Opinion of the European Economic and Social Committee on the Proposal for a Council Regulation on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (COM(2004) 490 final — 2004/0161 CNS)
Date: 2005-03-09
Institutions: European Economic and Social Committee
Subjects: budget, common agricultural policy, economic and social cohesion, environmental protection, fund (EU), rural development, sustainable development

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Official Journal of the European Union

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Opinion of the European Economic and Social Committee on the Proposal for a Council Regu-
lation on support for rural development by the European Agricultural Fund for Rural Develop-
ment (EAFRD)

(COM(2004) 490 final — 2004/0161 CNS)

(2005/C 234/09)

On 10 November 2004, the Council decided to consult the European Economic and Social Committee,
under Article 37 of the Treaty establishing the European Community, on the abovementioned proposal.

In a letter of 21 December 2004, the European Parliament also stated that on 14 December it had decided
to consult the Committee on the proposal.

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing
the Committee's work on the subject, adopted its opinion on 17 February 2005. The rapporteur was Mr
Bros.

At its 415th plenary session, held on 9 and 10 March 2005 (meeting of 9 March), the European Economic
and Social Committee adopted the following opinion by 125 votes to six with eight abstentions.

1. Introduction

— the success of EU enlargement (more than half of the EU-

25's population lives in rural areas);

Agenda 2000, adopted by the Berlin European Council
1.1
in March 1999, established rural development policy as the
second pillar of the Common Agricultural Policy to accompany
and complement the reform of market policy throughout the
EU. The reform of
the CAP in June 2003 consequently
confirmed the importance of the second pillar by introducing
new measures related to the promotion of products, food safety
and animal welfare. This approach should lead to an increase
in the financial resources available for rural development.

1.2
Reflecting the conclusions of the Salzburg conference
(November 2003), the Commission has set three major objec-
tives for future rural development policy in its Communication
on the Financial Perspectives and in the proposed Regulation
which is the subject of the present opinion, viz.:

— maintaining a high level of food safety, which is part of a

sustainable development approach;

— preserving a European agricultural model that is geared to
multi-functionality and permits a harmonious distribution
of agricultural activity throughout the European Union.

1.4
To better understand and appreciate the issues involved,
the Committee specified in the above opinion the principles
that must guide future rural development policy:

— the development of rural areas is important for the terri-
torial cohesion of the EU. Rural development must there-
fore be one of the top priorities of regional policy;

— increasing the competitiveness of
through support for restructuring;

the agricultural sector

— the primary purpose of the second pillar of the CAP must
be to support agriculture as it adapts to structural changes,
and to address public expectations;

— improving the environment and the countryside through

support for land management;

— the financial resources made available for this policy must
be sufficient for the Community to maintain its commit-
ment to rural areas;

— enhancing the quality of life in rural areas and promoting
through measures

diversification of economic activities
targeting the farm sector and other rural players.

— only a multi-functional approach to agricultural production

can help to maintain a living countryside;

The European Economic and Social Committee attaches
1.3
particular importance to these proposals.
Its own-initiative
opinion on The CAP second pillar: outlook for change in develop-
ment policy for rural areas (1) pointed out that rural development
links in with wider issues relating to:

(1) OJ C 302, 7.12.2004, pp. 53-59

— agricultural

and rural development
addressed by the same Commissioner.

issues

should be

the
As a natural continuation of
Committee intends, through the present opinion, to offer the
other institutions its views on the Commission proposal on
support for rural development.

its work in this area,

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1.5
The European Commission has widely consulted the
players concerned and the Committee was able to put forward
its various proposals on a number of occasions, particularly in
the context of the advisory committees. This extensive consul-
tation demonstrates the Commission's spirit of openness and
the Committee hopes that it will be able to act on the propo-
sals made within the framework of the legislative process now
being launched.

1.6
The Committee will draw up a separate opinion on the
new legal basis for financing the various EAFRD and EAGF
measures (COM(2004) 489 final — 2004/0164 (CNS)) (2).
Accordingly, the administrative aspects of the implementation
of rural development programmes will be examined in that
opinion.

