Future Prospects for Rural Areas in Europe
John Bryden: Joint Director, The Arkleton Centre for Rural
Development Research, University of Aberdeen.
This would be crystal ball gazing were it not for the fact that
a good deal of the future is already with us today - the dice
has already been, or is about to be, cast. Therefore I want to
start by looking at the current trends or tendencies affecting
rural areas, including market related trends and new policy directions.
Trends which affect nearly all rural areas in the European Union
include:-
Many of these trends are linked together through the general issue
of globalisation and related economic, social and political
restructuring. Most of them originate outside rural areas themselves,
and make it increasingly necessary to view such localities in
a broader context. They are not specifically 'rural' in origin
or nature: what delineates rural from urban restructuring is not
so much the nature of the forces driving change or their general
consequences, but rather the specific forms which these
take in areas we perceive as 'rural'.
It is important to stress that rural areas differ markedly from
one an other in their economic structure and activity, their natural
and human resources, the peripherality of their location, their
demographic and social conditions, their culture. They are therefore
affected in different ways, and to differing extents, by the trends
identified. Policies and support structures for rural areas must
increasingly recognise this diversity of conditions and outcomes
through flexible support structures and devolved repsonsibility
under the subsidiarity principle.
I want now to deepen the discussion of the implications of the
major trends identified above under the following headings:-
It is now commonplace to refer to the declining importance of
agriculture in rural areas. In the early 1800's, agriculture employed
some 35 percent of the British labour force, by 1900 this had
fallen to about 10%. Now the figure is less than one-in-fifty.
Although some rural communities remain highly dependent on farming,
the fact is that most of those living in the countryside now depend
on other sources of income and employment.
Along with changes in agricultural employment and technology have
come structural changes in the industry. There are fewer farms
and farmers, fewer and larger fields, greater specialisation at
farm and regional levels, and generally more intensive production.
A dual structure persists - a few very large commercial
farms dominate food production (various estimates suggest that
one-fifth of all farms produce eight-tenths of our food), whilst
the majority often have other sources of family income (commonly
off-farm jobs, but also a variety of on-farm diversified enterprises,
or off-farm businesses, and pensions).
Both OECD and UK studies, including the White Paper Rural England,
have shown that non-agricultural employment has been relatively
buoyant in rural as compared with urban areas. Nevertheless, closer
inspection of different rural areas shows clearly that even in
the most 'rural' regions, some (like Orkney) have experienced
growing employment whilst others (like Caithness) have experienced
declining employment (and sometimes also population). Moreover,
despite this relatively positive growth in rural employment, most
rural areas suffer an employment deficit, in the sense
that there is a net outflow of commuters from rural to urban areas
(see: Territorial Indicators of Employment Focusing on Rural Development:
OECD, 1996).
What this evidence suggests is that:-
One key element in economic change is globalisation. This
is manifested in:-
Consequential restructuring is occurring in agriculture,
agri-food, and food retailing and distribution sectors. There
is also a general shift to a service-based economy in which the
information and knowledge based industries play an increasing
role. Linked with this is a de-materialisation of production,
a de-linking of economic growth from consumption of raw materials,
a dissociation of financial sphere from the 'real economy', and
an internationalisation of savings-investment flows and of relations
in commercial and knowledge spheres.
In rural areas, tourism and recreation have been key growth areas
in the service sector. This and the desire of many urban people
to live (and sometimes establish enterprises) in rural areas is
linked to the notion that the countryside is increasingly a place
of consumption as well as production, and that this consumption
is of non-material attributes and public goods which the countryside
has - or is believed to have - in greater abundance than urban
areas (such as 'healthy' and 'stable' communities, lower crime,
a clean environment, active civic societies, interesting cultures,
attractive landscapes, wildlife, open space, tranquillity, etc.).
The important point in the present context is that such attributes
and public goods provide new commercial opportunities, and can
therefore contribute to the formation of competitive advantages.
Restructuring brings both threats and opportunities to rural areas.
Opportunities exist to tap new global markets, to develop new
service based activities including knowledge and information based
activities which are, in principle, less dependent on location
as a result of the extension of markets and the introduction of
Information and Communications Technologies. However, the threats
to rural areas existing activities, often based on natural resources
and low-wage manufacturing, are also evident.
Globalization and restructuring is facilitated by the spread of
new Information and Communications Technologies (ICT),
and associated organisational changes such as 'just in time manufacturing',
'flexible organisation', 'virtual organisation', growing intra-firm
relations and networking. ICT is giving rise to new opportunities
as well as threats in rural areas. Scotland, Ireland and the Scandinavian
countries are probably leading the way on the new opportunties
front, and the UK and Ireland have a language advantage in the
international information markets.
