Natural England

Mid Term Evaluation of the England Rural Development Programme (AP02/02)

FOR INFORMATION

MID-TERM EVALUATION OF THE ENGLAND RURAL DEVELOPMENT PROGRAMME (ERDP)

Background

1. This paper sets out the scope and opportunities presented by the 2003 mid-term evaluation of the ERDP. It identifies the key issues that the evaluation should be able to address and others that will need parallel action outside that process (e.g. through the Agenda 2000 mid-term review - see Board paper AP02/01). The paper also sets out, for information, our agenda for the evaluation and seeks the Board's endorsement of the proposed approach. 

2. The ERDP has been prepared under the EU Rural Development Regulation (RDR). Although the RDR measures are biased toward supporting farming and forestry, they offer Member States a relatively flexible mechanism through which to address their rural development needs. The mid-term evaluation, which is an EC requirement, provides an opportunity to seek improvements to the programme and its delivery mechanisms. We will wish to seek changes in order to maximise the potential of the ERDP to achieve relevant Agency policies such as those in our Strategy for Sustainable Land Management in England  (Annex 1) and our approach to integrated development of rural areas. 

The RDR context and timetable for the ERDP mid-term evaluation

3. The evaluation of rural development programmes is a relatively mechanistic process. The requirements are set out in the RDR and in associated Commission guidance (Annex 2 provides more details). Unfortunately the timetable for the mid-term evaluations means that the outcome of the process is likely to be too late to influence the mid-term review of Agenda 2000 which is progressing much more quickly. However, we are already aware that some of the changes to the ERDP we may wish to seek will require changes at EU level in the RDR and other Regulations. These aspects will be pursued in parallel with the ERDP mid-term evaluation process. 

4. In summary, the RDR requires Member States to: 

• submit annual progress reports to the Commission;
  
• prepare mid-term evaluations, carried out by independent evaluators, and send them to the Commission by the end of 2003,  which assess initial achievements and progress against objectives and targets in their rural development programmes. The Commission must present a synthesis report to the Agriculture Council in 2004; 
  
• repeat the mid-term evaluation, 'if necessary', at the end of 2005. DEFRA are pressing the Commission to make this a more substantive analysis in order to inform the reform of the CAP in 2006. 
  

5. Findings from recent and current joint research through LUPG show that in a European context the ERDP is relatively innovative. It uses a broad range of available measures and incorporates new schemes such as the Rural Enterprise Scheme. It was prepared following extensive consultations. The UK is also one of only two countries currently applying modulation to help increase funding for its rural development programmes.

6. We have been closely involved in the national and regional mechanisms that DEFRA has set up to advise on implementation and development of the programme in England. We have also had feedback from other partner organisations, such as the National Park Authorities. 

7. There are two main strengths to the programme. The first is the potential that the various measures offer for a wide range of rural development activities, including a limited amount of support within the Rural Enterprise Scheme for activities 'beyond the farm gate' which local communities and non-farming rural businesses are eligible. The second is DEFRA's willingness to acknowledge and seek to remedy a number of the weaknesses already identified.

8. Our main concerns are:

• the low level of funding for the ERDP and the restrictions due to current EC limits on the use of money generated from modulation  (e.g. money generated from modulation cannot be used to increase funding for the Rural Enterprise Scheme);
  
• the lack of integration between the measures and schemes and their delivery. DEFRA have begun to investigate with partners ways to achieve better integration in delivery and held a workshop in November 2001 at which we were represented;
  
• the lack of facilitation to promote awareness of and uptake ERDP schemes. We are co-funding a new partnership initiative in the North West Region to set up a pilot facilitation service to be managed by the DEFRA regional office;
  
• schemes and processes are very complex for applicants;  and
• the low number of applications for several Rural Enterprise Scheme (RES) measures (e.g. renovation of villages, basic village services and protection of the environment) which is of concern in most regions. High demand for other measures (e.g. farm diversification and tourism development) could lead to funding for RES measures of relevance to the Agency being reduced, unless action is taken soon. Our North East region is seeking to encourage take up of the full range of schemes and is co-ordinating a group of partners to explore how the regional allocation should be prioritised and promoted in 2002.
  

The Countryside Agency's agenda for the mid-term evaluation of the ERDP

10. Annex 3 highlights our current 'shopping list' for action in the mid-term evaluation. For information,  Annex 4 summarises relevant recommended action from the report of the Policy Commission on the Future of Food and Farming. Many of their recommendations are actions which we have pressed for. 

