Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - SAPARD Annual Report – Year 2005 {SEC(2006) 1628}
Date: 2006-12-11
Institutions: European Commission
Subjects: Central and Eastern Europe, EU programme, accession to the European Union, activity report, aid to agriculture, rural development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 11.12.2006 
COM(2006) 780 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, 
THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 

SAPARD ANNUAL REPORT – Year 2005 

{SEC(2006) 1628} 

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1. 

INTRODUCTION 

Beginning in 2000, the EU reinforced its pre–accession assistance for the rural development of 
ten  candidate  countries  of  eastern  and  central  Europe  by  creating  Sapard,  the  Special 
Accession  Programme  for  Agriculture  and  Rural  Development.  For  its  implementation  a 
unique  approach  was  chosen:  the  national  authorities  in  the  applicant  countries  assumed  the 
entire responsibility through fully "decentralised management" thus enabling the realisation of 
Sapard. One objective is to implement numerous small scale rural development projects and 
the other to create structures capable of applying the acquis communautaire upon accession. 
Detailed information regarding the implementation and management systems of Sapard can be 
found in the 2000 Annual Report. 

2. 

1 
MAIN RESULTS OF IMPLEMENTATION

From 2000 to 2005, a total of €2 663,9 million was allocated to the beneficiary countries for 
the  improvement  of  their  rural  and  agricultural  sectors,  of  which  €1 334,2  million  was 
allocated  to  the  eight  new  Member  States  (nMS)  eligible  for  Sapard  support2  and 
€1 329,7 million  to  Bulgaria  (BG)  and  Romania  (RO).  During  this  period  €1 803,0  million3 
was actually paid to the beneficiaries, representing 94,4% of all available appropriations under 
the Annual Financing Agreements (AFAs) 2000–2003 for the nMS and 40,9% of AFAs 2000–
2005 for BG and RO. 

In 2005 the European Commission (EC) committed €250,3 million to BG and RO and paid a 
total  of  €811,9  million  to  all  beneficiary  countries  of  which  €557,5  million  to  the  nMS  and 
€254,4  million  to  BG  and  RO.  The  payments  made  in  2005  represent  82%  of  the  payments 
made  during  2000–2004.  This  indicates  a  significant  increase  in  the  absorption  of  the  EU 
funds  and  is  mainly  due  to  the  fact  that  besides  LV  and  HU  all  nMS  reached  the  95% 
threshold at which the EC stops reimbursement payments until the final balance can be paid. 
LV (94,6%) and HU (91,3%) were close to it. 

In 2005, the nMS continued to pay contracts concluded under Sapard. At the end of 2005 only 
the CZ had officially stopped Sapard spending and submitted the final payment claim so that 
this programme could be closed in 2006. 

In all nMS the commitments made to the beneficiaries went well beyond the 100% available 
under  Sapard.  More  than  34 000  projects  were  committed,  amounting  to  €1 492  million  of 
Community contribution. 

As a result, the nMS were able to rapidly start the implementation of the post–accession rural 
development programmes. 

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See Annex A. 
Czech Republic (CZ), Estonia (EE), Hungary (HU), Latvia (LV), Lithuania (LT), Poland (PL), Slovakia 
(SK), Slovenia (SI). 
Pre-financing and reimbursement payments. 

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The total amount of public funds spent under Sapard at the end of 2005 was €2 334,9 million4. 
Large  shares  of  the  investments  made  under  Sapard  are  revenue  generating  investments 
supported  by  up  to  50%  from  public  sources.  The  overall  direct  impact  of  support  under 
Sapard (total eligible costs) amounts to a total of €4 287,1 million in investments and services 
provided.  Consequently,  each  €1  provided  by  the  Community  under  Sapard  results  in  an 
overall investment of €2,4. 

3. 

ASSESSMENT OF ACHIEVEMENT OF OBJECTIVES

5 

Now that the implementation of Sapard is coming to an end in the nMS it is possible to assess 
the overall impact of the country programmes. 

