In the last two decades, the European Union (EU) rural areas have been facing major challenges. Climate change is threatening biodiversity and prosperity, and the ageing population and the lack of generational change are causing an unprecedented rural depopulation. Yet, what could be the reasons behind these negative phenomena?

Not surprisingly innovation and digitalisation in rural areas are lagging behind urban areas. According to what Ursula von der Leyen stated in her latest State of the Union speech, as of today 40% of the people in Rural Areas do not have access to broadband internet. Digital skills amongst adults are also lower compared to adults of the same age group living in urban areas (48% against 55%). As a consequence, the lack of innovation and digitalisation is preventing farmers to become more efficient in their work and to keep pace with more stringent environmental regulations.

Additionally, climate change represents another considerable threat to rural areas. It is expected that European farms will – if not already – suffer from events such as the changing rainfall patterns, rising of temperatures, variability of temperatures, and extreme weather events, such as heatwaves, droughts, storms, and floods just to give an example. As these events are becoming more frequent, they are increasingly threatening the income and livelihood of farmers, by jeopardising harvest and the growth of crops. This reality, combined with the fact that most of the job opportunities are concentrated in urban areas, is causing a significant rural depopulation.

Yet, the recent EU investments in rural areas for digitalisation, and sustainable farming are the first step to reverse these trends, as they pave the way for new – and more environmentally friendly – job opportunities. As part of the reformed Common Agricultural Policy (CAP), which alone disposes of a budget of EUR 387 billion over the arch seven years (2021-2027), the EU has put in place different mechanisms to enable digitalisation, generational change, and sustainability in rural areas.

More specifically, the EU envisions greater support towards young generation farmers by distributing an amount at least 3% of their direct payments’ budget of the CAP towards young farmers, as start-up aid. Additionally, as part of the Next Generation EU fund, the EU makes available an additional EUR 8 billion for sustainable digitalisation. This fund does not only have the potential to unlock more efficient business models based on the new technologies but also to create new job opportunities for the rural areas.

When it comes to sustainability, 35% of the CAP budget is allocated to measures to support climate, biodiversity, environment and animal welfare, and 25% of the funding is allocated to innovative farming models and echo-schemes, such as organic farming, or agro-ecology. The reformed CAP also entails an enhanced conditionality mechanism that links CAP payments to a set of mandatory environmental requirements. The goal is to reduce greenhouse gas emissions coming from agriculture and to limit the impact of agriculture on climate change.

As investments from the European Union in digital and sustainable transformation increase, European rural areas must not lose their chance to fuel the rural economy and attract a new generation of rural entrepreneurs, by creating more sustainable and innovative business models. Although it is too early to say whether the policy will succeed in practice, at the theoretical level the EU has set a solid base for rural areas to thrive.

Authored by Mario Ceccarelli, Junior Project Officer at UIIN

Resources:

European Commission. (2021, July 12). The cap and climate change. ec.europa.eu. https://ec.europa.eu/info/food-farming-fisheries/sustainability/environmental-sustainability/climate-change_en.

European Commission. (2021, August 3). The new common agricultural Policy: 2023-27. ec.europa.eu. https://ec.europa.eu/info/food-farming-fisheries/key-policies/common-agricultural-policy/new-cap-2023-27_en.  

European Network for Rural Development. (2021). Eu Rural Review No 32. ernd.ec.europa.eu. https://enrd.ec.europa.eu/sites/default/files/enrd_publications/publi-enrd-rr-32_ltvra.pdf