Proposal for the Swedish Rural Development Programme Was Carried out by the Swedish Institute for Food and Agricultural Economics (SLI)

Rural Development Programme for Sweden 2007-2013 Rural Development Programme for Sweden

Rural Development Programme for Sweden – the period 2007-2013 For more information, visit www.sweden.gov.se/agriculture The European Agricultural Fund for Rural Development: Europe investing in rural areas

Produced by The Swedish Ministry of Agriculture Article no. Jo 08.008 Additional copies of the programme kan be ordered from the Swedish Ministry of Agriculture, SE-103 33 Stockholm, Sweden, tel: +46 8 405 27 50 or by visiting www.sweden.gov.se Printed by XGS Graﬁ sk Service, Stockholm, Sweden 2008 Cover photos From left to right René Guthof, Johanna Dahlin, Johanna Dahlin

1 Title of the programme...... 7 2 Member state and administrative region...... 8 3 Strengths and weaknesses and the strategy to deal with these; ex-ante evaluation...... 9 3.1 Strengths and weaknesses...... 9 3.1.1 Rural areas in Sweden ...... 9 3.1.1.1 Definitions of rural areas ...... 9 3.1.1.2 Land use ...... 10 3.1.2 The economy and structure of rural areas ...... 11 3.1.2.1 The rural population...... 11 3.1.2.2 Economy and labour market ...... 12 3.1.2.3 Education and human capital...... 18 3.1.2.4 Services and infrastructure...... 19 3.1.3 The land-based industries and the food industry ...... 20 3.1.3.1 Structure and production in the agricultural sector...... 20 3.1.3.2 Horticulture...... 25 3.1.3.3 2003 CAP reform ...... 25 3.1.3.4 Forestry in Sweden...... 27 3.1.3.5 Reindeer husbandry and Sami society in Sweden...... 28 3.1.3.6 Fishing...... 30 3.1.3.7 The food industry...... 30 3.1.3.8 Gender equality and the age structure in the land-based industries...... 32 3.1.3.9 Entrepreneurship and diversification in the land-based industries...... 34 3.1.4 The environment and landscape of rural areas...... 35 3.1.4.1 The natural and cultural values of the landscape...... 35 3.1.4.2 Water use and water quality...... 45 3.1.4.3 Air quality ...... 49 3.1.4.4 Climate change ...... 50 3.1.4.5 Use of plant protection products...... 50 3.1.4.6 Organic production...... 53 3.1.4.7 Land quality ...... 55 3.1.4.8 Animal welfare...... 56 3.1.5 Local development work...... 57 3.1.5.1 Leader II...... 59 3.1.5.2 Leader+...... 59 3.2 Strategy selected to deal with strengths and weaknesses ...... 62 3.2.1 Challenges and needs...... 62 3.2.2 Overarching strategy and national priorities ...... 62 3.3 Ex ante evaluation ...... 71 3.4 Effects of the previous programme period, etc...... 71 3.4.1 The Environmental- and Rural Development Programme...... 71

3.4.2 Objective 1 Northern Norrland ...... 76 3.4.3 Objective 1 Southern Forest Region...... 78 3.4.4 Leader+...... 80 3.4.5 Other support measures...... 81 4 Priorities and expected effects of the programme ...... 84 4.1 Justification of the programme’s priorities and action with reference to the EU strategy and Sweden’s national strategy...... 84 4.1.1 Axis 1...... 84 4.1.2 Axis 2...... 85 4.1.3 Axis 3...... 86 4.1.4 Axis 4...... 87 4.2 Expected effects of the programme according to the ex ante evaluation ...... 88 4.2.1 Introduction...... 88 4.2.2 Summary of the ex ante evaluation...... 88 4.2.2.1 Have experiences from previous programme periods and evaluations been taken into account?...... 90 4.2.2.2 Are the objectives realistic in relation to the financial resources allocated for each respective measure?...... 95 4.2.2.3 Does the programme help meet the EU’s overarching objectives and the objectives of the Swedish national strategy?...... 96 4.2.2.4 Impact of the programme on the environment...... 97 4.2.3 Concluding comment...... 99 5 Description of the proposed measures ...... 101 5.1 Ongoing contracts ...... 101 5.1.1 Transitional rules ...... 101 5.1.1.1 Support for investment in agricultural holdings ...... 101 5.1.1.2 Setting up of young farmers ...... 102 5.1.1.3 Skills acquisition in Action Area I (KULM)...... 102 5.1.1.4 Skills acquisition in Action Area II (K2)...... 102 5.1.1.5 Compensatory payments for less favoured areas...... 102 5.1.1.6 Support for environmentally friendly farming...... 103 5.1.1.7 Investment aid for processing and marketing of agricultural products ...... 103 5.1.1.8 Forestry support...... 103 5.1.1.9 Promoting the adaptation and development of rural areas..... 104 5.2 Requirements concerning all or several measures ...... 105 5.2.1 Cross-compliances...... 105 5.2.1.1 Statutory management requirements ...... 105 5.2.1.2 Good agricultural and environmental condition...... 107 5.2.2 Investment support ...... 108 5.2.3 Criteria and administrative rules for avoiding double financing in Article 5.6 of Council Regulation (EC) No 1698/2005...... 109

5.2.4 Controls under Article 48.2 of Commission Regulation (EC) No 1974/2006...... 111 5.3 Axis 1 Improving competitiveness in the agricultural and forestry sector...... 113 5.3.1 Skills acquisition, information and dissemination of knowledge...... 113 5.3.2 Setting up of young farmers...... 117 5.3.3 Modernisation of agricultural holdings...... 119 5.3.4 Adding value to agricultural and forestry products ...... 123 5.3.5 Support for cooperation for the development of new products, processes and technologies in the agricultural and food sector and in the forestry sector...... 126 5.3.6 Infrastructure of importance to the development and adaptation of agriculture and forestry ...... 129 5.4 Axis 2 Improving the environment and the landscape...... 132 5.4.1 Natural handicap payments in mountain areas or other areas presenting special difficulties...... 132 5.4.2 Natura 2000 support and support linked to Directive 2000/60/EC.... 136 5.4.3 Payments for environmentally friendly farming ...... 136 5.4.3.1 Swedish environmental legislation: Description of national provisions concerning certain areas eligible for agri- environmental payment...... 136 5.4.3.2 National minimum standards and other relevant national provisions concerning the use of fertilisers and plant protection products ...... 139 5.4.3.3 Elements common to all activities eligible for payment for environmentally friendly farming...... 141 5.4.3.4 Biodiversity and cultural heritage in semi-natural grazing lands, mown meadowland and wetlands...... 144 5.4.3.5 Valuable natural and cultural environments in the agricultural landscape and reindeer herding areas ...... 157 5.4.3.6 Payment for regional priorities...... 164 5.4.3.7 Traditional cultivated plants and livestock breeds ...... 169 5.4.3.8 Reduced nutrient leaching from arable land...... 175 5.4.3.9 Environment protection measures ...... 180 5.4.3.10 Organic forms of production ...... 185 5.4.3.11 Extensive ley management for a better environment and an open landscape...... 189 5.4.4 Non-productive investments – agriculture...... 194 5.4.5 Non-productive investment – forests ...... 194 5.4.5.1 Preserving and developing the biological diversity in forest.. 195 5.4.5.2 Promote biodiversity in broad-leaved deciduous forest...... 198 5.4.6 Elements common to all activities eligible for support for environmentally non-productive investments in forest...... 201 5.5 Axis 3 Diversification and a better quality of life in rural areas ...... 202

5.5.1 Measures to diversify the economy in rural areas ...... 202 5.5.1.1 Diversification into non-agricultural activities...... 203 5.5.1.2 Business development in micro-enterprises ...... 207 5.5.1.3 Promoting the tourist industry ...... 211 5.5.2 Measures for improving the quality of life in rural areas ...... 216 5.5.2.1 Basic services for the rural economy and population...... 216 5.5.2.2 Village renewal and development ...... 219 5.5.2.3 Conservation and upgrading of rural heritage assets ...... 222 5.5.2.4 Training and information measures ...... 224 5.5.2.5 A skills acquisition and animation measure for the preparation and implementation of a local development strategy ...... 226 5.6 Leader ...... 229 5.6.1 Justification for Leader...... 229 5.6.2 Establishing local action groups ...... 230 5.6.3 Implementing local development strategies ...... 234 5.6.4 Cooperation ...... 237 5.6.5 Operating costs for local action groups and information and animation measures ...... 238 6 Financial plan...... 240 7 Indicative allocation per measure...... 241 8 Additional national financing (Article 16(f) of Regulation (EC) No 1698/2005) .... 242 9 Compatibility with Articles 87, 88 and 89 of the Treaty...... 243 10 Links to other financial instruments...... 245 10.1 Links to the Common Agricultural Policy ...... 245 10.2 Delimitations with respect to ERDF, ESF and EFF...... 247 10.2.1 Delimitation with respect to strategy and measures in regional development policy...... 247 10.2.2 Delimitation with respect to strategy and measures in the European Fisheries Fund...... 249 10.2.3 Summary of demarcations...... 250 10.2.4 Demarcations concerning regional and local partnerships ...... 254 10.3 Links to other financial instruments in the Community...... 256 10.3.1 Delimitation of LIFE Funds...... 256 10.3.2 The 7th EU Framework Programme for Research and Technological Development...... 256 10.3.3 The 7th EU Framework Programme for Competitiveness and Innovation...... 256 11 Relevant authorities and responsible bodies ...... 258 11.1 Relevant authorities and responsible bodies appointed ...... 258

11.2 Administration and validation systems ...... 263 11.3 Leader 267 12 Monitoring and evaluation systems and the composition of the Monitoring Committee...... 271 12.1 Description of follow-up and evaluation systems ...... 271 12.2 Projected composition of the Monitoring Committee...... 274 12.3 Tasks of the Monitoring Committee ...... 274 13 Information and publicity...... 276 13.1 Information to beneficiaries...... 276 13.2 Information on the Community contribution ...... 279 13.3 Information to the general public...... 279 14 Designated parties and results of consultations...... 280 14.1 Designated parties...... 280 14.2 Outcome of consultations...... 284 15 Gender equality and discrimination...... 285 15.1 Gender equality...... 285 15.2 Integration...... 286 15.3 Special considerations applying to the Sami population ...... 287 16 Technical support...... 288 16.1 Technical support...... 288 16.2 The national network for rural development...... 290 16.2.1 Organisations and public authorities forming part of the rural development network...... 290 16.2.2 Procedures and timetables for building the network...... 290 16.2.3 Activities ...... 291 16.2.4 Budget...... 291 17 Annexes...... 292 17.1 Annex 1...... 292 Account of ongoing contracts and remaining payments after 15 October 2006, per measure ...... 292 17.2 Annex 2...... 296 17.3 Annex 3 Regional management initiatives ...... 298 17.3.1 Preservation of threatened weeds in arable land...... 299 17.3.2 Bio fallow ...... 299 17.3.3 Unharvested grain yield ...... 300 17.3.4 Management of landscape element of particular value...... 301

17.3.5 Traditionally hay-making on mown meadows ...... 302 17.3.6 Burning of semi-natural grazing lands and mown meadows ...... 303 17.3.7 Management of semi-natural grazing land and mown meadows at places difficult to access ...... 305 17.3.8 Management of mosaic land and other land with poor sward...... 306 17.3.9 Restoring of mown meadows and semi-natural grazing lands ...... 307 17.3.10 Maintenance and clearance of paths to and from Sami settlements..... 308 17.4 Annex 4 Ex ante-evaluation ...... 309 17.5 Annex 5 Possible combinations between different operations within the agri- environment payment measure...... 310 17.6 Annex 6 Cross-compliance obligations, national legislation obligations and management criteria for environmentally friendly farming...... 312 17.7 Annex 7 Maps...... 326 17.8 Annex 8 Communication plan for the Swedish Rural Development Programme 2007–2013...... 330 17.9 Annex 9 – Financial plan (annex to section 6 and 7) ...... 344

1 Title of the programme

Rural Development Programme for Sweden, 2007–2013.

2 Member state and administrative region

The programme relates to the whole of Sweden and overall responsibility for administration and implementation lies with the Swedish State.

3 Strengths and weaknesses and the strategy to deal with these; ex-ante evaluation

3.1 Strengths and weaknesses

3.1.1 Rural areas in Sweden

3.1.1.1 Definitions of rural areas Sweden is situated in the Scandinavian Peninsula, between the 55th and 69th parallels. The country is 1,572 km long and 499 km wide, and its total area is 449,964 km2. Sweden is geographically divided into three large areas. Götaland in the south and Svealand in the centre each occupy about a fifth of the country’s area. Norrland, in the north, covers 60 per cent of the country’s total area.

About 9 million people live in Sweden. Along with Finland, Sweden is the most sparsely populated country in the EU, with only 22 inhabitants/km2. Sweden’s population is concentrated to the southern parts of the country, and the northern parts have large areas that are very sparsely populated. According to the National Rural Development Agency, 24 per cent of the population lives in rural areas, according to the definition of “rural” as outside an urban area with a population of at least 3,000 inhabitants. Most of them live in more accessible rural areas. Only 2 per cent of Swedes live in sparsely populated areas situated more than 45 minutes by car from an urban area with a population of at least 3,000. There are more accessible rural areas in most parts of the country, while sparsely populated areas (in the National Rural Development Agency definition) primarily dominate the inland parts of the northern Swedish counties.

Rural areas in Sweden vary widely in the different parts of the country however. The Agency has therefore divided the various types of area into four regions, shown on the map in Figure 1, based on what labour market is within the reach of commuters who go home each day1; - inland regions of the northern Swedish counties, consisting mainly of the local labour markets that were part of the EU’s previous Objective 6 area. - other areas of the northern Swedish counties, covering other parts of these counties. - metropolitan regions, covering the local labour markets of Stockholm, Gothenburg and Malmö - rest of Sweden, covering other parts of the country.