Many rural areas (and firms) seek to protect themselves from increasing
global competition by creating local products which depend
on local identity for their market niche. This local identity
will often be closely linked to (perceived or real) local cultures
or environments, and therefore to the attributes and public goods
referred to above. Others have tried to capitalise on the distance
reducing effects of ICT, developing new information-based activities
which depend on digital telecommunications. Yet others are seeking
to widen markets and capture a higher share of value-added for
example by gaining a larger part of the food-chain, or by using
the 'information highway' to market local goods and services directly
to consumers and firms. Such efforts, increasingly linked to new
economic activities and sources of employment and livelihood in
rural areas, are in a sense opposites - the first type of activity
tends to re-integrate production activities with local places
and identities, whilst the second type is by nature the ultimate
in 'footloose' activity which can increasingly take place anywhere
which is connected to a digital communications network with competitive
charges.
There is a general decline in fertility linked with ageing
of the population and a fall in population growth rates. This
is occurring at the same time as unemployment rates are persistently
high as a result of economic restructuring and low economic growth.
The consequences include increased dependency ratios, declining
activity rates, and less job-security. There is a fall in annual
hours worked per person an increase in self-employment and part-time
working especially amongst women, as well as a rise in long-term
unemployment. Rural areas experience these tendencies as well
as urban areas. There is increased opportunity for leisure and
recreation, and longer periods of retirement or lower activity,
which often spills over into new demands on the countryside mentioned
earlier.
Whilst many observers expected rural populations to decline
as a result of changes in agriculture, this has not been the general
experience of all rural areas over the past two decades or so.
Given the generally low rates of natural population increase in
England (and throughout the EU except Ireland), the critical factor
is the net rate of migration into, or out of, rural areas.
This, in turn depends partly on the rural employment situation
in relevant travel-to-work areas or commuting zones, although
some rural areas do attract 'retirement' in-migrants. However
it will also depend on housing provision and costs, public transport,
vehicle and fuel taxation, road infrastructure, and access to
other services including health, education and training, and shops.
Thus movements of people are a key aspect of rural change
and development. In-migration, out-migration, retirement, the
retention or loss of young people, the return of diaspora, commuting,
recreation, tourism are all dimensions of this movement.
The change from a rural society which was centred for employment,
habitation, leisure, public life and services within short distances
(a 'short-distance' society), and which formed much of
the physical character of rural areas prior to the railway and
the motor vehicle, to one in which the arenas of work, living
space, recreation, public and civic life and services are in different
physical spaces has been characterised as a transition to an 'arena
society' (Fuller, 1994). This transition, which has become
more evident and more rapid since the 1960's, underpins and reflects
many of the economic and social changes, and in turn the environmental
and planning debates of which we are so aware.
Studies have demonstrated that poverty, deprivation and exclusion
are as much a rural as an urban problem, although they take specific
forms in rural areas. They are an outcome of restructuring and
labour market changes, demographic change, policy changes (housing,
transport), and other factors - in other words there are structural
causes, many of which are intensifying. For example, the shortage
of rented and other low cost housing, partly caused by the social
changes related to in-migration, and partly caused by depletions
in the public housing stock, has impacted on poorer sections of
the rural population. Lack of adequate (or any) public transport
in many rural areas also impacts severely on no-car and single-car
households. Problems of isolation have been noted for no-car and
single car households, and for many farmers, leading to apparently
high rates of suicide and other mental health problems. Particular
problems arise for travellers. Reforms in Social Policies suggest
that localities and regions will have to play a bigger role in
this respect in future, and this will also provide considerable
scope for innovation
In some countries, rural and urban areas experience changing
systems of values: notably the decline in forms of authority
and hierarchy (church, state, monarchy, science), decline in social
and economic relations based on trust and familiarity, growth
in individualism. Social relations are less bounded by space,
and 'communities' increasingly form around interests rather than
places. On the one hand this offers more scope for segmented markets
(as opposed to mass markets), customisation of products etc. On
the other, it means that new modes of collective action and solidarity
have to be found.
It is important to stress that there is a huge variation between
rural areas in all of these respects, and in terms of their consequences.
In recent years there have been strong indications that there
could be radical changes in EU agricultural and rural policies
as we enter the new Millennium, and these indications were confirmed
at the European Conference on Rural Development "Rural Europe
- Future Perspectives" (The "Cork Conference")
held in November 1996. These policies have been, and are likely
to remain, very important for rural England.