2. The Commission proposal

is part of

The Commission proposal

the efforts to
2.1
increase the transparency of Community rural development
policy and make it easier to understand. With this in mind, the
Commission proposes the setting-up of a specific fund (Euro-
pean Agricultural Fund for Rural Development — EAFRD)
contributing to the promotion of sustainable rural development
throughout the Community as a complement to the market
and income support policies of the CAP, cohesion policy and
the common fisheries policy.

2.2
To ensure greater consistency between the objectives
fixed at European level and the implementation of rural devel-
opment programmes, the Commission proposes the setting of
Community strategic guidelines for rural development strategy,
which would be adopted by the Council. Member States would
then draw up national strategy plans taking into account the
Community guidelines. These plans and rural development
programmes
should be drawn up in close collaboration
between the Commission, the Member State concerned and the
authorities and bodies designated by the Member State (local
and regional authorities, the economic and social partners and
any other appropriate body representing civil society).

To complement programme monitoring, the Commis-
2.3
sion proposes that each Member State draw up an annual
summary report describing the progress made in implementing
rural development programmes relative to the indicators set
out in the national strategy plan and the results of the ongoing
annual evaluations made for each programme. The Commis-
sion would submit an annual report to the Council, the Euro-
pean Parliament, the EESC and the Committee of the Regions.

to incorporate

The Commission proposes

the 26
2.4
existing measures and the proposed new measures — such as
the funding of NATURA 2000, forest-environment measures or
the training of
in devising
regional projects — under three priority axes with their own
specific goals, with minimum funding for each axis as follows:

locally elected representatives

— 15 % for axis 1 (Improving the Competitiveness of the Agri-
cultural and Forestry Sector) and 15 % for axis 3 (Diversifi-
cation of the Rural Economy and the Quality of Life in
Rural Areas);

(2) Opinion CESE 126/2005 Rapporteur: Mr Kienle

— 25 % for axis 2 (Land Management).

2.4.1
Axis 1 is targeted at improving the competitiveness of
the agricultural and forestry sector. Four groups of measures
are envisaged:

— improving human potential;

— restructuring physical potential;

— improving the quality of agricultural production and

products;

— two transitional measures for the new Member States invol-
ving support for semi-subsistence farms undergoing restruc-
turing and support for the setting-up of producer groups.

2.4.2
Axis 2, Environment and land management, focuses on
the sustainable use of agricultural and forestry land. The
existing ‘less-favoured areas’ measure is redefined in so far as
the delimitation of the intermediate zones is concerned (only
taking natural criteria into account). In addition, the benefici-
aries of the aid must comply with the general condition of
respect of EU and national mandatory requirements for agri-
culture and forestry (cross-compliance requirement for direct
aid under the CAP first pillar).

2.4.3
Axis 3, Diversification of the rural economy and the quality
of life in rural areas, is concerned with measures for diversifying
the rural economy through support for the creation of non-
agricultural activities by farmers or non-farmers, improving the
quality of life in rural areas (basic services for the population,
infrastructure) and measures relating to skills acquisition and
the capacity-building of locally elected representatives with a
view to the preparation and implementation of local develop-
ment strategies.

2.5
The LEADER approach is to be applied to all three axes
and a minimum of 7 % of the total rural development funding
available for programming must be reserved for the LEADER
element. The Commission proposes that a criteria-based reserve
(3 % of EAFRD) be earmarked for this programme.

As regards funding,

the Commission proposes that
2.6
resources totalling EUR 88.75 billion be made available for this
policy for the period 2007-2013. To this amount must be
added the amounts generated each year from modulation,
which will be available for all the axes (approximately EUR 8
billion over the same period).

3. General comments

3.1
The Committee welcomes the Commission's proposal to
set up a special fund for rural development (EAFRD) alongside
a fund for policy on agricultural product markets and direct
payments (EAGF). The Committee also notes that this legislative
proposal
is consistent with the conclusions of the Salzburg
conference, which discussed rural development in the enlarged
Union. However, it would draw the attention of the European
Parliament and the Council to the changes that need to be
made in order to respect the underlying principles of rural
development policy which the Committee referred to in its
own-initiative opinion.