Statistics Sweden does not distinguish between rural areas and sparsely populated areas; it simply delimits built-up areas with a population of more than 200. By that definition, 16 per cent of the population lives in rural areas, a level that has remained largely unchanged since about 1970. The OECD’s definition is based on the proportion of the population living in municipalities with a population density lower than 150 inhabitants/km2, which

1 Sweden’s rural and sparsely populated areas, National Agency for Rural Affairs, 2005.

for Sweden would mean that about 70 per cent of the population lives in rural areas. By the OECD’s definition, the only parts of Sweden not classified as rural are Stockholm and Skåne counties. By this definition, as much as 99 per cent of Sweden’s total land area would be defined as rural.

Figure 1 Rural areas in Sweden according to National Rural Development Agency definition

Source: Sweden’s rural and sparsely populated areas, National Rural Development Agency, 2005.

3.1.1.2 Land use More than half of Sweden’s land surface consists of landscapes formed by the land-based industries, i.e. agriculture and forestry, reindeer husbandry and fishing. The type of landscape in many cases is directly associated with the activities of the land-based industries and their use of the land. A vast amount of Sweden’s land area consists of forest, mountains, and grasslands. These areas are mostly very sparsely populated. Of Sweden’s total land area of 41 million hectares, almost 23 million hectares are forest. If the FAO definition for forest land is used, more than 27 million hectare are forest2. The

2 Sweden has a definition on forest land that differs from the definition used by FAO. The Swedish system is based on productivity that means that there must be a productivity of at least 1cubic meter standing volume per hectare and year, which means that the trees at maturity reaches a height of at least approximately 11-12 meters. Land that does not reach this level of productivity does in Sweden not count as forest land. According to the definition of forest land given by FAO, is land spanning more than 0.5

forest landscape includes a further 10–15 million hectares of wetlands and mountain forests. Reindeer husbandry takes place throughout about a third of Sweden’s land area. These areas are found in the forest and mountain regions of central and northern Sweden. Sweden is also a country rich in water: almost a tenth of the total surface area consists of lakes almost 100 000 of them.

Table 1 Land use in Sweden

Land use Per cent Agricultural land 8 Forest land 57 Built-up land 1 Wetland and natural grassland 17 Mountains 14 Source: Statistics Sweden; Land use in Sweden.

Sweden has a small proportion of agricultural land in comparison to other Member States. Agricultural land is concentrated to the southern part of the country. In Skåne, the Swedish county most heavily dominated by agriculture, almost half of the land area is utilised by agriculture. A relatively large proportion of the plains of central Sweden in the counties of Uppsala, Södermanland and Östergötland, 23–25 per cent, are also agricultural land. In the four most northerly counties, however, which comprise just over half of Sweden’s total land area, only a couple of per cent of land is agricultural land. Forests and mountains dominate. All in all, there are 3.2 million hectares of agricultural land in Sweden, of which about 2.7 million hectares is arable land and about 0.5 million hectares pasture land. Meadows and pastures are the largest crop counted by area, covering almost 40 per cent of the cultivated land. Eleven per cent of cultivated land lay fallow in 2004.

3.1.2 The economy and structure of rural areas

3.1.2.1 The rural population In the 1990s and early years of the 21st century, the population of metropolitan areas grew rapidly while that of rural areas fell. There are however large variations in population trends between different rural areas. The more accessible rural areas have experienced slight population increases in recent years, while sparsely populated inland regions of the northern Swedish counties have experienced a rather rapid fall in population. The rate of decline in sparsely populated areas has slowed since the turn of the century. This is partly due to an increase in the population of the archipelagos close to Stockholm and Gothenburg.

hectares with trees higher than 5 meters and a canopy cover of more than 10 per cent, or trees able to reach these thresholds in situ. This is why there arises a difference between the areas of total forest land.

The rural population is generally older than the population generally. In some areas, pensioners make up more than 25 per cent of the population (the national average is 17 per cent). The proportion of elderly is relatively high in particular in the inland areas of the northern Swedish counties and in southeast Sweden. There is also an unequal gender distribution. Only university towns and regional centres have more women than men.

Young people move away to study, work or experience a change of scene to a greater extent than older people3. It used to be the case that it was mainly young women who moved from rural areas to large towns, but in recent years young men have moved too. The statistics for 2002 and 2003 show changes in the migration patterns of young men. It is particularly the rural areas of Norrland’s inland that are still experiencing depopulation. It is important for the sustainable development of rural areas that they are able to attract young people to settle there. Depopulation causes problems in e.g. manpower supply and the base for services, schools etc. It is not in itself a problem that young people move away to experience a change of scene or to study; it is often beneficial for the dynamic development of the individuals themselves and for society as a whole. It is, however, of the greatest importance for rural areas that they can provide attractive jobs and social environments so that young people are able and willing to return after e.g. completing their education.

The value of rural areas as an attractive environment in which to live has grown, something that is apparent from the growth in population of more accessible rural areas. Improved communications have enabled us to live at a greater geographical distance from where we work. This allows us to base our choice of where to live on other factors than proximity to the workplace. Attractive areas in which to live, and the increasing importance of the home for individual well being, can affect where businesses choose to set up. Our lifestyle has changed, in that many people no longer live in the same place all year. It is common that people living in towns or cities move out to the countryside or archipelago for parts of the year. Overall, we are seeing a trend in which there is successive change in the utilisation of the potential of rural areas, and in which part-time residence, tourism etc. in rural areas, along with the increase in the population of more accessible rural areas, provides a counterweight to the common perception of population trends, even in our sparsely populated areas.

3.1.2.2 Economy and labour market Despite relatively strong economic growth in Sweden in recent years, employment has not grown apace. In 2005, the regular employment rate was 77.4 per cent and open unemployment 6.0 per cent4. The employment rate varies between urban areas and rural areas, but also between different rural areas. Figure 2 shows geographical variations in the employment rate in different parts of the country. The difference between the lowest and highest levels among regions is about 15–20 percentage points. The highest employment rate is primarily found around the metropolitan regions and in parts of the dynamic more accessible rural areas of Götaland. It is lowest in parts of the sparsely populated areas of

3 About sparsely populated and rural areas in Sweden, National Rural Development Agency, 2005. 4 Budgetpropositionen för 2006

northern Norrland, some parts of southern Norrland and some areas of south-west Skåne. Figure 2 Employment rate, 20–64 year olds, per type of area in 2003

Source: Drawn up by National Rural Development Agency. Foot note to Govt. Bill 2005/2006:100.

The rural economy has undergone sweeping structural change in modern times. Apace with the structural transformation of farming and forestry, other areas of the economy have in relative terms become increasingly important in terms of opportunities for subsistence and employment. For men in rural areas, the most important source of employment is manufacturing industry, while for women it is health care and other care. Compared to larger towns, a higher proportion of men in rural areas are employed in manufacturing industry and construction. A higher proportion of women in rural areas are employed in health care, other care and teaching. Structural change in the labour market has continued over the past ten years with increasing employment in the service sector and fewer people employed in agriculture, forestry and manufacturing industry. Growth in employment is seen mainly in the private service sector. The size of the public sector has in principle remained unchanged since the mid-1990s. The rural economy is

however still dependent on the land-based industries and business activity associated with them. Between eight and ten per cent of men in rural areas are active in the land-based industries, according to the definitions of the National Rural Development Agency. For women, the corresponding proportion is 2–3 per cent.

Globalisation, and resulting tougher competition, has contributed to rapid structural change in industry. Many smaller – and larger – rural communities have been affected by factory closures.

Figure 3 Proportion employed, per cent, in different business sectors (definitions of the National Rural Development Agency)

Sysselsatta efter näringsgren 2003 Källa: Glesbygdsverket

0% 5% 10% 15% 20% 25%

Jordbruk, skogsbruk, jakt och fiske

Glesbygd Energi- och vattenförsörjning, avfallshantering Tätortsn landsb Tätort Handel; transport, magasinering, kommunikation

Kreditinst, fastihetsförvaltning, företagstjänster

Forskning och utveckling, utbildning

Entrepreneurship in rural areas The Swedish countryside is not uniform; conditions for entrepreneurship differ dramatically around the country, as do the conditions for different sectors. The rural economy is characterised by a large number of relatively small companies run by their owners. It is unusual for agricultural holdings to have any employees; the family does most of the work. Other rural enterprises are also very much characterised by being small scale. As much as 80 per cent of rural companies have no employees, but the companies contribute, through their activities, to a demand for services and products in many different ways. The work of agricultural holdings is framed by market conditions that are determined by the CAP. Market signals have become stronger after the most recent CAP reform. Many other rural enterprises sell their products and services on the local market. The production of this latter category of companies is often small scale, and they often compete primarily on the local market. There are also specialised small businesses that are internationally oriented and compete on the global market.

Business conditions differ between more accessible rural areas and sparsely populated areas. Depopulation and geographical distance have contributed to a deterioration of social and economic conditions in many areas. However, the labour markets of urban areas and more accessible rural areas are more or less integrated5, which is largely possible thanks to improved communications. For sparsely populated areas on the other hand, sparseness and geographical distance play an important role in determining economic conditions. Low rates of growth and employment are still a distinguishing feature of these areas. Successively however, we are seeing trends towards new enterprises and new production in e.g. the service sector. The number of self-employed people in Sweden was 680 000 in 2005.

Historically, the economy of rural areas has been dominated by the land-based industries, which have accounted for the bulk of employment. The ongoing restructuring process and the smaller number of agricultural holdings in combination with structural change in industry affects the prospects for long-term sustainable economic development in rural areas. A further fall in the number of active agricultural enterprises can in the long term lead to falling employment in areas where alternative employment opportunities are few, and to under-use of the overall resources of rural areas in the shape of land, buildings and labour. To maintain a flourishing economy, new businesses must start and existing businesses must grow. New business sectors and products must be developed and traditional sectors provided with opportunities for continued growth, preferably with a higher level of know-how.

For many small rural businesses whether in agriculture or other sectors capital supply has become a growing problem. Good access to capital is often the deciding factor in whether existing companies can grow and new companies start. Companies that are not in pronounced growth areas or “growth sectors” and which approach highly centralised credit institutions often encounter stiff demands attached to capital that they want to borrow. It seems as though rural companies are associated with a high risk factor, which in turn is associated with geographical location and sector. Problems for rural companies are exacerbated by the fact that assets in the form of property and various types of plant are assessed as having lower alternative value. This means that individual entrepreneurs are very often forced to make personal guarantees in order to get a bank loan. The lack of risk capital has been highlighted in previous studies as a growth-suppressing factor for companies in rural areas6.

Conditions that promote and facilitate entrepreneurship are keys to achieving a sustainable, efficient economy. Rural areas are in many ways characterised by a strong sense of community. A 2005 interview study7 highlighted the sense of community with close interaction between people in different positions and the living environment itself as the biggest strengths of the countryside, besides its natural resources. These are important basic conditions for businesses, and create good overall conditions for the creation of new

5 National Agency for Rural Affairs, 2005. Conditions for small enterprises in rural areas. 6 Regionalpolitiska utredningen SOU 2000:87. 7 Eurofutures 2005, The Countryside in 2020.

businesses, products and services. Compared to other countries however, Sweden has a lower level of entrepreneurship and fewer new start-ups per year8.

Rural tourism has become an increasingly important component in the growth of the rural economy. It is estimated that rural tourism combined with farming turns over about 1 billion SEK (€ 0,1) a year. The growing tourist industry in rural areas largely consists of part-time self-employed/combination businesses, but also of a growing number of small businesses. A high proportion of these entrepreneurs are women. Small-scale tourism like “Stay on a farm”, wilderness activities, hunting, leisure fishing, Sami adventure activities, pony trekking and dog sledding are growing sectors, which often have their roots in the land-based industries. Other activities that are growing fast are contract activities such as “green habilitation” and equestrian-related activity. Another opportunity for the land- based industries is ecotourism. Ecotourism is responsible travel that helps protect natural environments and supports the well being of the local population. The natural and cultural landscape is a platform, and a prerequisite, for nature tourism and culture tourism in Sweden. Most nature tourism is based on the Swedish right to roam. In Småland and Blekinge, West Sweden and Jämtland and Härjedalen, nature tourists make up a bigger proportion of foreign tourists than is the case in other places in Sweden. There is believed to be great growth potential for this type of tourism in many sparsely populated and rural areas.

Renewable energy Renewable energy accounts for about 26 per cent of Sweden’s total energy consumption. As energy prices rise, production of renewable energy may become a competitive activity that can create growth in rural areas. Most bio energy is currently produced by the forestry sector, while production in the agricultural sector is limited and comparatively new. The recovery of biomass for energy purpose from forestry is considerably more energy efficient than dedicated cultivation of annual agricultural crops for energy purposes. At the same time, the biomass from forests has a number of other fields of application. Demand for renewable energy will probably grow and there is thought to be production potential in both the agriculture and forestry sectors, which could help achieve important environmental and climate objectives. One key issue for the industry of forest-products industry and the bio energy-using sector is how the increase in demand for bio fuel can be met through domestic production and development of new sources such as stumps and brushwood. Bio energy from the forest and agricultural sectors is currently used for heating and electricity production, and in the production of engine fuel. Bio energy from forestry is an integrated part of the processing chain, in which by- products are increasingly utilised in energy production.

