Table of Contents

• Part A - Introduction
  
  
• Part B - Comparative examination of support policies for rural areas in the five applicant countries
  • Estonia
  • Poland
  • Slovenia
  • Czech Republic
  • Hungary
    
    
• Part C - Detailed examination of rural development projects and initiatives in Poland
  • Criteria for the evaluation of rural development projects
  • Examples of specific cases
  • Conditions and approaches to support for rural development in Poland
    
    
• Part D - Conclusions and recommendations
  • Conclusions on the conditions and aid policies for rural development in the five applicant countries and recommendations for the promotion of sustainable rural development
  • Aid policy in the five applicant countries
  • Aid policy of the EU-Commission
    
    
• Publisher information

Part A - Introduction

The integration of the Central and Eastern European transition countries Estonia, Poland, Slovenia, Czech Republic and Hungary into the European Union represents a major challenge for the Community. The economic importance of agriculture is much greater in the five applicant countries than in the European Union (though this is less true of the Czech Republic). In the applicant countries, agriculture accounts for between 2.9% and 8% of GDP, as against a mere 1.7% in the 15 EU countries. Indeed, the differences are even greater when it comes to the proportion of the population employed in agriculture: the figures given for the Czech Republic and Poland are 4.1% and 26.7%. This compares with an average of 5.1%for the EU of 15.

In the five applicant countries the surface area and importance of rural areas is also greater than in the EU. Inhabitants of rural areas account for between 25% and 38% of their total populations as against a figure of 17.5% for the EU. Agriculture and rural areas are also very important both for the overall economic development of these countries and for the further course of their transition process. Unemployment statistics are an important indicator of this importance. Rural areas in the five applicant countries usually have considerably higher levels of unemployment than the cities.

In comparison with the agricultural sectors and rural areas of the existing member states, the five Central and East European countries exhibit a number of special features whose roots lie both in their histories and in the conditions of the transition process.

With a view to assisting the current economic and social reforms in the applicant countries and to preparing the integration of their national economies into the economy of the European Union, the EU has already made grants available through the PHARE programme at a very early stage. In Agenda 2000, the Commission envisages pre-accession aid for the applicant countries, to be offered throughout the duration of the programme from 2000 to 2006. The indicative breakdown of funds for all three pre-accession instruments is as follows (Source: EU-COM 1998f, figures given in MECU and at 1997 prices):

PHARE will now mainly support the process of taking over the acquis communautaire. The SAPARD programme, financed from the Structural Fund, will be offered for the promotion of agriculture and rural areas. The ISPA programme, which can be used to assist infrastructure investments, is comparable with the Cohesion Fund.

The study sets out to examine the conditions and options for a coherent agricultural and structural policy in the five applicant countries and to propose recommendations on what form aid measures for the development of rural areas should take. It begins by examining, comparing and evaluating national aid policies in the five applicant countries. The second part of the study examines and evaluates selected projects in different regions of Poland. Key questions relate to the development of these projects, to the experiences of their sponsors (not least in relation to support in the form of advice and aid), and to obstacles created by administrative or other restrictions. These form the basis for conclusions on the promotion of rural development in the applicant countries and the planned EU pre-accession aid.

Part B - Comparative examination of support policies for rural areas in the five applicant countries

Estonia

Of the five applicants, Estonia is the country with the smallest population. Among the many special features of its rural areas are their low population density and the fact that they include numerous islands. Like Slovenia, in1991 Estonia first had to re-establish its sovereignty. Its radical political and economic reorientation toward the West brought growth to its centres of economic activity.

Milk, fish and timber are the most important resources of Estonia's rural areas. However, the area of land under agricultural cultivation is declining. A combination of the fact that the privatisation process has still not yet been completed in the agricultural sector, the radical opening of Estonia's markets to western agricultural imports and crisis-ridden markets in the east has led to one fifth of arable land falling into disuse.

In 1994, Estonia developed initial guidelines on regional policy. Since 1995, a variety of programmes have been used which operate with distinct sets of eligible areas and which seek to respond to the differing problems faced by rural areas. So far, no administrative reform has been carried out. A new law designed to support rural areas and develop agricultural markets is in preparation. It operates according to the principles of EU structural fund aid and places the national programmes within a standard legal framework. In Estonia, there is a very active village movement which initiates rural development projects from the grass roots level. The operational programme for the implementation of SAPARD envisages the provision of increased support for these movements and their projects in the future. In this context, an aid concept is to be used that is similar to the LEADER programme.