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3.2
To begin with, the proposal to set up a single fund for
promoting rural development cannot be made without refer-
ence to an existing EU policy. The conclusions of the Salzburg
the declarations of the Luxembourg Council of
conference,
June 2003 and the Committee's recommendations (3) emphasise
that policy to promote rural development (second pillar of the
CAP) must accompany adaptation of agriculture (first pillar of
the CAP). The Committee would therefore like Article 3 of the
proposal to contain a reference to Treaty Article 33, which
defines the general objectives of
the Common Agricultural
Policy.

3.2.1 Text amendment proposed by the Committee:

‘Article 3:

Missions

1.
The Fund contributes to the promotion of sustainable
rural development throughout the Community in a comple-
mentary manner to and complements the other instruments of
the Common Agricultural Policy (the market and income
support policies of the Common Agricultural Policy), to Cohe-
sion policy and to the Common Fisheries Policy,
thus
promoting realisation of the objectives set out in Article 33 of
the Treaty.

The Fund also complements cohesion policy and the

2.
Common Fisheries Policy.’

3.3
The Committee believes that the economic development
of rural areas depends inter alia on complementarity between
agricultural and non-agricultural players.
the
proposed new measures promoting non-agricultural activity
and supporting small and micro-enterprises,
in line with the
European Charter for SMEs; their important role in job creation
in rural areas deserves support.

It welcomes

3.4
The processes of evaluating and adapting the objectives
of the EAFRD do not take into account the deadlines for the
development of the Common Agricultural Policy. The Commis-
sion has, in fact, emphasised that the CAP reform decided on
in June 2003 will have different effects in different regions, and
that in the period 2008-2009 the new Member States will be
abandoning the simplified arrangements and the Commission
will be evaluating the implementation of the various decou-
pling systems. It therefore seems necessary for the strategic
follow-up of rural development policy at European level to take
the deadlines for the first pillar of the CAP into consideration.

3.4.1 Text amendment proposed by the Committee:

‘Article 13:

Annual Commission report

1.
For the first time in 2009 and at the start of each year,
the Commission shall present an annual report summarising
the main developments, trends and challenges relating to the

implementation of the national strategy plans and the Com-
munity strategic guidelines, as well as to the impact of the CAP
on rural areas and how these areas are affected by major trends
on the international agricultural produce markets.’

In its own-initiative opinion of 1 July 2004 (4),
the
3.5
Committee considered the Commission's budget proposal to be
modest in relation to the stated objectives. The total budget for
rural development should be nearly EUR 96 bn for an EU of
25 for the period 2007-2013, compared with EUR 65 bn for
the current period (EU-15). While the Commission recognises
in the explanatory memorandum to document COM(2004)
490 final that over half the EU population lives in rural areas,
the budget allocated to the EAFRD will be equivalent to 28 %
of expenditure earmarked for regional policy and 32.5 % of
spending on the first pillar of the CAP (allowing for modula-
tion). It is therefore important to prevent the EAFRD from
becoming the sole financial
instrument for supporting rural
areas. This would amount to ghettoising the countryside.

This policy must thus be coordinated more closely
3.5.1
with regional policy and human resources development policy
(European Social Fund). The Committee therefore questions the
need for small-scale rural infrastructure to be supported solely
by rural development policy, and for a section on skills acquisi-
tion of local staff to be introduced, when this is the responsi-
bility of the ESF.

3.5.2
The Committee unreservedly welcomes the creation of
a minimum budget specifically for regions suffering structural
underdevelopment (EUR 31 bn). This sum is higher than that
granted for the current period (EUR 21 bn).

3.5.3
The budget allocated to LEADER would go up from
EUR 2.2 bn to EUR 8.8 bn (7 % of EAFRD and 3 % of the
criteria-based reserve); this is the largest percentage funding
increase. The Committee welcomes the integration of LEADER
as a fully-fledged axis of rural development policy, which will
help secure the permanent involvement of civil society in the
development of rural areas. Although the method is as impor-
tant as the objectives, the Committee notes with regret that the
objective to implement innovative or pilot actions is no longer
given prominence. Finally, the Committee draws the Commis-
sion's attention to the real risk that could be posed by too high
a financial obligation.
It would be regrettable if, given the
restricted budget, the LEADER axis were to be under-utilised
for administrative reasons or due to the non-availability of local
public finances. For this reason, the Committee proposes that
the minimum level imposed be lower for all Member States (a
minimum level of 4 % would tie in better with current plan-
ning). This minimum level does not in any way affect the right
of every Member State to push the LEADER approach to the
fore.