Central issues for the forestry and wood industries, and the bio energy-using sector, are how the increase in demand for bio energy can be met by domestic production and development of new product ranges. There has been growth in the production of bio energy from forestry. In total, the use of forest-based bio energy has grown to about 90

8 Swedish Agency for Economic and Regional Growth, 2003. Ett starkt entreprenörskap (Strong entrepreneurship).

TWh, and the proportion of bio energy in the total energy supply is about 17 per cent. This is high seen from a European perspective. The biggest producer and consumer of bio energy is the pulp and paper industry, which annually produces the equivalent of 45 TWh, of which over 90 per cent is consumed within the industry. Forest fuel is round wood, by- products and remnants from industry, and waste material from felling. Waste material can in turn be divided up into branches and tips, stumps and weak trees from salvage felling. The available volume of branches and tips is in direct proportion to the volume of final felling, which is much more than current outtake. Testing is under way in Sweden of the outtake of stumps.

Apart from the actual production of raw materials, the farming sector has the potential to develop the processing of bio fuels and participate in the manufacture of end products such as heating, electricity and fuels. Many farmers are already involved in the production of processed bio fuel products; for example, farmer-owned energy plants currently produce local heating for houses. There are a number of examples from around the country of successful rural enterprises in the energy field. The activity has often begun on a relatively small scale through cooperation between a number of farmers, after which volumes increase and cooperation agreements are entered into with e.g. municipal companies and big energy suppliers. Cooperation on biogas plants is relatively common between farmers and municipal companies or energy suppliers.

There has been increasing interest in recent years in cultivating energy crops. The increase in cultivation may partly be due to the support per hectare that was introduced in the CAP reform in 2003 and came into force in 2004 for the production of crops for (non- food) energy purposes. The area receiving support was just less than 32,000 hectares in 2005 (of which just over 10 000 energy forest in the shape of Salix willow) in Sweden, which is an increase compared to 2004, when just over 15 000 hectares were applied for. Applications were also submitted in 2005 for the cultivation of crops for industrial and energy purposes for an area corresponding to just less than 15 000 hectares.

In recent years, cultivation of Salix for heating purposes has taken place on over 13 000 hectares, and a further few hundred hectares have been used to grow hybrid aspen and poplar. About 3 500 hectares of canary grass are being cultivated but only a few hundred hectares are harvested as bio fuel. Large-scale burning of cereals for energy purposes began in the early 1980s. Oats are the primary source of burning, not least because oats have a high heat value. It is estimated that oat burning currently stands at about 20 000– 50 000 tonnes a year. Straw from cereal cultivation is also used for burning. It is mainly the farmers themselves who burn the straw in their own plants on the farms.

The bulk of the raw material in Swedish ethanol production is wheat. The area used for the production of ethanol for vehicles is about 25 000–30 000 hectares, which corresponds to about 150 000 tonnes of wheat and yields about 55 000 cubic metre of ethanol. In future, other crops such as sugar beets may be used as a raw material for ethanol production. There is currently limited cultivation of rapeseed for the production of RME9. There are a number of smaller plants that produce everything from a few tens

9 RME = rape methyl ester

of cubic metres a year to about 5000 cubic metre a year. Two big plants for the production of RME will become operational in 2006.

Market conditions for Swedish bio fuels are affected by the price of bio fuels from other countries. In Sweden, bio energy can currently be produced relatively advantageously on most land. This indicates that areas that have poorer potential for producing food competitively, and where there is good access to land, could become future energy suppliers. Other land may also be of interest, depending on the conditions and objectives of the owner of each particular holding. Biogas production is also regarded as having potential as a future energy source. This might be large-scale or small-scale production in which organic material such as fertiliser or seed is used to produce energy. Biogas is currently primarily produced in Sweden in bigger plants attached to waste plants.

The development and extension of wind energy is another strategic issue for future energy supply. Increased knowledge concerning wind energy as well as the spreading of such knowledge is thus important. The development of the wind energy sector may also offer new opportunities for e.g. rural entrepreneurs.

3.1.2.3 Education and human capital Know-how and training are often important if a business is to be successful, and with greater know-how comes greater human capital. Human capital is important in a company’s development for two reasons. First of all: human capital determines a company’s ability to accept and use new knowledge, for example in the shape of new technology. This in turn boosts the chances of increasing productivity or competitiveness in a company. Secondly: human capital is a key to a company’s potential to generate new knowledge or new technology within a company. According to a report from the National Rural Development Agency, the demand for qualifications in the labour market has changed dramatically over the past decades10. There has been rapid growth in highly qualified jobs generally requiring higher education, and it is primarily women who are responsible for this increase. Formal levels of education are however generally lower in rural areas than in towns and cities, and this is most clear among younger working people. The proportion of individuals with post-upper secondary education in towns and cities is 30 per cent, while the same figure for rural areas is 16–17 per cent. Employees living in rural areas are also over-represented in jobs that require upper secondary education or equivalent, and jobs with low qualification levels have grown in relation to the total number of jobs in rural municipalities. There are, however, many examples of rural areas where the economic and social environment has encouraged the development of a climate of entrepreneurship which is both competitive and fast growing, despite the fact that the level of theoretical education is comparatively low among both entrepreneurs and employees.

Studies show that there are not only differences in access to higher education; there are differences in attitudes. For example, many more girls than boys currently choose to go

10 National Rural Development Agency, 2006. Regionala trender i yrkesstrukturen (Regional trends in employment structures).

on to higher education. Many people in rural areas also begin their studies later in life. Alternative types of education, such as distance courses and “learning centres”, can be valuable alternatives for people living in rural areas.

3.1.2.4 Services and infrastructure Basic infrastructure in the form of communications and a good general level of service is crucial to favourable development in rural areas. A good level of service both public and private cannot in turn be maintained without an adequate population base. Some rural areas have experienced extensive depopulation, which has also led to deteriorations in the range of services on offer. Overall, the number of convenience stores has fallen by 14 per cent over the past 10 years and the number of stores has fallen most in more accessible rural areas. A fall in the number of areas with a convenience store means that people living in rural areas have to travel farther. Sparsely populated areas have experienced a fall of 20 per cent during the years 1996–2005. Between June 2003 and June 2004, 93 areas lost their last store. These districts are spread over the entire country, with the emphasis on the most northerly counties of northern Sweden – 41 of the districts are located there. In southern Sweden too central and eastern Småland, for example many areas suffered store closures. Today, almost 200, 000 people have to travel more than 10 km to their nearest store11. At the same time, the number of hypermarkets which are usually outside city centres grew by almost 40 per cent in the same period. This is a result of changed purchasing patterns and the forces of rationalisation in the retail trade. Where the country store remains, it often handles more than one service function, acting as a post office and bank, or a pharmacy or liquor store besides selling food. In many parts, however, services have been improved as a result of fruitful collaboration between different actors and by skills acquisition among service providers. See 3.4.5.

Information and communications technology (ICT) is increasingly important for rural areas, not just for individual sectors but also thanks to its distance-spanning nature, which makes it an important accessibility tool for rural enterprises and for individuals who live there. Those areas that cannot maintain good communications, above all in the shape of roads and ICT, will find it difficult to keep or attract companies and new businesses or people. Internet usage in Sweden is generally high. One problem in many rural areas however is that Internet connections are too slow for all services to be able to be carried out functionally. Additionally, there are still extensive rural areas that lack coverage for mobile communication. There has been an ambition to extend broadband generally, but in some rural areas there is a remaining need of better capacity. Municipalities are responsible for prioritising areas and the technology to be used. This has resulted in a range of technology and accessibility in rural areas.

Internet use is now relatively high among farmers. According to a recent study, about 80 per cent of agricultural holdings have access to the Internet. Of these, a third uses the Internet daily and a third a few times a week. Almost a third of agricultural holdings submit their applications for EU support online.

11 About sparsely populated and rural areas in Sweden, National Rural Development Agency, 2005.

3.1.3 The land-based industries and the food industry The land-based industries comprise agriculture, forestry, reindeer husbandry and fishing. Measures concerning the fishery sector will be handled in the EFF programme.

3.1.3.1 Structure and production in the agricultural sector Swedish agriculture has undergone extensive restructuring, which is still ongoing. The proportion of the population whose main employment is in agriculture has been falling for a long time in Sweden, and in 2004 comprised 1.4 per cent of all employed. The total number of people employed in agriculture, both permanently and temporarily, was 168,000 in 2003, just over 20 per cent of whom worked full-time. Most important, seen as a proportion of the total number in employment, are the agricultural sectors of Gotland, Kalmar and Halland counties. The amount of work varies greatly between differing types of operation. Holdings with domestic animals are often full-time, something which is less common among crop-growing holdings. Apart from direct employment in agriculture, there is also indirect employment, such as that of a contractor of input goods and services. According to calculations by the Federation of Swedish Farmers, the labour force in the agricultural sector, including the food industry and its suppliers, constitutes about five per cent of all employment in the country 12.

The number of agricultural holdings has fallen by 25 per cent since 1995, and in the most recent count (2004) stood at 67,000. The number of agricultural holdings grew steeply between 2004 and 2005 however, which can probably be explained by CAP reform (see 3.1.3.3). Over the past 10 years, the number of active agricultural holdings in less favourable areas has fallen by 43 per cent. The reduction of the number of livestock- keeping holdings is problematic for the maintenance of the open agricultural landscape in large areas of rural Sweden. The loss of these farms may also have a negative impact on business activity and services in the surrounding region. Structural changes are also related to poor profitability and capacity to adjust in small and medium-sized farms, as well as retirements due to a high average age among farmers, about 30 per cent of farmers are over the age of 60. It is important that the Rural Development Programme helps enable farms to survive in less favourable areas too. About a third of the holdings are full- time farms, and just under a tenth is so big that they need employees. At the same time as the number of holdings is falling, their average size is growing, both in terms of land area and in terms of the size of livestock units. Today, the average farm is 40 hectares in size, which is an increase of 26 per cent since 1995. The bigger, more specialised farms are today responsible for producing most food and for most land use. Seventy per cent of the total cultivated area is farmed by holdings bigger than 50 hectares in size.

Closures are most widespread among the family holdings that have long dominated Swedish agriculture. Most farms closures have been in the forest districts of Götaland; looking at the figures as a proportion of the total number of holdings however, closures have been more widespread in northern Sweden.

12 LRF, 2005. Gröna framtider (Green futures).

Table 2 Number of agricultural holdings per area in 1975, 1995 and 2003 1975 1995 2003 No. holdings No. holdings No. holdings Plains districts1 41 475 29 967 24 043 Forested and 63 874 42 230 33 133 forest/central districts2 Northern Sweden3 26 596 15 108 9 604 1 Götaland’s southern and northern plains, and the plains of Svealand. 2 Mixed and forested areas of Götaland, and forested areas of mid-Sweden. 3 Southern and northern Norrland. Source: Yearbook of Agricultural Statistics, 2005.

The economic situation of dwindling profitability, as well as social factors, often contributes to the decision to close the farm. There has not been such a clear decline in the number of part-time farms as among family farms.

Swedish agriculture is relatively specialised. A third of holdings grow crops, about 40 per cent keep livestock and about a tenth are mixed. Then there are smallholdings with a need of labour of less than 400 hours a year. Agricultural production is dominated by milk, which represents over a fifth of the production value of the sector, followed by cereal crops. The number of holdings with dairy cows has however fallen by almost 50 per cent since 1995, and the number of cows by 20 per cent, while milk production has fallen by only 1.5 per cent during the same period. There has been a long-term downward trend in numbers of beef cattle of a couple of per cent a year. Less insemination and reduced milk production has resulted in fewer calves. In 2005, beef production fell by 5 per cent, probably as a result of the restructuring of agriculture after CAP reform (see 3.1.3.3).

Agricultural structure and production vary widely in different parts of the country. Livestock keeping dominates in the four most northerly counties where there are also a large number of smallholdings. In mid-Sweden (Svealand and northern Götaland) there are a lot of large arable farms and few smallholdings. In the forest counties of southern Sweden, livestock holdings (beef) dominate while arable farms dominate the agriculture of Skåne.

Figure 4 Characteristic orientation of agriculture, by county, 2003

Competitiveness and profitability of the agricultural sector Competition in the agricultural sector is limited, thanks to the border protection and market regulation of the EU CAP. At present, rapid changes are taking place in the EU as well as on the world market. A number of new EU member states are big agricultural producers. Furthermore, the WTO agreement’s regulations on exports subsidies and customs tariffs in developed countries are being called into question. There are, then, a number of forces at work indicating that international competition can be expected to increase in traditional agriculture in Sweden as well as in the rest of Europe. Above all, we can expect to see more competition on markets that have a high degree of standardisation and where the products are homogenous and independent of origin.

The competitiveness of Swedish agriculture is affected by a number of factors, of which natural conditions are the most important. The Swedish Board of Agriculture report 2003:7 analysed the competitiveness of Swedish agriculture within various sub-sectors. According to the report, productivity in milk production is relatively good, while yields

for cereal are lower than those of a number of other European countries (EU-15)13. Lab- our productivity in the agricultural sector also follows the trend in comparator countries in Western Europe, and has grown somewhat more steeply from the mid-1990s and onwards. Productivity in agriculture in 2004 was € 13,219 measured as value added/unit of labour14. At the same time, the number of full-time equivalents is falling in the agricultural sector and a larger proportion of arable land is being voluntarily left fallow compared to other countries (apart from Finland). According to the report, there are indications that Swedish agriculture may be more poorly equipped than that of the comparator countries to deal with future developments. If the terms-of-trade15 continue to deteriorate compared to other countries, this can lead to long-term profitability losses. The indicator for labour productivity shows a good trend however, and this may outweigh poorer terms-of- trade. The climate is tougher however, and the stabling period longer, in northern Sweden when compared to the southern parts of the country. This has resulted in higher costs for meat and dairy production. The production value of agriculture was about SEK 41 billion (€ 4,6 billion) in 2004. Agricultural profitability is linked to agricultural competitiveness. Profitability has deteriorated in a number of production sectors in recent years. This primarily applies to dairy holdings, which is the most labour-intensive group of holdings in agriculture16. Cereal cultivation is also showing declining profitability.