11. The main change we seek is an increase in 2004 of the agreed rate of modulation to 10% (rather than 3.5%) mainly to increase funding for agri-environment schemes (the Policy Commission also call for this). Outside the mid-term evaluation process, we are seeking changes to EU rules to enable the funds generated to be used across the range of ERDP measures.  Other action that we are seeking through the mid-term evaluation process includes: 

1. agri-environment schemes available to as many farmers as possible through an all-England scheme targeted on outcomes identified farm by farm in whole farm plans(the Policy Commission calls for a single scheme, with a new 'broad and shallow' entry level, rationalisation of existing schemes and expanded support for organic farming);
   
2. achieving added value by better ERDP delivery processes  (e.g. more integration of measures; streamlined administration; greater transparency in selection processes; mechanisms for facilitating and co-ordinating scheme delivery; and improved promotion, especially for 'beyond the farm gate' rural development support);
   
3. an expanded and better funded Rural Enterprise Scheme, with support available to all disadvantaged rural communities (one option might be for the Government to consider co-funding the scheme at a higher rate);
   
4. ensuring that the experience of Countryside Agency initiatives is used fully to inform the mid-term evaluation (e.g. LMIs, "Eat the View" and Integrated Rural Development initiatives);
   
5. the need to give higher priority to sustainability and, at the regional level, to eligible non-agricultural elements of rural development, to ensure the ERDP is in tune with other rural strategies and action plans; 
   
6. consideration of whether other RDR measures not currently included in the ERDP should be  (e.g. marketing and processing forestry products, and possible use of Investment in Agricultural Holdings to support environmentally beneficial improvements).  

Outline strategy for influencing

12 The Agency's agenda will be promoted using a range of formal and informal means at both the national and regional levels. These include: inputs to the various DEFRA and Forestry Commission formal reviews and consultations on the ERDP and its measures as listed in Annex 4; the ongoing ERDP consultation mechanisms2 ; the regular liaison meetings with DEFRA ministers and officials, and with the Forestry Commission and other countryside agencies; though joint working with the Land Use Policy Group; though meetings with NGOs and farming organisations; and through our press and publicity work.

Financial and manpower implications

14. Staff resources for this work are limited to around 2 full time equivalents, mainly at S and H grades. Joint working will be essential to deliver the outputs we seek. Greater efforts would mean cuts in other work unless more resources were found. £53,000 is allocated for associated research.

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ANNEX 1

The Countryside Agency's agenda for action relevant to the mid-term evaluation of the England Rural Development Plan 

The Agency's Strategy for sustainable land management in England

1. Our Strategy for sustainable land management in England sets out an agenda for short, medium and long term action on the Rural Development Regulation and the CAP. It also proposes short to medium term action that has implications for the mid-term evaluation of the England Rural Development Programme and related aspects of the Rural Development Regulation. This includes:

In the short term: 

1. to make maximum use of the opportunities currently presented by the Rural Development Regulation, through the England Rural Development Programme (ERDP), to help everyone who is eligible. We want:
   
   1. added value by better integration of ERDP scheme delivery, through facilitation, co-ordination and, where appropriate, delegation of delivery;
      
   2. an expanded and better funded Rural Enterprise Scheme, with support available to all disadvantaged rural communities;
      
   3. the case made for a higher, and more proportionate, share of EU RDR funds - our current share, based on historical allocations, is only 3.5%;
      
2. provision of integrated business, conservation and environmental advice free at the point of delivery;
   
3. further development of needs-based training packages to support rural businesses and communities;
   
4. improved links between local communities and land managers to develop the interchange of goods and services that one might want from the other;
   

1. an expanded ERDP through a higher and more proportionate share of the EU RDR funds, supplemented by funds if any released as a result of EU-wide degressive support payments;
   
2. in the absence of degressivity, an increase in the percentage rate of modulation above the 4.5% level agreed in the ERDP (Note:  our recent press statement and the Policy Commission's report both call for modulation to be increased to 10% in 2004 and 20% by 2006 - see below);
   
3. agri-environment schemes available to all farmers through an all-England scheme targeted on outcomes identified farm by farm in whole farm plans;
   
4. greater integration of multifunctional land management into the rural economy. 

2. We have pressed the Secretary of State to commit the UK government to increase the UK modulation rate to 10% from 2004 onwards and to 20% from 2006 if Europe fails to reform the CAP. The effect of 10% modulation would be to almost triple the currently agreed 2004 rate of 3.5% (forecast to generate £70 million with matching funds from the Treasury). DEFRA have undertaken research on the likely effects of applying modulation at a range of rates. We have seen the findings which were submitted to the Policy Commission, but the figures are not yet publicly available.

3. We have also urged the Secretary of State to work with European partners to broaden the things on which 'modulated' money can be spent to benefit the wider rural community. 

