Intensities of total public spending, 2000-06 and 2007-13 compared

Looking at absolute spending by programme area can give a slightly misleading picture of relative resourcing between areas, because the territory and population of these areas vary considerably. Also, the time period is not entirely equivalent as between old and new MS, in that the EU-15, Bu and Ro had an uninterrupted programme period for the full seven years whereas the other new MS had two separate programming periods, the second of which was particularly short (2004-06).

Thus it is interesting to compare areas on the basis of a measure of the ‘intensity of spend’ – i.e. how much was spent per hectare of land, or per inhabitant, or per potential beneficiary, on average in a year. This should give a better basis for making some comparison of the relative level of resourcing for RD, between programme areas.

The intensity of spend was assessed by calculating average annual spend17 in each

programme area or Member State18 for the 2000-06 programming period and 2007-13 period,

expressing this per hectare of Utilisable Agricultural Area (UAA)19, per agricultural holding20

and per capita of those employed in the primary sector21, for all programme areas for which

these denominator characteristics were available, in 2002. For the 2007-13 period calculations, 2002 data were used as the denominator because this forms a (largely) consistent set. However, restructuring in the agricultural sector might be expected over time with fewer holdings and a smaller agricultural workforce. This means that the expected annual expenditure per holding and per worker in this period are likely to be under-estimated because we are using rather dated figures for holdings and workforce. Whilst UAA is considered more stable over time, there is nonetheless a trend towards gradual diminution of this area over time, meaning that the figures provided are also likely to be under-estimations in some cases. The results for both programming periods are presented in Table 3.2.

In 2000-06, average spending per hectare UAA was 2.6 times higher in the EU-15 than in the new MS and spend per capita of primary sector workforce was 69% higher. Spend per holding was 6.6 times higher. These differences are partly explained by the lower level and more restricted range of RD funding that was available to the new MS prior to accession, only under the SAPARD instrument (which applied 2000-04 for eight new MS and 2000-06 for Bulgaria and Romania).

The greatest intensity of spend per hectare UAA, 2000-06 occurred in a number of regions of Italy (particularly objective 1 regions), as well as Luxembourg, Austria and Malta. In most of these cases, relatively high spend per hectare is partly a function of small farm size, as well as Objective 1 status, in that the spend per holding is not especially high. Spend per capita of those working in the primary sector 2000-06 is highest in Luxembourg. However, the highest

annual spends per capita are in Objective 1 / convergence regions such as Basilicata and

some new German Länder, for example Sachsen Anhalt, Mecklenburg Vorpommern and

17_{Average spend is total spend divided by 7 years with the exception of Malta and Cyprus where the average spend is total} spend divided by the 3 years over which rural development funding has been available.

18_{Data restrictions mean it is not possible to carry out this analysis for every programme area. The data presented are as} disaggregated as possible.

19

UAA is a proxy for eligible land area – in reality a slightly larger area might be eligible, since UAA doesn’t include all forest land or common grazings.

20

This is a proxy for the number of beneficiaries, since most, but not all, funding goes to primary sector businesses.

21

Data on employment are for 2002 and are taken from Eurostat’s regional economic accounts as employment in agriculture, hunting and forestry. Exceptions are Germany, England, Scotland and Wales where data also include employment in fishing and Northern Ireland and Romania where data are from Eurostat’s regional labour market statistics and cover employment in agriculture, hunting, forestry and fishing.

Thuringen22. Other areas spending relatively high levels of funds annually on a per capita

basis are Finland, Ireland and Sweden. All of Ireland had Objective 1 status (Objective 1 funds comprised 5.0% of total funding in Ireland), but the high figures may also reflect relatively high spend on the axis 2 measures in these areas, supporting landscape management in areas of otherwise relatively low population density. The greatest average spend per holding was in the German new Länder, 2000-06, as might be expected given the large farms in these regions. Spend per hectare UAA was higher than the EU average in these areas, but not significantly so.

Table 3.2: Intensity of total public spend by programme area, in Euro

Per hectare Per holding Per capita employed in primary sector Average annual spend…

2000-06 2007-13 2000-06 2007-13 2000-06 2007-13 Austria 268.12 340.14 5,025.81 6,375.78 1,613.40 2,046.78 Belgium 43.08 68.82 1,298.53 2,074.44 1,157.80 1,849.63 Bulgaria 7.04 82.00 56.35 656.39 48.83 568.84 Cyprus 124.00 296.94 429.01 1,027.33 1,009.97 2,418.51 Czech Republic 23.34 142.24 1,851.83 11,285.63 395.51 2,410.37 Baden-Wurtemberg 172.16 125.05 3,861.87 2,805.22 2,252.47 1,636.17 Bayern 144.81 109.48 3,511.25 2,654.64 2,266.28 1,713.39

Berlin N/A N/A N/A N/A 200.17 N/A Brandenburg 131.15 148.76 25,980.51 29,469.10 4,315.08 4,894.50