Prices for leaseholds have grown by 36 per cent since 1994, and there are wide regional variations. In southern Sweden, the average leasehold price in 2004 was SEK 2 808 (€ 312)/hectare (including “free leaseholds”), but SEK 150 (€ 16,7)/hectare in northern Sweden. Land prices in southern parts of the country have climbed while leasehold prices in Norrland have not increased significantly. Free leaseholds are common in northern Sweden, where as much as 60 per cent of land is leased free.

The significantly poorer climate and other natural conditions in many parts of the country are a clear competitive disadvantage compared to agriculture in other EU countries. Growing international competition has, among other things, resulted in a significant fall in the number of active agricultural holdings in areas with less favourable production conditions. CAP reform is also judged to have affected developments somewhat. Continued development in this direction can, in the long term, constitute a threat to the general basis for the development of the agricultural sector and the processing stage. The reduction of the number of livestock-keeping holdings can in the long run threaten the maintenance of the agricultural landscape in large rural areas all over Sweden.

There are, then, indications that competitiveness is a problem for Sweden’s farmers in some areas and in some sectors. Continued European and international competition in

13 Swedish Board of Agriculture, 2003. Hur går det för svenskt jordbruk? En jämförelese med några konkurrentländer (How is Swedish farming doing? A comparison with some competitor countries) Report 2003:7. 14 This information is not definite and is currently being studied by Eurostat. 15 Terms-of-trade is defined as the ratio of export price and import price. 16 Swedish Board of Agriculture, 2005. Åtgärder för förbättrad konkurrenskraft och tillväxt på landsbygden. (Measures to improve competitiveness and growth in rural areas).

the sector will in future place higher demands on the adaptive capacity of the agricultural and food processing sectors. This can involve a risk of fewer companies within the industry, loss of jobs, a reduced area of cultivated land, and regrowth of woodland. The CAP has also created new conditions through its greater market focus. Adaptation can take place through improved efficiency and modernisation, or through greater differ- rentiation and processing of the production. Existing, profitable agricultural holdings also have the financial strength to develop new processing activities or other types of active- ties. Know-how, access to new knowledge and technology and professional and market- oriented entrepreneurship will, regardless of type of production, be a determining factor in success. In an international perspective, Swedish agriculture has a high standard, with high levels of product awareness. Generally, Swedish agriculture is well adjusted to regulatory requirements and growing consumer demands for safe and ethically acceptable food. Work to environmentally integrate agriculture has been undertaken successfully over a long period of time. There is potential to further develop production in this direction using modern production methods.

Extensive investment may be necessary to enable enterprises to capitalise on opportunities for improved profitability. Comparisons with competitor countries show that Swedish farmers have not invested to the same extent in recent years as, for example, their Danish colleagues. One example is in milk production, where the low rate of investment combined with the smaller amount of new construction being carried out means that Swedish producers have a relatively high fixed cost per dairy cow.

The challenge is be to retain and improve competitive and development power in Swedish agriculture and food production. It is crucial for the long-term development of agriculture and other rural enterprises that renewal and development take place in a way that allows competitive businesses to grow and strengthen.

Areas with natural handicaps Sweden’s northerly situation affects agriculture. The severe climate and short growing period north of the 62nd parallel and adjacent areas with similar natural conditions result in low yields, tight time-frames for sowing and harvest, a short grazing season and high costs for buildings and heating. This in turn boosts the cost of growing plants or keeping domestic livestock. Extremely low population densities and long distances to main population centres with a range of services are further obstacles to development in some northern rural areas.

Some regions of central and southern Sweden have a more pronounced inland climate than the coastal areas. This climate also entails a shorter growing season and lower crop yields. Poorer land consolidation means longer labour time and less chance to fully exploit mechanical capacity. These regions are also relatively sparsely populated. However, distances to the nearest population centres are usually considerably shorter than in northern Sweden, which makes employment outside agriculture and forestry easier to find.

About half of all agricultural land in Sweden is classed as Less Favourable Areas (LFA), of which a quarter is in the north, as mountainous regions. The average size of farms in the

LFA area is about 26 hectares, which is 28 hectares less than the average agricultural holding outside the LFA. Production in the LFA is dominated by milk production; 64 per cent of the country’s dairy cattle are found in the area. Grazing animals have been concentrated to southern Sweden’s forest regions over the past decade, which has led to relatively good utilisation of grazing land17. The forest regions of northern Sweden and other parts of the Norrland counties are experiencing significant problems with forest regrowth. There has been a steep decline in grazing land in the Norrland counties and the remaining areas are part of the prioritised lands in the environmental quality objective A varied agricultural landscape.

The above circumstances indicate how important it is that agriculture in the LFA is supported by special measures such as the LFA natural handicap payment. If the natural handicap payment (LFA support) had not been introduced in 1995, the difference between the rest of Sweden and the LFA would have been even greater than it is today. Farm closures and depopulation of rural areas have been somewhat slowed. Forests and high mountain terrain dominate the landscape in the north of Sweden, and farmland accounts for only a small percentage of the total area. Forest is the predominant land cover in central parts of Sweden. The most biologically valuable lands and most of the cultural heritage are found in the grazed landscape. Closures or woodland regrowth of agricultural land in the LFA area will thus result in lower biodiversity. Active agriculture with livestock keeping is a prerequisite for keeping arable and grazing land open. Management of cultural assets also secures permanent settlement in the area.

3.1.3.2 Horticulture Horticulture is primarily situated in the far south of Sweden, and close to towns in other parts of the country. There are currently about 3 000 companies around the country that operate horticulture. The area outdoors and under glass that is devoted to the cultivation of garden plants has remained largely unchanged over the past 20 years while the number of enterprises has fallen continuously. Organic horticulture occupies about seven per cent of the outdoor area, which is an increase of 50 per cent since 1999. Fruit and berry cultivation has increased, while vegetable cultivation has remained at the same level. Organic cultivation of vegetables under glass has on the other hand fallen since 1999 by about 20 per cent, and in 2005 comprised about 5 per cent of the total surface under glass devoted to vegetable cultivation. There are however wide regional variations in the area devoted to organic cultivation of horticultural products, from Södermanland County (2 per cent) to 56 per cent of all outdoor cultivation in Dalarna County. The proportion of organic outdoor cultivation is significantly higher in northern Sweden than in other parts of the country.

3.1.3.3 2003 CAP reform The new policy has been implemented in Sweden since 1 January 2005. It is expected to have consequences for the structure of Swedish agriculture, the landscape and production. Support that was previously linked to production is being converted into decoupled farm

17 Swedish Board of Agriculture, 2004. Tre nya miljöersättningar – hur blev det? (Three new environmental grants – what happened?) Report 2004:5.

support and paid to farmers who meet certain basic requirements regarding environmental considerations, public health, animal health, plant and animal protection, the cross-compliance provisions and management requirements for good agricultural conditions.

The Board of Agriculture’s long-term analyses point to a situation in which cereal production may fall by 15–35 per cent in the long term, beef production by 10–25 per cent and milk production by 15–20 per cent18. The fall in numbers of grazing animals is greater in the LFA, where much of the grazing land is situated. The reduction of the number of livestock-keeping holdings is problematic for the maintenance of the open agricultural landscape in large areas of rural Sweden. The loss of these farms may also have a negative impact on business activity and services in the surrounding region. Estimates are uncertain, because there are no historical parallels. Arable land use has remained more or less constant since the beginning of the 1990s. Some change in the area of agricultural land has taken place compared to 2004, which is probably explained by the CAP reform rules for farm support. While arable land area has grown by 2 per cent, the area devoted to cereal cultivation has fallen by 12 per cent. Cereal cultivation has primarily fallen in areas with low harvests. There has been increasing interest in recent years in cultivating energy crops. Ley cultivation on the other hand has climbed by about 13 per cent between 2004 and 2006. The area of grazing land has also grown since the reform but the biggest increase took place between the years 2003 and 2004. Since 2003, the area of grazing land has grown by about 13 per cent, corresponding to 65,000 hectares. For some counties in northern Sweden, we note significant increases in the area of arable and grazing land. One explanation for this might be that these areas were not previously needed as fodder areas, but that they are now entitled to farm support.

CAP reform has affected the number of cattle, which fell by 700 head between 2004 and 2005. The number of sucker cows grew somewhat while numbers of dairy cows fell. Numbers of cattle have fallen since 1995 by about 10 per cent, while the area of ley and pasture land has grown in the same period by 8 per cent19. This means that the fodder area per head has grown by about 20 per cent.

CAP reform has also affected the number of holdings. Preliminary figures show that the number of agricultural holdings has grown to 75,000, which is about 12 per cent more than that reported for 2003. The main reason for this is that the number of applications for agricultural support was much bigger in 2005 than in previous years. The increase applies entirely to holdings with only mown meadows and pasture land, or fallow land. In contrast, the number of holdings growing other crops fell. The main increases have been in the number of holdings in weaker agricultural areas and the number of smallholdings. The number of holdings in southern and northern Norrland has grown by a total of 27 per cent since 2003.

18 Swedish Board of Agriculture, 2005. Report 2005:14B. 19 Swedish Board of Agriculture, 2006. Effekterna av jordbruksreformen, lägesrapportering nr 6 (Effects of CAP reform, situation report no. 6).

The first results since introduction of CAP reform on 1 January 2005 thus show clear signs of some extension of the use of agricultural land, with more ley and fallow acreage. There has been less change in the more intensive agricultural regions since reform was introduced, compared to the forest and central regions.

CAP reform means that Swedish agriculture is faced with great challenges. At the same time, reform opens up new opportunities for developing new production and activities related to market demand.

3.1.3.4 Forestry in Sweden Half of Sweden’s forest land is owned by individuals, with an average property size of about 30 hectares. A third of these properties also have more than 2 hectares of agricultural land, so businesses combining agriculture and forestry are very common. In total, there are over 350,000 individual forest owners and almost 240,000 forest holdings.

Forestry, and the forest and wood industries, create employment in rural areas and are very important for the rural economy. Jobs are distributed all over the country, and in many districts companies in the forest industry are the most important private sector employer. There is regional variation in the relative importance of the forest for rural areas. While forest management takes place in the rural areas themselves, the forest and wood industries are often found in small towns. Generally, the importance of forestry in the regional economy is greatest in sparsely populated regions, for example in the inland regions of Norrland. The forest and forestry also have an indirect effect on the rural economy and its attractiveness, through the potential for hunting, fishing and nature tourism.

Like agriculture, forestry has undergone extensive structural change. The deregulation of forest policy that Sweden introduced in the early 1990s can be assumed to have hastened structural development. Technological development has led to greater productivity. Full- time employment and self-employment in the forest are falling. Most owners have their main source of income from another source than forestry, and the forest is often used as a supplement, to finance major outlays. Loss of jobs and self-employment is largely due to rationalisation and increased mechanisation in forestry over past decades. This has turned much forest work into a capital-intensive and high-tech activity. More than 80 per cent of clear-felling and terrain transport is carried out by subcontractors, while the forest owners themselves carry out over half of the management of the forest and most of the assisted planting. The forest industry employs about 90,000 people, of whom 15 per cent are women and 85 per cent men. Additionally, each employee in the forest industry provides employment for another two in sectors supplying goods and services to the forest industry, which means that the industry directly and indirectly employs about 270,000 people. In the northern counties, about 20–35 per cent of those employed in industry work in the forestry and wood industries.

The Swedish forestry and wood industry is one of the country’s most important basic industries, and has long been one of the biggest and most competitive on the international market too. It is responsible for 13 per cent of employment in Swedish industry,

15 per cent of its production and value added and 14 per cent of Sweden’s goods export. The total production value of the forest industry is about SEK 210 billion (€ 23,3 billion), most of which is represented by the pulp and paper industries. The Swedish pulp and paper industry is the third largest producer in Europe, and includes everything from big, multinational companies to small and medium-sized companies. Production of pulp and paper has grown by 20 per cent since the early 1990s. However, 70 per cent of the individual forest owners’ income comes from the sale of sawn timber. The Swedish sawmill industry is Europe’s second biggest producer and the biggest exporter of sawn needlewood products. Production in sawmills has grown in Sweden by about 40 per cent since the early 1990s, and production is evenly distributed over the country.

The Swedish panel industry has a modest position in an international perspective, but is of central importance in the Swedish furniture and interior decorating industry. The wood and furniture industry in Sweden is a mature sector consisting of small and medium-sized enterprises, most of which are situated in rural areas or small towns. Many of the companies have fewer than 10 employees. The industry is found throughout the country, but with some concentration to southern Sweden. Profitability is often low and efforts towards product development and renewal in the sector are very small compared to other sectors. Widespread renewal is necessary if the sector is to maintain, and preferably boost, the number of people it employs and increase its profitability.

The need of public support to the forest industry is today limited to some training measures and similar activity focusing on the national environmental quality objectives. There is a high level of environmental awareness in Swedish forestry and Sweden has a very high proportion of environmentally certified forest internationally speaking. About half of productive forest land is environmentally certified. This is one of a number of aspects in which the Swedish forest sector is well adapted to market demands.

3.1.3.5 Reindeer husbandry and Sami society in Sweden Since ancient times, the Sami have lived in an area that now spans four countries. It consists of the Kola Peninsula in Russia, northern Finland, and the coastal and inland areas of northern Norway, and Sweden from Idre northwards. The area is called Sápmi, Sami country.

Figure 5 Sápmi

Illustration: Svensk information/ Sara Bergkvist

Reindeer husbandry plays a central role in Sami society, but is also important for the rest of the economy in northern Sweden. In some small towns in sparsely populated areas, reindeer husbandry is actually seen as key to maintaining the level of public and private service. Today, about 10 per cent of Sami support themselves through reindeer husbandry and over 20 per cent are active in the reindeer husbandry in Sweden.

