The potential of the new EU Rural Development Programme in supporting Organic Farming

Summary

Background:
In July 2004, the Commission presented a new proposal for a Council Regulation on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) for the programming period 2007 – 2013 which has been agreed upon in June 2005 (European Commission 2005a, Council of the European Union 2005a and 2005b). The explanatory memorandum of the new Rural Development Programme (RDP) presented by the European Commission mentions that after a period of reforms of the First Pillar of the CAP, now focus will be led on the reform of rural development policy. However, this does not mean a paradigm shift but rather a consolidation and administrative simplification making rural development policy more efficient and coherent (Wehrheim 2005). Compared to current Council Regulation (EC) 1257/1999, the new RDP considers in Article 6 to strengthen the partnership approach through close consultation of competent regional, local and other public authorities as well as Non-governmental organisations and private bodies representing civil society (European Commission 2004b).
The regulation seeks dovetailing policies of first and second pillar: e.g. through modulation. On the other side, EU rural development policy should move towards a more strategic approach, reinforcing it and simplifying its implementation (European Commission, 2004a). To ensure the sustainable development of rural areas, the new RDP focuses on a limited number of core priority objectives relating to agriculture and forestry (European Commission, 2004b):
1. improving the competitiveness of agriculture and forestry by means of support for restructuring, development and innovation
2. improving the environment and the countryside by means of support for land management
3. improving the quality of life in rural areas and encouraging diversification of economic activity:
Each of these core objectives relates to one thematic axis for which each a range of measures are proposed:
Axis 1: Improving the competitiveness of the agriculture 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
In addition a fourth overarching axis is introduced which relates to all three objectives:
Axis 4: “LEADER” Axis
While so far the 2nd Pillar of the CAP was funded by two different financial sources (EAGGF Guidance and Guarantee section), the new regulation envisages the creation of only one new fund for Pillar 2: The European Agricultural Fund for Rural Development (EAFRD). Thus, current differences of Guidance and Guarantee section as concerns programming, administration and monitoring will be dispensed, which might lead to a significant ease of administrative tasks (Grajewski 2004). The resources available for the period 2007 to 2013 amount according to Article 70 of the Council proposal to 88,75 billion Euro at constant 2004 prices (European Council, 2005). The minimum EU fund contribution at axis level shall be 20%. In the case of Axis 1 and 3, maximum funds are ceiled to 50% of the eligible public expenditures (75% in convergence regions). For Axis 2 and the Leader Axis the maximum rate will be 55% (80% in convergence regions), expressing the EU priority attached to these axes. For the outermost regions the maximum co-financing rates are increased by 5 points (Council of the European Union 2005a). The implementation process of the new policy foresees adoption of the Community level strategic guidelines for rural development by autumn 2005 in order to enable Member states to finalise their national strategic plans until mid 2006 (European Commission 2005a).
So far, there has only been some scientific discussion on earlier stages of the respective regulation (Grajewski et al. 2004, Schader and Stolze 2005, Wissenschaftlicher Beirat Agrarpolitik, nachhaltige Landbewirtschaftung und Entwicklung ländlicher Räume beim Bundesministerium für Verbraucherschutz, Ernährung und Landwirtschaft 2005). Generally the approach of the regulation was considered to be an improvement. However, little reference has been made so far in the discussion to the prospects the new policy holds for support of organic farming, inspite of the fact that there are economic arguments in favour of support for organic farming (Dabbert et al. 2004). Organic farming is mentioned only once in the regulation, as a minor point and without any specifics. This seems to be in contrast to the importance given to organic farming by other statements of the Commission (European Commission 2004c). Also the recent Commission proposal for strategic guidelines (European Commission 2005b) is more explicit on the role of organic farming for rural development. It thus seems worthwhile to take a closer look at this aspect.