The  report  focuses  on  the  implementation  results  as  compared  to  the  Sapard  objectives.  It 
assesses  the  state  of  implementation  of  the  investment  measures  for  farms  and  the  food 
industry, which contribute, in particular, to the attainment of EU standards. It also assesses the 
other  two  investment  measures  for  diversification  of  economic  activities  and  rural 
infrastructure which mainly contribute to sustainable economic development and the creation 
of  job  opportunities  in  rural  areas.  These  measures  account  for  93%  of  the  total  Sapard 
allocation6. 

A horizontal assessment based on all indicators set out in the Sapard programmes will be done 
in the framework of the ex–post evaluation of the eight nMS' programmes. 

As regards BG and RO, this report will focus on the progress made throughout 2005. 

3.1 

New Member States  

Already by the end of 2004, all eight nMS had managed to contract  the total amount of EU 
funds allocated to them and to prepare a pipeline of projects eligible under the post-accession 
programmes. 

Investments  in farms and the food industry, which are the most essential sectors in terms of 
adoption  of  acquis  standards,  represent  53%  of  the  total  Sapard  allocation  to  the  nMS,  of 
which 24% was spent for investments in farms and 29% in the food industry.  

Under  the  farm  investments  measure,  the  share  of  animal  production  and  products  reached 
41%  of  the  overall  amount  contracted  in  the  eight  nMS.  Investments  in  the  wine,  fruit  and 
vegetables sectors are to a large extent related to adaptation to acquis standards. These sectors 
represent ca. 10% of the total investments under this measure. 

At  the  same  time,  investments  in  the  arable  crops  sector  represent  17%.  Although  the  crops 
sector in some countries is important in the overall agricultural production, the relatively high 
level of investments in the crops sector is also partly a result of economic difficulties in the 
cost  intensive  animal  production  and  products  sectors  which,  in  addition  to  the  lack  of  rural 
credit  finance,  lead  to  a  lower  uptake  in  the  live  sectors  and  consequently  a  higher  share  of 
support for the arable crop sector. This was for instance the case in the 3 Baltic States, where 
the share of investments in the crops sector corresponded to 45% in LV, to 47% in LT and to 
70% in EE. 

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Including national co-financing and payments by the nMS beyond the 95% ceiling. 
Annexes B and C contain a horizontal overview. 
Annex C.1. 

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As regards food processing and marketing, investments in meat and milk and dairy products, 
the  two  key  sectors  in  terms  of  adjustment  to  acquis  standards,  have  reached  52%  and  21% 
respectively. The monitoring data suggest that investments to meet acquis standards represent 
the  largest  share  of  the  investments.  For  example  in  PL,  the  largest  Sapard  beneficiary, 
investments aimed at adapting to EU sanitary and veterinary standards represent about 87% of 
the total investments in the meat and 72% of the investments in the dairy sector7. 

Moreover,  investments  in  first  stage  processing,  improving  quality  controls  and  rendering 
were  substantial  in  certain  countries.  For  example,  in  CZ  investments  in  improving  the 
structures for quality control in processing plants amounted to €23 million of which 99% was 
used to introduce the HACCP systems in dairy and meat establishments. 

These results suggest that investments under these two measures have contributed to achieving 
the Sapard objectives. 

Investments in rural infrastructure and diversification of economic activities represent 40% of 
the  total  Sapard  allocation  to  the  nMS,  of  which  31%  was  allocated  to  investments  in  rural 
infrastructure and 9% to investments in diversification of economic activities.  

Investments  in  rural  infrastructure  were  concentrated  on  investments  in  waste  management 
(39%),  water  supply  (19%)  and  local  access  roads  (35%).  The  relatively  high  level  of  rural 
infrastructure investments is in particular due to their high level in PL (47%) while other nMS 
have allocated substantially lower amounts to this measure. 

As  regards  diversification  of  economic  activities  in  rural  areas,  the  main  area  of  investment 
has been rural tourism (27%) while investments in the development of basic services represent 
11% of the allocation to this measure in the nMS.  

