2. Agriculture and rural development: uneasy relations

Various reasons may be suggested for this. One has to do with institutional attitudes of government, expressed and entrenched in departmental structures and administrative procedures, and in turn mirrored in the organisation of lobby groups. Agriculture has traditionally been dealt with via sectoral policies, rural development via territorial policies. Such orthogonal orientations of policy means that to integrate them calls for some gymnastic talent and much practice, not to mention persistence.

A second reason, in part a consequence of the first, is that the various people whose activities and interests are the subjects and objects of policy tend to see themselves in competition with one another. Budgetary allocations then take on the character of a zero-sum game: what is given to one is at the expense of the other. This issue of whom policy is to serve has received classic expression in the question whether policy is "pour l'agriculture ou pour la coiffure?". Thus farmers who see themselves necessarily rooted in the land are said to ask in righteous indignation why 'their' money should be taken away and given to others who just happen to work in rural areas, such as hairdressers.

These farmers may receive the reply that as things stand money used for rural development outside Objective 1 areas is additional to what is provided under normal payment via EAGGF guarantees. But this could incite them or their lobbyists to further musing: if they can prevent money being diverted into soft schemes to do with rural development, there would be more hard cash for them. Thus may rural development become a pawn in negotiations between ministers of agriculture, farmers' lobbyists and the European Commission. When negotiations are conducted in such a climate, the case for and objections to 'multisectoriality' tend to fall by the wayside or succumb to collateral damage from infighting over financing arrangements.

A third reason for uneasy relations is their different time horizons. Agricultural policy must always attend to next year's or indeed next week's prices and the effect they may have on farmers with fragile confidence and volatile temperaments. Rural development policy, by contrast, needs to look to the next decade or beyond and ask what will sustain faith if not strengthen conviction over that length of time. Agricultural circumstances can change overnight: in the morning farmers may wake to milk quotas and a ban on beef exports. Rural development never occurs overnight; it is always a long-term business.

As farmers tend to see things, better roads and prettier villages, not to mention conveniently local hairdressers, are all very well but do not look much like a substitute for price-support policies, not in the short-term anyway. What they would like to hear from the advocates of rural development is how soon will rural development projects benefit their bank balances and their families. Only then will they or their lobbyists listen to arguments for loosening their grip on market policies.

There is another side to this question of time horizons. Rapid change in agriculture can be devastating for the socio-economic well-being of rural areas. Gradual change, such as decrease in agricultural employment associated with long-term irreversible technological change, may be manageable. In some areas it can be compensated for by rural development programmes that foster increased employment in other sectors, such as manufacturing and services (perhaps initiated by, or otherwise benefiting, farm families themselves), and by taking advantage of other aspects of technological change, for example teleworking. Sudden reversals in agricultural fortunes, be they caused by singular events such as BSE in the UK or intentionally abrupt changes in policy, such as 'shock therapy' or 'structural adjustment' programmes in CEECs calculated to change attitudes and expectations, present problems of arresting or ameliorating rural decline rather than of promoting rural 'development' in the conventional positive sense.

Precipitate rural emigration, for example, prompted by such agricultural reversals, may undermine rural development programmes that could lessen the impact of such agricultural change because the selective departure of the people able to leave quickly might reduce disproportionately the developmental capacity that may have been built up slowly over preceding eras of gradual emigration.

For the CEEC's rural development is a new concept but, as in many existing member States of the EU, it is being administered there by Ministries of Agriculture. In Hungary (unusually) both agriculture and regional development are the concern of a single Ministry, although so far this does not seem to have worked very well in terms of producing integrated thinking and action. In both Estonia and Poland, there are sub-departments for agriculture and for rural development, each with a Minister. Responding to the pre-accession programme SAPARD (Special Accession Programme for Agriculture and Rural Development) has thus posed some challenges to existing structures of Government.

These and other considerations that might be adduced should be set in the wider context of Agenda 2000. The earlier agenda that gave rise to the Single European Act of 1987 and the Treaty of European Union in 1992 recognised, though not immediately and perhaps not without reluctance, that European unity has a necessary complement in diversity, and that diversity encompasses not just comparative advantage but competitive disadvantage too. It is reasonable for the European Union, both as it exists and after enlargement, to aspire as the subtitle to Agenda 2000 has it, to become a "stronger and wider union". It is not reasonable for it to aspire to become uniform. However 'common' the Common Agricultural Policy (CAP) might come to be under whatever reforms, and however rural areas may conceivably be 'developed', the objective should not be to make the European Union everywhere the 'same'. Diversity is of its essence, not an accidental property that will pass with time. It may, even for economists, sometimes constitute an asset to be exploited, not a liability to be eliminated.

