Identification of the critical socio-economic problems facing rural CEEC – and policy proposals
IDARA Working Paper
(Deliverable 10, Workpackage 3)
(June 2002)
National University of Ireland, Galway
VUZE Research Institute of Agricultural Economics
University of Budapest
University of Warsaw
Quality of Life and Management of Living Resources (QLRT-1999-1526)
Key Action 5 - Sustainable Agriculture, Fisheries and Forestry,
and Integrated Development of Rural Areas Including Mountain Areas
1
IDARA D10
1. Introduction 4
2. Rural Development Policy 4
2.1 What is Rural Development Policy? 4
2.1.1 What is rural, the rural region? 4
2.1.2 Why Rural development? 6
2.2 Rural Development Policy in Practice – some examples 8
2.2.1 Rural Development Policy in Europe 8
2.2.2 European Union Rural Development Policy 10
2.2.3 US Rural Development Policy 11
2.2.5 Conclusion 12
3. Rural Development in the CEECs 13
3.1 Czech Republic Rural Development Policy 13
3.1.1 Evolution of Rural Development Policy in the Czech Republic 13
3.1.2 Aim of rural development policy in the Czech Republic 13
3.1.2 Previous Rural Development Policy 14
Table 3.1(a) Czech Rural Renewal Programme 15
3.1.3 SAPARD and proposed future Rural Development Policy in the Czech Republic 16
3.1.4 Institutional Structures for Rural Development Policy in the Czech Republic 18
3.2 Czech Republic Regional SWOT analysis 20
3.2.1 Summary Profile of Trebic Region 20
3.2.2 SWOT Analysis and Priorities of Trebic Region 21
3.2.3 Summary Profile of Znojmo Region 22
3.2.4 SWOT Analysis and Priorities of Znojmo Region 22
3.2.7 Results of the Czech Republic Case-studies 26
Table 3.2(a) Czech Republic Regional and National Rural Priorities and Rural Policy 27
3.3 Suggested Policy Actions for the Czech Republic 28
3.4 Hungarian Rural Development Policy 29
3.4.1 Evolution of Rural Development Policy in Hungary 29
3.4.2 Aim of rural development policy in Hungary 30
3.4.3 Previous and Future Rural Development Policy in Hungary 31
3.4.4 SAPARD and proposed future Rural Development Policy in Hungary 32
3.4.5 Hungarian Rural Policy Institutional Implementation Structure 35
3.5 Hungarian Regional SWOT analysis 37
3.5.1 Summary Profile of Kunszentmiklós Region 38
3.5.3 Summary Profile of Tapolca Sub-region 41
3.5.4 SWOT Analysis and Priorities for Tapolca Region 42
3.5.5 Summary Profile of Nyírbátor sub-region 43
3.5.6 SWOT Analysis and Priorities Subregion Nyírbátor 43
3.6 Suggested Policy Actions for Hungary 49
3.7 Polish Rural Development Policy 51
3.7.1 Evolution of rural development policy in Poland 51
3.7.2 Aim of rural development policy in Poland 51
3.7.5 SAPARD and proposed future Rural Development Policy in Poland 52
National Rural Development Policy 52
Table 3.7(a) Polish SAPARD Programme 2000-2006 53
3.7.6 Polish Rural Policy Institutional Implementation Structure - Poland 54
Central Government 54
3.8 Polish Regional SWOT Analysis 56
3.8.4 SWOT Analysis and Priorities for Klodzko County 59
3.8.5 Regional Profile of Dolina Strugu 59
3.8.6 SWOT Analysis and Priorities for Dolina Strugu 60
3.8 Results of the Polish Case-studies 61
Table 3.8(a) Regional and National Rural Priorities and Rural Policy 63
3.3 Suggested Policy Actions for Poland 63
Bibliography 65
1. Introduction
Rural development is recognised as an essential component of sustainable growth throughout the world, and in the EU in particular. For example, successive policies within the framework of CAP have focused on sustaining socio-economic wellbeing in rural communities. This paper examines the existing rural situation in the candidate countries and makes an initial step in proposing some policy areas to help address ‘rural problems’ that exist there. A necessary first step is an examination of existing rural development policy, and indeed of the concepts surrounding this whole area. Therefore, the concepts of rurality, of classifying rural areas and the motivation for rural development policy are explored in sequence. A brief overview of rural development practice in Europe, in the EU and in the US is presented. Finally the analysis of the selected rural regions are presented, and the existing rural policy systems in each state outlined. The final section proposes broad rural policy areas[1].
