Decrease text Increase text

Rural Development Policy Overview


Importance of rural development

With over half of the EU population living outside of towns and with rural areas accounting for 90% of the territory of the 27 Member States - rural development is a vitally important policy area. Farming and forestry remain crucial for the management of natural resources in the EU’s rural areas as well as a platform for economic diversification in rural communities.

The main objectives of the EU’s Common Agricultural Policy (CAP) have remained consistent over the years, but successive reforms have led to changes in the instruments used. Originally, elements of rural development policy were embedded in the CAP. A separate and specific EU rural development policy became operational in 2000 when the CAP was reorganised into two pillars.

The CAP’s first pillar covers direct payments and market measures and the second CAP pillar covers multi-annual Rural Development Programmes (RDPs). The two CAP pillars are complementary.

Rural development policy has adapted and envolved since its inception in order to reflect key EU priorities. Its emphasis on investing for success has enabled many farmers to learn new techniques, upgrade facilities and carry out essential restructuring, thus sharpening their competitive edge.

In addition, very substantial provisions for the good of the environment are helping to turn the tide with regard to the challenges of biodiversity, greenhouse gas emissions, soil and water quality, and landscape preservation. Rural development policy has also embraced the need to support different types of job creation and the provision of basic services in our countryside. These help to promote quality of life, which is acknowledged as an important factor for sustaining thriving rural communities.

The essential rules for the period 2007 to 2013 are based on Council Regulation (EC) n° 1698/2005 of 20 September 2005 on support for rural development from the European Agricultural Fund for Rural Development (EAFRD). Under this Regulation, rural development policy for 2007 to 2013 is structured along three thematic axes and one horizontal axis: Read more about the EU Framework.

Financing the CAP

Regulations governing the financing of the Common Agricultural Policy (CAP) provided for the creation of two new funds in 2007, each financing one of the two pillars of the CAP, namely:

  • the European Agricultural Fund for Guarantee (EAFG) for Pillar 1
  • the European Agricultural Fund for Rural Development (EAFRD) for Pillar 2

The new regulation represents progress both on policy content and delivery for both pillars. The existence of a single fund for rural development, the European Agriculture Fund for Rural Development (EAFRD) and a single set of programming, financing, reporting and control rules aims to simplify the delivery of rural development policy.

The new fund operates with rules adapted to multi-annual programming, using organisational structures and procedures such as nationally-accredited paying agencies and an annual clearance of accounts with which Member States have many years of experience and which have a proven track record.

Revisions to rural development policy - the CAP 'Health Check'

The most recent revisions to EU rural development were introduced as a result of a CAP policy review process, known as the 'Health Check' of EU agriculture and rural policy. This led to the introduction of a series of policy changes, agreed between EU leaders in 2008. The Health Check provided an opportunity to ensure current policies were adjusted to better meet the various new challenges and opportunities affecting rural Europe, such as climate change and the growing demands for renewable energy.

The Health Check changes essentially seek to modernise, simplify and streamline the CAP, removing certain restrictions on farmers, helping them to better respond to signals from the market and to face new challenges. As part of these changes, direct payments to farmers are to be reduced with the transferred funds to underpin expansion of rural development support. This resulted in modifications being introduced to all national rural development strategies and RDPs. Seventeen Member States took this opportunity to introduce additional funding for the development of broadband internet access in rural areas. In tandem with the Health Check revisions, the European Economic Recovery Package was also introduced as a response to the 2008 financial crisis.

Click here to read more on the CAP Health Check.

To view the commission booklet on "EU Rural Development Policy: Facing the challenges" click here [PDF ].

Fact Sheet "Overview of the CAP Health Check and the European Economic Recovery Plan - Modification of the RDPs" [PDF ]

Related information