Investments  under  these  two  measures  improved  the  basic  infrastructure  and  supported 
sustainable development of economic activities in the rural areas. 

3.2 

Bulgaria8 

In 2005, the EU committed €75,1 million to BG under the AFA 2005. This brought the total of 
EU  funds  committed  for  BG  under  the  AFAs  2000–2005  up  to  €362,3  million.  At  the  same 
time the EC paid €67,2 million to BG and cumulated EU payments 2000–2005 amounted to 
€158,2 million (43% of available EU funds) at 31.12.2005. 

By the same date, the Sapard Agency had approved 1 921 projects under all measures (except 
for agri–environmental and irrigation), accounting for €286,5 million of EU contribution (79% 
of  the  AFAs  2000–2005).  However,  following  the  temporary  freeze  of  projects  approved 
under  the  so  called  "limited  time  procedure"  only  1 721  projects  were  approved  in  2005 
accounting  for  €  251,8  million  of  EU  contribution  (70%  of  the  EU  allocation  2000–2005)9. 
The application of this procedure by the Agency considerably delayed the implementation of 
the Programme. 

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9 

Annual Implementation Report PL, 2005. 
Annex C.3.9 gives an overview of the distribution of Sapard funds between measures for BG. 
The  "limited  time  procedure",  through  the  application  of  which  projects  were  approved  temporarily 
before the final eligibility check to speed up the implementation, had been applied by the Sapard Agency 
since  July  2004.  However,  it  turned  out  to  be  contested  at  national  and  EC  level.  As  a  result,  the 
implementation  of  the  Sapard  Programme  was  delayed  by  a  temporary  suspension  of  projects  until  a 
final decision on the conformity of the procedure is taken. 

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In 2005 only 12 projects were approved due to the exhaustion of funds under the AFAs 2000 – 
2004  and  the  relatively  late  ratification  of  the  AFA  2005.  As  a  consequence,  the  call  for 
applications  was  suspended  for  all  measures  except  “Vocational  training”,  “Setting  up 
producer  groups”,  “Forestry",  afforestation"  and  "Technical  Assistance"  for  which  limited 
funds had remained available.  

By the end of 2005, 1 378 projects have been completed corresponding to 72% of approved 
projects to that date, of which 536 have been completed during 2005. The EC contribution in 
the reimbursed subsidies was €159,1 million, corresponding to 54% of the amount under the 
AFA 2000–2004. 

The  measures  with  the  highest  allocation  are  “Investments  in  Agricultural  Holdings”  and 
“Processing and Marketing” covering respectively 32% and 34% of available funds. With as 
much as 81% of the funds approved for 1 324 projects, “Investments in Agricultural Holdings” 
has  been  the  most  successful  measure;  of  these  projects  998  have  been  completed  (391  in 
2005). Under the second most popular measure "Processing and Marketing" 238 projects were 
approved  (55  in  2005)  covering  59%  of  all  funds  available.  Under  “Investments  in 
Agricultural Holdings” the share of the arable crops, fruit and vegetables sectors still remains 
very high (77%) which is to a certain extent justified by the substantial need for rationalisation 
and  mechanisation,  partly  a  result  of  economic difficulties in  the  livestock  sectors and  weak 
rural  credit  services.  Under  "Processing  and  Marketing",  investments  in  the  processing  and 
marketing  of  meat,  fish,  milk  and  dairy  products  represent  a  53%  share  of  all  approved 
projects. 

The contracting level under "Diversification of Economic Activities" has also increased with 
291  approved  projects  covering  50%  of  the  amount  available  for  the  entire  programming 
period. 190 projects have been completed (88 in 2005). The key activities under this measure 
are  related  to  investments  in  rural  tourism  (43%)  and  investments  in  timber,  carpentry  and 
bio–fuels (33%). 

With  regard  to  the  measures  "Rural  Infrastructure"  and  "Renovation  of  Villages"  the 
contracting levels reached 60% and  50% respectively  of the amount available  for the period 
2000–2005 with 17 and 30 projects completed respectively by the end of 2005. Under "Rural 
Infrastructure", 83% of the funds were used for building roads. 