ANNEX 2

ENGLAND RURAL DEVELOPMENT PROGRAMME (ERDP) MID-TERM EVALUATION

EC framework and timetable for the mid-term evaluation of rural development programmes

The Rural Development Regulation (RDR) sets the framework and timetable for the evaluation of the rural development programmes of the RDR. Unfortunately, the RDR requirements mean that the outcome of the 2003 mid-term evaluation process will be too late to influence the mid-term review of Agenda 2000, which is progressing more quickly. Under the RDR, Member States must:

• submit annual progress reports to the Commission noting how measures are progressing and any proposed changes. Each Member State is required to inform the EC about follow-up action it intends to take in the light of the recommendations in its evaluation. Related to this is the option once a year for Member States to seek Commission approval to any significant amendments needed to the programme (this is likely to include any changes that would result from increasing the UK rate of modulation). The Commission has been asked to make a short summary of Member States' annual reports and present the results once a year from 2001;
  
• prepare mid-term evaluations, carried out by independent evaluators, to be sent to the Commission by the end of 2003. These evaluations are expected to examine initial achievements, their relevance, and progress against objectives and targets stipulated in the rural development programme (See Annex ....for details). DEFRA intend to appoint mid-term evaluators by mid-2002. The Commission has to present a synthesis report to the Agriculture Council in 2004. IEEP advise that is possible that progress under the RDR will also be examined in one or more of the integration reviews called for in 2002-3 under the Cardiff environmental strategy for agriculture;
  
• 'if necessary', repeat the mid-term evaluation at the end of 2005  (Article 45). DEFRA are pressing the Commission to make this a more substantive analysis in order to inform the reform of CAP in 2006. This will be important because the so-called 'ex-post' full evaluations of the effects of the completed 2000- 2006 rural development programmes are not due until the end of 2007 - too late to influence CAP reform for the period 2007-13.
  

EC mid-term evaluation requirements

2. The aim of the evaluation of the ERDP is to 'help to reorientate the programme if necessary and improve the implementation.' It is largely a technical exercise, evaluating the programme against the objectives, indicators and targets that have been set in the plan and recommending any changes that should be made (which do not require any changes to EC legislation). The evaluations must be carried out according to detailed EC guidance and through two types of questions:

• 'specific questions for the rural programming document in question';  and
  
• common evaluation questions relevant at Community level' (Article 44 of the RDR Implementing Regulation, 1750/1999). These include both questions that relate to each RDR measure implemented (e.g. agri-environment schemes, Rural Enterprise Scheme) and 'cross cutting' questions, such as environment and employment. The latter are designed: to examine:
  
  1. whether the programming approach has led to added value rather than just collating a series of measures;
  2. direct and indirect benefits; 
  3. any side effects; 
  4. the main effects of the programme in relation to the objectives of the RDR.  

3. The evaluation is also expected to examine 'initial achievements, their relevance and consistency with the rural development plan and the extent to which the targets1 have been attained. It should also examine the use made of financial resources and the operation of monitoring and implementation'  .

4. The guidance acknowledges that the mid-term evaluation is likely to need to concentrate on outputs and their immediate impacts because the wider, so-called 'global' impacts (positive and negative) may not become obvious until later. However, it also notes that evaluation must go beyond monitoring, reporting and auditing dealing simply with inputs, outputs and sometimes with results. It must also be concerned with the positive or negative impacts, expected or unexpected outcomes, including those which only become evident in the long term or which benefit people beyond the direct beneficiaries. It is also expected to take into account 'interactions between different actions .... and should examine the complementarity and synergy effects they may produce'.

Member State Monitoring and evaluation of the RDPs 

5. The RDR also expects Member States to carry out additional monitoring and evaluation of the implementation of their programme. The arrangements for England are described in the ERDP Section 12.2.

ANNEX 3

• REPORT OF THE POLICY COMMISSION ON THE FUTURE OF FOOD AND FARMING - Recommendations relevant to the mid-term evaluation of the England Rural Development Plan (with annotations relating to CA concerns)
  

• the Government should increase rates of modulation on a flat rate basis to 10% from 2004. The Government should fully match fund the modulated resources at a rate of 100% from the Exchequer. The resources made available should be used to provide additional funding for the England Rural Development Plan.  (p77).  Some of the resources need to be spent on assisting industry restructuring. The bulk should go towards paying farmers through agri-environment schemes for the environmental benefits they can provide to society through positive management of the land. The Commission notes that EU law may prevent modulation being applied in England alone and urges the devolved administrations and UK Government to move forward.
  