2. Rural Development Policy
2.1 What is Rural Development Policy?
2.1.1 What is rural, the rural region?[2]
Before any discussion of rural development policy can begin a number of fundamental concepts must be defined. However, this is not an easy task, as the definition of the core concept, i.e. rurality, proves an extremely elusive task. The easiest option is to identify ‘rural space’ as ‘non-urban space’. However, this may fail to take into consideration the vast complexity that is ‘rural’, and that makes ‘rural’. Some view rural as a spatial concept, as a place; while others see it as the people in the place and the ‘rural’ nature of the relations and interactions of these people.
For policy purposes rural is usually conceived as a territorial or spatial concept. For example, rural areas may be defined as compromising the people, land and other resources, in the open country and small settlements outside the immediate economic influence of major urban centres. It is not restricted to any particular use of land, degree of economic health or economic sector.
The OECD developed a simple definition of rural areas for the purpose of making international comparisons of rural conditions and trends((EC), European Commission 1997). The definition distinguishes two hierarchical levels of territorial unit: local and regional. At local community level (NUTS 5), the OECD identifies rural areas as communities with a population density below 150 inhabitants per square kilometre. At regional level (mainly NUTS 3), the OECD distinguishes larger functional or administrative units by their degree of rurality, depending on what share of the region’s population lives in rural communities. To facilitate analysis, regions are then grouped into three types:
· predominantly rural regions: over 50% of the population living in rural communities;
· significantly rural regions: 15 to 50% of the population living in rural communities;
· predominantly urban regions: less than 15% of the population living in rural communities (((EC), European Commission 1997).
The Eurostat classification is based on the degree of urbanisation. An algorithm was developed to classify every European region according to one of three classes (EC, 1997):
- Densely populated zones: these are groups of contiguous municipalities, each with a population density superior to 500 inhabitants/km2, and a total population for the zone of at least 50,000 inhabitants.
- Intermediate zones: these are groups of municipalities, each with a density superior to 100 inhabitants/km2, not belonging to a densely populated zone. The zone’s total population must be at least 50,000 inhabitants, or it must be adjacent to a densely populated zone.
- Sparsely populated zones: these are groups of municipalities not classified as either densely populated or intermediate.
A municipality or a continuous group of municipalities not reaching the required density level, but fully contained in a densely populated or intermediate zone, is considered to be part of that zone. If located between a densely populated and an intermediate zone, it is considered to be intermediate. For this to apply, the group of municipalities concerned must have an area of less than 100 km2 ((EC), European Commission 1997)
Also, according to their degree of integration with the national economy, rural areas can further be distinguished as:
- integrated rural areas, with a growing population, an employment basis in the secondary and tertiary sectors, but with farming still being a key use of land. Facing potential threats to their environmental, social and cultural heritage, some of these areas, relatively close to big cities, risk becoming dwelling areas only and not working areas ("rurbanization"); others are developing in their own right;
- intermediate rural areas, relatively distant from urban centres, with a varying mix of primary and secondary sectors; in many countries, larger scale farming operations are found in these areas;
- remote rural areas, with the lowest population densities, often the lowest incomes, and an older population which depends heavily on agricultural employment. These areas generally provide the least adequate basic services; isolating features are often topographic characteristics, like mountains, or their remoteness from transport networks ((EC), European Commission 1997).
These methods are of course about generalising and as Jouen (2001) points out not always satisfactory:
“However appealing and simple it may seem, defining three types of rural areas - urban-centred, dynamic and productive, declining and isolated - on the basis of population density and the economic dynamic rarely coincides with the regional strategies implemented. Except for some very typical regions, like the Arctic regions or the Belgian provinces, this grading can rarely be used to identify all the problems and opportunities.”(Jouen, Marjorie 2001)
However, notwithstanding the difficulties of the foregoing definitions, rural development policy necessitates identification of rural areas, and, despite theoretical problems, the definitions mentioned here are commonly applied.
