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11.11.2009 Studies
 
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Rural Development Investments: Do they Effectively Address the Problems of Rural Areas?

European Court of Auditors, 2006

Background

  • Review of the measures‘investment in agricultural holdings’, ‘improving the processing and marketing of agricultural products’ and ‘promoting the adaptation and development of rural areas’that made up 40 % of the 2000-2006 second pillar.

Findings

  • The flexibility of the Rural Development Regulation (broad objectives, lack of priorities) and the lack of of a clear strategy in the Member State programmes have led to a situation where it is unclear to which objective the funds have contributed.’ ‘Overall, the Court finds that no assessment can be made whether rural development investments are effective. Objectives are too broad and strategies to implement the policy are lacking.’
  • ‘There is a lack of effective conditions and selection procedures, to target funds on the most needy geographical areas and beneficiaries’ ‘A significant part of the expenditure is implemented in areas which are not predominantly rural’ (based on a sample of 300 projects and using the OECD area classification, 33% of the projects were undertaken in rural, 38% in medium and 29% in urban areas)
    indications were found that subsidies went into investments that would have been undertaken also without the subsidies (no additionality)

Comment

  • Recent reports, such as the 2009 Barca report commissioned by DG Regio, confirm that rural development – and other forms of EU-funded territorial policies – are still lacking a clear justification and a sound strategic focus

Download the full report here

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