That this is especially so of Europe's rural areas was one of the fundamental realisations that informed predecessors to Agenda 2000, such as the 1985 Green Paper Perspectives for the Common Agricultural Policy, the Communication on The Future of Rural Society of 1988, and subsequently influenced the reform of the Structural Funds in 1988 and of the CAP in 1992 (MacSharry reforms). Rural diversity has various geographical dimensions: of climate (from the frost-free Mediterranean to the Arctic Circle); of soils (fertility, drainage, fragility), of topography, (plains, mountains, coasts and islands), of location (proximity to major urban and industrial areas, to the coast and to the centre of the continent), of accessibility (transport distances and costs, centrality and peripherality), and of culture and history. But in the Europe that Agenda 2000 addresses, Europe after 1999, diversity has an inescapable political dimension as well.

This dimension is salient enough among existing Members and Applicants taken individually: contrast the politics of the UK and France. Between Members as a group and Applicants as a group it amounts to a divide; contrast agriculture and rural development in the UK and in Poland. To establish a viable (not just "stronger and wider) unity in diversity in Europe at the end of the twentieth century will require more than just setting an agenda - as indeed it did at the end of the nineteenth, or any previous century for that matter. This should be borne in mind when considering relations between agricultural policy and rural development policy. Their difficult state is but one particular instance of the larger difficulty of finding unity in European diversity that is not lessened by referring to it, as in Agenda 2000, as a "challenge".

Contemplating such a challenge may lead some to conclude there should be two distinct policies, with separate funding. Then rural development policies could be pursued for long enough to show benefits to farmers, and the charge of farmers that "you are taking our money away from us" would first be suspended and then quietly dropped. But others would reply that such a vision of separate domains is a dream born of administrative tidy-mindedness rather than waking attention to the way the rural world is and is becoming. For on closer examination, the sharp outlines of both sides tend to dissolve and the division between them becomes harder to draw as a single straight line.

This is in part, though not just, a consequence of ambiguities stemming from the way the domains are conceived and the words used to describe them. What is understood by the word 'rural' varies notoriously, even where near equivalents exist in different languages; what counts as 'agricultural' in bureaucratic definitions in German, Italian, French and English do not always include the same things. This adds to the difficulties of statisticians trying to compile compatible figures and the irritation of researchers hoping to discover interesting correlations among them, but it is not just a matter of convenience to be resolved by sensible convention. There is an abiding element of conceptual disagreement. What is 'rural' in the Netherlands or Denmark is essentially, not just conventionally, different from what is rural in Scotland or Finland.

Further, the way words that are available in different languages and states are used tends to change over time as the debate over policy and the policies themselves evolve. The word 'agriculture' may no longer have strictly sectoral connotations in all contexts; in English, with variants in England and Scotland and Wales, 'hill farmers' are nowadays not just farmers who happen to farm on rounded elevations of land. They are also, and in some quarters now primarily, thought of as the bastions of a threatened cultural tradition in aesthetically pleasing landscapes with little chance of alternative employment. So too with the word 'development'. The addition of 'sustainable' as a qualifier initially promised clarification but subsequently threatened to confuse just what is envisaged as the desired end state: to sustain (keep going) the development (the process of improvement), or to develop (bring into being) sustainability (a stable state or self-correcting equilibrium)? Adding the word 'rural' compounds the difficulty: should it go before or after the word 'sustainable'?

This confusion or evolution of language is not just gratuitous; in part at least it reflects genuine conceptual complexity. Nowadays the Commission likes to speak of "a multi-functional agriculture" and refers to a model of agriculture that is distinctively 'European':

The fundamental difference between the European model and that of our major competitors lies in the multifunctional nature of Europe's agriculture and the part it plays in the economy and the environment, in society and in preserving the landscape, whence the need to maintain farming throughout Europe and to safeguard farmers' incomes.

The Commission may well have various interests in promoting such a model. In collecting many things into a single breathless sentence it cultivates the impression that some policy circles can be squared. Having it adopted by all parties may smooth otherwise turbulent negotiations with refractory partners by conveniently blurring distinctions and obscuring differences between rival positions. Those who hold them may then be persuaded that the gap between them is narrower than they thought, become less sure of the righteousness of their cause and so be more easily assuaged in their disappointment at settling for less than what they hoped for at the start.

Be all that as it may, agriculture may nonetheless have many functions. The question then becomes how many of these does a particular agricultural policy support and how well does it serve them.