Poland

Poland is the largest of the applicant countries both in terms of its surface area and in terms of its population and its agricultural sector employs more people than those of all the other applicants put together. Poland is considered to be one of the transition countries that can expect to join the European Union soonest. Positive trends include economic growth of 6% (1996), rising foreign investment and a slightly falling unemployment rate. The downside of this growth is a growing gulf between the regions and the danger that large areas of the country could become marginalised. Rural areas are home to 38% of the population, with roughly 44% of their inhabitants employed in farming. These areas also have the highest unemployment. Unlike most other transition countries, Poland was able to retain a high proportion of private farmers. The previous regime was only able to push through the nationalisation of the land in the north and west of the country. As a result, small farmers are a prominent feature of Polish agriculture. However, the agricultural sector's structural problems, which are often attributed to this, need to be seen in a differentiated region-by-region context. In the north of Poland, the problems are comparable with those of other transition countries. The closure of state-run production facilities has resulted in high unemployment while at the same time giving rise to large-scale farming structures, albeit on a lower level than in, say, Hungary or the Czech Republic. By contrast, the majority of private farmers operate in the south and east. Workers made redundant in other parts of the economy have been absorbed by the agricultural sector. Although hidden unemployment is a problem here, it is not as crucial as in the north of the country, either for the people or for the social development of the villages. As in the other transition countries, rural development is held back by the poor infrastructure facilities in rural areas.

Three phases can be distinguished with regard to support measures for agriculture and rural areas. Toward the end of the first phase, which lasted until 1993/94, initial moves toward a rural development policy were defined. With a view to creating jobs in rural areas, from the outset the Polish government targeted its efforts at promoting investments in the infrastructure of rural communities. Through the PHARE programme, individual projects were promoted on a fairly uncoordinated basis, including some in rural areas. The second phase was ushered in by a change of government and the prospect, held out by the European Union, of Poland being admitted to the EU. The country's agricultural and rural development policies took on a more distinctive profile as a result of the rural development programme adopted in 1994. Moves away from sectoral policy and toward integrated approaches emerged. Strengthened and equipped with government and international funding, aid programmes were established to modernise the agricultural and food sectors on the one hand and to boost the economy and improve infrastructure on the other. In 1996 and 1997, two initiatives, known as "Task Forces", funded by the Polish government and the European Commission, formulated criteria to be met by a future Polish regional development policy which was to be geared to EU structural assistance. Four pilot projects organised on the basis of the principles of EU structural aid were initiated.

The third phase, which began in 1997/98, was shaped by the prospect of EU membership and was again ushered in by a change of government. The administrative and territorial reform was carried out in 1998. This made it possible to greatly strengthen administrative autonomy in municipalities, rural districts and the newly formed provinces ( województwa). This is regarded as one of the essential preconditions for introducing the principle of subsidiarity into Polish regional aid.

1998 saw the presentation of a new strategy for the development of the agricultural sector and rural areas with the aim of achieving greater cohesion of agricultural and structural policy, as called for in the accession partnership for Poland. So far, the question of which institutions and administrative levels should be responsible for implementing future agricultural and structural policy measures has remained open. The law on regional development currently in preparation is intended to help clarify this area.

Slovenia

While Slovenia is the smallest of the five applicant countries in terms of surface area and the second smallest in terms of population size, from the point of view of economic power it boasts the highest per capita GDP. This relatively young country used to be part of Yugoslavia and became independent in 1991. Its rural areas are typically located in mountainous regions. Unlike similar areas in other countries, Slovenia's rural areas are of major economic, social and ecological importance precisely because they offer relatively limited scope for agricultural production. For example, agri-tourism represents an important source of income. As in Poland, collectivisation was only partially implemented, with the result that 90% of all farms remained private. The production capacity of these farms is very low, with the main focus on dairy products. The animal processing sector is dominated by large production facilities. Despite a positive economic trend, major deficits still remain with regard to the restructuring of the agricultural and food sectors. Regional aid has steadily become more significant. The recently unveiled "Agricultural policy reform programme 1999 - 2002" defines four pillars of government agricultural policy: (1) Market and price policy; (2) Direct payments to encourage farmers to cultivate the land along lines which are both environmentally sound and appropriate to the local landscape; (3) Programme for the modernisation of the agricultural and food sectors and (4) rural development programme. The village development programme, which has so far been implemented with great success, is being integrated into the rural development programme. However, considered as a whole, the resources and administrative preconditions for the implementation of these programmes do leave something to be desired.

