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CHIRLEAN, Management of the International Projects Course

Chapter 11: OTHER SPECIAL FUNDS, DESTINED TO AGRICULTURE

STRUCTURE OF THE COURSE 13: 11.1: Rural Development policy 2007-2013 11.2: European Agricultural Fund for Rural Development (EAFRD): 11.2.1.: Scope, mission and objectives of EAFRD 11.2.2.: Principles of assistance; partnership 11.2.3.: Implementation of EAFRD 11.3: European Fisheries Fund (EFF) 11.3.1.: Common Fisheries Policy (CFP) 11.3.2.: European Fisheries Fund (EFF)

11.1: Rural Development policy 2007-2013

On 20 February 2006 the Agriculture Council adopted EU strategic guidelines for rural development - five months after the adoption of the Council Regulation on support for rural development by the new European Agricultural Fund for Rural Development (EAFRD). These guidelines set out a strategic approach and a range of options which Member States could use in their national strategy plans and Rural Development programmes. Since the reform of the Common Agricultural Policy, Rural Development is playing an increasingly important role in helping rural areas to meet the economic, social and environmental challenges of the 21st century. Rural areas make up 90 percent of the territory of the enlarged EU and the new legal framework points more clearly to the direction of boosting growth and creating jobs in rural areas in line with the Lisbon Strategy and improving sustainability. The Rural Development policy 2007-2013 focuses on three areas in line with the three thematic axes laid down in the new rural development regulation: 1. improving competitiveness for farming and forestry; 2. environment and countryside; 2. improving quality of life and diversification of the rural economy. A fourth axis called "Leader axis" based on experience with the Leader Community Initiatives introduces possibilities for locally based bottom-up approaches to rural development. The programming period provides a unique opportunity to refocus support from the new rural development fund on growth, jobs and sustainability. The European legal framework being established, Member States can now elaborate their national strategy plans and rural development programmes before submitting them to the European Commission. For each set of priorities, the EU strategic guidelines are suggesting key actions. Member States shall prepare their national rural development strategies on the basis of six community strategic guidelines, which will help to:

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identify the areas where the use of EU support for rural development creates the most value added at EU level; make the link with the main EU priorities (Lisbon, Gteborg) ensure consistency with other EU policies, in particular cohesion and environment; accompany the implementation of the new market orientated CAP and the necessary restructuring it will entail in the old and new Member States. The six strategic guidelines are: 1. Improving the competitiveness of the agricultural and forestry sectors 2. Improving the environment and the countryside 3. Improving the quality of life in rural areas and encouraging diversification 4. Building Local Capacity for Employment and Diversification 5. Translating priorities into programmes 6. Complementarity between Community Instruments[96].

11.2: European Agricultural Fund for Rural Development (EAFRD)

For the period 2007 2013, according to the proposal about the modification of the legislation in force concerning the rural development, the European Commission has proposed financing for this sector to be assured by a unique fund European Agricultural Fund for Rural Development (EAFRD). Thus the financial package for rural development must include the amounts coming from the two sections (guidance and guarantee) of the European Agricultural Guidance and Guarantee Fund (EAGGF), meaning that the amounts originating from the EAGGF Guidance will be transferred to this fund, EAFRD. The total budget of EAGGF Guidance, allocated by the EU to the Member States and Candidate Countries (EU 27), is of 31.301 million of Euro, of which for Romania and Bulgaria the amount of 2.208 million Euro is granted. In addition to this, a fix amount of 209 million Euro/year will be transferred to this fund from the cooperation objective with the aim of financing the projects of LEADER+ type. In conclusion, the importance of the rural development sector has imposed both the increase of the funds and implicitly the simplification of money allocation system. 11.2.1.: Scope, mission and objectives of EAFRD The scope of the COUNCIL REGULATION (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) is to: 1) lay down the general rules governing Community support for rural development, financed by the EAFRD, established by Regulation (EC) No 1290/2005; 2) define the Objectives to which rural development policy is to contribute; 3) define the strategic context for rural development policy, including the method for fixing the Community strategic guidelines for rural development policy and the national strategy plans; 4) define the priorities and measures for rural development; 5) lay down rules on partnership, programming, evaluation, financial management, monitoring and control on the basis of responsibilities shared between the Member States and the Commission.