(3) OJ C 302, 7.12.2004, pp. 53-59

(4) OJ C 302, 7.12.2004, pp. 53-59

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3.5.4
Thus about EUR 50 bn would be left for financing
classical rural development measures. This sum will increase by
only EUR 8 bn through funds being transferred from the first
to the second pillar of the CAP. The Committee therefore asks
that funds provided by modulation be allocated only to axes 1
and 2, in order to meet the objective of concomitant adaptation
of agriculture. This allocation would in no way prejudice the
amounts which each Member State may assign to the various
axes when the rural development programmes are adopted.
Moreover, the funds provided by modulation should logically
meet the principle of cross-compliance defined in Article 10 of
Regulation 1782/2003, and cross-compliance can only be
applied for activities falling under axes 1 and 2.

Text amendment proposed by the Committee: ‘Article 70: Resources
and their distribution

[…]

take into account

In addition to the amounts indicated in paragraph 5, the
6.
for the purpose of
Member States shall
programming the amounts
resulting from modulation as
provided for in Article 12(2) of Regulation (EC) No. …/…
[financing of the CAP]. These amounts will be transferred to
axes 1 and 2 of Regulation (EC) No. …/… [EAFRD].’

3.5.5
The Commission proposes applying a system of penal-
ties for farmers based on the cross-compliance of funds from
the first pillar of the CAP as regards Axis 2 measures. As this
cross-compliance requirement applies only to farmers,
the
Committee cannot endorse the Commission's proposal, which
aims to make a distinction that is based solely on profession.
The Committee reiterates that it is in favour of the principle of
equality in the treatment of beneficiaries of public aid.

3.5.6
Financial calculations presented by the Commission
estimate that implementation of the NATURA 2000 network
will cost EUR 6.1 bn per annum, a large proportion of which
will be provided by the EU in the form of co-financing. The
Community contribution could be financed by the rural devel-
opment fund, e.g. expenditure on the compensation to be paid
to land owners and land users. The Committee has issued a
separate opinion on the Commission's proposal for financing
NATURA 2000 (5). The opinion notes that funding NATURA
2000 is a new, additional task that is being assigned to a finan-
cing instrument which (contrary to political promises) is being
increased very little. It makes it quite clear that the Commission
proposal in its present form is only acceptable if:

under the financial perspective (and are not at the expense
of existing programmes); and

— these resources are then ringfenced for NATURA 2000
measures (so that they can only be used for this important
policy).

3.5.6.1
For this reason, the Committee proposes retaining
the measures set out in Articles 36 and 43 regarding compen-
sation for the income forgone as a result of the restrictions
imposed by NATURA 2000 status, but deleting the part of
Article 53 that concerns support
the
NATURA 2000 network, as this should be covered by a
specific programme.

for the operation of

Text amendment proposed by the Committee: ‘Article 53: Protection,
upgrading and management of the natural heritage

The support referred to in Article 49(a)(iv) covers environ-
mental awareness actions, and tourism improvements and the
drawing-up of protection and management plans relating to
NATURA 2000 sites and other places of high natural value.’

3.6 While welcoming the Commission's acknowledgement
of the need to offset the natural handicaps of mountainous
regions, the Committee is not convinced by the Commission's
proposed solution for areas affected by significant natural
handicaps. This entails reducing both the number of eligible
areas and the level of Community aid. The Committee points
out that natural factors (agriculture, climate, water) must be
aggregated when defining areas with a significant natural
handicap, as the accumulation of minor natural handicaps
really hampers the development of rural areas. For regions that
would not be classified as having a significant natural handicap,
the Committee also proposes that Community aid be tapered,
as provided for with regional policy. This phasing-out
programme would make it possible to mitigate the economic
disruption for agricultural holdings.

3.6.1 Text amendment proposed by the Committee (addition of new
point 5) of ‘Article 37: Agri-environment and animal welfare
payments

[…]

— the resources needed to implement NATURA 2000 are
additional to the sum earmarked for rural development

(5) Opinion CESE 136/2005, rapporteur: Mr Ribbe.

