Model of Agriculture

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The Basis of Classification of Measures as
Environmentally- or Competitiveness-Oriented
Environmental Competitiveness
Explicitly agri-environmental Investment in holdings
Water resources Land re-parcelling
Forestry Producer groups
Less Favoured areas Processing and marketing
Renovation and rural heritage Early retirement
Semi-subsistence farming
Compliance with EU standards
Training and infrastructure
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Comparison of Environmental-Oriented and
Competitiveness-Oriented Policy Take-up, SAPARD,
NMS8 Romania
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Comparison of Environmental-Oriented and
Competitiveness-Oriented Policy Take-up, NRDPs,
NMS8
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• Why might pre- and post-accession implementation
  be so different?
• Copenhagen Criterion Ability to compete in the
  Single Market
• Bias towards measures that were easier to gain
  approval for
• Measures where there was domestic experience or a
  reference-point
• But once in the EU
• The measures adopted tend to attract higher EU
  co-financing rates
• Wider experience had slowly been gained through
  SAPARD
• But still limited, given the importance of
  agri-environmental measures in the Rural
  Development Regulation

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• Thus far, we have seen
• Flexibility is an important element of Rural
  Development, given widely-varying national needs
• But, so far the Rural Development policy menu has
  been unstructured and has been biased towards
  competitiveness-measures
• The structure of budgetary support has been very
  complex, with different sources, co-financing
  rates and documentation
• There are concerns over the ability of the NMS to
  co-finance measures and also to utilise the
  available funds

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• But Rural Development post-2007?
• Single funding source (European Agricultural Fund
  for Rural Development)
• Single document (National Strategy Plan), to be
  implemented through the National Rural
  Development Programmes (NRDPs)
• The available measures will be more structured
• Sectoral Competitiveness (minimum 15 of budget,
  75 EU co-financing for convergence regions)
• Environmental Measures (minimum 25 of the
  budget, 80 EU co-financing for convergence
  regions)
• Diversification and Quality of Life (minimum 15
  of budget, 75 EU co-financing for convergence
  regions)

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• This adds up to
• Clearer structure
• More choice
• But therefore greater demands on national
  administrations
• So, Romania needs to focus on gaining as much
  experience as possible between now and 2007
  implementing Rural Development, but especially
  environmental and diversification measures