A market policy might seek to promote competitiveness of the agricultural sector, where competitiveness means 'do not need export subsidies to sell on the international market'. In the Europe of the EU15 and the CEEC10, competitive agriculture of that kind seems feasible mainly in certain areas and for certain commodity products: say, with varying degrees of confidence, wheat and barley in lowlands of East Anglia and Normandy or the plains of Hungary and Romania; pork in Denmark and Poland; beef in Scotland and Hungary; citrus fruit, wine and olive oil in some parts of the Mediterranean states, timber products in Sweden and Finland.

In other areas, such as the mountainous regions of Spain or Greece or Slovakia, a market policy may not often promote competitiveness because farmers in these areas are not and will never be 'efficient' producers of tradable commodities except in specialised niches. But in mountainous areas, some ways of farming and some kinds of farmer, whose cattle and sheep cannot support them and their own family let alone compete with those on the plain or across the ocean, may be good (rather than 'efficient') producers of highly differentiated products offering real or perceived advantages to consumers, and providers or presenters (rather than 'producers') of recreational amenity and services to visiting tourists. They could thereby help conserve the natural environment, to the benefit of visitors and local inhabitants alike, not to mention non-human ones. By the life-long (not just year-round rather than seasonal) presence of them and their families, they could help maintain the viability of services to local communities and through their local knowledge help preserve these communities and the local cultural heritage. To expect a market policy to support farmers on the plains and on the mountains equally well asks a lot both of what economic theory should promise and what policy can claim to deliver. That a policy may operate effectively to promote rural well-being, using farmers as the conduit of distribution in some areas but not others, indicates that agriculture has its limitations as a development vehicle. Given these limitations, it may not always be the most appropriate one, at all times as well as all places.

Such considerations prompt a series of general questions. Why articulate rural policy through farms and farmers? Are they the only available conduit of funds, the sole vehicle of development in rural areas? If not, are they the most efficient? What is the proper measure of efficiency here; indeed is efficiency, however measured, the most appropriate criterion? Is 'effectiveness' as relevant as 'value for money'? Whatever may have been the case in the past, to which Agenda 2000 is responding, what of the future, the rural world for which it is an 'agenda' and so will have a part in creating?

The influence over policy that agricultural lobby groups such as COPA and the NFU, with their organisational structure carefully attuned to the sectoral administrative structure of national governments, have long been able to exercise goes some way to explain why it has been articulated that way in the past and is so at present. But it does not thereby provide a justification as to why it should continue to be so in the future, especially given the changing circumstances acknowledged by Agenda 2000 and which it claims to address.

An alternative to a mono-sectoral market policy, albeit still based on a multi-functional agriculture, is a multi-sectoral rural development policy. This would indeed attend to agriculture, but as one element among others. Such a policy would address the range of people in rural areas directly not just indirectly; it would concern itself with other entrepreneurs (perhaps even hairdressers), as well as individuals and collective agencies - not just farmers.

Various considerations lend interest to such an approach. A specific case is the contrasting trend in rural employment in the Orkney Islands compared to Caithness, the adjacent region of mainland Scotland. In the former employment has risen 8 % in the last decade or so, whereas in the latter it has gone down by 6 %. The differential performance does not seem explainable by agriculture, directly or indirectly, and so calls for analysis of problems (and successes) of rural well-being that does not look solely through agricultural spectacles. Considering rural employment more generally, the history of the CAP shows that a notable consequence of focusing on farms and farmers is that large ones with most of the assets get most of the money. But there is a long-term trend, likely to continue, for large farms to offer less and less local employment. More so than small farms, they tend to substitute machines for people generally, and in particular people from outside the area, such as consultants and contractors based in cities, for people from the locality. Some at least of the money they receive under the CAP is funding these trends.

The problem of employment is more complicated than a simple function of farm size, however. It is not the same everywhere. In remote areas where there is little alternative employment, policies that favour small farms which will continue to offer jobs may serve the purposes of rural development. There, small farms constitute a valuable resource for rural development and may indeed promote a 'living countryside' through low-intensity, environmentally-friendly practices Agenda 2000 claims to favour as well as engaging in other economic activities. But in rural areas near to urban centres or accessible to them via good transport links, there may be a range of alternative employment available already or accessible given individual initiative. An agricultural policy that favoured small farms at the expense of large ones might incur costs to competitiveness not compensated by employment benefits. Some kinds of small farms in such areas might constitute an obstacle to efficiency, because the land and other inputs they take up are not available to large farms that could make more productive use of them. Any rural policy designed to deal with rural diversity must therefore also be able to deal with different agrarian conditions.