2.1.2 Why Rural development?
Rural development policy grew out of the recognition of the ‘rural problems’ modern rural areas were experiencing, and the desire to alleviate these problems. Rural ‘problem’ areas are broadly characterised by low population density, low income levels, ageing population, dependency on agriculture, poor service provision, etc. There has always existed an urban-rural gap, however, labour-displacing productivity growth in primary sectors, along with higher rates of growth in competitive urban-centred sectors, have widened the historic urban-rural gap. The OECD (1993) states that the aim of rural development policy is to address this gap and it’s associated problems.
Parker (1995) further elaborates on the nature of the ‘rural problem’. He recognises that the spatial dispersion of people living in rural areas increases the cost and difficulty of providing rural goods and services effectively. Moreover, specific economic conditions in rural areas also result in fewer development opportunities being available than in non-rural locations. Agriculture is generally the most important economic sector, making rural areas highly dependent on the performance of a single sector, where investments are risky. In addition, the tax base is limited, resulting in rural areas often being unable to mobilise sufficient resources to finance their own Rural Development programmes. Lastly, rural areas are often politically marginalised, leaving little opportunity for the rural poor to influence government policies. The impact of this combination of geographic, economic and political factors is a high incidence of poverty and a low level of development. (Parker, Andrew N. 1995)
· Present Rural Development Policy and Emerging Trends
Shepherd (1998) defines rural development as the set of activities and actions of diverse actors – individuals, organisations, groups – which taken together leads to progress in rural areas. Progress is defined differently by different people: historically, material progress – growth of incomes and wealth, poverty alleviation – has been the main consideration in development theory and practice. Today other indicators of progress – cultural, spiritual, ethical - are increasingly taking their place beside the material in a reformulated, more holistic concept of development. (Shepherd, Andrew 1998)
Within most modern rural development policy the following aims/goals can be identified:
· enhancement of the competitiveness of rural regions so that they can contribute appropriately to achieving national economic development goals,
· provision of opportunities to rural citizens to share a standard of living generally comparable to national norms, and
· identification, development and/or protection of key national elements of the built environment in rural areas, especially where it can not be reasonably expected that private market transaction alone will secure a future socially optimal level. (OECD 1993)
A number of recent trends in the rural development arena in particular can be identified. These include:
· a shift from sectoral to territorial based policy (EC 1999(a))
· a recognition that there are different types of rural, and therefore must be different types of rural development policies (EC 1999(a))
· a shift from an approach based on subsidising declining sectors to one based on strategic investments to develop new activities (Pezzini, Mario 2000)
· a recognition that rural development policy is more than agricultural policy (Sears, David W. 2000)
· a move towards more bottom-up and participative policy involving public, private and voluntary sectors (Pezzini, Mario 2000)
· an emphasis on innovation as an essential ingredient for success, e.g the LEADER Community Initiative
· a recognition for the need for an integrated approach (EC 1999(a))
· a focus on local specifities as a means of generating new competitive advantage (Pezzini, Mario 2000)
Shepherd (1998) highlights the necessity of the need for an integrated approach.
“In rural areas….what is required is local institutional development, including the development of market institutions and enterprises, but also infrastructure, services and governance. Without strong civic associations and local organisations the world’s powerful economic corporations will ride roughshod over local interests. The state should have a strong role in protecting and promoting organisations of civil society”.
Jouen (2001) believes that, as is the case for the other economic development policies, there are two roughly opposing visions for the future of rural areas. The first view is that the rural world has the autonomous capacity to revive itself. This view often coincides with a more inward- looking strategy centred on the quality of life and training of the local people, the mobilisation of local players, the creation of jobs for the unemployed. The second view is more outward looking and tends to focus on importing modernity, although mobilising the local community and rural players is still considered important. It takes the form of economic development programmes for tertiary activities (tourism, cultural heritage, information technologies) or primary activities (agriculture, food industry, fisheries), the marketing and improved quality of agricultural products and crafts.
These differences and the type of policies chosen in the future will naturally reflect different state’s/region's cultural and social context. Indeed while almost all rural areas are experiencing ageing populations, the problems differ according to the exact makeup of the population: sometimes farmers engage in more than one activity like in Austria and Luxembourg; or they are highly trained professionals like in Denmark, Belgium, Picardy and Alsace; however, this category of the population may be particularly disadvantaged like in Alentejo (Portugal), Galicia (Spain), Apulia (Italy) or Epirus (Greece). (Jouen, Marjorie 2001)