5.
A five-year phasing-out period is provided for, with
decreasing payments to farmers from any areas that are no
longer classified as areas affected by significant natural handi-
caps as defined in Article 47(3)(a) owing to a change in statis-
tical categories.’

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3.7
The Commission's intention (1) not to fix the imple-
menting provisions in the rural development regulation and (2)
to apply more flexible financial programming rules should
improvement in implementing the new regu-
ensure a real
lation. While the Committee supports the principle of setting
minimum rates for each axis, it believes that the Commission's
is not consistent with its position on this issue. A
proposal
study has shown current
funds under the rural
development regulation to be closely related to the specific
features of farming and rural areas of EU countries and regions.
The Commission has emphasised that the CAP reform of June
2003 would have varying effects in rural areas. The combined
total of the minimum rates for each axis should therefore be
less than 50 %, to be consistent with the subsidiarity principle
and tie in with the various rural situations in Europe.

take-up of

3.7.1 Text amendment proposed by the Committee:

‘Article 16:

Balance between priorities

procedures and thus imposes new economic viability criteria
on projects that are in the planning stage. Lastly, the planned
deadline would appear to be excessively long given the nature
and scope of the financed projects.

The Committee

is pleased that

3.10
the preparation,
management and evaluation of rural development programmes
are to be based on the principle of partnership (Article 6),
including consultation with the socio-economic partners. The
Committee asks that this provision be made mandatory and
that all representatives of economic and social groups in rural
areas be fully involved in the rural development network at
European, national and regional level. By the same token, the
Committee would like to take part, as an observer, in the Rural
Development Committee provided for in Article 95, and as
permitted under Article 7 of Council Decision 1999/468/EC;
this would enable organised civil society to be involved at
every stage of implementing Community policies.

3.10.1 Text amendment proposed by the Committee:

‘Article 68:

European rural development network

The Community financial contribution to each of the three
objectives referred to in Article 4 shall cover at least 1510 % of
the Fund's total contribution to the programme for priority
axis I and III referred to in Sections I and III respectively under
Chapter I of Title IV and 2520 % of the Fund's total contribu-
tion to the programme for the priority axis II referred to in
Section II of Chapter I.’

A European Network for Rural Development
the
networking of national networks, representative economic and
social organisations, and administrations active in the field of
rural development at Community level and the European
Economic and Social Committee shall be put
in place in
accordance with Article 67(1).’

for

of

The

rural

process

evaluating

3.8
development
programmes ensures effective utilisation and more efficient
deployment of Community funds. The Committee points out
that the objectives of a public policy are set on the basis of
future needs and not just according to the results of the various
rural development programmes. The administrative simplifica-
tion proposed by the Commission is thus undermined by
imposing a surfeit of evaluation processes and will only have a
few direct repercussions for the final beneficiary.

3.10.2 Text amendment proposed by the Committee:

‘Article 69:

National rural network

Each Member State shall establish a national rural network,
which gathers together all the representative economic and
social organisations and administrations involved in rural devel-
opment as well as the institution representing organised civil
society.’

3.9 Moreover, the Committee emphasises that the Commis-
sion's proposal does not deal with the issue of simplifying
administrative procedures for the final beneficiary. Although
this matter is largely discussed in the opinion on Financing the
CAP (6),
the Committee will here summarise its concerns
regarding the limited steps to simplify procedures for the final
beneficiary. For example, Article 25 of the proposal simplifies
conditions for the modernisation of farms by ceasing to make
aid for investments in farms conditional on the existence of
normal market outlets (type of product, type of investment and
expected capacity). However, Article 73 sets a repayment dead-
line of seven years in cases where the investment undergoes a
significant modification. This new rule strengthens monitoring

(6) Opinion CESE 126/2005, Rapporteur: Mr Kienle

4. Specific comments

4.1
The Committee stresses the clarification achieved by
grouping the 26 measures for rural development into three
distinct axes. Nonetheless, some of the Axis 1 and 2 measures
could more appropriately be included in Axis 3, as their appli-
cation will increasingly cover all aspects of the management of
rural areas. The Committee therefore proposes
the
measures set out in Article 28 (Infrastructure related to the
development and adaptation of agriculture and forestry), Article
38 (Non-productive agriculture investments) and Article 46
(Non-productive forestry investments) be placed under Axis 3.

that

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In its 2001 opinion on young farmers (7), the Committee
4.2
already stressed the importance of aid to help young farmers to
set up and stay in farming. This theme should therefore be one
of the priorities of the future strategic plan for rural develop-
ment, and start-up aid should not be restricted to the single
premium proposed by the Commission in Article 21 of the
draft regulation. Above all, it is important to ensure that the
amounts in question are not reduced.

