LEADER in Romania

capacity that lacks experience in dealing with non-agricultural measures (Gorton et al. 2009), but it also lacks experiences in strategic long-term planning (SCRN 2009). Therefore, with the loss of autonomy with EU accession, adapting to European policies not only turned out to be problematic in compliance with standards and other requirements, but also in programme elaboration that satisfied national and European concerns (for details, see Chapter 7). The NRDP was finally launched in 2008. The community contribution from 2007-2013 amounts to Euro 8.1 billion (EC/2009/545) and the EU co-financing rate is at 82% for Axis-2 measures and 80% for all other measures high (cp. Section 3.1). Within the implementation of the NRDP, however, handling and accessing EU rural development funds appear to remain problematic: Several rural development measures have been delayed, e.g. farm advisory service and measures under the LEADER Axis. Further, while for some measures the absorption of funds fails to appear due to little interest from the side of potential beneficiaries (e.g. Measure 142 Support for Producer Groups), other measures are over-requested (e.g.

Measure 322 Village Renewal).

After becoming aware of the low absorption rates of EU funds, the NRDP implementation has been pushed, but Romania still ranks last among the EU-27 in terms of EAFRD fund absorption, at 17.7% (EAFRD absorption rate at EU-level was 32.4% on 30.06.2011) (ENRD 2011). Taking into account all EU funding sources available to Romania from 2007-2013, the absorption rate was 3.5% in October 2011 (Mediafax 2011). Thus, the agricultural and rural sector is performing comparatively well in fund absorption. Generally, the problems in EU programme management are rather profound, and not necessarily sector-specific obstacles.

External pressure is likely to enhance this unsatisfactory situation, as donors who provide state credits [primarily the International Monetary Fund (IMF), the World Bank, and also the EC] see the absorption of funds as essential for economic recovery (EIU 2010). Indeed, not only was the agricultural administration confronted with the challenge of institutional expansion in the run up to EU accession, but it also had to tackle consolidation efforts in response to the fiscal crisis facing Romania, which include staff and salary cuts.⁶⁶

Despite several institutional changes in recent years, some fundamental statements on the administration in charge with the NRDP implementation can be made: The Managing Authority settled in the Ministry of Agriculture and Rural Development (MARD) is responsible for the NRDP implementation.⁶⁷ The Managing Authority is represented at the county level by the rural development department in the 42 Directorates for Agriculture and Rural Development (DARDs).⁶⁸ The Paying Agency for Rural Development and Fisheries, which has evolved from the former SAPARD-Offices, is beyond the handling of financial-technical issues, also involved in the selection of beneficiaries for some measures. The Paying and Intervention Agency for Agriculture (PIAA) in charge of CAP Pillar 1 has a minor stake in administering area-related Axis-2 measures.

3.5.2 LEADER in Romania

LEADER and the National Rural Networks 63 and policy perception are heavily influenced by four decades of socialism, which generated mistrust of local actors related to institutionalised forms of associations and cooperation, particularly the rural environment is characterised by a low rate of trust in formal affairs and institutions (Mandl et al. 2007; Marquardt et al. 2009) and 83% of surveyed members of the agricultural administration declared that they see a general problem with collaboration between public and private actors (Marquardt et al. 2009). Moreover, until today, hierarchical structures in policy-making and in the administration predominate, and developing new modes of regional governance remains demanding. Though local communities gained some first experience with inter-community associations and accession programmes in the pre-accession period, they still lack capacities for project planning and fund management. Besides registered microregion-associations, a few informal groups including private and public actors were established – mostly externally stimulated and technically and/or financially supported – for realising funded pilot-projects.⁶⁹ However, these initiatives rarely applied an integrated approach and dissolved after their project ended. Another constraint for the implementation of LEADER is seen in the lack of financially strong partners for co-financing projects (NRDP 2010). This concerns both financially strong partners from the private and public sectors.

From the administrative point of view, the (little) experience with administering rural development policies gained through the SAPARD pre-accession instrument (see above) can be assumed to be little helpful for managing the integrated LEADER approach with less schematic measures.

Yet the LEADER programme is a completely new and more demanding approach for both the administration as well as for potential beneficiaries. Overall, for the implementation of LEADER in Romania, the SWOT-Analysis (Strengths-Weaknesses-Opportunities-Threats-Analysis) prepared for the NRDP identifies the valorisation of funds and the improvement of governance, as well as the following threats: 1) the existence of non-representative partnerships⁷⁰ and; 2) the low absorption rate of funds.

3.5.2.2 Design of the Romanian LEADER programme

Acknowledging the outlined burdens potentially hampering the implementation of LEADER, the EC facilitated the framing conditions for implementing LEADER for Romania (as well as for Bulgaria) in the current funding period. The EC allowed both countries to:

1. Set up an additional preparatory LEADER measure aimed at capacity-building at the local level, whose implementation, however, was to formally start not after 2009 (EC/2006/664;

EC/2007/434; NRDP 2010). Thus, the LEADER Measure 43 as introduced in Section 3.2.2 includes for Romania (and Bulgaria) two sub-measures. The additional one, Sub-measure 43.1, for which private co-financing was required, is available to potential LAGs.

It supports building representative PPPs, and drawing up an RDC in order to participate in the LAGs’ selection. Furthermore, under this measure, centrally-organised trainings for potential LEADER beneficiaries are funded;

2. Extend the period between NRDP approval and call for LEADER applications (EC/2007/434), allowing more time for capacity-building;

69 Programmes that tried to root at the local level are, for instance, the “Rural Development Project” (2000-2006) of the World Bank (see World Bank 2008b) and the “Local Agenda 21” (2000-2009), a United Nations Development Programme (see UNDP 2007b). Both of these programs initiated and co-financed the implementation of concrete infrastructure projects, whereas the planning and realisation of the projects was technically assisted. The programmes consider more or less a bottom-up or participatory approach and have different sub-focuses, but they do not follow an integrated regional development approach.