• set up a pilot unified scheme of demonstration farms by the end of 2002 and if successful roll out a programme as soon as possible  (p30).  One of the purposes would be to provide a focus for promoting to local farmers the agri-environment and farm business development schemes available through the ERDP;
  
• key demonstration farms might 'offer the ideal location for establishing a permanent partnership offering local facilitation services, smaller versions of the successful Bodmin and Bowland initiatives (p 30). If these partnerships were successful in attracting the involvement of local farmers, DEFRA should give serious consideration to offering a delegated grant scheme, tailored to the local environment and meeting the needs of local farmers and communities. these are report proposals not full recommendations); 
  
• use the lessons learned from land management initiatives to inform a full and open review of farm advice services and priorities for action  (p63).  DEFRA should thoroughly and rapidly evaluate the results of the Countryside Agency's LMIs and the (MAFF) Forest of Bowland and Bodmin Moor pilot projects.
  
  The Policy Commission support delivery of a national farm advice service with three elements: an integrated and co-ordinated network of farm advice and training providers; a free farm advice, facilitation and training service; and accredited advisers who are able to deliver a high-quality tailored service to farmers.  The Commission recognise this would need a substantial increase in Government funding which will be difficult unless there are changes to the EU rules on RDR funds (including modulation) to enable them be used more flexibly and to support advice and facilitation).
  

• Funding for Processing and Marketing Grants (PMG) should be expanded by £5 million per year for the next 3 years, to assist collaborative enterprises with the investment needed to establish themselves in processing and marketing their products (p 43) (
• both the upper threshold of grants should be removed and the lower threshold reduced  to allow respectively larger projects to be funded if this offers best value for money and smaller enterprises to access funds (p 44). (Note:  The Wales Rural Development Plan includes a Small Food Processors Grant under the Investment in Agricultural Holdings measure (RDR Article 4). This grant helps farmers to set up new, and develop existing, small scale projects (costing less than £40,000) adding value by processing on their farms. It is designed to be complementary to the marketing and processing scheme in Wales. This approach might be developed in the ERDP).
  
• Rural Enterprise Scheme
  
• the Rural Enterprise Scheme (RES) budget should be substantially increased at mid-term review (p44 - in the context of promoting local food)  unless EU rules are changed this would result in reduced funding for other RDR measures that cannot be funded through modulation. Also, as Commission has focused on food and farming no mention is made of the potential of the RES for supporting development of tourism and craft activities and other rural businesses).
  

• England needs a long term strategy for creating and exploiting opportunities in non-food crops  (p 54) (Note: this would need to inform the ERDP energy crops scheme);
  
• Given the environmental rationale for growing biofuels care must be taken to ensure that they are grown and transported by energy efficient and ecologically sound means. The report also recommends reducing the duty on biofuels to help convince processors to drive the market forward (p55).  

Agri-environment schemes

• future environmental schemes, and, where appropriate, woodland schemes, should include water management as an option for support  to aid flood management.  The use of land management options for flood management will be aided by a rapid shift to whole-catchment planning and away from the current system. The farming industry should look to embrace water management as a viable 'alternative crop) (p56). 
  
  Note:  the 'land reparcelling' measure, within the Rural Development Regulation Article 33 rural development measures, is being used in Germany to aid land transfer to improve wetland habitats. This measure is not currently applied in the UK but might be useful in this context;
  
• agri-environment schemes should be rationalised to enable them to become the upper tiers of a new single stewardship scheme.  The same scheme should in due course incorporate the existing land management grants, for example for woodland and flood protection;
  
• the bulk of the new resources made available for agri-environmental programmes by further modulation should be spent on a new, broad and shallow 'entry level' stewardship tier, open to as many farms in England as possible, and accessed through a whole farm plan. This tier must be kept as simple and easy to administer for farmer and Government as possible, with payment on a flat rate basis per hectare. There should be as light a touch in compliance monitoring as EU rules will permit;
  
• the operation of the new stewardship tier should be piloted across a range of sectors as soon as possible (p87). Farming industry representatives and land managers should be involved from the start in the design and implementation of the scheme. The Government will need to consult widely on the resulting revision of the ERDP;
  
• support for organic farming should become a separate strand of the recommended new 'broad and shallow' environmental scheme  (p88).  Organic farmers would receive per hectare payments for the environmental benefits they deliver alongside conventional farmers. They would need their own set of prescriptions. The Policy Commission considers that organic farming would justify higher payments to reflect its holistic approach and the increased biodiversity and other environmental benefits delivered across the whole farm area. They propose reassessing whether conversion support that farmers currently receive is still appropriate. Organic farmers would be well placed to pass on into to higher tiers of stewardship. (Note: the specific environmental benefits that organic farming provides should be clearly identified and explicitly related to the payments made);
  
• Government needs to ensure that DEFRA gets the running costs needed to ensure that the new scheme is administered smoothly and effectively  (p 87)  (including investments in mapping technology and IT); 
  
• Farmers joining the new entry level scheme should receive three free days of advice from a local accredited adviser  (p64) (Note: this should link with the Vocational Training Scheme).
  

