EU Rural Development Conference, Salzburg, November 2003
Keynote Speech: Rural Development Situation & Challenges in EU-25
John M Bryden
Why are 1000 people here this week to talk about rural development? Only 500 came
to Cork in 1996, and a mere 200 to the first EU rural development conference in
Inverness in 1991. If you had tried to run a conference or more probably a seminar on
European rural development in 1981, as I did, then you were lucky to get 30 people.
The growth in interest in rural development has been exponential! Yet, if we look at
rural areas beyond the commuting belt of cities and larger towns, this has been a
period of tremendous change, huge challenges and all too often negative trends. Here
I am speaking about issues of social and economic cohesion, the survival of rural
populations and cultures, equity and human rights issues, and the protection and
creative use of our environment. Equally, and especially since the structural fund and
CAP reforms of the late 1980's and early 1990's, it has been a period of rural policy
experimentation.
As we enter the exciting and challenging period of this major enlargement, we must
assess how far we have gone, as well as what we know, and what we do not. We must
be modest about our achievements, and take a fresh look at where we should go. I
believe you have come here because this is widely recognised in both the existing and
new member states.
As a one-time farmer, I make no apology for insisting that we take a territorial view
of rural development, and a territorial view of rural policies. Farming on its own will
not save rural places. However, the development of rural places can save farming and
farm families, as well as others who live, and seek livelihood in, rural places. That I
believe to be a universal truth, whether farming accounts for 2% or 40% of rural
employment. Our main question at this conference must therefore be ­ what
makes rural places economically, socially, culturally and environmentally
healthy, and how can European and national policies best work together to
achieve this?
To my mind `healthy rural communities' have at least seven key characteristics.
First and foremost, they are at least maintaining their population and within it a viable
age structure. Usually this also means that they have a positive rate of net in-
migration.
Secondly, healthy rural communities have diversified their economic base beyond the
primary sector, maintaining or even increasing employment rates in the face of
inevitable declines in primary sector jobs. These conditions would also tend to mean
that poverty and unemployment rates are no worse than those in cities and larger
towns..
Thirdly, the physical and mental health of the rural population is as good as it is
elsewhere. Public health depends on socio-economic determinants, especially poverty
and major risk factors including high blood pressure and blood cholesterol, obesity,
smoking and excessive alcohol, and exercise.
Fourthly, healthy rural communities value their history, culture and environment and
have a pride in their identity, and use these both to enhance the quality of life and
develop new economic activities and improve the rewards to existing economic
activities. The education system supports these values.
Fifthly, healthy rural communities have widespread property ownership, clear titles,
and relatively high rates of locally financed and initiated new small enterprise start
ups. People have access to collateral, hence loans at reasonable interest rates. The
transactions costs of doing business are low. There are open and active networks with
links across ngos business and public sector, and good links with the outside world
Sixthly, public agencies work together towards common goals and with an agreed
value basis, and do not fight against each other. These goals and values are set
through local democratic and participatory process: ie they are `bottom-up'. There is
a lively and democratic local government, with reasonable fiscal and decision making
autonomy.
Lastly, and most important of all, healthy rural communities are doing their own
development, and not having it done to them by others.
So how well are our rural places doing in the Europe of 25 against these seven
criteria?
Population & Migration
As most of our rural areas now have negative rates of change in the natural
population, and relatively high rates of out-migration especially of youth, the
maintenance of rural populations almost everywhere is now dependent on significant
levels of inward migration. Only the more successful rural areas in western Europe
have succeeded in achieving positive rates of net in-migration. The corollary is an
ageing population. In the new member states, crude death rates exceed crude birth
rates in rural areas in four out of the five countries for which the data is available. In
many but not all cases there has been a migration from rural to urban areas and
especially capital cities, e.g. Slovakia and Hungary. However, in some, such as
Romania, there has been a flow of migrants from urban to rural areas often in search
of subsistence in the face of industrial restructuring. Youth dependency rates in the
new member states are relatively high, age dependency is also high and the population
in rural areas is usually older.