3.3 

Romania10 

In 2005 the EU committed €175,2 million to RO under the AFA 2005. This brought the total 
of EU funds committed for RO under the AFAs 2000–2005 up to €967,4 million. In 2005 the 
EC  paid  €187,2  million  to  RO  and  the  cumulated  EU  payments  2000–2005  amounted  to 
€385,4 million (39,8% of EU funds) at 31.12.2005. 

By  the  end  of  2005,  the  Sapard  Agency  had  approved  1 928  projects  amounting  to 
€534,8 million of EU funds (55%  of  the  Sapard allocation for 2000–2005). Considering that 
the  EC  should  pay  €792,2  million11  to  RO  by  the  end  of  2006  to  avoid  de–commitment  of 
funds,  and  only  €385,4  million  was  paid  by  the  end  of  the  year  2005,  RO  risks  loosing 
substantial EU funds if the implementation does not accelerate considerably during 2006. 

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11 

Annex C.3.10 gives an overview of the distribution of Sapard funds between measures for RO. 
The  deadline  for  de-commitment  of  funds  was  extended  by  one  year  for  AFA's  2004  and  2005  by 
Regulation (EC) No 1052/2006 of 11 July 2006 (OJ L 183, 12.7.2006, p. 3). 

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The  implementation  of  Sapard  started  only  mid–2002  and  faced  serious  difficulties,  mainly 
related  to  the  lack  of  administrative  capacity  and  credits  for  farms  or  rural  businesses. 
Furthermore,  the  floods  which  affected  RO  in  2005  hampered  the  execution  of  the 
Programme. 

Considering  the  scope  of  damages  (estimated  at  €1,6  billion  and  3,4%  of  the  2003  GDP) 
affecting  almost  every  county  during  April-September  2005,  the  EC  agreed  to  re-allocate 
substantial funds to the measure "Rural Infrastructures" for rehabilitation in the affected areas. 
Moreover,  it  agreed  to  use  the  related  provisions  of  MAFA  (Multi  Annual  Financing 
Agreement) in case of natural disasters allowing to apply a higher EU co-financing rate (85% 
instead  of  75%)  and  a  higher  public  aid  rate  (75%  instead  of  50%  for  private  beneficiaries) 
under some measures. In addition, a new sub-measure for investments in flood prevention was 
created.  

In  general,  the  Programme  is  characterised  by  a  strong  emphasis  on  rehabilitation  of  rural 
infrastructure while the acquis related measures have only recently started to absorb funds to a 
larger extent. Therefore, one of the main objectives of the Programme,  to  help  RO  meet the 
requirements of the EU acquis, has not yet been attained. 

The largest share of EU funds has been allocated to “Rural infrastructure". However, no new 
projects  were  contracted  during  2005  since  the  contracting  level  reached  100%  of  the  funds 
already in 2004 (49% for roads, 35% for drinking water facilities, 16% for sewerage systems). 
The “Rural Infrastructure” measure has been subject to allegations of low project quality and 
irregularities  in  the  tender  procedures.  RO  has  made  efforts  to  reinforce  controls  of  the 
implementation  and  therefore  none  of  the  alleged  irregularities  have  led  to  financial 
corrections  so  far.  Many  completed  projects  were  moreover  seriously  damaged  during  the 
2005 floods. 

The  EU  acquis  related  measure  “Processing  and  Marketing”  which  has  been  allocated  the 
second largest share of funds is facing serious absorption problems. The level of contracting 
reached  only  54%  of  the  funds  available  for  the  period  2000–2005.  Out  of  the  amount 
allocated to this area the meat products sector received 52% and the dairy sector 19%.  

"Investments in Agricultural Holdings" is the third most important measure. Contracting under 
this measure however only reached 28% of the available funds (59% for field crops, 20% for 
milk, 12% for meat). In the run up to accession, attention is given to enhance implementation 
in the livestock sectors. 