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Missions: The EAFRD shall contribute to the promotion of sustainable rural development throughout the Community in a complementary manner to the market and income support policies of the common agricultural policy, to cohesion policy and to the common fisheries policy. Objectives: Support for rural development shall contribute to achieving the following objectives: (a) improving the competitiveness of agriculture and forestry by supporting restructuring, development and innovation; (b) improving the environment and the countryside by supporting land management; (c) improving the quality of life in rural areas and encouraging diversification of economic activity. The objectives set out above shall be implemented by means of the four axes defined as follows: Axis 1: Improving the competitiveness of the agricultural and forestry sector Axis 2: Improving the environment and the countryside. Axis 3: The quality of life in rural areas and diversification of the rural economy Axis 4: Leader (approach) Note: The Leader approach shall comprise at least the following elements: (a) area-based local development strategies intended for well-identified sub-regional rural territories; (b) local public-private partnerships (hereinafter local action groups); (c) bottom-up approach with a decision-making power for local action groups concerning the elaboration and implementation of local development strategies; (d) multi-sectoral design and implementation of the strategy based on the interaction between actors and projects of different sectors of the local economy; (e) implementation of innovative approaches; (f) implementation of cooperation projects; (g) networking of local partnerships. 11.2.2: Principles of assistance; partnership The principles of assistance are: complementarity, consistency and conformity. The EAFRD shall complement national, regional and local actions contributing to the Communitys priorities. The Commission and the Member States shall ensure that the assistance from the EAFRD and the Member States is consistent with the activities, policies and priorities of the Community. The assistance of the EAFRD shall be consistent with the objectives of Economic and Social Cohesion and those of the Community support instrument for fisheries in particular. This consistency shall be provided by the Community strategic guidelines, the national strategy plan, the rural development programmes and the Commission report. In accordance with their respective responsibilities, the Commission and the Member States shall ensure the coordination between the assistance from the different Funds, the ERDF, the ESF, the Page 3 of 12

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CF, the Community support instrument for fisheries, and the interventions of the European Investment Bank (hereinafter the EIB), and of other Community financial instruments. Partnership EAFRD assistance shall be implemented through close consultations (hereinafter partnership) between the Commission and the Member State and with the authorities and bodies designated by the Member State under national rules and practices, including: (a) the competent regional, local authorities and other public authorities; (b) the economic and social partners; (c) any other appropriate body representing civil society, non-governmental organizations, including environmental organizations, and bodies responsible for promoting equality between men and women. The Member State shall designate the most representative partners at national, regional and local level and in the economic, social, environmental or other sphere (hereinafter partners). It shall create the conditions for a broad and effective involvement of all appropriate bodies, in accordance with national rules and practices, taking into account the need to promote equality between men and women and sustainable development through integration of environmental protection and improvement requirements. The partnership shall be conducted with due regard to the respective institutional, legal and financial responsibilities of each category of partner. The partnership shall be involved in the preparation and monitoring of the national strategy plan and in the preparation, implementation, monitoring and evaluation of the rural development programmes. Member States shall involve all appropriate partners at the various programming stages, due regard being had to the time limit set for each step. 11.2.3.: Implementation of EAFRD National Strategy Plans Each Member State shall submit a National Strategy Plan indicating the priorities of the action of the EAFRD and of the Member State concerned taking into account the Community strategic guidelines, their specific objectives, the contribution from the EAFRD and the other financial resources. The national strategy plan shall ensure that Community aid for rural development is consistent with the Community strategic guidelines and that Community, national and regional priorities all coordinate. The national strategy plan shall be a reference tool for preparing EAFRD programming. It shall be implemented through the rural development programmes. Each national strategy plan shall include: (a) an evaluation of the economic, social and environmental situation and the potential for development; (b) the strategy chosen for joint action by the Community and the Member State concerned, showing the consistency of the choices made with the Community strategic guidelines;