The Sami in Sweden herd reindeer on just over a third of Sweden’s surface, concentrated to the northern parts of the country. The “reindeer herding right” is the Sami’s right to use land and water to maintain their reindeer. Reindeer husbandry is based on the natural migration patterns of reindeer and their need of natural grazing. This means that different land areas are used depending on the time of year and grazing and weather conditions. Reindeer husbandry in Sweden is organised in Sami villages. The Sami village is a form of economic cooperation as well as a given geographical area of land. Members of the Sami village herd reindeer within the land area and can also hunt and fish in parts of it. There are 52 Sami villages in Sweden. Traditionally, reindeer husbandry has been combined with other commercial activities such as hunting, fishing and handicraft production. This is also the case today.

Each Sami village has a variable number of reindeer herding enterprises, which in turn consist of one or more reindeer owners. In 2004, there were over 950 enterprises and the number of reindeer owners was about 4,600. The total number of reindeer also varies each year, depending on access to grazing, slaughter and the presence of carnivores. There were about 240,000 reindeer in 2003. The average number of reindeer per enterprise in 2004 was 280. The number of reindeer per enterprise varies greatly within Sami villages as well as between regions. To be able to live entirely off reindeer herding, an enterprise is

estimated to need 400–600 reindeer. The majority of reindeer owners own few reindeer, and half of the reindeer in Sweden are in big reindeer herding enterprises with over 400 reindeer. By tradition, then, as well as for economic reasons, many reindeer husbandry enterprises are dependent on complementary activities and other income alongside reindeer herding.

The number of reindeer herding enterprises grew between 1994 and 2001 while the number of reindeer fell; the total number of reindeer in Sweden fell by an average of 23 per cent between 1994 and 2001 among reindeer owners with more than 400 animals. There are big regional differences, and a comparison shows that the number of companies has mainly grown in the mountain Sami villages of Norrbotten county, with a reduced number of reindeer per enterprise, while the number of reindeer per enterprise is more constant in the southern mountain Sami villages and in the forest Sami villages. Reindeer herding in Norrbotten County is dominated by small enterprises to a greater degree today than it was 20 years ago, while developments in other areas of the reindeer herding area have gone in the opposite direction. If we look at the number of reindeer-herding members of the Sami villages, numbers have doubled in Norrbotten County in the same 20-year period while the number of reindeer-herding members in Jämtland and Västerbotten counties has grown by only a third. Overall developments indicate that the average reindeer herding enterprise is getting smaller and smaller, and that income alongside reindeer husbandry is growing at the same time.

3.1.3.6 Fishing The fisheries sector, one of the land-based industries, includes about 1,900 professional fishermen, 200 aquaculture business and 1,700 employees in the food industry. There are also about 300 fishing tourism companies. There are about 3.1 million leisure fishing enthusiasts in Sweden, and a large potential market in the EU, where it is calculated that there are about 25 million leisure fishermen and women. Farmers are often the owners of fishing waters. Many farmers have fishing and hunting activities as part of the agricultural enterprise. The fishing sector and fishing opportunities are important in maintaining the vitality of the coast and countryside. Fishing is also an important recreational activity for the public. Environmental damage, activities that affect water areas, and overestimation of fish numbers can result in dwindling resources. Environmental considerations and an ecosystem approach are being increasingly taken into account in fisheries policy, although not yet sufficiently.

3.1.3.7 The food industry The food industry is Sweden’s fifth largest industrial sector in terms of employment, with operations throughout the country. The small-scale food industry is the most important for rural employment. In 2005, the food industry employed about 60,000 people, corresponding to about nine per cent of total industrial employment. Increasing international competition, however, has forced it to restructure and make improvements in efficiency, leading to a decline in the number of jobs in recent years. Productivity, measured as value added/unit of labour input, was SEK 592 200 (€ 65 800) in 2004.

The industry is dominated by small businesses. The number of companies processing food has grown in recent years. In 2005 there were just over 3 100 companies, of which 1 300 were one-person companies with no employees20. There is believed to be great potential in the development of small-scale or local/regional food processing. The number of companies in this sector has grown in recent years. A study by the Swedish National Food Administration21 however shows that one obstacle to the establishment or development of small-scale food production companies is often lack of know-how about product development and marketing. The smaller food companies, those with fewer than 50 employees, also experience difficulties in getting their products accepted by retailers. The local food industry has an important role to play in maintaining employment in rural areas. The large enterprises, however, are of crucial importance for overall employment in the food industry.

About 70 per cent of the products of Swedish agriculture are processed by the food industry in Sweden. Those sectors most dependent on access to Swedish raw materials are probably the dairy sector and the slaughter and butchery industries. Many companies use Swedish origin as a selling point, and access to Swedish raw materials is important for these companies. This primary production is, in turn, often dependent on the Swedish food industry. Without a domestic food industry, demand for Swedish raw materials risks falling drastically. Additionally, the profitability of agriculture is directly linked to that of the processing industry, since farmers largely cooperatively own the processing industry.

The structure of the food industry of course has effects on primary production. About a third of all dairies have vanished in just over 10 years. There are today about 15 dairy companies distributed over about 40 production locations22. So far, the producers have not been directly affected by the closures, because the dairies still have to collect the milk, but concentration of the plants poses a long-term threat to milk production. At the same time as a number of large dairies have closed, however, a number of small ones have opened up around the country.

Membership of the EU has brought about great changes in the food industry. Swedish industry gained access to a new major market, but at the same time, competition became tougher within Sweden. Since Sweden joined the EU, its food exports have grown faster than the export of goods from other industry23. One important indicator of competitiveness is the trade balance in the food sector, which showed a deficit of SEK 26 billion in 2004. The trade deficit has grown by 33 per cent since 1995. However, exports of foods have grown since 1995 by as much as 195 per cent, and of agricultural raw materials by 50 per cent. Dominant among the imported products are goods that are not produced in Sweden, but meat and meat goods are a significant and growing part of imports. Of all meat consumption in Sweden, about 20 per cent of pork and 40 per cent of beef was

20 Livsmedelsföretagen, 2005. Livsmedelsåret (The year in food) 2005. 21 National Food Administration, 2001. Lokal och regional livsmedelsproduktion (Local and regional food production), report 17. 22 Svensk Mjölk 2005, Mejerifakta (Dairy Facts), 2005 23 Livsmedelsföretagen, 2003. Livsmedelsåret (The year in food) 2003.

imported in 200324. The corresponding figures for 1995 are 9 and 16 per cent. Employ- ment has fallen in the slaughter and butchery industries, despite the fact that we are eating more meat than ever in Sweden. Growing meat consumption has thus largely led to greater imports, and not to changed domestic production. Food exports in recent years have increased significantly and are thought to have further growth potential. For example, there is a growing market for organic products.

3.1.3.8 Gender equality and the age structure in the land-based industries Reindeer husbandry, agriculture, forestry and fishing are male-dominated activities. A study of gender equality in agriculture and forestry in Sweden found that agriculture and forestry are two sectors where society’s drive towards greater gender equality has not come as far as in other sectors25. One explanation, according to the study, is that gender equality work has focused on terms of employment, and companies in the land-based sector are usually small. Additionally, farms are often family companies where the man, as lead farmer, is the only one registered as a company owner, which makes women invisible in the statistics26. It has been difficult to learn more about the situation of women in the land-based industries due to shortcomings in the statistics, which are completely lacking in some areas.

According to the study, in employment terms women make up 33 per cent of those employed/self-employed in agriculture; the proportion is higher on smaller farms. Measured in hours worked, women’s share is lower. Thirty-eight per cent of forest owners are women, and the proportion has grown. In reindeer husbandry, 25 per cent of reindeer owners are women and only 12 per cent of reindeer husbandry enterprises are principally owned by a woman.

According to the above study, there is a distorted distribution of income in farming households, which needs to change. Women’s share of income from business is biggest in the orientations milk production, horticulture and beef production. In 2001, women’s total income was 84 per cent of that of men; women’s income from employment, on the other hand, is generally higher than men’s. Women often have jobs off the farm, and thereby contribute financial security, which can be very important in an agricultural household.

Women’s role in the land-based industries has changed a lot over the past 80 years. Traditionally, participation by both women and men has been a basic prerequisite of making the business work and supporting the family. As society has changed successively, so has women’s situation. More women than men go on to further education, and for many it is natural to move away from the place where they grew up to study and work. It

24 Swedish Board of Agriculture, 2003. Report 2003:24. 25 Ministry of Agriculture, Food and Consumer Affairs, Ministry Publications Series Ds 2004:39. Det går långsamt fram – jämställdhet inom jord- och skogsbrukssektorn (Moving ahead slowly – gender equality in the agricultural and forestry sectors). 26 National Rural Development Agency 2005. Conditions for small businesses in rural and sparsely populated areas.

is also common that the woman in the farming household is the most highly educated and has the higher income and the broadest social contact network.

Compared to other sectors, there is a high average age in the land-based industries. The average age of a farmer in 2002 was 50. Twenty-eight per cent of forest owners are over 6527. Reindeer owners also have a high average age; over 30 per cent are above the age of 60. The average age of those herding reindeer is even higher, with over 35 per cent above the age of 60. Older farmers are over-represented among small businesses. Among other small business owners, over 10 per cent are older than 6028, while the corresponding proportion for farmers is 30 per cent.

Table 3 Average age of agricultural holding owners and average age of other business owners

Year Average age, farmers Average age, business owners in Difference Sweden 1986 47,2 46,4 +0,8 1990 47,9 46,9 +1,0 1995 50,6 46,8 +3,8 2000 50,0 46,8 +3,2 2002 50,2 47,2 +3,0 Source: Swedish Board of Agriculture, 2005. Åtgärder för förbättrad konkurrenskraft och tillväxt på landsbygden. (Measures to improve competitiveness and growth in rural areas).

The table shows that the average age of owners of agricultural holdings has grown since 1986 and that it is growing faster than the average for all business owners. In the early 1990s, the average age grew by about three years, to later become stabilised at the higher level. The radical domestic agricultural reform that was implemented in the early 1990s caused a great deal of uncertainty about the future of agriculture, something which may have hampered new recruitment. This took place at the same time as the Swedish economy entered a deep recession. When agricultural policy after only a couple of years underwent a change of focus towards harmonisation with the European CAP, farmers became more optimistic again.

As the land users in the agriculture, forestry and reindeer husbandry sectors are becoming older; we can expect major ownership changes in the future. Those farmers who are now above the age of 70 will probably stop working within the near future, and lease or sell to others, let family members take over or allow the land to become regrown with woodland.

Modern Sweden is a multicultural society. In 2005, 13 per cent of the population was born abroad. Most of those who move to Sweden go to live in metropolitan regions, and the proportion of those born abroad living in rural areas is only 5 per cent. Among those employed in the farming, horticulture and forestry sectors, less than one per cent was born outside the Nordic region. A 2004 study by the Ministry of Agriculture, Food and

27 Swedish Forest Agency, 2005. Swedish Statistical Yearbook of Forestry 2004). 28 Federation of private enterprises, 2003. Facts about small and large enterprises 2003.

Consumer Affairs 200429 showed that networks, communication and information between the land-based industries and those born abroad functions poorly. Very few of those born abroad come into contact with the land-based industries, or are given information about the opportunities for employment and self-employment that exist.

3.1.3.9 Entrepreneurship and diversification in the land-based industries Ongoing developments over the past half century, with ever fewer active agricultural holdings, are continuing, or actually being exacerbated, by the most recent reforms of agricultural policy. A very large proportion of agricultural households have their main income from work outside the holding, and they have agriculture or forestry as a part- time or hobby activity. In 2003, around 60 per cent of privately-owned holdings earned income from other activities than agriculture or forestry.

There is, however, a growing group of entrepreneurs who have diversified into income- generating activities alongside their traditional farming work. It is somewhat more common that bigger companies have complementary activities of this nature. New activities in agriculture that are growing in importance include various types of contract work, equestrianism, rural tourism, small-scale processing of raw materials and local sale of the company’s products, and production of raw materials for energy purposes. Almost 30 per cent of agricultural holdings have another activity than farming or forestry that is important for the holding’s income and employment. Greater diversification in agriculture and other sectors creates a potential for a broader range of services and products that make rural areas more attractive in general, both to people interested in settling there and to visitors from outside.

Agriculture and forestry holdings have great potential to be able to utilise natural resources in various types of activity, and many farmers also own fishing waters. There is a great interest in equestrian activity in rural areas and the combination of agriculture and equestrian tourism is becoming increasingly common. One in ten members of the Federation of Swedish Farmers works directly in horse related business activities30. Horses generate significant employment in rural areas, not least through agricultural production of fodder and stabling. According to the most recent survey, there are about 280 000 horses in Sweden31. The absolute majority of those who keep horses keep them as a leisure interest or hobby. Most of the horses are in more accessible rural areas, and interest in horses is often an incentive to go and live in the countryside.

Reindeer husbandry has relatively low profitability and is traditionally often combined with other business activities. Today, about 10 per cent of Sami in Sweden live off reindeer husbandry, and about 20 per cent are active in reindeer husbandry. The majority of Sami, then, do not work in the sector. Some Sami live in small and medium-sized towns all over Sweden, relatively far away from the traditional sectors. At the same time,

29 Ministry of Agriculture, Food and Consumer Affairs, 2004. Rapport om de gröna näringarna och integrationen (Report on the green sectors and integration). 30 LRF, 2005. Gröna framtider (Green futures). 31 Statistics Sweden, 2005. Horses and horse establishments 2004. J024SM0501.

many Sami remain in sparsely populated areas, supporting themselves through everything from reindeer husbandry, hunting and fishing to employment in municipalities, county councils and the private sector. The traditional Sami sectors are still an important cornerstone in the Sami community and Sami culture, and are also an important source of income. There is believed to be further potential for growth and renewal of such complementary activities, through processing of reindeer meat for example and also in areas such as handicrafts, tourism and natural experiences. Reindeer husbandry is regarded overall as being very important for the development of many rural areas in northern Sweden.