Czech Republic

The Czech Republic is a relatively densely populated country with a long-standing industrial heritage. Low mountainous countryside accounts for two thirds of its territory, which breaks down into three regions (Bohemia, Moravia and Silesia) which evolved naturally over time. As a result, a little less than half of the land under cultivation is located in "disadvantaged areas". However, farming is of secondary importance for the national economy. Agricultural production underwent extensive collectivisation or nationalisation. The transition process has given rise to a mixture of large farms and numerous smaller and medium-sized family operations. Despite drastic workforce cuts in the converted state-run and collective farms, unemployment is remarkably low in the Czech Republic. High regional unemployment rates, as found in the northern parts of the Czech Republic, are attributable to the collapse of the country's industry which was characterised by monostructures. By contrast, in the south tourism has created new jobs.

Up until 1996, there were no plans for assisting rural areas. Policy remained sectoral and only weakly defined, in line with the low importance initially ascribed to rural areas. Since 1995, agriculture in the disadvantaged areas has been receiving targeted aid and since 1994 a very successful village renewal programme (now: rural renewal programme) has been under way which supports investments in construction projects for public buildings and infrastructure as a way of assisting the economic growth of the communities concerned. At the same time, it envisages models of citizens' participation which are familiar from village development in German-speaking countries. There are plans for assistance for integrated "rural micro-regions" projects in the context of this rural renewal programme. A plan for the further development of rural areas is in preparation. There is now also some coordination of the ministries involved in rural development. An administrative reform according greater autonomy to the districts, the mid-level tier of administration, has still not yet been adopted, but at local authority level numerous active groups have emerged which definitely have the potential to become crystallisation points for development concepts based on a bottom-up approach.

Hungary

Situated in the eastern part of Central Europe, Hungary can be classified into three major regions: the lowland plain, Transdanubia and the Northern Mountains. With the capital alone accounting for one fifth of the country's population, rural areas are sparsely populated and population density decreases from west to east. Rural areas and farming are very important for Hungary. In some regions, agriculture provides employment for over 16% of the active population. Moreover, Hungary is a net exporter of agricultural products. In 1996, Hungary's traditionally export-orientated agricultural sector accounted for 18% of all the country's exports. The sector is characterised by extremely large-scale structures and intensive involvement in processing, with this type of farming accounting for just under half of the agricultural land under cultivation. In addition, there are over one million smallholdings run on a part-time basis. Only 5% of farms are run by self-employed private farmers. The agricultural sector is characterised by a sizeable black economy.

With the adoption of the "Regional development and town and country planning act" in 1996, Hungary already partially paved the way for the implementation of national aid activities in rural areas. In 1998, competence was transferred to the Ministry for Agriculture which, unlike the Ministry for the Environment, which had previously been in charge of such matters, has offices in each of the country's 19 administrative districts ( komitate). There are plans for the establishment of regional development funds. These will operate on the same level as the newly established regional development forums. These seven newly created regions are intended to form an intermediate link between the national level and the existing komitate administration. However, their tasks have not yet been clearly defined. One major factor which is holding back the development of an integrated rural development policy is the lack of an administrative reform and the limited nature of the financial resources available. The promotion of human capital is a very important factor, not least in light of the chronic shortage of capital afflicting all forms of agricultural operations.

Comparative examination of support policies for rural areas in the five acceding countries

The main purpose of the comparative examination is to assess how far the aid principles of the EU structural funds are already recognisable in the aid policies of the applicant countries. A functioning autonomous administration run by the regional authorities and the formation of organised interest groups are regarded as crucial preconditions for the principle of subsidiarity, of focusing on bottom up approaches and of involving the social partners.

A comparison of government policy on the promotion of rural development in the five applicant countries reveals differences which mainly relate to the existence and efficiency of the lower tiers of administration. The following aspects should be mentioned in this context: programmes for village renewal, of the type already being implemented successfully in Slovenia and the Czech Republic, promote the activation and involvement of the rural population in a special way and can also become the germ of more far-reaching rural development projects. Estonia has active village movements. This type of approach is not found in Hungary, while in Poland it does occur where the mayors and village inhabitants have taken the initiative themselves.

