3. Rural Development and the 2020 Reform Process

2.49 The latest reform to the CAP provisions on rural development, agreed as part of the Europe 2020 reform process, are focused on a further refinement of the targeting of rural development programmes, and improving their integration with other instruments within both the CAP itself and other areas of EU law, including environmental regulation.

2.50 The objectives for rural development measures, within this broader context, are set out in article 4 of the 2013 Regulation. These are:

(a)fostering the competitiveness of agriculture, to assure ‘viable food production’.¹¹⁰

(b)ensuring the sustainable management of natural resources, and climate action. It might be noted that this encapsulates what are in effect two separate objectives – climate adaptation measures, and alongside this natural resource protection (which may not of itself contribute to climate adaptation policy), and

(c)achieving a balanced territorial development of rural economies and communities, including the creation and maintenance of employment.

2.51 The objectives are fleshed out in further detail in six specific priorities to be pursued in measures adopted in rural development plans.¹¹¹ These include fostering knowledge transfer and innovation in farming forestry and rural areas, and strengthening the links between agriculture food production and research and innovation; enhancing farm viability and competitiveness; promoting food chain organization, including food processing, animal welfare and risk management in agriculture; restoring preserving and enhancing ecosystems;¹¹² promoting ‘resource efficiency’ and supporting a shift towards a low carbon and climate resilient economy in agriculture; and (finally) promoting social inclusion, poverty restriction and rural economic development. The latter objective is expressed as including policies facilitating diversification, the creation and support of small enterprises and job creation, and fostering information and communication technologies in rural areas.¹¹³

2.52 The principal changes introduced in the 2013 Rural Development Regulation are both structural and thematic. In the first place, there is a greater focus in the 2013 Regulation on promoting knowledge transfer and innovation, and measures for climate change mitigation and adaptation and protection of the environment. This strengthened focus on climate change and the environment is accompanied by a change in the organisational structure of the rural development funds and of their targeting. The 2013 Regulation has removed the organization of the rural development measures around ‘axes’ in order to introduce greater flexibility into the programme, and has also consolidated many of the measures also covered by the prior 2005 Regulation into a smaller number of broader policy objectives that rural development measures can be used to address. There is also a focus on improving the effectiveness and cohesion of rural development policy. The European Commission proposals on which the 2013 Regulation was based focused on three key changes of emphasis:¹¹⁴ introducing more effective delivery mechanisms, strengthening the coherence between rural development policy and other EU policies, and improving risk management.

2.53 The emphasis on quantified targets and an outcome-focused approach can be seen in the requirements to be included in member’s states rural development plans.¹¹⁵ These include ‘appropriate targets’ for each of the focus areas of the union priorities (above) for rural development included in the programme, and the inclusion of common indicators to measure the financial execution, outputs and impact of the programme.¹¹⁶ The Commission is to develop a common monitoring and evaluation system in consultation with the member states in order to demonstrate the progress and achievements of rural development policy, to improve the targeting of support for rural development and to support a common learning process for monitoring and evaluating the impact of rural development funding.¹¹⁷ The Commission will also enter into a partnership agreement with each member state highlighting its broad strategy for the use of EU funded strategic rural development investment.

2.54 It is envisaged that there will eventually be 118 rural development plans in total across the twenty-eight member states. The EAFRD budget for rural development funding under the plans has been set at 99.6 billion Euros for 2014–2020. The rural development plans for the UK were approved in February 2015, with allocated EU funding of 3,470.7 million Euros, 3.56% of the total EAFRD expenditure from 2014–2020.¹¹⁸ The agri-environment programmes contained in the rural development plans for England and Wales, will be considered in more detail in Chapter 13 below.

1Wildlife and Countryside Act 1981, s 28, as amended by Sch 9 of the Countryside and Rights of Way Act 2000.

2See Chapter 13, paras 13.11 ff below.

3See Environmental Protection Act 1990, ss 131–134, Natural Environment and Rural Communities Act 2006, ss 1 and 2, Sch 1 (as to powers and constitution of Natural England). See further Chapter 13 below.

4As to which see the Natural Environment and Rural Communities Act 2006, ss 31–39 and Sch 4.