Economic Diversification
In the EU-15 the situation is that some rural areas have done relatively well, while
others have not done so. Both the RUREMPLOI and the DORA projects show that
there is a differentiation between those areas that have been able to create
employment and raise employment rates, and those that have not. Successful rural
areas have managed to offset declining primary sector and related employment
through new growth areas including tourism and recreation, new value-added and
niche product activities, specialised manufacturing, health and social care, activities
related to local culture and environment, and sometimes also activities based on ICT,
including call centres. The LEADER Programme, and in some cases the Structural
Fund programmes, have been important here. Local factors have been crucial and
include a sense of local identity, place based marketing, good governance,
revitalisation of cultural and environmental assets, strong local entrepreneurship,
appropriate and timely external support. Unfortunately, many rural areas have
continued to lose employment.
In the new member states, a high proportion of rural people are still engaged in the
primary sector and traditional manufacturing activities which are usually under
considerable economic pressure. Underemployment and unemployment is
consistently higher in rural areas, especially among young people and women.
In both old and new member states, families on small farms survive by a mixture of
subsistence and off-farm earnings. Frequently this involves long distance commuting
to urban and industrial centres at considerable cost.
In the EU-15 rural incomes per capita in areas beyond the commuting belt are
generally lower than those in cities and larger towns. In the new member states, the
evidence is much clearer ­ rural GDP (PPP) per capita in Estonia is 44% of national
average, in Hungary it is 67% in Slovenia 75%, in Slovakia 88%. In 7 of the 10
countries for which data is available, rural areas have a higher share of the population
living in poverty. In 8 of the 10 new member states, rural-urban disparities are thought
to have increased in the past five years.
The situation can only be solved by increasing rural employment and enterprise
outside the primary sector.
Health
We cannot say with certainty what the rural health situation is in the EU-15, but in
many of the more sparsely populated rural areas we know that there are considerable
problems with poor diet, alcohol abuse, higher rates of smoking, and ironically lack of
exercise leading to health problems. We also know that there are problems in
supplying quality health care in such areas, including problems of recruitment and
retention of professionals. In the new member states, the situation appears to be
worse. In the Czech republic, infant mortality is twice as high in the rural regions, and
it is higher than urban rates in Slovakia, Slovenia, Romania and Bulgaria. A health
impact assessment (HIA) of agriculture policy was recently carried out by the
government of Slovenia. This HIA revealed that disparities such as level of
unemployment; educational attainment; GDP; mortality rates and life expectancy are
all worse in many rural areas. Cirrhosis of the liver, from alcohol abuse, was also
highest in rural areas. Although data from other countries is lacking, since there is a
generally accepted link between poverty and ill-health we can fairly safely infer that
poor health is a greater problem in rural areas. We also know that there is a close link
between unhealthy diets and food systems, especially the lack of affordable fresh
vegetables and fruit and oversupply of subsidised butter and animal fats.
Opportunities exist to improve this during the de-coupling process in CAP ­
especially to encourage more production and consumption of vegetables and fruit, and
less of butter and animal fats. The siting of international supermarkets and closure of
local fresh food markets (sometimes as a result of over zealous application of EU
regulations e.g. Lithuania) can have perverse results unless steps are taken to address
the contradictions. This is an area where research and action should be a priority in
the EU-25. The Slovenian Health Impact Assessment provides a model that could
easily be adopted by each EU-25 and carried out nationally at relatively little cost.
Value of rural identity, culture, history, environment, and education
In the existing member states, the situation in rural areas is as ever highly variable.
However, in some cases, creative use has been made of the LEADER programme to
develop activities around local culture, history and environment, essentially local
public goods that enhance quality of life for local people and visitors and also provide
hooks for economic activities. Place based marketing has also developed around local
and regional identity. There are also some outstanding projects in education to
enhance and give value to young people's appreciation of local culture, history and
environment. But these are far from being the norm; we need to make them so.
