The contribution of EU funding and LEADER to rural areas – new studies published

The European Commission has published a new study examining the contribution of EU funding to the development of rural areas, and a new evaluation of the impact of LEADER on balanced territorial development.  Both reports highlight the significant impact of the CAP in addressing the needs of rural areas and pursuing the Long-term vision for rural areas.   

The study on funding for EU rural areas¹ explores the specific role of the Common Agricultural Policy (CAP) 2014-2022 alongside that of other EU funds targeting rural areas in the 2014-2020 cohesion policy period, primarily ERDF/CF, ESF and EMFF. In addition, the study provides a forward-looking glance at the CAP 2023-2027 period.  

The analysis of the funding mechanisms in rural areas looks at CAP funding beyond farming at EU, Member State and regional level. The main findings covering the 2014-2022 period indicate that the expenditure linked to the selected measures for rural development beyond farming amounts to EUR 8.6 billion (total EU paid) between 2014 and 2021. This corresponds to approximately 9% of the total EAFRD EU expenditure. Rural development measures beyond farming (in terms of planned EU expenditure) account for EUR 18.3 billion, or approximately 14% of total EAFRD planned EU expenditure. Funding for joint measures would add an additional EUR 68.8 billion, or 54% of total planned EU expenditure, with EUR 41 billion paid out. 

The study acknowledges that a limited number of measures (primarily M07 – Basic services and village renewal, M16 - Cooperation, M19 – LEADER/CLLD) target many different needs. This is particularly the case with LEADER, which has proven to be an important measure in targeting rural needs beyond farming. While the small-scale and bottom-up delivery of these measures can effectively target needs in principle, this dispersal of limited funding in relation to a large variety of needs can risk individual needs not being met. The project team recommends increasing the budget allocation of the EAFRD interventions targeting rural development beyond farming to safeguard adequate funding to effectively target rural needs beyond farming.  

The project team recommends increasing the role of other funds, such as the ESF+, ERDF/CF, and EMFAF in rural regions, to leverage their strengths in targeting needs which remain under-targeted by CAP support. This applies, for example, to investments related to digitalisation, mobility, SME and employment-related support beyond the agricultural sector, where CAP 2014-2022 contributions have been less strong.  

To ensure a synergistic delivery and high relevance of the support, the study recommends a more integrated and holistic delivery of CAP and other EU funding, especially at local and regional levels. Integrated support should also be offered outside the use of multi-funding LEADER/CLLD. However, local actors should be equipped with sufficient implementing capacities to enable an effective delivery of such mechanisms. The study also recommends better integration of the CAP with national or regional support schemes and legislation, as this increases the relevance and potential effectiveness of CAP support for more complex needs. 

The project team recommends capacity building in particular for local actors in the delivery of EU funding (from strategies to implementation and communication), particularly in more deprived rural regions and small municipalities, where limited administrative capacity may prevent full access to CAP funding opportunities.   

The study identifies 223 constrained and remote rural regions at NUTS3 level, accounting for approximately 54% of all rural regions, and around 10% of all EU inhabitants. The authors recommend increased attention to the funding needs of these regions from EAFRD beyond farming measures and cohesion policy support, as well as the EMFAF.  

The project team also recommends that Member States apply more differentiated definitions (such as by remoteness or persistent population decline) of rural areas in their strategic frameworks, taking into account the territorial heterogeneity present in rural areas. 

The safeguarding and strengthening of more coherent, overarching governance structures and communication channels between programme stakeholders is essential as a precondition to the delivery of EU funding to rural areas. The project team recommends that the European Commission continue to offer dedicated networking support to programme authorities and stakeholders via existing network platforms, such as the CAP Network, the Rural Pact or the communities of practice. 

The evaluation of the impact of LEADER towards the general objective ‘Balanced Territorial Development’ looks at how LEADER contributes to local development, and its added value in terms of augmenting social capital, local governance and project results in rural Europe.  

EU Member States are legally obliged to allocate at least 5% of their rural development funding to LEADER. The allocation of the EU rural development fund to this end is EUR 8.5 billion for the EU-27 and the UK, up to a total of EUR 12.36 billion (2014-2022) when adding national public co-funding and additional voluntary public top-ups. Other EU funds can also be added, but their effective contribution to multi-fund strategies is only 25%.  

As of September 2023, the average utilisation of funds is 63%. The implementation period continues until end 2025. Due to the long lead-in time, the bulk of LEADER expenditure occurs towards the end of the policy cycle. The absorption is highly variable across Member States and regions. 

There are 2 894 Local Action Groups (LAGs) in rural Europe, covering a rural population of 170 million (62%). In practice, the average amount of public funding allocated to each local strategy is EUR 4 million for the whole nine-year period.  

LEADER has created almost 60 000 jobs. There are a huge number of LEADER projects (120 000 completed up to 2021), and they cover a large array of local development objectives, such as the diversification of economic activities, knowledge transfer, short value chains for local products, and many others. 

The study found that the quality of implementation of LEADER has influenced the ability of LEADER to deliver results. In particular, the more the seven LEADER principles are applied, the better the results – especially for improving cooperation between different levels of governance and meeting local social needs. The bottom-up approach, the participatory methods, capacity building among local actors, the LAGs’ animation and facilitation activities, and networking appear to be the most important elements in the effectiveness of LEADER. 

LEADER also seems to have produced better project results compared to other similar RDP measures. LEADER contributes positively to multi-level governance and improves social capital, and while both are not easily measured, they result in the empowerment of local people and help to leverage additional resources.   

LEADER contribution needs to be assessed in line with its local scale and the small resources allocated to it (2% of the CAP budget). LEADER delivers small projects; therefore, complementary (CAP, other EU or national) measures are essential to meet the challenges of many rural areas in the EU.  

The added value of LEADER, such as building social capital, reinforcing local governance, and delivering enhanced projects needs to be put more in the policy focus by LEADER stakeholders. Planning, monitoring and evaluation of LEADER should look for the added value of LEADER, including its intangible benefits. 

More innovation-friendly rules (e.g. less strict requirements on the durability and successfulness of projects) and better links between LEADER and research and innovation ecosystems can be considered in the future to promote more innovative projects through LEADER.  

Cooperation is a source of learning and knowledge exchange for local communities. Networking at the regional, national and EU level provides high value, and all LAGs should be encouraged to participate in this. 

There are still some areas of improvement for further simplification and reduction of administrative burdens and complexities, particularly in the delivery mechanism and multilevel governance. However, this is largely a matter of Member States and regions. Moreover, ways of simplifying multi-funding LEADER/CLLD and cooperation need to be further explored. 

Learn more on the EU CAP Network website!  

Curious about how the CAP is implemented in each Member State? Explore country data on the EU CAP Network website to learn how the CAP works in practice and to find information about the national CAP Strategic Plans, networking and other useful data from Member States.  

For more concrete examples, search our good practice database, which gathers over a thousand good practices from Member States.   

Our LEADER section provides a lot of useful information for better LEADER implementation, as well as practical tools to learn more and connect with LAGs and LEADER stakeholders across the EU.   

If you need inspiration, check out our Projects Brochures, where each issue highlights a number of good practices related to specific topics. You can also learn more about policy developments through our Policy Insights articles.  

And if you want to make your voice heard, get in touch with the National Network in your country!