5Agriculture Act 1986, s 18(1).

6as to which see Chapter 13, paras 13.112 ff below.

7Wildlife and Countryside Act 1981, s 39.

8Permitted development rights are, for example, restricted in National Parks: see Chapter 12, para 12.55 below.

9See Chapter 12, para 12.14 ff below.

10Countryside and Rights of way Act 2000, s 74.

11It was published as Annex C to DEFRA Circular 01/2005 / ODPM Circular 06/2005: Biodiversity and Geological Conservation – Statutory Obligations and their Impact Within the Planning System.

12National Planning Policy Framework (Department for Communities and Local Government, 2012) paras 109–125. And see DEFA Circular 01/2005 / ODPM Circular 06/2005 ibid, paras 84–86.

13Conservation of Habitats and Species Regulations 2010, SI 2010/490, reg 39.

14SI 2015/596, Sch 2, Pt 6.

15See Chapter 12, paras 12.49 et seq below.

16Directive 2011/92/EU of the Council and the European Parliament on the assessment of the effects of certain private and public projects on the environment, [2011] OJ L26/1. The 2011 Directive consolidated amendments to the original EIA Directive (Council Directive 85/337/EEC, [1985] OJ L175/40) and made by: Directive 97/11/EC, [1997] OJ L73/5; Directive 2003/35/EC, [2003] OJ L156/17; and Directive 2009/31/EC, [2009] OJ L140/114. The Directive has most recently been amended by Directive 2014/52/EU of the European Parliament and of the Council, [2014] OJ L 124/1. The 2011 consolidated text of the EIA Directive (as amended by Directive 2014/52/EU) will be referred to hereafter in this work as ‘the EIA Directive’.

17The Town and Country Planning (Environmental Impact Assessment) Regulations 2011, SI 2011/1824: and see DETR Circular 02/1999, ‘Environmental Impact Assessment’. The Regulations currently in force in Scotland are the Town and Country Planning (Environmental Impact Assessment) (Scotland) Regulations 2011, SSI 2011/139.

18DETR Circular 02/1999 Environmental Impact Assessment; now Planning Practice Guidance Environmental Impact Assessment (2015) available at http://planningguidance.communities.gov.uk.

19See further Chapter 12, para 12.33 below.

20Environmental Impact Assessment (Agriculture) (England) (No 2) Regulations 2006, SI 2006/2522. These replaced the Environmental Impact Assessment (Uncultivated Land and Semi Natural Areas) (England) Regulations 2001, SI 2001/3966. The 2001 regulations had failed to fully implement the Directives requirements, having omitted the restructuring of rural land holdings from EIA. This omission was rectified in the 2006 regulations.

21See further Chapter 12, para 12.159 ff below.

22See Articles 38–44 of the TFEU as renumbered following the entry into force of the Treaty of Lisbon. A detailed consideration of the law of the common agricultural policy is beyond the scope of this work. See further M.N.Cardwell, The European Model of Agriculture (OUP Oxford, 2004) and J.A.Usher, EC Agricultural Law (2nd ed. OUP Oxford, 2001).

23These are the EAGF and EAFRD constituted under Regulation (EU) 1306/2013, OJ L 347/487.

24As to which see below, para 15.05.

25Council Directive 91/676/EEC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources (the ‘Nitrates Directive’), [1991] OJ L375/1.

26Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (the ‘Habitats Directive’), [1992] OJ L 206/7.

27There are a number of texts dealing with the economics of CAP reform and 1992. Particularly to be recommended is Neville, W and Mordaunt, F ‘A Guide to the Reformed Common Agricultural Policy’ (Estates gazette, 1993), which deals with both legal and economic aspects of CAP reform in a clear and comprehensive manner.

28Council Regulation 2078/92, [1992] OJ L215/85.

29See para 13.01 ff below.

30It was envisaged that the main effect of the Mid-term Review would be upon the milk quota system (on the basis that a decision would be taken to end milk quotas by 2006). Yet, in the event, the milk quota system was one of the few areas of the Common Agricultural Policy that remained relatively undisturbed (milk quotas surviving until at least 31 March 2015): Council Regulation 1788/2003, OJ 2003 L 270/123, Art 1.