As to the quality of education, and life long learning, much remains to be done to
secure equality with urban areas in both existing and new member states. Rural
people's employment opportunities and future incomes will be increasingly restricted
if they do not have equal educational and continuing learning opportunity from pre-
school to retirement. The norm in the EU 25, and it is especially the case in the new
member States, is that educational attainment is lower in rural than in urban
populations. This is especially true of higher education and continuing education.
Property ownership, clear title, access to credit
This has been a major issue in the new member States and although much progress
has been made, problems with titles remain in some rural areas.
Access to credit has improved in the new member States but interest rates remain
high. Transactions costs, risk and uncertainty are generally higher than in EU-15, and
these factors combined with relative poverty explain low rates of rural investment and
low rates of local business start ups relative to national averages (e.g. Bulgaria,
Romania).
In the EU-15 the picture is variable. Some rural communities have relatively vigorous
local entrepreneurship, while others do not. The conditions which underpin such
entrepreneurship, such as local institutional capacities, governance, the asset base,
networking characteristics, property ownership, and local culture and history are also
variable. There are sufficient cases of vigorous local entrepreneurship to argue that
rural areas are not necessarily doomed to a slow death, and a good case for arguing
that less successful rural areas can learn from their peers.
Institutional capacities and governance
Again, the situation in the EU-15 is highly variable, and determined by national and
regional factors as well as local conditions. Relatively successful rural areas have
better local government and governance, with public agencies working together and
having good relations with the civic and private sectors, a relatively high degree of
fiscal and decision making autonomy. These are supported by national and regional
fiscal equalisation schemes in countries such as Sweden and Germany. In others local
government and governance are both weak, and fiscal equalisation may be weak,
obscure, or non-existent. LEADER is generally seen to have strengthened local
capacities in many rural areas during the last 13 years or so.
In the new member States local institutional structures and governance are generally
weak ... like some existing member State, they have a legacy of highly centralised
government and low degrees of local decision making and fiscal autonomy, leaving
little room for local initiative.
Who is doing the rural development?
This is closely related to the previous issue. In general, one might say that
considerable progress has been made in many of the existing member States since the
1980's both as a result of LEADER and similar national schemes and initiatives to
give rural people a greater say, and a greater role, in their own development. Much
has also been done in the new member States to change the development paradigm,
for example through activities of such as the Carpathian Foundation in Slovakia,
Hungary and elsewhere. However, much remains to be done in this regard. In the new
member States, local institutional weaknesses mean that the framework conditions for
a more empowered rural population are weak, and need to be addressed.
Conclusion
The foregoing analysis suggests that there remains a good deal to be done to secure
`healthy' or `sustainable' rural communities in the EU-25. It also suggests that there is
a need for both EU and national policies to work in a more integrated way if the
broader concerns of rural people in terms of jobs, incomes, employment, quality of
life, health, education etc are to be addressed. We have made some progress, but
significant challenges remain. Although many of these challenges are significantly
greater in the new member States, the situation is far from solved in the EU-15. A
new policy paradigm ­ a real territorial rural development policy ­ is needed.
Although radically different from the CAP and Structural Funds policies, it can draw
upon the lessons of both.
I do not, however, wish to end on a negative note. Although there are great
challenges, there are also many and diverse opportunities. These opportunities, and
the capacity to grasp them, have been demonstrated by rural people in many areas of
Europe. We need to learn from these successes, and transfer experience between rural
areas in the wider EU-25. Rural areas have learned ­ and will learn - best from their
peers, and the kind of mechanisms for this developed in the 1990's under the
European LEADER observatory must not be lost with enlargement. General de Gaulle
is credited with the rhetorical question: how is it possible to govern a country with
500 different kinds of cheese? The enlarged EU may after all have 1000 or more
different kinds of cheese in 1000 different rural areas. My response would be let 1000
cheeses bloom! And, of course, support them with a proper Territorial Rural
Development Policy!
Principal References
Atterton, J., Bryden, J., Courtney, P., and Timm, A (2001) Dynamics of Rural Areas:
National Report-Scotland. Aberdeen, June 2001.
