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Improving Implementation

Agriculture and the wider economy

Thematic Working Group 2 was set up in March 2009, to analyse links between agriculture and the wider rural economy”. Its main aim was to identify and describe potential synergies and/or conflicts between agriculture and the rural economy in different EU rural areas. The working group, chaired by the European Commission (Directorate General for Agriculture and Rural Development - DG AGRI) and comprising national experts, steered the analytical work, which focused on:

  • The input/output analysis in 18 small regions (NUTS 31) representing different types of rural areas in the EU.
  • The screening of six 2007-2013 Rural Development Programmes (RDPs) and other programming documents related to the selected regions.

Findings – main factors influencing the linkages

The results of the input/output analysis in the 18 regions demonstrated that links between agriculture and the rest of the local/regional economy are generally stronger and more positive than might be inferred from statistics, where often agriculture has a low share of local Gross Domestic Product (GDP) or employment.

Agriculture is identified as a key factor” in the local economy in 14 out of 18 regions studied, with especially high links with food processing, hotels and catering and trade.

Important factors influencing links between agriculture and other sectors include:

  • Natural advantages (land quality, climate, local tourist attractions).
  • The existence of infrastructure.
  • The overall strength of the national economy.
  • The level of education, training and entrepreneurial potential of the local population.
  • Access to funding support, particularly related to the complexity of application procedures, the scale of funding and the speed of decisions.

Policy implications

The analysis of the RDPs and other programming documents in on third of 18 regions originally selected allowed the extraction of some important policy implications.

  • While some rural development programming documents make reference to the importance of reinforcing the links between agriculture and rural development, they are far from consistent in their approach. In addition, they are often not coherent in terms of how the stated aims feed through into the priorities/objectives and measures.
  • Only a limited degree of complementarity has been found between the RDPs and other funded programmes (at EU, national and regional level) making it difficult to fully integrate the use of the available financial resources in rural areas. Rural development policies should focus on developing and facilitating more integrated responses to the complex challenges that most areas are facing, in particular to exploit better the relationships between upstream and downstream economic sectors.
  • To improve the RDPs’ implementation, modifications in measure selection criteria could be made to explicitly recognise the links between agriculture and other sectors. For example, the specification of high scores in case of economic diversification projects which commit to establish links with local agricultural activity - where clear multiplier effects can be generated (e.g. new jobs, enhanced incomes, etc.) - or a better targeting of environmental objectives are two options in this regard. The design of projects could be improved through more effective provision of technical support to potential investors to enhance both the viability of the project and its links with local agriculture and the obligation to submit a marketing plan, where possible.

Main reports

  • TWG2 - Selection of regions and initial I/O analysis results [PDF ]
  • TWG2 - Summary of initial I/O and regional analyses findings [PDF ]
  • TWG2 - Final I/O analysis results and additional qualitative research in selected regions [PDF ]
  • TWG2 - Analysis of programme management framework and projects in selected regions [PDF ]
    • Annex 1 – Questionnaire enquiries in 6 regions [PDF ]
    • Annex 2 – Project examples [PDF ]
  • TWG2- Final report [PDF ]

Dissemination of results

  • TWG2 leaflet [PDF ]
  • The paper “Policy insight from recent research” provides an overview of the main findings of final report, based also on a review of the most relevant research reports already published in relation to this topic. [PDF ]
  • 4 Articles on specific regions analysed. The 4 articles describe in-depth regional case studies focusing on regional structures and dynamics
    • The Gers region and the willingness to change [PDF ]
    • A combination of agricultural and cultural activities: Kalmar county in Sweden [PDF ]
    • Between successful development initiatives and institutional capacity shortcomings: the case of Trikala in Greece [PDF ]
    • Finding new development opportunities in rural areas: the case of Somogy in Hungary [PDF ]
  • Case studies aim at presenting empirical evidence and examples of successful investment initiatives which have reinforced links between farm and non-farm businesses in rural areas; 24 case studies have been collected both from the 2000-2006 and 2007-2013 RDPs. For more information click here.

Click here for more information [PDF ]

Related information

  • TWG1: Targeting rural territorial specificities and needs
  • TWG3: Public goods and public intervention
  • TWG4: Delivery mechanisms of EU Rural Development Policy