31Council Regulation 1782/2003, OJ 2003 L 270/1 (‘2003 Horizontal Regulation’), Art 1.

32Now Art 39 of the TFEU, discussed above.

33On the 1992 MacSharry reforms, generally, see, eg, N Neville and F Mordaunt, A Guide to the Reformed Common Agricultural Policy (London: Estates Gazette, 1993), passim; A Swinbank, ‘The New CAP’, in C Ritson and DR Harvey (eds.), The Common Agricultural Policy (2nd ed., Wallingford: CAB International, 1997), 95; and R Ackrill, The Common Agricultural Policy (Sheffield: Sheffield Academic Press, 2000), 92–107.

34European Commission, Agenda 2000: For a Stronger and Wider Union, Bulletin of the European Union, Supplement 5/97, COM(97)2000, Part One, I.4.

35The Development and Future of the CAP, COM(91)100, 8.

36A consideration of the impact of the WTO negotiations on the Agenda 200 reforms, and the potential compatibility of the CAP measures with WTO disciplines, is beyond the scope of this work. For further discussion see inter alia: M.Cardwell and C.Rodgers, ‘Reforming the WTO Legal Order for Agricultural Trade: Issues for European Rural Policy in the Doha Round’ (2006) 55 International and Comparative Law Quarterly 805–838; J.Rude, Under the Green Box (2001) 35 Journal of World Trade 1015; A. Swinbank and R.Tranter, ‘Decoupling EU Farm Support: Does the New Single Payment Scheme Fit within the Green Box?’(2005) 6 Estey Centre Journal of International Law and Trade Policy 47.

37See, generally, eg, J Moody and W Neville, Mid Term Review: a Practical Guide (Bristol: Burges Salmon, 2004), 32–165.

38OECD, Decoupling: a Conceptual Overview (Paris: OECD, 2001), 8. See also, eg, MR Grossman, ‘Multifunctionality and Non-trade Concerns’, in M Cardwell, MR Grossman and CP Rodgers (eds.), Agriculture and International Trade: Law, Policy and the WTO (Wallingford: CAB International, 2003), 85.

39OECD, Decoupling: a Conceptual Overview (Paris: OECD, 2001), 5.

40Ibid, 9. Express reliance was placed on definitions of decoupling developed in SA Cahill, ‘Calculating the Rate of Decoupling for Crops under CAP/Oilseeds Reform’ (1997) 48 Journal of Agricultural Economics 349.

41For the support schemes comprised within the SFP, see the 2003 Horizontal Regulation, OJ 2003 L 270/1, Annex I.

42Article 43.1 ibid.

43Article 37.1 ibid.

44Articles 58 and 59 ibid.

45See the Common Agricultural Policy Single Payment and Support Schemes Regulations 2005, SI 2005/219, Sch 1 (the regional element rising from 10% in 2005 to 100% in 2012 and the historic element falling correspondingly).

46See Arts 59.2 and (for the definition of eligible hectares) Art 44.2 ibid.

472003 Horizontal Regulation, OJ 2003 L 270/1, Arts 72–78.

48Ibid, Art 71. Greece, Finland, France, the Netherlands and Spain have taken advantage of this derogation.

492003 Horizontal Regulation, OJ 2003 L 270/1, Arts 66–67.

50Ibid, Annex VI, as amended by Commission Regulation 118/2005, OJ 2005 L 24/15. For the Scottish Beef Calf Scheme, see the Common Agricultural Policy Single Farm Payment and Support Schemes (Scotland) Regulations 2005, SI 2005 No 143, Regs 16–25.

51See Chapter 15 of the second edition of this work, for example.

52European Commission, COM(2002)394, 21.

532003 Horizontal Regulation, OJ 2003 L 270/1, Art 63(2).

54The calculations are labyrinthine. The set-aside rate is less than the original 10% applied from 2000 because the new scheme covers a larger area of each holding: instead of just applying to arable land the set aside scheme now applies to land used for all purposes other than permanent pasture (it could include, for instance, fodder crops and temporary grass). The percentage of the total eligible area of a holding to which the set-aside rate applies is, therefore, greater. The intention is to arrive at a similar area of arable land set aside in any one year, defined on a regional basis, by scaling down the total set-aside requirement proportionately.