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(c) the thematic and territorial priorities for rural development under each axis, including the main quantified objectives and the appropriate monitoring and evaluation indicators; (d) a list of the rural development programmes implementing the national strategy plan and an indicative EAFRD allocation for each programme, including the amounts provided for in Article 12(2) of Regulation (EC) No 1290/2005; (e) the means to ensure coordination with the other common agricultural policy instruments, the ERDF, the ESF, the CF, the Community support instrument for fisheries and the EIB; (f) if appropriate, the budget for achieving the Convergence Objective; (g) a description of the arrangements and the indication of the amount earmarked for establishing the national rural network. Commision Report Each Member State shall send the Commission its national strategy plan before submitting its rural development programmes. For the first time in 2011 and at the start of each second year, the Commission presented a report summarizing the main developments, trends and challenges relating to the implementation of the national strategy plans and the Community strategic guidelines. The last Commission Report shall be presented at the start of 2015. This report shall be based on the Commissions analysis and appraisal of the Member States summary reports and any other available information. It shall indicate the measures taken or to be taken by the Member States and Commission in order to provide an appropriate followup to the reports conclusions. The Commission Report shall be sent to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Rural development programmes The EAFRD shall act in the Member States through rural development programmes. These programmes implement a rural development strategy through a set of measures grouped together in accordance with the defined axes, for the achievement of which aid from the EAFRD will be sought. Each rural development programme shall cover a period between 1 January 2007 and 31 December 2013. A Member State may submit either a single programme for its entire territory or a set of regional programmes. Member States with regional programmes may also submit for approval a national framework containing common elements for these programmes. Each rural development programme shall include: (a) an analysis of the situation in terms of strengths and weaknesses, the strategy chosen to meet them and the ex ante evaluation;

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(b) a justification of the priorities chosen having regard to the Community strategic guidelines and the national strategy plan, as well as the expected impact according to the ex ante evaluation; (c) information on the axes and measures proposed for each axis and their description, including the specific verifiable objectives and indicators that allow the programmes progress, efficiency and effectiveness to be measured; (d) a financing plan, comprising two tables: a table setting out, in accordance with Article 69(4) and (5), the total EAFRD contribution planned for each year. When applicable, this financing plan shall indicate separately within the total EAFRD contribution the appropriations provided for the regions eligible under the Convergence Objective. The planned annual EAFRD contribution shall be compatible with the Financial Perspectives; a table setting out for the entire programming period the total Community contribution planned and the matching national public funding for each axis, the EAFRD contribution rate for each axis and the amount earmarked for technical assistance. When applicable, this table shall also indicate separately the planned EAFRD contribution for the regions eligible under the Convergence Objective and the matching national public funding; (e) for information, an indicative breakdown of the initial amounts by measure in terms of public and private expenditure; (f) where applicable, a table on additional national financing per axis; (g) the elements needed for the appraisal under competition rules and, when applicable, the list of aid schemes to be used for the implementation of the programmes; (h) information on the complementarity with the measures financed by the other common agricultural policy instruments, through cohesion policy as well as by the Community support instrument for fisheries; (i) programme implementing arrangements, including: the designation by the Member State of all the authorities and for information a summary description of the management and control structure; a description of the monitoring and evaluation systems, as well as the composition of the Monitoring Committee; the provisions to ensure that the programme is publicized. (j) the designation of the partners and the results of the consultations of the partners. Rural development programmes shall be established by a Member State following close cooperation with the partners. Member States shall submit to the Commission a proposal for each rural development programme. The Commission shall assess the proposed programmes on the basis of their consistency with the Community strategic guidelines, the national strategy plan and this Regulation. Where the Commission considers that a rural development programme is not consistent with the Community strategic guidelines, the national strategy plan or this Regulation, it shall request the Member State to revise the proposed programme accordingly. Each rural development programme shall be approved in accordance with the procedure referred to in Council Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). Rural development support is provided through EAFRD according to the measures under the four axes above-mentioned, as follows: Page 6 of 12