In other traditional Sami sectors, too, the opportunity to supplement income is decisive if people are to remain in sparsely populated areas.

3.1.4 The environment and landscape of rural areas

3.1.4.1 The natural and cultural values of the landscape What the landscape consists of is very important in how we see it in a recreational and aesthetic perspective. Forests, mountains, lakes and the cultural landscape are important for recreation and tourism, and are valuable resources for the countryside as a whole. Grazing land, meadows, waterways and cultural environments are important components of the landscape, as is the distribution of cultivated land and forest, and the edge zones between them. Different methods of cultivation in combination with different natural conditions have led to a richly varied landscape. The existence of a variety of environments in which to live, is an important condition for a wealth of cultural heritage, plants and animals. The features of the landscape teach us what the previous agricultural landscape looked like and how it worked. In many places, it can be difficult to understand the historical dimension of today’s fragmented landscape with its isolated grazing and meadow lands. The cultural environments, and the farmed landscape, often contain great biological values.

The UN Convention on Biological Diversity, which came into force in 1993, contains an overall objective that biodiversity should be preserved and utilised in a sustainable fashion. The Convention covers the diversity of cultivated land as well as mountains and forests. Four of the sixteen national environmental quality objectives (EQOs) touch directly on the land-based industries and their natural and cultural values. The EQO A varied agricultural landscape means that the value of the farmed landscape and agricultural land for biological production and food production must be protected, at the same time as biological diversity and cultural heritage assets are preserved and strengthened. By 2010, all meadows and semi-natural grazing lands land will be maintained and managed in such a way as to preserve its value (interim target 1). Additionally, the number of small- scale habitats in the cultivated landscape will be preserved to at least the same extent as today throughout the country (interim target 2), and the number of culturally significant landscape features that are managed will increase by about 70 per cent to the year 2010 (interim target 3). The EQO A rich diversity of plant and animal life means that biological diversity must be preserved and sustainable used for the benefit of present and future generations. The EQO Sustainable forests sets out the objective that the value of forests

and forest land for biological production must be protected at the same time as biological diversity and social values are safeguarded. A magnificent mountain landscape rests on reindeer husbandry as a condition for a landscape characterised by grazing, at the same time as its significant natural and cultural assets are preserved (interim objective 3).

Sustainable use of natural resources should take place in a landscape perspective and on the basis of implementation of the European Landscape Convention. The Convention is to help protect, manage, and plan landscape areas. In the Swedish ratification work it is important that the process has local and regional support. The pilot landscape strategy projects that are currently under way in a number of counties can constitute an important part of implementation of the Landscape Convention; to bring about more focused work in the preservation and sustainable use of biodiversity in a landscape perspective.

The cultivated landscape A varied cultivated landscape contains a number of plants and animals that have found their habitats there thanks to the use and maintenance of the land. The cultivated landscape is a result of previous land use, with diversified use of forest and agricultural land and with contiguous semi-natural grazing lands and meadows. Centuries of tradition have created the conditions for a flora and fauna that is many times unique, even in international comparisons. The number of threatened, rare and vulnerable plant and animal species whose main distribution is in the agricultural landscape is currently estimated at over 1,000, which is half of the red-listed species in our country. Seventy per cent of threatened vascular plant species are found in the cultivated landscape.

Much of the biodiversity of the cultivated landscape is found in meadows and semi- natural grazing lands. These are more species-rich than most other types of land in Sweden. Use of the land through cutting and grazing leads to a rich diversity and density of species. A mown meadow could hold between 40-50 species of flower and grass per square metre. Also, the variations of ploughed fields, different crops, livestock keeping, maintained forest edges and wooded areas all favour biodiversity. Small-scale biotopes and obstacles to cultivation in the cultivated landscape are important environments for small game and for a large number of plant and animal species.

The threat to agrarian settlement The settlement structure of the countryside and its building traditions show great variations that stretch back through the centuries. These variations are of course partly a result of natural conditions, but also of various factors such as varied production orientations and building traditions. Seen over time, the need of buildings for various uses has changed, and restructured operations mean that some buildings are no longer needed. Rationalisation has meant that old buildings located on areas that are no longer cultivated do not keep their function; they are owned and managed by other land users than farmers, or else are uninhabited and unused.

This situation has meant that a large portion of the buildings in rural areas risks falling victim to decay or destruction. Various studies have shown that the potential for new or alternative uses is the most important factor in maintaining and preserving buildings. It is therefore important to see agrarian construction as an asset to rural areas, and to draw

attention to the development potential of the buildings as an asset of the landscape and thereby a link to e.g. tourism and the experience industry.

Threats to biodiversity Biodiversity at different levels, from genetic diversity to populations, species and ecosystems, is declining steeply today. The greatest threat to biodiversity is the destruction of ecosystems and the habitats of species32. In Sweden, biodiversity is particularly threatened by changes in land use, particularly abandonment of farmland with the loss of active users, loss of pasturing and resulting regrowth of woodland. The intensification of agriculture, with the removal of obstacles to cultivation and small-scale biotopes from cultivated fields, threatens the habitats of many species and thus biodiversity. This particularly applies to the plains of southern and central Sweden. There is less and less variation in the landscape, so it is particularly important to preserve the remaining structures in the cultivated landscape, since they create an infrastructure for biodiversity.

Natural, unfertilised semi-natural grazing lands and meadows have traditionally been used to grow fodder for dairy and beef production, but are seldom profitable in a modern farm. In the 1920s, over 2 million hectares were used for pasturing and meadows. Today, only one per cent of all meadows and a quarter of the area of semi-natural grazing lands remain. Many landscape features and small-scale biotopes have also disappeared. This in turn has meant that many plant and animal species that have their habitats in the cultivated landscape are now only found in scattered residual populations. Weak and dying-out populations have problems in becoming reproductive again, and plants and animals run a great risk of dying out as a result of the increased fragmentation of the landscape. Recovery is often a slow process. In a northern European perspective, Sweden still has a high proportion of semi-natural grazing lands and meadows, despite the steep decline in this type of land throughout the 20th century.

The number of birds in the agricultural landscape is used in the EU as a measure of the state of biodiversity. Figure 6 shows the “Trim index” which weighs together a number of common bird species found in the cultivated landscape. Eleven bird species are included in the index for Sweden. According to the trim index in Figure 6, the number of birds associated with the cultivated landscape has fallen by as much as 40 per cent since the mid-1970s.

32 Government Bill 2004/05:150, Swedish Environmental Objectives – A Shared Task.

Figure 6 Trim index for Swedish bird species in the cultivated landscape

1,4

1,2

1,0

0,8

0,6

Trim index 0,4

0,2

0,0 1974 1978 1982 1986 1990 1994 1998 2002 2006

Source: Lindström and Svensson, 2006. Övervakning av fåglarnas populationsutveckling (Monitoring the population trends of birds.) Annual report for 2005.

After the steep decline in 1975–1985, the situation stabilised, but there seems again to be a fall. There can be several reasons for this pattern, such as a shift from spring to autumn sowing, reduced grazing, and the removal of important edge biotopes such as shrub curtains and wetlands.

The general threat to semi-natural grazing lands is the lack of grazing animals to keep the land open, and the fact that the animals that are there are not optimally used33. Farming with grazing animals is a prerequisite for the preservation of biodiversity and the cultural assets that are associated with the Swedish cultivated landscape.

There has been a drop in the number of dairy cows by about 170,000 animals since the early 1990s. This corresponds to 30 per cent of the total number. The number of other cattle has not fallen to the same extent as dairy cattle however. Horses can, under some conditions, graze the semi-natural grazing lands. The great changes in support systems that resulted from CAP reform are expected to speed restructuring, resulting in fewer, but bigger, and agricultural holdings. This can lead to problems in keeping the semi- natural grazing lands open, since the distance to the centre of the farm will increase. CAP reform may however lead to new opportunities for economically viable production for larger farms with grazing animals.

Economic incentives to preserve biodiversity in the cultivated landscape were introduced in Sweden in the late 1980s. Considerable resources have been allocated to preserve meadows and semi-natural grazing lands, for example in the Environmental and Rural Development Programme 2000-2006. Since 1995, the acreage of semi-natural grazing lands has grown from about 350,000 hectares to more than 500,000 hectares in 2005. Figure 7 shows the area of semi-natural grazing lands from 1981 to 2003.

33 Board of Agriculture. 2006. Betesmarkerna efter 2003 års jordbruksreform – hot och möjligheter (Pasture land after the 2003 CAP reform – threats and opportunities). Report 2006:3.

Figure 7 Area of open pasture (hectares), 1981–2003

500 000

400 000

300 000

200 000

100 000

0 1980 1985 1990 1995 2000

Source: Board of Agriculture, 2004. Den samhällsekonomiska effektiviteten i miljöersättningen för betesmarker och slåtterängar (Socioeconomic efficiency of environmental compensation to pastures and meadows).

The statistics for semi-natural grazing lands should be interpreted with caution however, since the definition of semi-natural grazing lands has varied over the years. The area of semi-natural grazing lands grew on entry into the EU in 1995, which was due to changed methods for collecting statistics and the fact that it became more profitable for farmers to keep semi-natural grazing lands open as a result of agricultural policy. There is great regional variation. Most semi-natural grazing lands, about 40 per cent, are in the forested and mixed countryside of Götaland.

The forest landscape Over past centuries, the forest landscape has undergone change as a result of human activity coupled to industrialisation and the use of raw materials from the forest for e.g. biomass, pulp wood and sawn timber. Numbers of game and previous forest pastures affect, and have affected, the forest landscape. Natural forest fires and dominating use of clear-felling have led to a situation where continually tree-covered areas, “continuity forests”, are unusual. Forests are today more similar to one another in age, and consist to a large extent of one or two dominant tree types, usually fir or pine, even in places where deciduous trees used to be more prominent. Natural disturbances such as fire have been limited. Other disturbances, such as selective cutting, burn-beating and favouring of deciduous trees and types of grass, have largely disappeared. Continuity forest management aims to actively use the forest, but with adapted methods and improved consideration, so that e.g. some biodiversity or other values are strengthened.

The number of red-listed species in the forest landscape currently stands at about 1,800. Of these, about 30 per cent are dependent on dead wood or old trees. Numbers of mature and old trees, dead wood of varying quality and deciduous trees in stands of evergreens have fallen; thanks to active measures, they are growing again, but not in enough numbers. Examples of active measures are information and counselling, formation of

nature reserves and habitat protection areas, nature conservation agreements34 and voluntary set aside35.

Most of the endangered species in southern Sweden are dependent on hardwood forest. The amount of hardwood forest has fallen in Sweden over the past 200 years. For a number of species and environments, there is actually a situation where species or groups of species are at, or under, their “threshold values”. There is therefore a great need to restore and recreate natural assets in hardwood forests. Like the agricultural landscape, the forest has many values apart from biological ones; not least, cultural values. For the community, the forest is important for recreation and leisure.

Hardwood forest issues have been increasingly discussed in recent years. For a long while, Sweden has worked through directed government grants to boost interest in managing hardwood forests and for greater activity in hardwood forests. Important instruments have been guidance on forest management and support for management and regrowth measures. Funds have largely gone to measures in existing hardwood forest. Financial yields from planted hardwood forests are negative in Sweden.

Nature reserves, national parks and nature conservation areas cover a land area of about 4 million hectares, of which 2 million are forest biotope. An additional 10 000 hectares of forest are protected by biotope protection, and 20,000 hectares of forest have natural resource management agreements. The amount of standing wood has grown by over 60 per cent since the 1920s. Annual growth is estimated at 104 million cubic metre of forest.

Forest policy in Sweden In the revised Swedish Forestry Act of 1994, production goals and conservation goals are both given equal importance. The first section in the Swedish Forest Act states “The forest is a national resource. It shall be managed in such a way as to provide a valuable yield and at the same time preserve biodiversity. Forest management shall also take into account other public interests.” Forest owners have great responsibility for achieving these goals. This means that forest owners have to take general consideration of the environment, e.g. when clear cutting, individual trees or groups of trees should be left of consideration of bio diversity or cultural values and the shape and size of a clearing should be adjusted after the nature and cultural environment.

Besides the general consideration that forest owners have to take according to national legislation they, as a collective, will contribute to fulfil the national goal that 900 000 hectares of productive forest land of high conservation value below the mountain border is excluded from forest production during the period 1999-2010. This objective thus means that additional forest areas, beyond what has already been protected until 1999 by nature reserve, habitat protection areas, national parks or nature conservation agreements,

34 A nature conservation agreement is an agreement between forest owners and the State to protect the forest on a long term base, usually 50 years. 35 The forest-owner sets aside forest areas for nature conservation and by taking other kinds of environmental care without compensation from the State.

will be protected. Until 1999, the protected forest area amounted to 850 000 hectares. The objective of 900 000 hectares of productive forest land, means that the forest-owner will set aside 500 000 hectares of forest areas for nature conservation and by taking other kinds of environmental care without compensation from the State, during the period 1999-2010. The other 400 000 hectares will be protected with different tools where the State will compensate the forest owners: 1. Nature reserve – The usual form of protection and their size may vary from a few hectares to thousands of hectares. Nature reserves can be owned both by the State and by private persons. Long term protection. 2. Habitat protection area – Smaller habitats with high conservation values. Long term protection. 3. Nature conservation agreement – High environmental values can also be protected through agreements between forest owners and the State. 50 years protection.