Even if the ideas promoted at Cork have not had an easy passage
subsequently, either in the preliminary debates on the next 'reform'
of the structural funds, or within the agricultural council, the
background papers and declaration remain the best indication we
have of recent Commission thinking on the topic. In particular,
they indicate that the Commission is working towards a more 'integrated',
spatially differentiated, and 'bottom up' rural policy.
Following a number of reports on the consequences of Eastern Enlargement,
and statements by not a few potential applicants like Poland that
the CAP was a barrier to entry, and, this year, the passage of
the FAIR Act in the USA, this process has been boosted by the
increasingly widespread view that the CAP would need to be further
reformed in or soon after 1999. The thought was that this would
at some stage imply a cut in the CAP budget, and savings could
be available for other purposes. In addition, the mid-term review
of the Structural Funds operations takes place in 1996-7, and
EU Structural Policy is being re-assessed in 1997-8. Already the
First Report on Economic and Social Cohesion in the EU has been
published, and a Cohesion Conference was held in April 1997. Following
the conclusion of the Intergovernmental Conference at the Amsterdam
Summit in June, the Commission will announce its financial prospective
for 1999-2005. This will provide the framework for CAP and Structural
Funds post 1999, setting out the main lines of the Commission's
thinking. It will be announced next week (Agenda 2000+).
In political terms, if further meaningful reform of the CAP is
inevitable, then the Commission must be concerned to have some
alternative policies to offer, and rural politicians are anxious
that the 'money will not be lost' to rural areas. Although there
are difficulties foreseen in the next GATT Round with any policy
measure which is restricted to farmers as a 'client group', since
all of these could be argued to have production effects whichever
'box' they may be in, general measures aimed at rural development
actors, including farmers, would not be subject to the same objections.
At the same time, of course, the reform of the Structural Funds
in the late 1980's, and the creation of regional programmes,such
as those for Objective 5b areas and LEADER, provided the basis
for thinking about new rural development policy instruments, especially
locally based integrated rural development which recognised the
diversity of rural Europe.
Some important themes and issues which arise from the ten points
in the Cork Declaration (see Annexe ) are:-
The issue here is whether 'rural preference' could be a feasible
potential replacement for 'agricultural preference ' in the Treaty
of Rome (which might assist with the next GATT round). It also
refers to the issue of rural-urban balance. However, farming lobbies
may be expected to resist transferring resources from policy measures
directed mainly at them, to measures for which the whole rural
population, or worse the whole population in selected target rural
areas, is the client group.
It is not really clear what is to be integrated, but it was hoped
to include the Accompnaying Measures to the CAP reform, and Structural
Funds spent in rural areas (at least Objective 5b, 5a, LEADER
and probably parts of Objectives 1 and 6), and possibly some Evnironmental
spending (e.g. what was LIFE). Simplification meant reducing the
large number of programmes, and combining funds into one set of
regional programmes, with one 'pipe' for Brussels money and one
set of rules. There remained questions about integration with
national policies, and mechanisms for regional and local programming.
The idea was that there should be a single 'Integrated Rural Development' programme for each rural 'region', and this also links (although not necessarily so) with the concept of the Single Rural Development Fund. The issue of the role of small towns and villages, and mention of village renewal, is also significant given their place in diversified rural labour markets and service provision. However, important questions remain about how rural regions are going to be defined and delimited for policy purposes, and how these will relate to urban areas with which they have important economic and other relations.
The need for 'bottom up' development involving both horizontal
and vertical co-operation and partnership, suggests a combination
of structural fund (Objective 1/5b) and LEADER mechanisms for
planning and implementation of integrated rural programmes. This
is reinforced in Point 6, which stresses decentralisation, subsidiarity,
and the need for flexibility. However, in many regions there is
little sign of a 'bottom up' approach or of public participation
in development planning and processes, despite the rhetoric. Moreover,
Administrative Regions, which we must assume for the present to
be the level with which the European Commission will direct the
new policies, are usually too large to make bottom up participatory
approaches feasible. Most likely, 'bottom up' will be a philosophy
or approach to development on the one hand, and a set of eligible
measures (on the LEADER model) on the other.
For most nations and regions in Europe integrated, local, bottom
up, development is a new paradigm, representing a complete change
from previously centralised and 'top down' structures. It requires
more accountability and transparency at local levels than is usually
evident, and different forms and styles of support. Awkward questions
arise about relationships between local development bodies and
democratic institutions and processes. These issues need to be
tackled, if serious imbalances in the IRD planning and implementation
processes are to be avoided.