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Axis 1: Improving the competitiveness of the agricultural and forestry sector (a) measures aimed at promoting knowledge and improving human potential through: vocational training and information actions, including diffusion of scientific knowledge and innovative practises, for persons engaged in the agricultural, food and forestry sectors; setting up of young farmers; early retirement of farmers and farm workers; use of advisory services by farmers and forest holders; setting up of farm management, farm relief and farm advisory services, as well as of forestry advisory services; (b) measures aimed at restructuring and developing physical potential and promoting innovation; modernisation of agricultural holdings; improving the economic value of forests; adding value to agricultural and forestry products; cooperation for development of new products, processes and technologies in the agriculture and food sector and in the forestry sector; improving and developing infrastructure related to the development and adaptation of agriculture and forestry; restoring agricultural production potential damaged by natural disasters and introducing appropriate prevention actions; (c) measures aimed at improving the quality of agricultural production and products; helping farmers to adapt to demanding standards based on Community legislation; supporting farmers who participate in food quality schemes; supporting producer groups for information and promotion activities for products under food quality schemes; (d) transitional measures for the Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia concerning: supporting semi-subsistence agricultural holdings undergoing restructuring; supporting setting up of producer groups. Axis 2: Improving the environment and the countryside. (a) measures targeting the sustainable use of agricultural land through: natural handicap payments to farmers in mountain areas; payments to farmers in areas with handicaps, other than mountain areas; Natura 2000 payments and payments linked to Directive 2000/60/EC; agri-environment payments; animal welfare payments; support for non-productive investments; (b) measures targeting the sustainable use of forestry land through: first afforestation of agricultural land; first establishment of agro-forestry systems on agricultural land; first afforestation of non-agricultural land; Natura 2000 payments; forest-environment payments; restoring forestry potential and introducing prevention actions; support for non-productive investments. Axis 3: The quality of life in rural areas and diversification of the rural economy (a) measures to diversify the rural economy, comprising:

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basic services for the economy and rural population; village renewal and development; encouragement of tourism activities; (b) measures to improve the quality of life in the rural areas, comprising: basic services for the economy and rural population, village renewal and development, conservation and upgrading of the rural heritage; conservation and upgrading of the rural heritage. (c) a training and information measure for economic actors operating in the fields covered by axis 3; (d) a skills-acquisition and animation measure with a view to preparing and implementing a local development strategy. Axis 4: Leader The support granted under the Leader axis shall be for: (a) implementing local development strategies, with a view to achieving the objectives of one or more of the three other axes; (b) implementing cooperation projects involving the objectives selected under point (a) from above; (c) running the local action group, acquiring skills and animating the territory. Resources and their distribution The EAFRD contribution shall be calculated on the basis of the amount of eligible public expenditure. The EAFRD contribution rate shall be established for each axis. (a) In the case of axis 1 and axis 3 as well as for the technical assistance the following ceilings shall apply respectively: 75 % of the eligible public expenditure in the regions eligible under the Convergence Objective; 50 % of the eligible public expenditure in the other regions. (b) In the case of axis 2 and axis 4 the following ceilings shall apply respectively: 80 % of the eligible public expenditure in the regions eligible under the Convergence Objective; 55 % of the eligible public expenditure in the other regions. The minimum EAFRD contribution rate at axis level shall be 20 %. At the initiative of the Member States, for each rural development programme, the EAFRD may finance preparation, management, monitoring, evaluation, information and control activities of programme assistance. Up to 4 % of the total amount for each programme may be devoted to these activities.

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11.3: European Fisheries Fund (EFF)