The level of contracting under "Diversification of Economic Activities" has reached only 23% 
of the funds allocated for 2000–2005 by the end of 2005, of which 86% relate to rural tourism.  

4. 

PROGRAMME IMPLEMENTATION AND MANAGEMENT 

4.1 

Monitoring of programme implementation 

During  2005  the  EC  continued  to  work  closely  with  the  beneficiaries  on  running  the 
monitoring and evaluation systems. In addition to the ongoing monitoring, the 14 Monitoring 
Committees  held  during  2005  focused  on  programme  modifications.  11  EC  Decisions 
amending the Sapard programmes of nine countries (all except PL) were adopted in 2005, of 
which eight were taken for the nMS and three for BG and RO (Annex D). 

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For  the  nMS,  who  stopped  contracting  projects  in  2004,  amendments  mainly  concerned  the 
preparation of final payments. 

The  main  objective  of  the  amendments  adopted  for  BG  and  RO  was  to  better  focus  the 
programmes to accession and to improve the absorption capacity. Furthermore, a programme 
amendment  was  approved  allowing  for  the  application  of  special  provisions  with  regard  to 
natural disasters and to re-allocate funds for the rehabilitation of the infrastructure affected by 
the floods in RO.  

4.2 

Update on mid-term evaluations 

According  to  MAFA,  the  mid-term  evaluations  should  be  updated  where  and  whenever 
appropriate.  Based  on  this,  it  was  decided  to  carry  out  such  updates  for  BG  and  RO  by 
31.12.2005. As neither of the countries had submitted the evaluation by that date, the reports 
will be reviewed by the EC during 2006. 

4.3 

Rural Credit 

The PHARE Small and Medium Finance Facility (SMEFF) combines resources of the EBRD, 
the CEB/KfW with PHARE grants in order to provide financial intermediaries in the candidate 
countries with incentives to  

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– 

– 

expand their offer of finance to SMEs including farms and rural business, 

enhance their capacity to assess and monitor the related risks and 

manage their risk exposure. 

The Rural Sub Window (RSW) aims at strengthening the financial sector's capacity to increase 
access to finance for farmers and rural businesses. 

By the end of 2005, EBRD had signed 6 RSW projects with financial intermediaries in BG, 
PL, SK, SI and CZ amounting to a total of €47 million of credit lines and €6,6 million of EU 
incentives.  The  CEB/KfW  has  signed  2  projects  with  financial  intermediaries  in  SK 
(€5 million) and RO (€30 million) and a total amount of EU incentives of € 3,5 million. 

4.4 

Croatia 

The Croatian (HR) programme was adopted by the EC on 8.2.2006. With a financial allocation 
of €25 million for 2006 it defines 3 priorities to be implemented through four measures: 20% 
of EU funds will be allocated to "farm investments", 39% to the improvement of "processing 
and marketing of agricultural and fishery products" and a further 40% will be devoted to the 
improvement  of  "rural  infrastructure"  with  the  remaining  1%  to  be  used  for  technical 
assistance.  

The HR MAFA was adopted on 6.12.2005 and signed on 29.12.2005. The MAFA lays down 
the Community management and control rules for Sapard. 

As Sapard is managed under the full responsibility of the country, HR is required to set up and 
accredit a Sapard Agency to which the EC will subsequently confer the management of aid.  

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5. 

5.1 

ACTIVITIES IN RELATION TO CONFERRAL OF MANAGEMENT, AUDITS AND CONTROLS 

Update on Conferral of Management of Aid and monitoring missions12 

In 2005 only one conferral audit mission has been carried out to RO covering four measures. 
The  EC  Decision  was  not  issued  in  2005  as  the  RO  authorities  were  due  to  amend  and 
complete some of the Sapard procedures in order to comply with the MAFA requirements. 

Moreover,  several  fact-finding  audit  missions  were  carried  out  to  the  candidate  countries 
Croatia (HR) and Turkey (TK). For HR the objective was to follow up the progress made by 
the National Fund and the Sapard Agency towards accreditation, whereas for TK the objective 
was  to  kick-start  the  accreditation  process  under  the  new  Instrument  for  Pre-accession 
Assistance (IPA) available  from  January  2007 and to provide advice and information on the 
tasks and responsibilities involved.  