It was proposed that rural development policy should apply 'to
all areas', and not simply those designated as priorities under
the structural funds. In other words it is in one sense at least
to be a 'horizontal' policy. At the same time, it must respect
the principles of 'cohesion', and therefore be 'modulated' according
to some system of prioritisation, as is the case with Objective
1 and 5b at present. This will involve either the use of a simple
criteria like GDP per head, or it will involve the classification
of rural areas according to some assessment of needs, in order
to decide the various degrees of priority attached to different
rural areas. The vaguer and more complex the criteria, the more
scope there will be for horse-trading. While the horizontal element
may give some assurance to farmers that reductions in CAP support
would be 'compensated' by new rural policies, those in richer
regions may doubt whether there will be a 'juste retour' in monetary
terms.
The UK receives substantial support from CAP spending. For example,
in Scotland about 80% of all EU funds coming to rural areas comes
through the CAP. Therefore, the issue of whether any savings in
the CAP come back to the UK rural areas is important, and so therefore
is the question of how rural areas will be prioritized for rural
development spending. the switch from CAP to rural development
also raises issues of matching funding.
Sustainable development is mentioned in several places, and we must assume that it refers generally to the references made to this in the Treaty of Union, which use a Brundtland type definition and make it an objective of all EU policies. The declaration states that policies should promote rural development which 'sustains the quality and amenity of Europe's natural resources, biodiversity and cultural identity so that their use by today's generation does not prejudice the options for future generations.'
The stress placed on the need for 'self-sustaining' private and
public initiatives, which may reflect a concern in some quarters
that some initiatives funded by the Structural Fund programmes,
and perhaps also LEADER, have not been viable following the ending
of public support, or have had recurrent expenditure implications
which are not sustainable in the longer term, especially in an
era of fiscal austerity.
The actual outcomes from Cork and the Structural Policy debate
are not yet known. There has been little enthusiasm in the Agricultural
Council or amongst lobby groups for the kind of CAP reform being
suggested by Fischler and others at, and prior to, Cork. Yet at
the same time, this is hardly surprising in terms of public rhetoric.
In private, at least some members of administrations and lobbies
are more realistic about the need for such reform in the light
of the very probable US and Cairns Group position at the next
WTO trade talks starting in 1999 (Europe will be isolated on Agricultural
Protection). However, as leaked this week in the press, a McSharry
II type reform will be announced next week as part of the Agenda
2000 framework document, and this will mainly involve cuts in
support prices for cereals, beef and milk, with additional compensation
through direct payments. This will probably be an interim reform,
an opening shot for the Trade Talks starting in 1999. It may not
even mention rural development. It will not in my opinion go far
enough for Europe's trading partners, to meet the needs of future
enlargement, or indeed for internal opponents of the CAP.
Equally, there has been little enthusiasm for the Cork agenda
within the Commission - DG-16 has argued strongly against the
idea of a horizontal rural policy and in favour of greater targeting
of the structural funds on priority rural and urban regions. At
the EU level, perhaps the most likely scenarios for the outcome
of the Cork and Structural Funds debates after 1999 are, at present:-
At the EU level, the most likely scenario for the outcome of the
Cork and Structural Funds debates after 1999 is, at present:-
The actual outcome depends to a very large extent on the internal
battles currently being fought between the Directorate-General
for Agriculture and Rural Development (DG-VI) and that for Regional
and Cohesion Policy (DG-XVI) which largely concern internal power
structures and the need to prepare the farming lobbies, and richer
agricultural areas, for further CAP reform than with their respective
merits. The Cork principles and declaration pointed to a far more
integrated rural development policy and programme. What we are
likely to get falls far short of that vision.
Other critical areas of policy include
governance (democracy, legitimacy, transparency, partnerships,
co-ordination and integration, localisation or decentralisation)
physical planning, social welfare, transport, telecommunications,
and environment (e.g. carbon taxes).
Rural areas are largely being shaped by forces which are beyond
their direct control - especially globalisation, restructuring,
the new urban consumption demands on the countryside, the sustainability
ethic, and policy changes which are often related to these forces.
This causes us to focus hard on how different rural areas can
respond most effectively - to take advantage of new opportunities,
and to ward off threats. Some critical issues in this response
are:
* the need to find better ways of developing a vision for rural
areas - what do rural people and urban people want them to be
like in the medium and long terms future? This is linked to..