Any comparative appraisal of alternative approaches to rural well-being should note that while sectoral market policies for agriculture have their theoretical limitations and difficult history, so too do rural development policies, at least as they have evolved in the EU15. These policies no longer conform to any coherent theory of regional economic development because they have accumulated disparate components with successive rounds of negotiations, particularly those to do with admitting new members. A notable instance of this is the increasing number of Objectives and the proportion of the total area and population covered by them. Finland and Sweden negotiated a new Objective 6 oriented specifically to their rural needs; the Irish and the Highland Scots have proved creative calculators in qualifying for the various Structural Funds associated with Objectives 1 and 5b, at least in terms of the criteria laid down by Brussels. One of the main proposals in Agenda 2000 is to 'simplify' the various provisions that bear on rural development: the number of relevant objectives is reduced to just two, and the eligibility rules are stricter. These changes may not make rural development policy any more coherent, but they do suggest dissatisfaction with the way such policies have worked in the past and a disinclination to back the Cork Declaration on A Living Countryside with appropriate shifts in the emphasis of policy from the traditional sectoral concerns of agriculture to the holistic concerns of rural development.

Outside the EU15 in the CEEC10 there are comparable historical legacies. There is a common legacy of strongly centrist state structures, with correspondingly weak regional organisation and administrative traditions. The post-war collectivisation of agriculture has bequeathed the post-1989 problems of de-collectivisation, restitution of property appropriated by the state, and what attitude to adopt towards the sale of land to foreign interests.

By the same token, particular states have particular inheritances. Three examples must suffice. In Poland collectivisation was long resisted with considerable success and so never became as widespread or as entrenched as in other CEECs. So Poland now enters accession negotiations on agriculture with a large number of small family farms, at a time when the CAP is under pressure from budgetary concerns and international trade agreements monitored by the WTO. The effect on rural areas, if thousands of families ceased to support themselves by farming, would set quite a challenge for any rural development policy. In Romania many rural areas were de-populated in previous decades, but since 1989 many people have returned from the cities to eke out a living on small plots of the land. Adding to this pressure on land is the decline of mining, which has left many people in rural areas, who were previously not dependent on agriculture, now looking for alternative ways of making a living there. So from political necessity much attention has been given in national policy to rural development, to the comparative neglect of agriculture. However, the pre-accession programme SAPARD is primarily addressed to agriculture.

Finally, in Hungary before 1989 agricultural policy had not taken much account of environmental concerns, and to the extent these were addressed, this was done separately. Nor did agricultural policy consider the impact of agricultural practices on the regional and local environment. Since 1989 new ministerial structures have been developed, with new allocations of responsibilities. In addition, agro-ecological regions have been mapped and assessed according to market conditions and defined as suitable for intensive or extensive agriculture, or protection, with particular concern for wetland regions and water protection. This has apparently afforded greater scope for integrating agricultural and environmental policies, and in accession negotiations, the possibility of 'trading' agricultural provisions and measures for rural development ones in ways not available to or not considered by other acceding CEECs.

There is a further problem that is common to all acceding CEECs, in addition to those arising from their individual traditions in agricultural and rural development policy. They must take on board the policies of the EU for both, as embodied in the acquis communautaire, all at once, unless they can negotiate some derogation. Member States have (in most cases) had many years to accommodate themselves to these policies, both their benefits and their costs; they have learnt to live with them in their own way. By contrast, CEECs face the task not just of devising feasible policies that are acceptable nationally but also are acceptable to both the Commission and to existing Member States. Given the uneasy relations between agriculture and rural development in the Commission and each Member state, acceding CEECs may be forgiven for feeling that they have rather too many masters to please. That these masters do not agree among themselves about the proper domains of agriculture and rural development, and tend to change their minds with time and circumstance, can only add to that feeling.

Conclusion
In both Member and Acceding States, as things stand, rural development tends to be seen largely through agricultural eyes. Whether this is a legacy of past thinking entrenched in institutional structures that have not changed though the thinking may have, or is the result of calculated compromises negotiated nationally or internationally, it is the way things are. Agenda 2000 reflects this reality and plans to implement it must accommodate it. This gives rise to a more sharply focused question: given that is the way of the world, and of Agenda 2000, how best to deal with those realities? How to make the most of what is on offer in Agenda 2000: cope with or get around its limitations and restrictions, which in the short term cannot be removed, and use to best advantage what scope it allows to adapt its provisions to meet the needs of individual states, locally and regionally as well as nationally? Moreover, how to do all that starting from where we are now - rather than from some other place more to our liking or later when times may be easier. This practical question pervaded the Seminar, as it does the rest of this report.