4.2.1 Text amendment proposed by the Committee:

‘Article 21:

Setting-up of young farmers

(…)

2.

The support shall be granted in the form of:

— a single premium up to the maximum amount laid down in

Annex I;

— an interest rebate on loans taken out in order to cover the
expenses arising from installation. The capitalised value of
this rebate may not exceed the amount of
the single
premium.’

4.2.2 Text amendment proposed by the Committee: ‘Article 23: Use

of advisory services

(…)

to help future farmers and potential

forest holders to
c)
cover the costs arising from the preparation of a business plan
for the development of their agricultural and forestry activity.’

the condition requiring 10 years'

The Committee draws attention to the fact that a diffi-
4.3
cult agricultural
transformation is underway in several new
Member States, a process which is far from being completed.
farming
For this reason,
activity for support to be granted for early retirement is,
in
these cases, unreasonably stringent. The Committee proposes a
transitional period in which a shorter period of farming activity
would be sufficient, with an additional condition requiring
work in agriculture for the majority of the applicant's working
life.

4.4
The Commission proposes that support given to invest-
ments enable improvements in the competitiveness of agri-
cultural activity, or encourage diversification. The Committee
wishes to make it clear that support given to an investment
should not only be understood in terms of a physical invest-
ment. Intangible investments promoting technological progress
or involving the transfer of knowledge in the field of product
quality, environmental protection and/or improvements should
be included in each of the measures concerned (Articles 25, 27,
31 and 50).

4.4.1
The agricultural sector is notable for the low profile of
its female workforce, as Commission figures show. Conse-
quently, men remain the chief beneficiaries of direct aid and
structural assistance. There is thus a clear need to raise
women's profile in the decision-making process. The EU should
therefore adopt measures to remedy the situation and facilitate
the setting-up of farms managed by women. The Committee
asks that this aspect form a specific point of the Community's
strategic plan.

Article 27 deals with investments adding value to
4.5
primary agricultural and forestry production. It limits eligibility
to aid according to the size of the enterprise concerned. The
Committee contends that, given the consolidation of economic
activity in rural areas, the proposed limitation is too restrictive
to offer a real opportunity for the development of economic
activity in rural areas. In reality, enterprises such as agricultural
cooperatives or agro-food businesses with a turnover of over
EUR 10 million and which number more than 50 employees
do not necessarily have easier access to loans than small busi-
nesses, yet represent an important source of employment.

Nonetheless, the aid allocated under the EAFRD to
4.5.1
give added value to primary agricultural production must be
restricted to processing activities that bring real added value to
primary local and regional agricultural production and which
harness local know-how, conditions and traditions, and innova-
tions. In this spirit, the EAFRD must also have a mission to
encourage cooperation and dialogue between the different
players of the local agro-food and forestry industry.

4.3.1 Text amendment proposed by the Committee: Article 22: Early
Retirement, Section 2, The Transferor — addition of new
point d):

4.5.2 Text amendment proposed by the Committee:

‘Article 27:

Adding value to primary agricultural and forestry production

‘d) In the case of farmers from Member States who joined
the European Union on 1 May 2004, a transitional
period of ten years applies: carrying out farming activity
for the five years preceding transfer along with the
applicant having devoted at least half of his working
life to farm work as a farm worker during the preceding
fifteen years.’

(7) EESC opinion on New economy, knowledge society and rural develop-
for young farmers? Rapporteur: Ms Sanchez

ment: what prospects
Miguel, 17.10.2001; OJ C 36 of 8.2.2002

(…)

2.
Support under paragraph 1 shall be limited to micro and,
small and medium enterprises within the meaning of Commis-
sion recommendation 2003/361/EC, and to associative enter-
prises set up by producers. In the case of forestry production,
support shall be limited to micro-enterprises.’