This implies that Sweden has different national methods and tools to protect forest land with high conservation values, including Natura 2000. The following table shows how the 400 000 hectare of forest land, which shall be protected and where the State is compensating the forest owner, are divided on the different tools. The table also includes information about areas that have been protected so far (until 2006). Table 4. Protected forest area until 2006 Target 1999-2010 Reached up to 2006 of which Natura 2000 Nature reserve 320 000 hectare 72 600 hectare* 58 500hectare Habitat protection 50 000 hectare 17 300 hectare 4 100 hectare areas Nature conservation 30 000 hectare 13 500 hectare 1 800 hectare agreement Total 400 000 hectare 98 400 hectare 64 400 hectare *until 2005

About 520 000-600 000 hectares of productive forest land below the mountain boarder has been set aside since 1999 without compensation from the State, according to preliminary calculation. The amount of forest land of high conservation value of these set aside areas is still unclear, however.

For land which is protected as nature reserve and habitat protection area the land owner could receive payment for the trespass in ongoing land use as a result of the decision to protect the forest. A land owner could choose to keep the land and receive a trespass payment or sell the land to the state. The choice of many land owners is to exchange the land to replacement land as they would like to continue with forestry. The state will then take over the land that is covered by nature reserve and offers replacement land.

For land that is protected by nature conservation agreements there is no statutory right to be compensated. However, in most cases a payment to the land owner is granted which is lower than the above mentioned trespass payment for habitat protection area and nature reserve.

Natura 2000 In Sweden, some 4,100 areas have been designated under Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds (OJ L103, 25.4.1979, pp. 1–18, Celex 31979L0409), and Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (the Natura 2000 Directives). (OJ L206, 22.7.1992, pp. 7–50, Celex 31992L0043). The absolute majority of the designated Natura 2000 areas (3 971 objects covering an area of 6 278 230 hectares) have been chosen according to the Habitat directive (OJ L206, 22.7.1992, pp. 7–50, Celex 31992L0043) and a lesser part (530 objects covering an area of 2 887 234 hectares) according to the Wild bird directive (Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds). There is a substanstial overlap between the areas designated under the two directives, and the total area of Natura 2000 areas in Sweden is some 6.4 million hectares of land, corresponding to about 14 per cent of the country’s area. Sweden is obliged to take appropriate steps to maintain the conservation of these areas, or, where necessary, restore them. About 60 per cent of the Nature areas are protected, for example as nature reserves.

For many of the habitats within the Natura 2000, the terminology of these habitats differs substantially from the terms and the ground for designation that traditionally are used in the Swedish nature conservation work. The statistics concerning the acreages of agricultural land designed as Natura 2000 areas varies. The reason for this is that the Natura 2000 objects in some cases include also other types of land in addition to the agricultural land.

Within the LFAs, there are 110 000 hectares of agricultural land designated as the Natura 2000 areas, which corresponds to nearly 6 per cent of the total acreage of agricultural land in the LFAs. This is a “gross” acreage where the whole block of land is included even if only a minor part of the block is designated as a Natura 2000 area. Presently, there is no more reliable statistics of the net acreage of agricultural land designated as Natura 2000 areas. Of these 110 000 hectares, the Alvaret on the island of Öland, as a part of the World Heritage List of UNESCO, represents a relatively large part, specially in support area 5:a and 5:b, with 32 000 hectares where the majority is semi-natural grazing lands.

Table 5 Natura 2000 as percentage of total agricultural area within LFAs

Support areas Area Natura 2000 as per cent of acreage F 54 150 4,8 1 21 262 7,7 2a 153 276 2,9 2b 84 781 0,6 3 95 613 1,3 J 189 892 1,7 4b 10 101 1,0 5a 401 858 5,8 5b 553 568 6,1 5c 220 746 9,1 5m 140 146 15,2 Total 1 925 393 5,8

The agricultural landscape contains about 65 000 hectares of meadows and semi-natural grazing lands that have been designated as Natura 2000 areas. This is approx. 15 per cent of all meadow and semi-natural grazing lands in Sweden. Of these habitats in the agricultural landscape, about 75 per cent are managed through grants under the auspices of Environmental and Rural Development Programme 2000-2006. There are also opportunities to apply for funding from the EU LIFE funds for other more comprehensive restoration projects not supported by the Rural Development Programme. Approxi- mately 2,000 hectares of semi-natural grazing lands are currently covered by project support within the current LIFE framework. In accordance with an EEA report (2004:1), semi-natural grazing lands, extensively used areas and small-scale mosaic landscapes are defined as areas of high natural value. For Sweden, such lands cover an area of 600 000 hectares according to EEA report 2005:6.

The protection of Natura 2000 is considered as a part of the Swedish environmental quality objectives (EQO). The most important of the 16 EQO for preserving the biodiversity in the agricultural landscape is “A rich agricultural landscape” which means by 2010, all meadows and semi-natural grazing lands land will be maintained and managed in such a way as to preserve its value (interim target 1). Due to the EQO stating that all valuable grasslands should be maintained, land designated as Natura 2000, and other valuable grasslands, have been eligible for payment under the agri-environmental measures in the former Environmental and Rural Development Programme 2000-2006.

Of forest land, 1.9 million hectares are currently designated as Natura 2000 habitats. This corresponds to just over eight per cent of the total area of forest. These areas are, or will be, protected as national parks, nature conservation areas, areas with natural management agreements or as protected biotope areas. The Natura 2000 habitats in forest land covers both productive forest area and forest impediments36. Today (until 2006), 99 per cent of

36 Forest impediments are regarded as land unsuitable for wood production unless site improvement measures are applied (Swedish Forest Act, Section 2)

the Natura 2000 habitats in forest is protected through nature reserve, habitat protection areas, national parks or nature conservation agreements37. More than half of the Natura 2000 habitats in forest is productive forest land.

The forest impediments always requires, both within and outside a Natura 2000 habitat, a permit according to the Swedish Forestry Act, to carry out forest management. For productive forest area that is not protected as national parks, nature conservation areas, areas with natural management agreements or as protected biotope areas, a permit is required according to chapter 7, article 28 (a) and (b) of the Environmental Code, to carry out activities or measures that may harm the environmental values of a Natura 2000 habitat.

A permit for forest management may be given within a Natura 2000 habitat, only if the management by itself or together with other planned or continued activities do not: 1. harm the biotope or biotopes that is to be protected in the area, 2. have a negative effect of the species that is to be protected, is exposed to a disturbance that may in a considerable way complicates the protection of the species in the area.

The designation of Natura 2000 areas is not associated with payment possibilities. When a permit is not given and when this means that ongoing land use is considerable aggravated in the referred part of the property it is possible to get paid.

The cultural values of the landscape The cultivated landscape and much of the forest landscape are a result of human activity. The natural and cultural aspect is always present to varying degrees in different parts of the country and in different types of landscape. These regional characteristics are unique or representative of their region, and it is therefore important to preserve them. Changes in the landscape through human activity or natural processes are important forces behind biodiversity. Cultural values in the landscape are the monuments and traces of past times, such as stone walls, traditional fencing, ancient fields and reindeer fences, which allow us to experience the historical background. Cultural values are also the traditional distribution of agriculture and forest in woodland and mountain pasture areas, infields and outfields as well as agrarian construction with its variations in function, material and building techniques.

In the country’s mountain areas, much of the region’s cultural heritage is based on reindeer husbandry and its complementary activities. Reindeer husbandry has also had great impact in northern forest regions. Reindeer have had a central function for a long time, but the forms of reindeer herding have varied over time and between regions. Sami cultural values in reindeer herding areas are vulnerable due to their construction. In the landscape, the heritage consists of e.g. stores, trap pits, settlements, and reindeer grazing lands, pens and marketplaces. The restructuring which reindeer husbandry and Sami society have undergone, e.g. through the shift from intensive to extensive reindeer

37 Statistics from the Environmental Protection Agency and the Swedish Forest Agency.

management, has meant that many Sami cultural sites are no longer used, and thus risk being forgotten. This, in combination with the fact that Sami cultural heritage sites are perishable, is a threat to Sami culture.

Cultural values have often been formed by the dynamic between various types of land use in the cultivated and forest landscape, such as woodland and mountain pasturing. The cultural values of the forest are usually divided into four categories: the fixed ancient monuments that are protected in the Heritage Conservation Act, the other cultural heritage preservation interests of the forest described in Section 30 of the Forestry Act, intangible cultural assets (for example place names and folk tales) and biological heritage. Biological heritage consists of biological characteristics that have arisen through human use of forest resources, and which cannot survive without continued human use of the land.

3.1.4.2 Water use and water quality

Water use by agriculture Sweden is rich in water, with a long coastline and lakes make up more than 9 per cent of the country’s total surface area. There has been a drastic fall in open water in the cultivated landscape over the past 50 years, with resulting negative impact on biodiversity and the landscape. Compared to the rest of Europe, Sweden has relatively good access to water, but there are areas that experience temporary shortages, e.g. southeast Sweden and the coastal regions. The total water outtake for Sweden was calculated at 3.2 billion m3 for 2000. Most of the water, almost two thirds, was surface water, i.e. from lakes and waterways.

Sweden has been divided into five water districts under Council Directive 2000/60/EC establishing a framework Community action in the field of water policy (OJ L327, 22.12.2000, pp1–73, Celex 32000L0060). The three southern water districts cover the bulk of Swedish agricultural land. Agriculture represents about 4 per cent of total water use. In agriculture, water is used to irrigate crops and as drinking water for livestock. Total use is estimated at about 135 million m3 of water per year.

Just over two-thirds of agricultural water use is for irrigation. Agricultural water use is greatest in södra Östersjön water district. Along with Västerhavet water district, it represents almost 85 per cent of total agricultural water use. The irrigated area in 2003 covered just about 50 000 hectares. The main crops irrigated are special crops such as potatoes and sugar beets, but ley and to some extent cereals are also irrigated. According to forecasts, agricultural water use is not expected to rise in the next ten years.

Water quality Sale of nitrogen and phosphorous in mineral fertilisers in 2004/05 (1 July–30 June) was just under 162 000 tonnes and just over 15,000 tonnes respectively. These were the lowest sales recorded since the 1960s. The amount of nitrogen sold per hectare of cultivated arable field was 68 kilogram for the whole country; this was about nine per cent less than sales for the previous year. The highest use is reported for areas with more intensive

agriculture. The sale of phosphorous in mineral fertiliser has been declining since the early 1980s. This trend has levelled off in recent years however. The sale of phosphorous per hectare of cultivated arable field was 6.5 kilogram, which was nine per cent down from the previous year’s sales. The cadmium content of phosphorous fertiliser was estimated at 5 grams per tonne of phosphorous in 2004/05.

Falling profitability in cereal cultivation may be one reason for the lower use of nitrogen, while dry weather in the spring of 2004 may be another. An increase in the area devoted to oleiferous plant cultivation may at the same time have boosted use.

Balance calculations for agricultural land (the soil surface method) show, for 2003, a total application of 123 kilogram nitrogen and 14 kilogram phosphorous, respectively, per hectare. The nitrogen surplus was estimated to be equivalent to 46 kilogram per hectare while the phosphorous surplus was 2 kilogram per hectare. For both nitrogen and phosphorous, this means that there is a lower surplus than in previous calculations for 2001. The same calculations for the agricultural sector (farm gate method) show a surplus of nitrogen of 54 kilogram per hectare and for phosphorous of just less than 3 kilogram per hectare. Compared to 2001, this means a lower surplus of 5 kilogram nitrogen per hectare and 0.7 kilogram phosphorous per hectare. Table 4 shows the soil surface and farm gate balances for the agricultural sector for the years 2001 and 2003. Table 6 Soil surface and farm gate balances for nitrogen and phosphorous in kilogram per hectare for 2001 and 2003

2001 Soil surface Farm gate Nitrogen Phosphorous Nitrogen Phosphorous Added 123 14 91 9,6 Removed 76 11 33 6,0 Surplus 48 2,5 59 3,6 2003 Soil surface Farm gate Nitrogen Phosphorous Nitrogen Phosphorous Added 123 14 89 9,3 Removed 77 12 35 6,4 Surplus 46 2 54 2,9 Source: Statistics Sweden.

Leaching of plant nutrients and eutrophication In the 2005 Swedish report under Article 5 of Parliament and Council Directive 2000/60/EC establishing a framework for Community action in the field of water policy, problems with eutrophication of fresh water are primarily linked the cultivated plains of southern and central Sweden. Coastal waters are also most clearly affected in southern Sweden. The Baltic has had eutrophication problems for a long time, largely due to the long-term impact of all the Baltic rim countries. Effects of eutrophication include depletion of biodiversity in fresh water and the sea, regrowth of lakes and waterways and the spread of green algae mats, algae flowering and the death of the seabed. Nitrogen compounds also reach the groundwater and lead to greater levels of nitrates in wells and

water catchment areas. The assessment in the report is that the current situation for the Baltic will not change significantly to 2015 due to slow recovery, even though major steps are being taken in all rim countries. Work is currently under way to develop the programmes of measures necessary to achieve the demands set out in the Directive. The programmes are expected to be completed in 2009. After this, the programmes should be able to form an important basis for the design of types of payment within the framework of the rural development programme.

Leaching of the plant nutrition substances nitrogen and phosphorous from arable land is a significant cause of eutrophication of lakes, waterways and the sea, and is estimated as being responsible for almost half of anthropogenic emissions. Leaching of nitrogen is affected by e.g. the distribution of crops on arable land, the nitrogen uptake of the crops and the size of the arable land area. According to calculations, leaching of nitrogen from Swedish agricultural land (from the root zone) has fallen by 25 per cent between 1985 and 1995. Calculations for 2000 show that anthropogenic load from Swedish sources on the Kattegatt and Skagerack and the Baltic Proper has fallen by about 11 per cent compared to that of 1995.