• the existing Hill Farming Allowance funding along with receipts from modulation should be combined in upland areas to become a single 'broad and shallow scheme' for hill areas. (p85-6) Taking the two streams of funding together would produce higher payments in hill areas. As in the lowlands, the existing more bespoke schemes above the new tier would be rationalised into steps of a single ladder, ascending through more demanding tiers that are, increasingly, aimed at particular areas, habitats and species. Upland areas will continue to be targets for these upper tier schemes because of their special environmental character. 
  
  The Policy Commission endorsed the Hills Task Force (HTF) proposal that the long term aim for Less Favoured Area Support should be an integrated tiered payment scheme reflecting environmental and social benefits, actual costs of landscape, wildlife and access maintenance and the economic difficulties of traditional hill farming. They also supported the HTF recommendation that the payment basis for environmental schemes should reward the production of environmental outputs as well as reflecting agricultural income foregone. 

• DEFRA should simplify the administration of the VTS as far as possible within EU rules (p61); 
  
• It should be better integrated into the environmental management aspects of the ERDP (p61);
  
• training is needed to develop advisers' all round skills and knowledge (p64) (Note: the connection with the VTS is not made in the report but VTS offers potential to achieve this).  

Early retirement

• the report decided against recommending a retirement incentive scheme because it was not considered to offer value for money commensurate with the quite large costs involved this is an RDR measures which is not applied in the UK).
  

• introduce capital allowances on specified new environmental pollution control and monitoring equipment in agricultural use (p 89) to assist and encourage take up by farmers of environmentally beneficial technologies. (Investment in Agricultural Holdings (RDR Article 4) could be used to provide grants. For example, the Wales Rural Development Plan includes a Farm Improvement Grant to help farmers adopt best practice to make animal welfare, hygiene and product quality improvements and to enhance, protect and maintain the environment of the farm. Pollution and waste management is one of the three categories of eligible improvements. It is a condition that the investment must take the farm above the statutory minimum requirements); 
  
• development of a strategy for the production of organic food addressing all parts of the food chain (Note: the strategy should inform or be part of the mid-term evaluation and be used as a basis for encouraging integrated use of ERDP measures that will support implementation of the strategy e.g. marketing of quality products); 
  
• facilitate more and better quality educational visits to farms - the report suggests a number of approaches educational access could also be promoted through a basic agri-environment scheme as is the case with Tir Gofal in Wales and Countryside Stewardship); 
  
• efforts should be made to establish EU-wide agreements on the raising of animal welfare standards in Europe the Policy Commission report does not mention that the RDR Article 33 (indent 11) measure relating to the protection of environment includes 'the improvement of animal welfare'. This is included within the current Rural Enterprise Scheme (although it is given little emphasis), but it could be used more to raise animal welfare standards in England);
  
• encourage collaborative ventures (p35) and give high priority for grant funding and Government aided venture capital initiatives to professionally managed collaborative ventures developing processing units  (p45) (Note:  the Marketing and Processing Grant scheme already allows farmers to collaborate with other non-farming investors: this could be better promoted and used). 

• enabling modulation funds to be spent on a wider range of measures  (p 76);
  
• much greater flexibility in use of RDR rules,  for example to enable them to support advice and facilitation (p63); 
  
• providing higher payments for organic farming through a separate strand within a new broad and shallow agri-environment scheme to reflect the increased biodiversity and other environmental benefits delivered across the whole farm area  (p88-9). (Note:  this is likely to need a change in the EU criteria for calculating the payments, to introduce delivery of public benefits and to reduce the weight of the 'income foregone' element of the current payment).  

ERDP Mid-term evaluation - timetable for planned Government reviews and CA 'shopping list' for changes ANNEX 4  

NOTE 1. Early retirement  (the fourth 'Accompanying measure) is not implemented in the ERDP. The CA response to the ERDP original consultations was that we did not see a new scheme as a high priority. It would be costly, unlikely to be cost effective, likely to hasten the current trends to leave farming and farm enlargement and paid insufficient attention to other aspects of the economy of rural areas. This conclusion is supported by the report of the Policy Commission on the Future of Food and Farming. 

Rosie Simpson

January 31 2001