Brussels,


​The European agricultural fund for rural development (EAFRD) finances the EU's contribution to Rural Development Programmes (RDPs).

RDPs consist of measures and projects that contribute to the EU-wide objectives of:
  • improving the competitiveness of agriculture
  • encouraging sustainable management of natural resources and climate action
  • achieving a balanced territorial development of rural economies and communities

​Programmes are prepared on a national or regional basis, and must work towards specific targets relating to the EU’s rural development objectives.

​Features of RDPs​
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  • Spending on climate and environment
​At least 30% of funding for each RDP must be dedicated to measures relevant for the environment and climate change, much of which is channelled through grants and annual payments to farmers who switch towards more environmentally friendly practices.
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  • Supporting local actions
At least 5% of RDP funding must go to actions based on the LEADER / community led local development approach.
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  • Promoting smart villages
Rural development programmes can also support the smart villages initiative, which aims to provide a versatile toolbox to foster, enable and scale up innovation in rural areas around Europe, addressing the common challenges faced by citizens living in rural territories.

  • Financial instruments
Through financial instruments, the EAFRD acts as a source for loans, microcredit, guarantees and equities, available to recipients in agriculture, forestry and rural areas who are undertaking financially viable projects that support the priorities of the EAFRD. Fi-Compass includes further information on EAFRD financial instruments.
The 2021-2022 transitional period

​During the first two years of the 2021-27 MFF, the existing 2014-20 CAP regulations will continue to apply, as set out in the transitional regulation adopted on 23 December 2020.

The regulation is in place to ensure a smooth transition to the future framework of the CAP strategic plans.

CAP strategic plans are due to be implemented from 1 January 2023.

The strategic plans will allow for a greater degree of flexibility between the two funds and will include the ambitions of the European Green Deal, in particular the Farm to Fork Strategy.

Overall, 40% of total CAP expenditure will be dedicated to climate action.
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The financing of the rural development


The European agricultural fund for rural development (EAFRD) finances the CAP’s contribution to the EU’s rural development objectives:
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  • improving the competitiveness of agriculture,
  • encouraging sustainable management of natural resources and climate action,
  • achieving a balanced territorial development of rural economies and communities.

​These objectives are realised through national and regional rural development programmes (RDPs), which are co-financed by the EAFRD and the national budgets of EU countries. During the 2014 to 2020 programming period, the EAFRD contributed €100 billion to RDPs.

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​The EAFRD can also provide investment support for rural enterprises and projects through financial instruments, such as loans, guarantees, or equity. Details about financial instruments available under the EAFRD are provided on the online advisory platform Fi-Compass.

The EAFRD is one of five funds included under the framework of the European structural investment funds (ESIF), which target cohesive investment towards sustainable economic development in the EU.

The EAFRD remains under the ESIF framework in 2021 and 2022, after which it will fall fully under the framework of the CAP strategic plans.