5.2 

Clearance of accounts decision 

The annual accounts 2004 for 10 countries (CZ, EE, HU, LV, LT, PL, SK, SI, BG and RO) 
were cleared by the EC Decision C(2005) 3656 of 30 September 2005. 

The annual accounts for the financial year 2003 regarding BG, RO and PL were not covered 
by  the  EC  Decision  of  28  September  2004.  Therefore,  two  certification  audit  missions  were 
conducted during 2005 to RO and PL and additional information was requested from BG. The 
EC Decisions relating to these 3 countries will be taken during 2006. 

5.3 

Conformity Clearance decision 

After its start in September 2003, the compliance audit enquiry was continued during 2004 and 
2005.  In  2005,  5  conformity  missions  were  carried  out.  In  CZ,  HU,  LT  and  PL  the  audits 
concentrated  on  the  implementation  of  corrective  measures  to  address  the  recommendations 
made  during  the  first  enquiries  carried  out  in  2003  and  2004.  In  RO,  a  second  audit  was 
carried  out  to  cover  the  expenditure  declared  during  2005  and  to  perform  an  overall 
verification of the implemented procedures for a new measure. 

During  these  audits,  selected  samples  of  payment  files  were  examined  and  some  final 
beneficiaries  were  inspected  on  the  spot.  The  weaknesses  detected  were  addressed  to  the 
authorities  concerned.  The  application  of  possible  financial  corrections  to  the  expenditure 
affected  will  be  evaluated  at  the  end  of  the  clearance  of  accounts  procedures  linked  to  the 
present enquiry according to MAFA. 

A  Conformity  Clearance  Decision  C(2005)3702  was  adopted  on  6.10.2005  excluding  from 
Community financing certain expenditure incurred by  BG under Sapard due to unacceptable 
conflicts  of  interests  between  the  beneficiaries  and  their  consultants  for  two  projects  and,  in 
one  case,  for  non  compliance  with  private  tendering  rules  established  by  the  Community 
legislation and by the MAFA. 

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See Annex E. 

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5.4 

Work carried out in relation to the European Court of Auditors (ECA) 

In the framework of the DAS 2004 the ECA checked the EC's handling of the Sapard Annual 
Implementation Reports focusing on the documentation of the EC's analysis of the reports and 
on the respect of the deadlines as laid down in the MAFAs. The comments made were duly 
taken into account by the EC services. 

Moreover, in the framework of its 2004 annual report the ECA carried out audits in HU and 
SI. The EC services examined these reports as well as the replies from the MS, and followed 
up  on  some  of  the  issues  raised  during  the  national  audits  in  both  countries.  After  this 
examination  the  EC  considers  that  there  is  no  evidence  of  widespread  errors  or  system 
weaknesses. 

In its conclusions for the 2004 financial year the ECA notes that, for the pre-accession funds in 
general, risks of varying degrees existed at the level of the implementing organisations in the 
candidate countries. For Sapard in particular the ECA noted that certain weaknesses had been 
identified but with minor financial impact. Overall it concluded that, for Sapard, "the systems 
included the key concepts, procedures are well documented and the systems as described and 
accredited were generally working in practise … On the basis of the audit work performed and 
excepted  the  court  reiterates  the  opinion  that  the  Sapard  supervisory  and  control  systems 
generally worked in practise." 

5.5 

Information on irregularities 

In 2005, 151 new cases of irregularities where brought to the attention of OLAF: 87 in RO, 
21 in HU, 19 in PL, 9 in BG, 4 in LV, 3 each in EE and SI, 2 each in LT and CZ and 1 in SK. 
The number of cases reported from the nMS is clearly decreasing whereas the majority of new 
cases  brought  to  OLAF’s  attention  came  from  the  accession  countries  where  Sapard 
expenditure  rose.  Some  countries,  in  particular  RO,  have  communicated  irregularities  for  an 
amount  below  €4 000  with  the  consequence  that  the  number  of  irregularities  reported  from 
those countries was quite high. 