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4.6
The wording of Article 28 does not appear to encom-
pass all operations allowed under the current rural develop-
ment regulation. The Committee therefore proposes that this
article clearly stipulate land consolidation. The practice of land
consolidation must take into account respect for the country-
side and not only concern agricultural aspects.

investigate new projects with not
inconsiderable budgets
(EUR 2.6 billion) and new national contributions that are not
guaranteed at the time of planning. The Committee therefore
recommends deleting Article 92, and asks the Commission to
pay closer attention to the LEADER approach as part of the
Community's strategic plan and the approval phase of the rural
development programmes.

4.6.1 Text amendment proposed by the Committee:

‘Article 28:
Infrastructure related to the development and adaptation of
agriculture and forestry

Support provided for in Article 19 (b)(iv), may cover notably
land consolidation or operations related to access to farm and
forest land, energy supply and water management.’

4.10
The Committee welcomes the Commission's proposal
to set up farm relief services. This measure has proven in the
past that it can help to make rural regions more attractive and
create jobs. Nonetheless, the maximum period of five years
seems to be too short a time for guaranteeing the lasting effect
of these services.

4.10.1 Text amendment proposed by the Committee:

‘Article 24:
Setting-up of management, replacement and advisory services

The Committee emphasises that the wording, particu-
4.7
larly in the French version, does not make it clear whether the
measures contained in the proposed legislation are mandatory
or not. The Committee therefore proposes modifying the
wording of Article 37 on Agri-environment and animal welfare
measures, to state that these measures remain mandatory, as is
the case under the existing regulation.

Support provided for in Article 19 (a) (v) shall be granted in
order to cover costs arising from the setting-up and develop-
ment of management, relief and advisory services. It shall be
degressive over a maximum period of five seven years from
setting-up.’

4.7.1 Text amendment proposed by the Committee:

‘Article 37:

Agri-environment and animal welfare payments

1. Member States must make available support provided for
in Article 34 (a)(iv) throughout their territories, in accordance
with their specific needs.’

As mentioned in point 3.5,

4.8
the EAFRD should not
represent a default form of financing if other financial instru-
ments are not adapted to rural areas. For this reason, the
Committee proposes that points c) and d) be removed from
Article 57 on Skills acquisition and animation. The European
Social Fund must be able to assist with the training of coordi-
nators and locally elected representatives in charge of local
if the project follows in
development projects. Furthermore,
line with the LEADER procedure, it will be possible to finance
part of the local promotional activity.

4.9
The Committee is not in favour of the proposal to
implement a criteria-based reserve, as is the case for regional
policy, or of allocating it to the LEADER axis. In reality, the
implementation of a criteria-based reserve in regional policy
has shown that this measure is often considered to be a source
of
frustration by the Member States rather than a boost.
Although the evaluation criteria, as defined in Article 92,
remain deliberately wide, the Commission has not explained
how this reserve is related to the strategic objectives set out at
Community level. Finally, no decision will be reached regarding
the allocation of this reserve at Local Group Action level before
2011. This will only leave two years of planning in which to

The promotion of entrepreneurship and the strength-
4.11
ening of the economic fabric outlined in Article 49 must not
only concern the creation and development of micro-enter-
prises but also the take-over of existing enterprises and support
with the transfer process. In line with the stances it has taken
on enterprise policy, the Committee requests that Article 49
(a)(ii) be amended to read ‘support for the creation, take-over and
development of micro-enterprises …’.

4.12
The agri-environment programme helps to generate
positive externalities in environmental terms (e.g. reduction of
erosion and desertification, improvement in water quality and
water saving, improvement of biodiversity by providing shelter
for different species). An incentive payment should therefore be
provided, based on recognition of externalities.

4.12.1 Text amendment proposed by the Committee: Article 37(4):

The payments shall be granted annually and shall cover
‘4.
additional costs and income forgone resulting from the
commitment given,
to
provide compensation for the environmental services rendered
through the practice of agri-environment measures; where
necessary, they may cover also transaction cost.

together with an incentive payment

Where appropriate, the beneficiaries are selected on the basis
of calls for tender, applying criteria of economic, environmental
and animal welfare efficiency.

Support shall be limited to the maxima laid down in Annex I.’

