Introduction

Rural development is the second pillar of the common agricultural policy (CAP). It is in line with the Lisbon objective on competitiveness and the Gothenburg objective on sustainability and focuses on four fundamental areas:

1. the competitiveness of agriculture, food products and forestry;
2. land management and the environment;
3. quality of life and diversification in rural areas;
4. The Leader Community initiative.

The competitiveness of agriculture, food products and forestry is to be improved through measures targeting human capital, physical capital and food products, including quality production. Land management measures will be established to protect natural resources and improve high nature value farming, forestry systems and cultural landscapes. The quality of life and diversification in rural areas is being enhanced by incentivizing the diversification of economic activities and the expansion of local infrastructure. Finally, the Leader initiative promotes diversification of the economic activities of rural areas through innovative, integrated local development schemes with an emphasis on participation.

The Rural Development policy 2007-2013 is hearted on three particular areas laid down in the new rural development regulation being: 

1. Improving competitiveness for farming and forestry;
2. Environment and countryside;
3. Improving quality of life and diversification of the rural economy.

A fourth axis called "Leader axis" based on experience with the Leader Community Initiatives introduces possibilities for locally based bottom-up approaches to rural development. The new programming period provides a unique opportunity to refocus support from the new rural development fund whereby through Axis mentioned before, adopt the rural development to generate growth, create jobs and maintain sustainability as shown in the figure below.

The Regulation specifies minimum proportions of the EU co-financing to be allocated to each Axis, as shown in Table 1 below.  As these minima account for only half the available co-financing there is considerable scope for Member States to shift the balance of their programmes to meet their own priorities, as shown below, including the possibility of allocating more than half the funding to the Leader approach in which the objectives of different Axes may be combined. 

Figure 2.1 The Strategic Approach - The new Rural Development Plan 2007 – 2013