Bremen N/A N/A N/A N/A 952.42 N/A Hamburg N/A N/A N/A N/A 1,735.93 1,355.17 Hessen 101.59 82.55 3,168.75 2,575.00 1,637.08 1,330.32 Mecklenburg Vorpommern 109.46 122.16 28,545.96 31,858.03 4,583.31 5,115.09 Niedersachsen 67.54 78.71 3,152.49 3,673.86 1,479.23 1,723.86 Nordrhein Westfalen 52.86 74.88 1,511.22 2,140.89 660.13 935.19 Rheinland Pfalz 121.68 98.29 3,015.06 2,435.59 1,668.80 1,348.07 Saarland 129.49 109.02 6,111.65 5,145.53 2,398.82 2,019.62 Sachsen 186.82 188.46 21,039.84 21,224.47 3,596.71 3,628.27 Sachsen Anhalt 164.31 130.67 39,852.45 31,694.42 5,621.42 4,470.68 Schleswig-Holstein 57.50 64.68 3,191.35 3,589.92 1,404.04 1,579.39 Thuringen 176.13 161.21 28,062.44 25,684.08 4,394.68 4,022.22 Germany 120.54 111.10 4,964.64 4,576.13 2,264.29 2,087.10 Denmark 29.20 44.65 1,596.90 2,441.74 892.24 1,364.28 Estonia 34.31 166.06 740.61 3,584.47 716.51 3,467.81 Spain 35.24 61.57 777.76 1,358.76 922.07 1,610.86 Finland 193.73 331.26 5,683.91 9,719.02 4,487.77 7,673.73 France 58.52 61.41 2,649.25 2,779.80 1,957.68 2,054.15 England 14.00 44.60 803.20 2,559.77 718.30 2,289.19 Scotland 27.40 68.31 5,157.38 12,859.48 2,215.39 5,523.88 Wales 72.33 N/A 2,847.86 N/A 2,905.14 N/A Northern Ireland 74.72 43.60 2,794.55 1,630.66 2,424.23 1,414.57 UK 23.01 46.87 1,458.42 2,970.74 1,222.46 2,490.09

22_{Note that where Objective 1 areas were smaller than the Guarantee-fund programme area, these Objective 1 funds are here} dispersed across more UAA, holdings and population than was actually the case in practice.

Per hectare Per holding Per capita employed in primary sector Average annual spend…

2000-06 2007-13 2000-06 2007-13 2000-06 2007-13 Greece 153.43 228.72 779.25 1,161.66 764.77 1,140.08 Hungary 25.88 169.34 145.67 952.98 484.34 3,168.60 Ireland 118.95 140.63 3,844.91 4,545.77 4,322.73 5,110.68 Abruzzo 289.27 128.98 1,940.87 865.41 3,395.42 1,513.99 Basilicata 255.41 167.15 1,898.66 1,242.57 5,919.21 3,873.80 Bolzano 123.15 161.06 1,559.56 2,039.60 2,232.31 2,919.43 Calabria 212.35 283.87 710.74 950.11 1,362.94 1,821.97 Campania 223.77 477.48 731.80 1,561.50 1,239.17 2,644.12 Emilia Romagna 102.25 124.26 1,255.51 1,525.80 1,430.60 1,738.58 Friuli Venezia Giulia 149.23 161.40 1,291.18 1,396.44 1,804.08 1,951.16 Lazio 107.32 129.09 596.27 717.21 1,186.63 1,427.30 Liguria 677.86 785.04 1,208.90 1,400.04 2,401.62 2,781.35 Lombardia 94.42 131.03 1,504.86 2,088.33 1,304.57 1,810.38 Marche 96.28 128.20 885.95 1,179.75 1,868.54 2,488.19 Molise 92.13 130.40 720.62 1,019.92 1,653.80 2,340.66 Piemonte 88.63 119.15 1,175.31 1,580.12 1,467.96 1,973.57

Puglia 95.69 N/A 431.05 N/A 1,059.49 N/A Sardinia 114.91 155.40 1,538.09 2,080.16 2,934.31 3,968.45 Sicily 160.89 236.93 698.39 1,028.47 2,009.18 2,958.79 Toscana 104.28 148.12 940.06 1,335.19 1,674.58 2,378.44 Trento 181.99 243.91 1,049.77 1,406.89 2,482.23 3,326.67 Umbria 164.94 300.92 1,368.81 2,497.27 3,839.73 7,005.24 Valle d'Aosta 176.18 467.11 1,874.10 4,968.72 3,823.17 10,136.19 Veneto 115.01 157.02 656.07 895.72 1,381.07 1,885.54 Italy 136.12 165.30 909.08 1,103.97 1,747.87 2,122.57 Lithuania 24.12 123.99 230.87 1,187.03 251.39 1,292.52 Luxembourg 327.26 409.33 17,119.07 21,412.03 10,485.43 13,114.87 Latvia 22.12 78.09 202.46 714.86 386.87 1,366.02 Malta 235.92 N/A 231.63 N/A 16.57 N/A