552003 Horizontal Regulation, OJ 2003 L 270/1, Art 56(1).

56Under the CAP ‘Health Check’: Regulation (EC) 73/2009, Recital (3).

57Ibid, Art 4 and Annex I. These statutory management requirements are to be introduced in three tranches over the period 1 January 2005 to 1 January 2007.

58Ibid, Art 5 and Annex IV. For the implementing legislation in England see: The Common Agricultural Policy Single Payment and Support Schemes Regulations 2005 SI 2005/219; The Common Agricultural Policy Single Payment and Support Schemes (Appeals) (England) Regulations 2004 SI 2004/2689; The Common Agricultural Policy Single Payment and Support Schemes (Cross Compliance) (England) Regulations 2005 SI 2005/3459; and the Common Agricultural Policy Single Payment and Support Schemes (Integrated Administration and Control System) Regulations 2005, SI 2005/218.

59European Commission, Europe 2020: a strategy for smart sustainable and inclusive growth, COM (2010) 202 Final (3 March 2010).

60EU Commission, The CAP Towards 2020: meeting the Food, Natural Resources and Territorial Challenges of the Future, Communication of the Commission to the European Parliament, the Council, European Economic and Social Committee and the Committee of the Regions, COM (2010) 672 Final.

61See COM (2010) 672 Final at 8–9.

62Regulation (EU) 1307/2013 of the European Parliament and of the Council of 17 December 2013 OJ L347/608 (20.12.2013).

63Regulation (EU) 1305/2013 of the European Parliament and of the Council of 17 December 2013, OJ L 347/487 (20.12.2013).

64Regulation (EU)1306/2013 of the European Parliament and of the Council of 17 December 2013, OJ L 347/487 (20.12.2013).

65See Title VI of Reg (EU) 1306/2013 (the ‘horizontal regulation’), and in particular Article 93. Annex I sets out the SMRs and GAECs in more detail.

66Article 94 ibid.

67Articles 97 and 99 ibid. The cross compliance obligations also now apply to many rural development schemes (see Art 92 ibid).

68Article 99 ibid.

69Article 100 ibid.

70Now Regulation (EU) 1305/2013 on support for rural development, [2013] OJ L 347, 20.12.2013, p 487 see para 2.49 ff below.

71Regulation (EU) 1305/2013, Art 28.3.

72See, eg, House of Commons Environment, Food and Rural Affairs Committee, The Mid-term Review of the Common Agricultural Policy, Third Report of Session 2002–03, HC 151, paras 52, 76 et seq.

73Reg (EU) 1306/2013, Art 99.

74European Commission, Indicators for the Integration of Environmental Concerns into the Common Agricultural Policy, COM (2000) 20 final, esp. at 10 ff.

75European Commission, Towards Sustainability: A European Community programme of policy and action in relation to the environment and sustainable development (1993) O.J. C 138/5, esp. at C138/38.

76Decision 1600/2002 of the European Parliament and of the Council, Our Environment Our Choice [2002] O.J. L242/1.

77See Title V of Council Regulation (EC) 797/85, 1985 OJ L93/1.

78The accompanying measures to the 1992 reform included: Council Regulation (EC) 2078/92, OJ L215/85 (the ‘Agri Environment Regulation’), Council Regulation (EC) 2079/92, OJ L215/91 (on early retirement from farming), and Council Regulation (EC) 2080/92, OJ L215/96 (instituting a Community aid scheme for forestry measures in agriculture).

79Council Regulation (EC) 2078/92, OJ L215/85.

80See generally Commission of the European Community, Agenda 2000: For a Wider and Stronger Union, COM (97) 2000 final.

81See further: European Commission, Bulletin of the European Union, 3-1999. And for a wide-ranging account of the outcome of the Berlin Summit see M.Cardwell, The European Model of Agriculture (Oxford University Press 2004) at pp 112–130.

82Above para 2.16 ff.

83Council Regulation (EC) 1257/99, [1999] OJ L160/80.