An administrative and territorial structure at the lower levels which is complete and has existed securely for some considerable time is an essential precondition for rural development. Poland has successfully completed this reform. In the Czech Republic, Hungary, Estonia and Slovenia comparable reforms have yet to be undertaken.

Quasi-governmental organisational forms, such as regional development forums and development groups or agencies, are familiar features of Hungary and Poland. The other countries do not have any comparable approaches to the coordination of rural development at regional level.

The existence of interest groups representing various professional groups, economic sectors or social partners is a further important precondition for the implementation of sustainable development processes. Chambers of agriculture have already been established in Hungary, Poland and Estonia. In the Czech Republic, many associations exist which represent the interests of rural communities and the farming population.

Programme planning is another necessary precondition for applying for EU structural assistance. In all countries, programme planning, in the sense of coordination of the ministries and participating lower administrative units - as far as possible with the involvement of the social partners and interest groups - is still in its infancy. On the other hand, the principle of cofinancing already appears to have been incorporated into many national programmes. In future, the EU programmes PHARE, SAPARD and ISPA will operate according to this principle.

Part C - Detailed examination of rural development projects and initiatives in Poland

Criteria for the evaluation of rural development projects

The EU has been implementing support measures for rural development projects for some years and over periods spanning several programmes. The experience gained from these can be used to formulate central criteria which any support measure needs to meet if it is to have an impact. The following points also form part of the support guidelines of the operational programmes: (1) Definition of the purpose(s) of the support; (2) Definition of the object of the support; (3) Definition of support areas; (4) Definition of the nature and amount of the support; (5) Definition of the recipient of the support (beneficiary); (6) Term and/or validity of the support programme; (7) Definition of application and approval procedures; (8) Coordination of the support project with other projects and planning; (9) Administrative jurisdiction; (10) Assistance for and empowerment of applicants and/or target groups through advice. With the aid of these criteria, the following section examines and evaluates the support practice of selected development projects in rural areas of Poland.

Examples of specific cases

Assistance for village development in the province (województwa) of Opole was launched in 1997. After a two-year preparatory period in which procedures used in the German State of Rhineland Palatinate were adapted to Polish conditions, 57 villages from 27 gminy ( municipalities - i.e. towns and rural communes) applied to participate in the first round. In the form of workshops chaired by trained moderators, the situation was analysed and a set of guidelines and proposals for improvements were prepared. Measures were subsequently implemented with relatively little investment expenditure and with high levels of funds contributed by the villagers themselves. The existence of a regional tradition of autonomous economic action was one of the key prerequisites for a high level of mobilisation of initiative on the part of the villagers themselves. Good planning, the use of trained moderators and the provision of sufficient time for the procedure were equally important success factors. This made it possible to fully utilise the scope for improving the position of the village using resources generated by the villager's own initiative. To enable larger projects for the improvement of village infrastructure (sewers, telecommunications etc.) to be carried out, in the second phase the gminy need to be allocated financial resources.

The Malopolska agricultural and rural development project is one of the four regional Polish pilot projects and covers nine (former) województwa (provinces) of the Malopolska region in the south and south-east of Poland. This region is characterised by small-scale agriculture with high levels of surplus labour and a rural population on low incomes. In order to try out a new form of action by way of an example, the project was conceived and implemented in line with the principles of the EU structural funds. In 1998, what have been the only funds so far paid out under the PHARE programme were made available on the basis of municipal applications for the promotion of infrastructure projects. The administrative and territorial reform will result in some restructuring of the project. The project is seen as one of the two pilot projects that should receive future support in the framework of SAPARD. Practical implementation of the project highlights a typical conflict in the area of subsidiarity which arises wherever new action is to be taken on the basis of administrative structures which were simply forced to change.

The milk producers' cooperative in the mountain municipality ( gminy) of Tokarnia is a project initiated by the village population and implemented with the aid of Swiss funding and experts which sets out to maintain milk production, thereby preserving the farming landscape in a rural locality. It is beset by shortcomings familiar from aid projects in developing countries. Once the experts are withdrawn, and as a result of delays in releasing the funds, the project stagnates. There is no initiative guidance to enable further steps to be taken towards improving the value added by farms.