* the need to develop a new planning paradigm, which moves to positive and integrated or holistic strategic planning of localities and regions, and away from the narrow confines of physical planning as we have known it in most of the the post-war period. It must reflect the sustainability agenda, and embrace economic, social and environmental dimensions, objetcives, goals, criteria, indicators and measures.
* the need to develop a new support framework which radically
reduces the number of separate schemes, funding mechansisms etc
(which mean confusion, overlap, heavy administrative costs, low
effectiveness, difficulties of integration, lack of flexibility),
preferably into a 'single pipe' of resources. This support framework
should draw together all forms of support for investment in human,
social, environmental and economic capital. It should form the
'contract; between Brussels and national governments on the one
hand, and with locales and regions on the other.
This agenda is unlikely to be realised just yet, but it is likely
to remain a powerful one for further ahead.
This is really an addendum to my powys paper (posted on
the arkleton and ark-group lists on tuesday) now that the
final Agenda 2000 report has been published.
As expected, there is a McSharry II type reform proposed
- with price cuts for cereals beef and (less so) milk.
However farmers will get income support to compensate
(note the subtle change in language from 'compensation
payments' to income support which is important for the
modulation issue). Income support will be capped per farm
- this is 'modulation' which has been mooted for some
time, and will obviously reduce the amount of income
support given to very large farmers in output terms. In
addition there is a suggestion that cross-compliance may
be introduced in relation to income support - farmers
will have to comply with environmetnal standards to get
the cash.
CAP will fund a beefed up agro-environment type scheme,
and (in addition, I presume) a 'low input farming' scheme
in mountain and less favoured areas (combining HLCAs and
ESA type measures in one scheme.
There is also ref to CAP funding for rural development,
but the catches here are (a) it refers to 'at the member
State's request' (b) it relates to items previously
funded by EAGGF - which have been for direct or indirect
benefit to farmers, and which may be narrowly
interpreted. It is definitely NOT the Cork vision of
integrated, bottom up development for ALL rural areas,
but something more restricted than that, and with very
meagre financial resources.
In fact the CAP reform will ADD to CAP spending, not
reduce it, despite all the howls from farmers lobbies.
And the vast majority of this spending will still be
directed at farmers, and not the rural community at
large. This is a missed opportunity.
Moreover, what is proposed will obviously not satisfy our
GATT partners - the CAP reform, sooner or later, will
have to get deeper. Wheather it meets the requirements of
enlargement is also doubtful. For most rural families in
the countries expected to negotiate membership over the
next few years (Poland, Hungary, Czech Rep, Slovenia,
Estonia, Cyprus) the most important issue will be new
non-agrixcultural employment opportunities in the rural
areas - since most of them will not continue in farming
under a CAP type regime, and nearly all need
supplementary incomes. If non-farming rural employment
and incomes can be improved, then structural change will
follow, and incomes will allow investment for those who
wish to mechanise etc. We have to get away from the fix
we are in with the CAP, and the idea that it is 'good'
for farmers and (even more absurd) good for rural
communities.
All that said, for those lucky enough to be in the new
Objective 1 and 2 regions, programmes will thankfully be
better integrated by the looks of things - i.e. human
resource and agricultural/fisheries structural measures
will be joined with regional development & infrastructure
measures in a single regional programme. This is more
like the Cork vision. Unfortunately, there will be fewer
such regions after a transition period, especially in the
richer countries. Objective 1 eligibility criteria are to
be 'strictly adhered to' - at income per head of 'less
than' 75% of EU average. This will rule out at least part
of the Highlands and islands (but note the new amended
Article 130a of the Treaty after Amsterdam which makes
'reducing disparities between levels of development of
the various regions and the backwardness of the least
favoured regions or islands, including rural areas' an
aim of the Community). Clearly, parts of the Highlands
and Islands (including the Western Isles) are likely to
satisfy the criteria. Others - currently with Objective
5b status, are likely to be unable to satisfy the
criteria for Objective 2 status, and will thus be
ineligible for structural funds (expect the new Objective
3 and the un-integrated items mentioned above under CAP)
after the transition period.
In general, it should be noted that by 2006 as much as
one-third of structural fund spending will be in the new
accession member States and eligible areas in existing
member States will have shrunk from over 50% of the EU
population to less than 40%.
There is still a good deal to play for though - these are
but framework proposals, and details will come out later.
The structural fund proposals will be elaborated early
1998, and we may see a rural development COM-doc soon
giving more details of the proposed horizontal measure.
----------------------
john bryden
geo339@abdn.ac.uk