84See Art 2 of the Council Regulation (EC) 1257/99. The measures for which support could be made available within rural development plans also included: investment in agricultural holdings; establishing young farmers; training; early retirement; less favoured areas; improving processing and marketing of agricultural products; forestry; and promoting the development of rural areas.

85European Commission, Agenda 2000: Reform of the Common Agricultural Policy available at: www.europa.eu.int/scadplus/leg/en/lvb/160002.htm.

86Between 2000 and 2006 rural development expenditure was budgeted to run annually at between 4300 million and 4370 million Euros. In the same period, however, total annual CAP expenditure was budgeted to be between 40920 million Euros (in 2000 itself) and a maximum of 43900 million Euros (in 2002).

87For detailed discussion of these see Chapter 13 below.

88Council Regulation (EC) 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development, 2005 OJ L277/1.

89Council Regulation (EC) 1698/2005, Preamble, Recital 11.

90Ie the management of European wildlife sites designated for protection under Directive 92/43/EC [1992] OJ L206/7 (the Habitats Directive). And see Chapter 13 below for the implementation of the Directive in English Law and its impact on agricultural land management.

91Ibid, Recital 31. ‘Support for specific methods of land management should contribute to sustainable development by encouraging farmers and forest holders in particular to employ methods of land use compatible with the need to preserve the natural environment and landscape and protect and improve natural resources’.

92Ibid, Recital 35.

93Ibid, Recital 35 and Art 39.3. For cross compliance rules at that time see Council Reg (EC) 1782/2003,[2003] OJ L270/1, Arts 4 and 5, and Annexes I and IV.

94Article 28.3 of Regulation 1305/2013.

95European Commission, Directions Towards Sustainable Agriculture (1999), COM (1999) 22 final [1999] OJ C 173/2 at 17. The difficulty here, of course, is in establishing the ‘bright line’ distinction between polluter pays and ‘provider gets’, represented by the norm of good agricultural practice – a mutable and imprecise standard at best: see further Rodgers, C.P., ‘Environmental Policy and the Reform of European Agriculture Law’, Chapter 11 in (Cardwell, Grossman and Rodgers eds.) Agriculture and International Trade: Law, Policy and the WTO (CABI, Oxford 2003), esp. at 287–289; and M.Cardwell, ‘The Polluter Pays principle in EC Law and its Impact on United Kingdom Farmers’, (2006) 59 Oklahoma Law Review 89.

96But only ‘where duly justified to achieve environmental objectives’: see Council Regulation (EC) 1698/2005, Art 39.2.

97There is a procedure under Art 90, ibid, for member states to apply to the European Commission for approval for commitments of longer duration.

98Ibid, Art 39.4.

99Ibid, Art 39.4.

100Chapter 13 below.

101Council Regulation (EC) 1698/2005, Art 4.1.

102Ibid, Art 17.

103Ibid, Art 9.

104Ibid, Art 11.

105Ibid, Art 15.

106EU Commission, The CAP Towards 2020: meeting the Food, Natural Resources and Territorial Challenges of the Future, Communication of the Commission to the European Parliament, the Council, European Economic and Social Committee and the Committee of the Regions, COM (2010) 672 Final, at page 6.

107Regulation (EU) 1305/2013 of the European Parliament and of the Council of 17 December 2013 on the support for rural development by the European Fund for Rural development (EAFRD).

108Ibid, Art 3 (‘mission’ of the rural development fund).

109Ibid, Art 5.

110See COM (2010) 672 Final (above note 107) at page 7.

111See Art 5 (Union priorities for rural development) and Arts 6 and 8 (content of rural development plans.

112Article 5(4) ibid. This provision mandates a focus on especially Natura 2000 areas, areas facing natural constraints and high nature value farming, and on European landscapes. Improving water management (including management of pesticides and fertilisers) and soil management are also mandated under this objective.

113Article 5(6)(a)–(c) ibid.

114See COM (2010) 672 Final at page 10 ff.

115These are set out in Art 8 ibid.

116See Art 69 as to common indicators.

117See ibid Arts 67 and 68.

118See Factsheet on the 2014–2020 Rural Development Programme for England (United Kingdom) available at: www.europa.eu/rural-development-2014/UK/factsheet-england_en.pdf.