70 Within the SWOT-Analysis, the phrase “non-representative partnerships” is used without any explanation (NRDP 2010, p. 57). However, looking at the different sections in the NRDP it can be concluded that this phrase refers to a configuration of partnerships which are not representative for the population groups in the regions and do not adequately add weight to the private sector.

3. Direct less EAFRD funds to the LEADER Axis. As mentioned in Section 3.1, while EU-15 have to direct at least 5%, and the EU-10 at least 2.5% of their total EAFRD to the LEADER Axis, for Romania and Bulgaria, the 2.5% clause applies only for the period 2010-2013, and any contribution of the EAFRD for that axis from 2007-2009 shall be taken into account for the calculation of that percentage (EC/2006/1463).

Romania directed 2.3% of its total EAFRD budget to the LEADER Axis,⁷¹ in absolute terms including 20% national co-financing, the total public contribution amounts to Euro 235 million. It is expected that an additional Euro 78 million of private resources will be spent for LEADER activities (Table A.3.6). In the distribution of the LEADER budget in comparison to other Member States, emphasis is placed on Measure 4.3 Running the local action group, acquiring skills and animating the territory, for which 25% of the LEADER budget are foreseen (EU average = 15%) underlining the focus on capacity-building. This priority setting is not only reflected in setting up the preparatory Sub-measure 43.1, but also in the design of Sub-measure 43.2. It is divided into two components: a) Running the LAG; and b) Training and animation, whereupon at least 20% of funds have to be spent for activities of Component b, such as training of staff, circulation of information, etc. With 2% of the LEADER budget Measure 4.2 supporting cooperation projects has, from a financial-technical perspective, little weight (EU average = 6%). Fully 73% of the LEADER budget is directed to Measure 4.1, which is slightly below the EU average share of 79% (see Figure 3.1). The NRDP can be interpreted in such a way that projects aiming at the objectives of one or more of the first three EAFRD Axes can be realised under this measure.

According to the Romanian NRDP, the main objective of LEADER is – closely following the European priorities – strengthening governance and use of the endogenous potential of the regions. Additional national objectives and priorities adapted to the socio-economic situation, which are listed in Table A.3.2, were set. Besides the objective linked to the additional preparatory measure, which are Fostering partnerships and Preparing and assuring implementation of the local development strategies, the main priorities taking into account the small horizon of experience with LEADER are: a) Setting up and developing LAGs; and b) Achieving cooperation between rural actors. Further objectives mentioned are the participation of the local community members, a bottom-up approach and the alleviation of disparities between regions.

3.5.2.3 Scheduled and realised programme implementation

Preparations for putting LEADER into action started with an EU Twinning Project prior to accession (see Table 4.2; Chapter 7). The Romanian programme agencies responsible for LEADER are, at the national level, the NRDP Managing Authority settled in the MARD and, at the county level, the DARDs. Further, the Paying Agency for Rural Development and Fisheries (PARDF) is in charge of administrative and financial issues (for details, see Chapter 7). Activities within the Twinning Project include the arrangement of LEADER training for staff of the DARDs, and of potential beneficiaries. Therefore, already in 2006 121 regions were pre-selected. Subsequently, representatives (LEADER-animators) from these regions participated in the trainings by early 2007. No strict eligibility criteria related to the composition of potential LAGs and regional features had to be fulfilled for participation at this stage.⁷² The idea was that capacities should be built up until the formal start of the

71 Rounding out the percentages, the share for LEADER is 2.3% for both budget variants - for the original planned budget and for the budget which includes the amount Romania received in the context of the European Economic Recovery Plan in the course of the funding period. If the complementary direct payments are not considered as part of the EAFRD budget, resources allotted for LEADER make up 2.48% of Romania’s EAFRD budget.

72 The decisive criteria for the pre-selection of potential LAGs were easy to identify: the region’s classification as a rural area, and a minimum size measured in terms of the number of inhabitants (for details, see NRDP

LEADER and the National Rural Networks 65 programme. However, after the first trainings a long period of abeyance followed, as between 2007 and 2009 no further LEADER-specific activities were carried out by the programme agencies. Despite the fact that the prearrangements for LEADER began in good time, obstacles to implementation occurred: Although originally scheduled for 2008, the preparatory Measure 43.1 funded under the EAFRD started with considerable delay in late 2009 (see Table 4.2). The measure was planned to be implemented in three subsequent phases: Phase 1: Raising awareness of local actors regarding the LEADER approach; Phase 2:

Training for the representatives of potential LAGs; Phase 3: Financial support for the preparation of LAGs’ applications. However, the original plan was not adhered to. The phases occurred partly in parallel, and Phase 3 started prior to Phase 2.

The deadline initially scheduled for the submission of LEADER applications passed without action at the beginning of 2009. Moreover, potential beneficiaries were faced with several changes to the programme guidelines, for instance, the national refinement of the common requirements for LAGs to be eligible changed over time, e.g. in terms of the demarcation of the LEADER regions.⁷³ Also, the deadline for submitting LEADER applications was rescheduled several times. Finally, instead of selecting two groups of 40 LAGs, the competitive selection of 81 LAGs took place in June 2011, after a two-year delay. The criteria used to select the LAGs (see Table A.6.2), the partnership and the strategy of potential LAGs, were only published after the call for applications in 2010. For both Measure 43.1 and for the final participation in LEADER, regions from which no representative had taken part in the initial LEADER trainings could submit applications. Thus, within the three years, new potential LAGs have evolved, and other groups have been reconfigured or have dissolved.