Netherlands 32.87 33.86 778.94 802.62 588.59 606.48 Poland 34.40 170.50 228.46 1,132.34 212.99 1,055.66 Portugal 154.18 190.69 1,598.56 1,977.17 935.55 1,157.12 Romania 6.35 95.84 19.73 297.69 25.05 377.83 Sweden 120.70 167.54 5,376.23 7,462.27 3,918.01 5,438.25 Slovenia 77.57 340.33 489.10 2,145.97 377.72 1,657.27 Slovakia 27.41 171.27 816.83 5,102.92 583.08 3,642.62 EU-15 average 139.30 160.13 5,063.47 4,717.46 2,485.38 3,324.45 NMS average 53.54 166.96 453.55 2,553.42 375.74 1,947.82 EU average 121.34 163.02 4,091.51 3,801.90 1,995.44 2,742.03

It is also interesting to note those areas with a particularly low intensity of spend 2000-06, indicating a lower level of RD resourcing:

• The programme areas with less than €30 per hectare UAA/year for RD include

Denmark, England and Scotland, as well as seven of the new Member States.

• Those areas with under €500 per holding/year include nine of the new Member

States (and the new MS average as a result), the exceptions being Czech Republic, Estonia and Slovakia. The only EU-15 region in this category was Puglia. This tends to reflect areas with particularly large numbers of very small holdings (although not all such areas appear in this category).

• Those areas where there is less than €750 per person employed in the primary

sector for RD include all new Member States except Cyprus, as well as Berlin,

Nordrhein-Westfalen, England and the Netherlands. In some cases these figures reflect little agricultural activity (Berlin), in others a relatively low level of support (England and the Netherlands, for example) and in some small farm sizes resulting in a greater distribution of total funds across those employed in the agricultural sector (the new Member States where the situation is exacerbated by a relatively low level of support, particularly prior to accession).

Whilst average spend per hectare UAA is planned to be marginally higher in the new MS (minus Malta) compared to the EU-15 in 2007-13, spend per holding and per capita is significantly higher in the EU-15. This reflects these countries’ generally larger holdings and fewer people employed in the primary sector. There are some exceptions to these general trends, for example, expected spend per holding 2007-13 in the Czech Republic is relatively high as a result of some very large farms skewing the sample average. The regions expecting to spend the largest amount per hectare UAA 2007-13 include Liguria, Campania and Valle d'Aosta. Outside Italy, relatively large amounts per hectare are expected to be spent in Luxembourg, Slovenia, Austria and Finland. Again, generally small farm sizes appear to be influential in this pattern. Although Finland and especially Luxembourg also expect to spend relatively high amounts per holding and per person employed in agriculture, spending per holding is expected to be relatively high in Austria, whereas spending per person employed is not. Expected spend per holding is high, as would be anticipated, in regions with very large farms including, for example, a number of new German Länder (Mecklenburg-Vorpommern, Sachsen Anhalt and Brandenburg) as well as Scotland. In per

capita terms, the regions where expenditure is expected to be relatively high include

Luxembourg, Valle d'Aosta, Finland and Umbria.

The main point of difference in expenditure intensities in the new period, as compared to the old, is greater similarity in expected spend per hectare UAA between the old and new Member States. There is also a reduction of the gap in spending per holding and per person employed in the primary sector between these two groups, for the 2007-13 period. Also, while intensity of spend for all 3 axes increases significantly in the new MS between the two programme periods, it increases only slightly per hectare, decreases slightly per holding and increases significantly only per agricultural employee, among the EU-15. However, the missing data should be borne in mind, as this may have an impact on the comparison.

The differences in expenditure intensity at the individual programme level, between periods, illustrate how for some regions, the new programme period represents a significant decrease in overall public funding, even before accounting for inflation, for EU RD measures. This is the case per hectare UAA, per holding and per agricultural work unit for the same 7 German Länder (and for the average for all Germany), as well as for 2 Italian regions (Abruzzo and Basilicata), and Northern Ireland, in the UK. By contrast, the intensities of spend for most of the accession states grow significantly between the two programming periods.

The available data suggest that average spend overall at the EU level is expected to be higher on a per hectare basis in the 2007-13 programming period than in the previous period (€163.02 compared to €121.34) and on a per capita basis (€2,742.03 compared to €1,995.44). However, on a per holding basis expected payments will be smaller (€3,801.90 compared to €4,091.51). This is an apparent paradox because the same data on UAA, holdings and workforce are used for both periods so one would expect an increase against all three denominators, between the two periods. However, looking more closely, the lower spend per holding is apparently explained by farm structure in the regions where data are missing, for the second period.