11.3.1.: Common Fisheries Policy (CFP) Fish resources are a natural, renewable and mobile resource whose reproduction and movements are beyond our control. They are part of our common heritage and healthy stocks can sustain a reasonable rate of fishing but they need a healthy marine environment. Fishing and aquaculture are two of the most important uses of the sea. As well as providing a healthy and enjoyable source of food they create much-needed jobs in coastal areas and promote the social and economic well-being of the European Union's fishing regions. However, these activities must be regulated through international cooperation to allow for the continuous renewal of stocks and the protection of marine ecosystems. Fish resources are part of our common heritage. Rules are necessary to prevent overfishing by some to the detriment of all. The Common Fisheries Policy (CFP) is the European Union's instrument for the management of fisheries and aquaculture. It was created to manage a common resource and to meet the obligation set in the original Treaties of the European Community. Because fish are a natural and mobile resource they are considered as common property. In addition, the Treaties which created the Community stated that there should be a common policy in this area, that is, common rules adopted at EU level and implemented in all Member States. The Common Fisheries Policy shall ensure exploitation of living aquatic resources that provides sustainable economic, environmental and social conditions. For this purpose, the Community shall apply the precautionary approach in taking measures designed to protect and conserve living aquatic resources, to provide for their sustainable exploitation and to minimise the impact of fishing activities on marine eco-systems. It shall aim at a progressive implementation of an eco-system-based approach to fisheries management. It shall aim to contribute to efficient fishing activities within an economically viable and competitive fisheries and aquaculture industry, providing a fair standard of living for those who depend on fishing activities and taking into account the interests of consumers. Common measures are agreed in the following main areas: Conservation and limitation of the environmental impact of fishing - to protect fish resources by regulating the amount of fish taken from the sea, by allowing young fish to reproduce, and by ensuring that measures are respected. Structures and fleet management - to help the fishing and aquaculture industries adapt their equipment and organisations to the constraints imposed by scarce resources and the market; measures aimed at creating a balance between fishing effort and available fish resources are also in place; Markets - to maintain a common organisation of the market in fish products and to match supply and demand for the benefit of both producers and consumers; Relations with the outside world - to set up fisheries partnerships agreements and to negotiate at the international level within regional and international fisheries organisations for common conservation measures in deep-sea fisheries.

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11.3.2.: European Fisheries Fund (EFF) A new fund for the sustainable development of fisheries in the European Union On 19 June 2006, the Council of Fisheries Ministers agreed on the Regulation on the European Fisheries Fund (EFF) that the Commission proposed in July 2004. The EFF, replaced the Financial Instrument for Fisheries Guidance (FIFG), from 1 January 2007, and it is designed to secure a sustainable European fishing and aquaculture industry. The fund will both support the industry as it adapts its fleet to make it more competitive and promote measures to protect and enhance the environment. It will also help fisheries communities most affected by the resulting changes to diversify their economic base. Support will be reinforced for measures that will ensure that the industry will continue to have access to the skilled labour force it requires. The EFF runs for seven years, with a total budget of around 3.8 billion. Funding will be available for all sectors of the industry sea and inland fisheries, aquaculture businesses, producer organisations, and the processing and marketing sectors - as well as for fisheries areas. It will be up to Member States to decide how they allocate funds between the different priorities set. Objectives of EFF The main objective of the EFF is to grant financial support to the European fishing industry, during the period 2007-2013, with a view to help it adapt to the evolving needs. The Fund particularly focuses on: supporting the major objectives of the Common Fisheries Policy (CFP), particularly those agreed during the reform of the policy in 2002. This includes in particular the sustainable exploitation of fisheries resources and achieving a stable balance between these resources and the capacity of Community fishing fleet ; strengthening the competitiveness and the viability of operators in the sector ; promoting environmentally-friendly fishing and production methods; providing adequate support to people employed in the sector. fostering the sustainable development of fisheries areas; Extent to which EFF is different to FIFG The EFF operates on a similar basis as its predecessor. However, it will be simpler to manage. It will also better target the objectives of the reformed CFP. It will integrate better other Community policies, such as environment and employment and follow a stronger and more comprehensive strategic approach. Innovative elements of EFF The EFF was designed as a real tool to help deliver sustainability for the fishing industry. Aid will promote and accompany the adjustment of fishing fleets to available resources, particularly for those targeting endangered stocks. The environmental dimension is also reinforced through a set of measures to promote selectivity and reduce the negative impacts of fishing and aquaculture activities on the environment. The Fund will also dedicate more attention to the preservation of human resources in the fisheries by providing adequate answers to the economic and social needs of the people employed in the sector. The EFF will contribute better to the sustainable development of fisheries areas, particularly those which are heavily dependant on fishing, through the financing of local development strategies, designed and implemented by the stakeholders themselves. Page 10 of 12