The  majority  of  irregularities  reported  arose  from  the  incorrect  application  of  procurement 
rules,  the  irregularity  of  accounting,  the  ineligibility  of  certain  expenses  and  forged 
documents.  Inadequate  staffing,  lack  of  training,  the  importance  of  rotation  as  well  as  the 
desire to commit Sapard funds before the accession related deadline is reached, are considered 
as the risk factors.  

6. 

FUTURE DEVELOPMENT 

6.1 

Instrument for Pre-accession Assistance (IPA) 

In 2005, the EC prepared the legal basis to follow up on the reform of the external aid policies 
proposed  in  the  Financial  Perspective  2007–201313  which  resulted  in  the  elaboration  of  the 
new instrument IPA replacing the 5 former instruments PHARE, ISPA, Sapard, CARDS and 
the  TK  pre–accession  assistance.  Moreover,  implementing  rules  for  IPA  including  the  Rural 
Development Component of the instrument (IPARD) were prepared and the preparatory work 
for the implementation of IPARD in the candidate countries concerned (HR, TK, fYRoM) was 
initiated.  

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COM(2004) 101. 

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6.2 

Croatia 

Preparatory  work  for  the  IPARD  component  which  will  apply  from  2007  has  accelerated 
during the year 2005. 

The  IPARD  programme  will  be  based  on  the  Sapard  programme.  It  will  include  additional 
measures  such  as  “Development  and  Diversification  of  Rural  Economic  Activities”, 
“Agricultural  Production  Methods  Designed  to  Protect  the  Environment  and  Maintain  the 
Countryside” and a “Leader–type Measure”. Croatia envisages submitting an IPARD plan for 
EC approval during 2006. 

6.3 

Turkey 

During  3  preparatory  missions  to  Ankara  in  April,  July  and  December  2005,  the  TK 
authorities confirmed their intention to start with the implementation of an IPARD Programme 
for  TK  as  early  as  possible  and  no  later  than  during  the  first  half  of  2008,  while  the  EC 
provided advice on the key steps to be taken. 

Detailed  sector  analysis  involving  independent  expertise  will  become  a  requirement  for  all 
sectors  included  in  IPARD  programmes.  Upon  request  of  the  TK  authorities,  the  FAO  has 
started to carry out a study of the dairy sector in autumn 2005 to be finalised in 2006.  

With  regard  to  rural  credit  finance  the  EC  has  stressed  the  importance  of  well  functioning 
financing facilities for the absorption of IPARD funds.  

6.4 

Co–operation with International Organisations 

The  EC  has  increasingly  developed  cooperation  with  International  Financing  Institutions 
(IFIs) in the field of pre–accession assistance to rural development in recent years. The result 
has  been  a  better  understanding  of  the  functioning  of  Sapard  as  well  as  IPARD  and  the 
potential areas of collaboration between the IFIs and the EC services in this field. 

Close coordination and cooperation with the World Bank (WB) started in HR soon after it was 
awarded candidate status by the  EU.  The  WB  Agricultural Acquis Cohesion Facility  for  HR 
(€25,5  million)  was  designed  to  build  up  capacities  within  the  HR  Ministry  for  Agriculture, 
including  support  for  the  establishment  of  an  Sapard/IPARD  Agency  and  the  preparation  of 
Sapard/IPARD measures. 

Under the Agriculture Reform Implementation Project (ARIP), the WB is supporting IPARD–
type measures in TK.  

The EC has also been in close contact with other international donors, such as the UNDP and 
the  USAID,  to  better  coordinate  the  respective  rural  development  activities.  The  EC  is 
furthermore  a  member  of  the  East–Agri  group  which  is  a  network  of  agricultural  and  agri–
business  institutions  working  in  the  region  of  Central  and  Eastern  Europe  under  FAO 
coordination. 

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