Bryden J and Hart J K (eds) (2004f). Why Local Economies Differ: The Dynamics of
Rural Areas in Europe. The Edwin Mellen Press. (In press)
Bryden, J., Efstratoglou, S., Persson, L-O., Schrader, H., Atterton, J., Ceccato, V.,
Courtney, P., Efstratoglou, A., Hachmöller, G., Hart, K., Koch, B., Kouroussi, E.,
Masurek, L., Apostolos Papadopoulos, A., Timm, A (2001b). Dynamics of Rual
Areas. Final Report. December. http://www.abdn.ac.uk/arkleton/dora1199.htm
Bryden, J.M. et al., Farm Household Adjustment in Western Europe. 1987-1991:
Final Report on the Research Programme on Farm Structures and Pluriactivity,
Luxembourg, Commission of the European Communities, 1993.
CEC, First Report on Economic and Social Cohesion, 1996.
CEC, Second Report on Economic and Social Cohesion COM (2001b) 24.
http://www.inforegio.cec.eu.int/wbdoc/docoffic/official/report2/contentpdf_en.htm
Csaki, C and Lerman, Z (eds) (2000) The Challenge of Rural Development in the EU
Accession Countries. Third World Bank/ FAO EU Accession Workshop. Sofia,
Bulgaria, June. World Bank Technical Paper No 504.
Dawe, S. and Bryden, J., Competitive Advantage in the Rural Periphery; re-defining
the global-local nexus. In Urban Development in Frontier Regions, Lithwick, H. and
Gradus Y., Eds., Kluwer Academic Publishers, The Netherlands, 1999.
Efstratoglou, S., et al., Dynamics of Rural Areas: National Report, Greece, AUA,
Athens, 2001.
Maillat, D. (1995) Territorial Dynamic, Innovative Milieus and Regional Policy,
Entrepreneurship and Regional Development, 7, 157.
Network of Independent Experts in the CEE Candidate Countries (2003). The Future
of Rural Areas in the Candidate Countries. Ch 3. Rural Economies. Assessment
Report (Draft) Sept. 2003. Lead Expert G Dalton. Prepared for Project No. 29686 of
the European Commission, Agricultural Directorate-General.
OECD, Territorial Indicators of Employment: Focusing on Rural Development, Paris,
1996.
Persson, L.-O. & Ceccato, V. (2001) Dynamics of Rural Areas: National Report-
Sweden. NORDREGIO, Stockholm, 2001.
Reimer, B. (1997) Informal Rural Networks: Their Contribution to "Making a Living"
and Creating Rural Employment. In Rural Employment: An International Perspective,
Bollman, R. and Bryden, J., CAB International, Oxford, UK, 1997.
Schafer Elinder, L (2003) Public health should return to the core of CAP reform.
Point de vue, Eurochoices vol 2 no. 2.
Schrader, H., et al., Dynamics of Rural Areas: National Report, Germany, FAL,
Braunschweig, 2001.
Sedik, D (ed) (2002) Individual Farms in Eastern Europe and the Commonwealth of
Independent States. Rome, FAO.
Stohr W B. (ed) (1990) Global Challenge and Local Response: Initiatives for
Economic Regeneration in Contemporary Europe, Stohr, W.B., UNU/ Mansell press,
London and New York.
Terluin, I.J. (2001) Rural Regions in the EU: Exploring Differences in Economic
Development, Netherlands Geographic Studies, Utrecht/Groningen.
Terluin, I. and Post J. (2000) Employment Dynamics in Rural Europe. CABI,
Trowbridge, UK.
van der Ploeg, J. D. and van Dijk, G., Eds (1994) Beyond Modernisation: The Impact
of Endogenous Rural Development. Van Gorcum, Assen, 86.
WHO (2003) Diet, nutrition and the prevention of chronic diseases. Joint FAO/WHO
expert Consultation, WHO technical report series 916, WHO Geneva, Switzerland.
WHO (2002) Food and Health in Europe. Summary. World Health Organisation
Regional Office for Europe. Copenhagen, Denmark.