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Last but not least the rules and mechanisms for delivering assistance are simplified under the EFF compared to the current FIFG. Main priority of intervention of EFF EFF targets five priority areas. These reflect EFFs task of facilitating the implementation of measures adopted under the reform of the CFP to secure economic, environmental and social sustainability in fisheries. The five EFF priorities are as follows: 1. adaptation of the Community fishing fleet; 2. aquaculture, inland fishing, processing and marketing of fisheries and aquaculture products; 3. measures of collective benefit; 4. sustainable development of fisheries areas; 5. technical assistance to facilitate the delivery of assistance. Type of support that the processing and marketing sectors will enjoy from the EFF Most fish processing and marketing enterprises, with the exception of the retail sector, will have the opportunity to receive the EFF assistance. Aid will apply to micro, small, medium and some of the large enterprises, while priority will be given to micro and small ones and different rules on aid intensity will apply according to the size of enterprises. Investments to improve working conditions, health and hygiene standards, protect the environment and provide high quality products will be eligible for support. Moreover, innovation will be considered as a key aspect not only for products but also for production methods and application of new technologies. In the current context of scarcity of raw materials, the Fund will promote a better use of little-used species, by-products and waste. Finally, the Fund will also assist the marketing of products mainly originating from local landings and aquaculture. Aims and scope of the measures of collective interest Measures of common interest should encourage stakeholders to take initiatives that are of collective benefit aimed at achieving value added over and above traditional individual investments. They should above all contribute to meeting the objectives of the CFP. This will cover measures that are implemented collectively in the above spirit such as promoting partnerships between scientists and fishermen, upgrading professional skills, promoting selectivity, combating ghost fishing, reducing by catches, improving quality and food safety, contributing to the better management of waste treatment or setting up and restructuring producers organisations. Other measures will concern the protection and development of aquatic fauna and flora, the modernisation and restructuring of fishing ports and landing sites and the improvement of safety within fishing shelters. Measures of collective interest will also extend to the development of new markets, a policy of quality products, pilot projects to test innovative technologies and the modification of fishing vessels for their reassignment to non fishing activities such as training, research and tourism. Responsibility for managing the EFF programs EFF programs are managed according to the principle of shared management. Consequently both the Commission and Member State shall be responsible for managing of EFF programs. The tasks of the Commission and the Member States are clearly divided. The Member

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States will set up the different bodies and the management and control system required to run the EFF programs. The Commission role will be to check the proper functioning of these systems. The audit authorities of the Commission, European Court of Auditors and Member States are regularly controlling the efficient and quality use of EFF assistance. The Commission regularly monitors the progress of implementation for each member state through implementation reports, Monitoring Committee meetings, other bilateral meetings, evaluation findings and audit reports. Budget and financial allocations According to the new Financial framework for 2007-2013 approved by the European Council in December 2005, the total EFF budget amounts to 3 849 million (2004 prices) of which 2 908 million for the Convergence areas and 941 million for the non Convergence areas. Taking into accounting that 0.8% should be reserved to the technical assistance to be managed by the Commission, the remaining total EFF budget allocated to MS in 2004 prices is 3 818 million ( 2 885 million for Convergence regions and 933 million for non Convergence regions). The EFF Regulation indicates the objective criteria on the basis of which the Commission makes the indicative breakdowns by Member States. This breakdown will indicate separately the amounts earmarked for the regions eligible to the Convergence objective and the amounts for the remaining regions. In doing so, the Commission will have to fulfil the obligation of concentration of around three quarters of financial resources in the Convergence regions. For the allocation between Member States for Convergence regions, the methodology used is the same for all the Structural Funds, EFF and Rural Development Fund. It is based on the historical share of each Fund compared to the overall envelope for all Structural Funds per Member State. Nevertheless, the flexibility has been given to the Member States to shift amounts between Funds. For the allocation of the EFF amount between Member States of the non Convergence budget, the Commission used the objective criteria spelled out in the EFF Regulation and referring to the size of and employment in the fisheries sector, the scales of adjustments need to the fishing efforts, past performance and other particular needs. Bulgaria and Romania got full access to the EFF after they joined the EU. EFF budget allocations for Bulgaria and Romania are 70 million and 204 million respectively (in 2004 prices). Bibliography: 1. European Commission, Agriculture and Rural Development, http://ec.europa.eu/agriculture/rurdev/index_en.htm 2. Press office of the Ministry of Agriculture, Forests and Rural Development, 3rd December 2006, http://www.fermierul.ro/modules.php?name=News&file=article&sid=826 3. Official Journal of the European Union, COUNCIL REGULATION (EC) No 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD);

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