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4.13
In order to support and encourage the creation and
take-over of small and micro-enterprises in rural areas and in
line with the recitals of the Decision of the Council and of the
the
European Parliament of 12 July 2004 on the MAP,
Committee requests that the Commission and the European
Investment Fund implement new measures to promote and
develop the use of financial instruments, in particular the SME
guarantee facility, by enterprises in rural areas. Furthermore, it
requests that the EIF and the Commission examine the possibi-
lity of complementarity or additionality between the EAFRD,
ESF, ERDF and the EIF instruments with a view to providing
increased and simplified support for investments made for the
setting-up and take-over of enterprises in rural areas.

4.14
In its proposal, the Commission stresses that measures
in the Land management axis must encourage farmers and forest
holders in particular to employ land-use methods that are
compatible with the need to preserve the landscape. The
Committee notes that the Commission has not proposed a re-
assessment of the aid ceilings for agri-environmental measures,
which remain the same as for the 1999 proposal.

4.15
The Committee would expect the regulation to state
that measures by the Member States and regions to conserve
and utilise genetic resources, especially on farm conservation,
may also be supported under the EAFRD programme.

5. Conclusions

The Commission's legislative proposal regarding support
5.1
for rural development
is largely in line with the Salzburg
conclusions. The Committee has given much attention to this
subject and would like to thank the Commission for the level
of dialogue that it maintained with the Committee members.
Above all, the Committee wishes to emphasise that the EAFRD
cannot, by itself, provide a solution to all the problems of rural
development. Tie-in with the ERDF and the ESF should be
examined further.

the same,

territorial cohesion. All

The development of rural areas clearly involves the prin-
5.2
ciple of
the Committee
emphasises that to ensure the economic and social sustain-
ability of these areas, it is necessary to take into account the
contribution of the Common Agricultural Policy's two pillars to
the maintenance and creation of employment in all the EU's
regions, particularly through the development of competitive
agricultural or non-agricultural activity, based on innovation. It
is for this reason that the Committee asks the Commission and
the Council to include the new directions of the Common Agri-

Brussels, 9 March 2005.

cultural Policy in the mid-term assessment of
strategy.

the Lisbon

The budgetary issue remains at the heart of the ques-
5.3
tions
the Commission's
raised. The Committee believes
budgetary proposals to be modest and stable (1.24 % of GNI).
It is this that has led the Committee to take a critical view of
the complete integration of NATURA 2000 into the EAFRD, as
this would account for almost one half of the EAFRD budget
envelope. At the same time, the tripling of the budget envelope
for the LEADER approach is rather surprising given the devel-
opments in national contributions. The Committee also points
the Commission's financial proposal represents a
out
minimum basis for discussion, without which the future rural
development policy could not form an effective part of the
sustainable development strategy or of the Lisbon strategy for a
competitive EU economy with full employment.

that

for

had

planned

5.4
The Committee is also concerned about the repercus-
sions that budgetary discussions may have on the implementa-
tion of future rural development policy. In its schedule, the
Commission
development
programmes to be adopted before the end of 2006 but it could
prove difficult in the short term for the Member States to reach
an inter-institutional agreement on the financial perspectives.
The Committee would therefore like the Commission to
present the main points of the Community's strategic plan as
soon as possible, even if the regulations are in fact adopted at a
much later date.

rural

the

5.5
The Committee would also like to propose several
changes to the Commission, the European Parliament and the
Council as regards the policy guidelines arising from the Salz-
burg conference, such as the maintenance of the link between
the 1st and 2nd pillars of the CAP, the principle of subsidiarity
in planning measures, and greater simplification of procedures
for the final beneficiary. The Committee therefore asks the
Commission to pay particular attention to this, especially
during
development
programmes, by asking Member States what they have done to
simplify procedures for the final beneficiary.

approval phase of

rural

the

the

5.6
The Committee hopes that it will be closely involved in
the decision-making process in the future and during the imple-
mentation of this policy in order to give its opinion on the
Community's strategic plan and ensure that organised civil
society is properly consulted on the development of rural devel-
opment programmes.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND

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Official Journal of the European Union

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APPENDIX

to the Opinion of the European Economic and Social Committee

The following amendment was defeated but obtained at least one quarter of the votes cast:

Amendment 3

Delete points 3.5.3 and 3.5.4.

Result of vote:

For: 31

Against: 69

Abstentions: 10