The cooperation between four municipalities in Dolina Strugu ( Rzeszow province) is one of this region's highest-profile projects. An ad hoc move by four municipalities to join forces (to apply for telecommunications facilities) led to more far-reaching activities. The best known project is probably the direct distribution of mineral water under the name "Alfred". This paved the way for a marketing project for regional products made by local farmers. With the aid of the ECOS-OUVERTURE programme, village moderators were also trained and a centre for agricultural tourism was established. Numerous other projects are in the planning stage. The most important prerequisite for the success of the projects was the fact that the municipalities joined forces. This was the outcome of the efforts of active mayors who worked to secure aid at an early stage, in conjunction with a local businessman and the work of the regional development agency in Rzeszow. Obstacles to the continued implementation of the project lie both in the processing of the ECOS-OUVERTURE programme and in a certain "hand-out" mentality on the part of those in charge in the municipalities.

New sources of income in Sielinko, a rural area in Poznan province, accompany a process of agricultural development toward western-style intensive farming. Here, smaller farms are looking for new sources of income which might take the form of agricultural tourism or the expansion of direct marketing linked to the production of special products.

Conditions and approaches to support for rural development in Poland

In Poland, the municipalities and their mayors are the main driving force behind regional development. The administrative and territorial reform has created conditions which are significantly more conducive to the emergence of local and regional initiatives. Obstacles lie in the lack of a clear overview of the support opportunities available and in the difficult access to support programmes for the rural population. Banks and lending facilities have also still not yet been adequately developed. One factor which has crucial implications both for the problem solutions currently on offer in the agricultural sector (or to be offered in the future) and for the support projects which are to be prepared is the widespread tendency to think in terms of subsistence farming. The motives of rural families do not generally follow the logic of aid provided for investment projects and this is compounded by a mistrust of government policy and a rejection of joint efforts. A further obstacle is the poor infrastructure facilities of many rural localities.

On the other hand, the initiatives and projects under way in different parts of Poland have made it clear that they are able both to identify and utilise endogenous potential and to develop novel forms of cooperation. The conclusions which emerge from this are as follows:

(1) To make it possible to encourage and implement private sector projects as well as infrastructure improvement projects in the municipalities, there need to be substantial improvements in the nature and scale of the advisory services available to the rural population.

(2) The phases in the preparation of projects and the elaboration of viable concepts based on bottom-up approaches cover periods of months or of one to two years, as well as requiring intensive contact between the applicants and the institution providing the assistance. In principle, these tasks can be undertaken by various organisations. Government administration is unlikely to be suited for this, given that the process involves service tasks requiring a high degree of flexibility and target-group focus.

(3) Given the abundant availability of labour in the rural regions of Poland and given that the businesses based there are short of capital, it should be possible, when granting aid, to take ample account of efforts made by the parties themselves.

Part D - Conclusions and recommendations

Conclusions on the conditions and aid policies for rural development in the five applicant countries and recommendations for the promotion of sustainable rural development

This chapter contains conclusions and recommendations. It is subdivided into two parts as the recommendations in particular are addressed to two different quarters.

The first part sets out conditions for successful aid and formulates recommendations for the governments of the five applicant countries.

The second part sums up the recommendations for the European Commission. At the same time, a distinction is drawn between general points and recommendations for the creation of instruments.

Conditions for successful aid in the five applicant countries:

• Instruments for the promotion of rural development are used in all five of the applicant countries examined. There are differences in approach, in the focus for aid, and in the areas eligible for such aid. However, it is possible to enumerate some basic conditions which are important for the successful use of rural aid programmes. These are factors which can still be influenced during the pre-accession phase and which should be taken into account in the practical implementation of aid measures. In the following, we enumerate such conditions and address possible approaches to fleshing them out with a view to arriving at a promising aid policy.
• Programme planning and strategy development for the development of rural areas are carried out in all five applicant countries. However, they are predominantly based at national level in the competent ministries and are still relatively strongly determined by agricultural policy approaches, whereas rural development as a process in which new economic opportunities can be prepared remains relatively vague. So far, the involvement of medium and lower levels has only been successful in pilot projects covering limited geographical areas. The implementation of further pilot projects in selected regions with selected priorities in terms of content should be strengthened and evaluated for strategy development and programme planning.
• In national aid programmes, the principle of cofinancing is already being applied, depending on the scope offered by national budgets. Efforts to introduce the cofinancing principle should be continued.
• From a programmatical point of view the existing strategy and programme planning documents do call for bottom-up approaches to rural development, but some important preconditions for implementation are still not in place. These include strengthening the municipal and district levels in their self-management and the provision of advisory services for potential applicants. Advisory concepts should be developed as part of fundamental thinking on the streamlining of aid practice.
• The involvement of social partners, interest groups etc. is already a part of individual countries' pilot projects. The chances of implementation and the practical success of this are greatest where a start is made at the lowest possible level, i.e. in the municipality or within a group of municipalities.
• In rural areas in the applicant countries, and in particular in Poland, subsistence farming is widespread as a defining system of values and way of life for whole sections of the population. However, the logic of the programmes and the incentives created by aid are geared to gainful activity and are ill-suited to the subsistence-based approach of rural families. This should be given greater consideration in the implementation of aid programmes. Effective concepts for assisting subsistence-oriented target groups should be prepared as part of fundamental thinking on initiating and guiding local projects.
• So far, aid activities in rural areas have focused very much on expanding infrastructure, eradicating shortages of supplies etc. Projects of this type are directly in the public interest, arouse little substantive controversy and have found active proponents in the persons of mayors. By contrast, projects based in the private sector, involving long preliminary stages before applications are submitted and a relatively high degree of substantive complexity, such as setting up businesses, formation of producers' cooperatives etc. have so far not often been undertaken because of a widespread lack of the necessary activating advice. At most, government advisory agencies provide such advice in the agricultural tourism sector.

Recommendations on the implementation of aid policy in the five acceding countries:

• The governments should define by law which ministries are to be responsible, which government department or quasi-governmental organisation is to take charge of handling arrangements, advice etc.
• Aid should be processed in a more recipient-friendly manner. Service entities for providing information and advice on aid opportunities should be set up at the lower level.
• The geographical definition of aid areas should concentrate on areas defined by criteria. Under no circumstances should a country's entire territory be defined as an area eligible for aid.
• Functional autonomous administrations should be set up at the lower levels and given the option of
• establishing commercial enterprises themselves or participating in such enterprises.
• Data on which to base planning and evaluation of aid measures (agricultural statistics, unemployment statistics etc.) should be improved and prepared for small areas.
• Provision should be made to enable research accompanying aid programmes to be carried out by institutes based in the country in question and cooperation with universities should be stepped up.
• There should be an improvement in the macroeconomic business environment for companies already operating in rural areas or which have yet to be set up there. This particularly applies to the banking system and lending facilities.
• Support should be provided for non-governmental organisations (NGOs) whose aim is to promote regional development.

Three basic requirements to be put to the governments of the five applicant countries:

From the series of proposals and recommendations enumerated here, three points can be highlighted which have key parts to play in the promotion of rural development in the five applicant countries in that there are several ways in which they can have a positive impact:

a) Self-administration

A functioning self-administration at municipal, borough and district level is fundamental and indispensable for programme planning, for taking account of the principle of subsidiarity and for enabling bottom-up approaches.

b) Independent and activating advice

As a supplement to the establishment and expansion of a functioning administrative structure for the implementation of aid measures, as explicitly envisaged as part of pre-accession aid, departments or institutions should be created to perform the following tasks, or organisations should be given the job of performing such tasks: provision of information and activating advice for potential applicants and/or beneficiaries of aid measures in rural areas; participation in setting up cooperation projects, paving the way for economic projects; support for parties interested in submitting applications in consultation with the approving authority. These tasks should be financed from public funds and should be entrusted to independent units which should be separate from the authorisation and funding management process in terms of their organisation and personnel.

c) Fixed subsidies instead of proportionate financing

In designing national aid programmes it is important to take particular account of the fact that potential applicants in rural regions are likely to have inadequate capital resources but a surplus of labour. Aid systems based on fixed subsidies therefore make a better choice than proportionate financing. To a considerable extent, it should be possible to incorporate and take account of efforts made by applicants themselves.

General recommendations on structural aid:

In parallel with SAPARD and ISPA, appropriate programme content based on the logic of ERDF and ESF should be prepared and implemented in the pre-accession phase.

Financed under the EAGGF Guidance Section, the SAPARD programme is regarded as a rehearsal for making use of structural aid after accession. After their admission to the EU, applicant countries will be declared objective 1 regions. The structural aid measures organised in this context will then be derived first and foremost from the ERDF, with the ESF also participating in the aid. Financing will only be provided via the EAGGF Guidance Section where measures in the field of agriculture and rural areas are involved. In order to ensure comprehensive preparation, in line with the subsequent involvement of all three funds in financing, all three funds should also be offered in the pre-accession phase since each is characterised by different terms and conditions. What is more, at the EU's end the funds are managed by different Directorates-General and at Member States' end they are also processed by different ministries. Otherwise, during the preparatory phase it will not be possible to rehearse subsequent coordination of all authorities (and groups) (necessary for coherent programme planning).

With regard to the fleshing out of SAPARD (EU COM 1998, 153 final) the following recommendations are made:

• Article 2 (1) should be supplemented by the indent "Improving value-added of agricultural holdings and value-added in rural areas". In particular, it is a matter of it also being possible for aid for processing facilities to be based on an operational and regional perspective if this can lead to an increase in regional value-added. This particularly applies to aid for small and medium-sized processing businesses integrated into the regional economic relationships. In the applicant countries it needs to be possible either to modernise existing capacity or to establish new capacity.
• Article 4(1): To enable greater incorporation of regional interests into programme planning, contrary to the provisions of Article 4(1) it must be stipulated that in preparing the plan the competent authority named by the applicant country must involve the most representative partner (of its own choice) at national, regional and local level. At all levels of programme planning, involvement should take place on the appropriate territorial level.
• Article 4(4) and (5): The short preparatory period of six months which the countries are allowed (Article 4(4)) is a problem, as is the long approval time on the part of the Commission (Article 4(5)). It is proposed that the preparation time be lengthened to at least nine months and the approval time shortened to at least four months.
• Article 4(2): During the SAPARD programme, within their national aid programmes the five applicant countries should, if necessary, be allowed to make changes in the areas eligible for aid and in the amount of aid etc. It is proposed that it should be possible to revise the development plans in the event of major changes in the socio-economic situation (Article 4(2)).
• The cofinancing rate of SAPARD is set at 75%, which is too low when compared to the two other programmes PHARE (100%) and ISPA (80%). Given that the agricultural sector is the weakest branch of the economy and that at the same time substantial restructuring needs must be addressed in this context, corresponding distortions and displacements between the programmes are to be feared (Huber, 1998).

With regard to the fleshing out of PHARE, the following recommendations are made:

The "institution building" promoted in the framework of PHARE should not concentrate solely on administration concerned with handling the programme, but should also promote administration concerned with service tasks (information and advice) and/or should promote or assign tasks to other organisations which assume such tasks. Information and activating advice for the potential applicants and/or recipients of aid measures in rural areas must be financed from public funds, but at the same time be able, financially, organisationally and in terms of personnel, to be handled in an independent unit and as such separately from the institution that administers the aid and approves applications. This should be seen as a vital precondition for successful implementation of bottom-up approaches.

Recommendations for further action

The study's findings with regard to the aid policies of the applicant countries, the insight gained from the detailed analysis of regional development projects and the recommendations made should be discussed with representatives of all the groups of interested parties addressed. The obvious way to accomplish this would be in the form of a workshop.

Publisher information

This document is available in the following languages:
DE (original), EN, FR

The complete study (AGRI 114) is only available in German language.

This study is part of the 1998 annual research programme and was commissioned by the Directorate General for Research of the European Parliament on the basis of a restricted invitation to tender.

This study was undertaken upon request from the Committee on Agriculture and Rural Development on 4 February1998 and served, among other purposes, as a basis for the Workshop "Creating Partnership for Pre-Accession - an East-West Encounter for Policy Options for Sustainable Rural Development in Central and Eastern Europe" held in Estonia and Sweden from 30 May to 6 June 1999.

A list of other working papers under the same series can be found at the end of this publication.

The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament.

Reproduction and translation for non-commercial purposes are authorized, provided the source is acknowledged and the publisher is given prior notice and sent a copy.

Manuscript completed in March 1999.

© European Parliament: 11/1999