According to recently completed calculations, nitrogen leaching from arable land in Sweden in 2003 amounted to over 60,000 tonnes. Between the years 1995 and 2003, leaching was estimated to have fallen by about 7,000 tonnes. The reduction is primarily explained by reduced cultivated acreage, greater nitrogen efficiency in cultivation and through environmental payment for cultivation of catch crops and spring cultivation. A minor part is explained by increased spreading of manure during spring and changes in what crops are cultivated. It is not possible to say what this reduction means in relation to emissions to lakes, waterways or the sea. To calculate this, it is necessary to estimate what part that is separated off in the water system’s route to the sea through sedimentation, plant uptake and formation of nitrogen gas (retention). This has not yet been done.

Nitrate levels of over 50 millegram per litre have only occasionally been measured in ground water for the 1996–2002 period, and the levels of nitrate in ground water are declining according to measurements carried out within the framework of environmental monitoring programmes. There are however problems with high nitrate levels in drinking water, particularly in southwest Sweden. A total of about 100 000 people in Sweden have drinking water with nitrate levels over the Swedish health limit (10 milligram per litre of water, expressed as nitrate nitrogen).

Total Swedish anthropogenic emissions of phosphorous from Sweden to surrounding marine waters have been estimated at about 3,100 tonnes. However, the figures for phosphorous are very imprecise. Phosphorous levels in water from arable land are highest in the area around Lake Mälaren, which has a high clay content in the soil, and from the southern counties with high phosphorous levels (P-AL) in the soil as a result of fertilisation. A typical level is 0.15 milligram of total phosphorous per litre. Overall, agriculture is a significant source of phosphorous emissions to the sea, particularly to the areas of the Baltic Proper and the Skagerack/Kattegatt. It is estimated that emissions have fallen since 1995, which can be explained by a reduced number of animals, and that there has been a fall in fertilisation using phosphorous since the 1980s.

The MTR-reform will probably lead to lower levels of plant nutrient loss, because of more ley cultivation and because there will be less livestock. It is still difficult to assess, however, the extent to which this will happen. Together with measures such as cultivation of catch crops, spring cultivation, protected zones, the creation of wetlands and information and training measures, the contribution of agriculture to the eutrophication of lakes, waterways and seas should fall significantly, thus contributing to the achievement of the environmental quality objective “Zero eutrophication”. These measures also have bearing on other environmental quality objectives, such as “High quality groundwater”, “A balanced marine environment” and “Flourishing coastal areas and archipelagos”.

Emission of plant nutrition substances from forestry primarily takes place from land where felling has taken place. Emissions per unit of area are small, however, but since the areas are very large, total emissions are estimated at about 40,000 tonnes for 2000. Forest land and other land are the dominant sources for emissions of plant nutrition substances from northern Sweden to the Sea of Bothnia and Gulf of Bothnia38.

Measures National programmes of measures to reduce emissions of nitrogen from human activity have been drawn up since the late 1980s, not least as a result of the work in the marine environment conventions OSPAR (Convention for the Protection of the Marine Environment in the North-East Atlantic) and HELCOM (The Convention for the Protection of the Marine Environment of the Baltic Sea Area). Sweden ratified both conventions in 1992. The first programmes covered selective measures in agriculturally intensive and coastal areas, such as restrictions on spreading manure, demands for storage capacity for manure, improved planning of plant cultivation and fertilisation through information and training, and requirements for a greater proportion of autumn and winter covered land. Particularly environmentally sensitive areas of southern Sweden and coastal regions were designated. General measures were introduced to reduce the intensity of farming, such as limits on livestock density and environmental taxes on mineral fertiliser. Tax on mineral fertiliser is currently SEK 1.80 (€0.2) per kilogram nitrogen.

On Sweden’s entry into the EU, Sweden designated Gotland, Blekinge, Skåne and Halland counties, and the coast from Norway round to the Stockholm archipelago and Öland, as sensitive areas according to Council Directive 91/676/EEC on protection of waters against pollution by nitrates from agricultural sources (OJ L375, 31.12.1991, pp. 1–8, Celex 31991L0676). These areas corresponded to the previously designated areas of environmental sensitivity. In 2002 and 2003, additional sensitive areas were added in Stockholm, Uppsala, Södermanland, Östergötland, Västra Götaland, Örebro and Väst- manland counties. Of the total area of cultivated land in Sweden, about 65 per cent is designated as sensitive areas. This corresponds to 17 per cent of the total land area. Previous programmes of measures formed a basis for the programmes introduced in accordance with the requirements of the nitrate directive. Sweden has also legislated on

38 Swedish Environmental Protection Agency, 2002. Report 5247 TRK. Transport-Retention-Källfördelning, Belastning på havet (Transport-Retention-Distribution of Sources. Load on the sea).

further supplementary measures, including on restrictions on spreading. The measures required under article 5.4 of the nitrate directive are today integrated into Sweden’s Environmental Code, section 5.4.3.2.

In accordance with Council Directive 96/61/EC of 24 September 1996 concerning integrated pollution prevention and control (OJ L257, 10.10.1996, pp. 26–40, Celex 31996 L0061) (IPPC), large pig and poultry farms are subject to permits. The same demands also apply under the Convention on Long-Reach Transboundary Air Pollution (LRTAP). These demands have been introduced into Swedish legislation through the Regulation (1998:899) concerning environmentally hazardous activities and the protection of public health. Under the Regulation, a permit is required for a farm with more than 200 animals, regardless of the type of animal. The permits set out the requirements that must be met to comply with the Directive and Annex IX of the Convention. In Sweden, farms with more than 100 animals must also report their activity to the supervisory authority. The supervisory authority may then stipulate further requirements for a particular farm.

Apart from these measures, intensified information measures for improved use of plant nutrition and payment for the cultivation of catch crops, spring cultivation, protective zones along waterways and lakes, and the establishment and restoration of wetlands have been implemented in the Swedish Environmental and Rural Development Programme for 2000–2006.

3.1.4.3 Air quality Most acid rain that falls on Sweden originates in other countries. Precipitation of acidifying substances is higher than nature can cope with. There is a high frequency of soils with naturally low pH values and low buffering capacity. Particularly in southwest Sweden, with relatively large precipitation surpluses, this means that critical load is heavily exceeded.

Total ammonia emissions in Sweden were, according to the latest calculations (2003) 55,600 tonnes. Emissions from Swedish agriculture have fallen by 13 per cent compared to 1995 levels. This means that the level given for Sweden both with regard to the LRTAP Convention and Parliament and Council Directive 2001/81/EC of 23 October 2001 on national emission ceilings for certain atmospheric pollutants (OJ L309, 27.11.2001, pp. 22–30, Celex 32001L0081) has been achieved. Sweden signed the LRTAP Convention in 2001.

Agriculture is responsible for almost 85 per cent of total ammonia emissions. For 2003, agricultural emissions were equivalent to 46,500 tonnes of ammonia. Agricultural emissions have fallen since 1995 by 10,000 tonnes, or roughly 18 per cent, while emissions from other sectors (particularly road traffic) have climbed by about 30 per cent. Livestock and especially manure management contribute about 95 per cent of all ammonia emissions from agriculture. The reduction is due to a smaller number of animals, a transfer from solid manure to slurry, better storage of manure and a larger proportion of the manure being spread on unsown land being degraded immediately. In the 1990s, various regu-

lations were introduced, primarily in the plains regions of Götaland and Svealand, with the objective of reducing ammonia loss in the storage and spreading of manure. This is described in more detail in 5.4.3.2

Forecasts about the effects of the MTR-reform point to reduced livestock numbers, which should be positive from an ammonia viewpoint, and lead to a further reduction in ammonia emissions from agriculture in the next few years.

3.1.4.4 Climate change Under the Kyoto Protocol and burden sharing between EU Member States, Swedish emissions of greenhouse gases are to grow by 4 per cent compared to 1990 levels. The target set by the Swedish Riksdag (Parliament) however is that Sweden’s emissions of all six greenhouse gases are to fall by 4 per cent compared to 1990 levels. The national objective is to be met without compensation for uptake to carbon sinks or the use of flexible mechanisms.

Total Swedish emissions in 2003 were 70.6 million tonnes of CO2 equivalents and the proportion contributed by agriculture was 12 per cent. Agricultural emissions of greenhouse gases fell by just under 9 per cent between 1990 and 2003. Reduced methane emissions are because of less livestock keeping, while the fall in nitrous oxide is primarily due to the lower use of both commercial fertiliser and manure. The effects of the MTR- reform will be decisive in determining future greenhouse gas emissions from agriculture. Particularly important will be the scope and orientation of livestock keeping, nitrogen use, the extent of cultivation of organogenic soils, and the cultivation of energy crops. The fall in the number of cattle will lower the methane emissions and improved nitrogen efficiency should lead to reduced emissions of nitrous oxide. Net annual uptake of greenhouse gases by the forest is about 15–20 million tonnes of CO2.

No national regulations have been introduced that directly aim to reduce greenhouse gas emissions. However, regulations covering manure management may also influence greenhouse gas emissions. For example, the requirement to cover slurry containers may result in a reduction in methane emissions, although nitrous oxide emissions may increase alongside this. At the same time, a shift from solid to slurry will probably mean that nitrous oxide emissions will fall while methane emissions will increase.

3.1.4.5 Use of plant protection products Sales of plant protection products (counted per kilogram of active ingredient) to agriculture climbed in 2003, primarily due to stockpiling of various preparations. On 1 January 2004, the tax on plant protection products was raised from SEK 20 (€ 2.2) to SEK 30 (€ 3.3) per kilogram of active ingredient. The increase in sales in 2003 was followed by an expected fall in 2004. As an average for these years, sales to agriculture, including fruit cultivation and horticulture, amounted to 1 585 tonnes. This is equivalent to about 17 per cent of total sales of plant protection products, which were over 9 550 tonnes. Almost 8 tonnes of chemical plant protection products were sold to forestry. The amount of plant protection products sold to agriculture, as an average for 2003 and 2004, was 4.2 million hectare doses, or 1.6 doses per hectare.

There has been an upward trend in use over the past 10 years, primarily in the latter half of the 1990s. A general explanation for the trend can be changes in the choice of crops, crop rotation and a general intensification of cultivation subsequent to Sweden’s entry into the EU. For example, there has been an increase in the cultivation of winter grain, which has resulted in more monotonous crop rotation, which in turn can give rise to problems with certain pests and weeds. Further reasons for the increase in this period is probably that destruction of growth on fallow land, ploughing up of ley and combating perennial weeds in post-harvest stubble have taken place to a greater extent using plant protection products. The reason is that chemical treatment is cheaper, more effective and less time-consuming than mechanical treatment. Finally, new, more effective products have been introduced. This has led to greater profitability in control in more cases than before. At the same time, the increase has been counteracted by factors such as the introduction and increased use of low-dosage substances, and improved adaptation to needs. Variations in weather conditions also partly explain annual variations in use.

Forecasts of the effects of the MTR-reform show that cereal cultivation is falling in areas with poorer conditions, and that ley cultivation is instead increasing. This will probably lead to a lower use of plant protection products. In the longer term, production will be guided to a greater extent by developments in the world market, which is expected to lead to greater fluctuation in cultivation. What overall effect this may have on the use of plant protection products is difficult to assess.

Measures Work has been under way since 1987 to reduce the health and environmental risks associated with the use of plant protection products, within the framework of national action programmes. The table below shows some objectives and results achieved in the first three programmes. Trends in amounts sold are shown in Figure 8. Table 7 Objectives and results of action programmes to reduce the risks associated with plant protection products

Period Objective (compared to average figures for Result the baseline years 1981–1985) 1987–1990 Objective: 50 per cent reduction in 49 per cent reduction compared to amount used baseline years 1991–1996 Objective: 75 per cent reduction in 64 per cent reduction compared to amount used baseline years 1997–2001 Previous objective remains of 75 per 61 per cent reduction in amount cent reduction in amount used. compared to baseline years. Objective for risk reduction established. Looking at risk indicators for Reduction in risk, expressed as risk health and environment, the indicators for health and environment, reduction in risk was 77 per cent is to be bigger than the reduction in the and 63 per cent respectively in amount used. 2000. 2002–2009 No objective for reduced amount, but objective for risk reduction based on risk indicators for health and environment.

The programme has covered a number of different measures in a number of fields. Some of these areas are a shift to substances, and conditions of use, that involve less risk; training and information measures; introduction of regulations for handling and spreading, and control of plant protection product residues in foodstuffs.

Systematic review of the permits of all older plant protection products was carried out in the 1990–1994 period. The substitution and precautionary principles were important in the review. Review resulted in a number of active substances being disallowed in plant protection substances on the Swedish market, or that their use was severely curtailed. The substitution and precautionary principles continue to be important for Sweden, both in its work to approve active substances at EU level, and for the approval of plant protection products at EU level. Application of Council Directive 91/414/EEC of 15 July 1991 concerning the placing of plant protection products on the market (OJ L230, 19.8 1991, pp. 1–32, Celex 31991L0414) means that a number of active substances that have previously been banned on the Swedish market have now been approved at EU level and will therefore once again be permitted in Sweden.

The use of plant protection products poses risks to health and the environment, since the user can be exposed to the substances and plant protection products can spread into the surrounding area. The risks associated with plant protection products are largely due to how the substances are handled and spread, but also to the type of spreading equipment. For example, wrong handling and spreading, and faulty equipment, can lead to greater risk of pollution of the aquatic environment but also to undesired levels in foodstuffs and negative effects on flora and fauna. National risk indicators have been drawn up for health and the environment with respect to plant protection products. The values for these indicators fell continuously until the early 1990s. After that, the health indicator has continued to fall while the environmental indicator has remained constant over the past ten years. Figure 8 shows trends in these indicators in relation to the total number of hectare doses.

Figure 8 Trends in health and environment indicators in relation to the total number of hectare doses, 1986–2004

In 1990, training in the use of plant protection products in agriculture, forestry and horticulture became mandatory. A number of training and information measures have been implemented to reduce the risks, integrated with forecast and warning activities and the drawing up of anti-pest strategies. The regulations about mandatory training and the spread of plant protection products are shown in section 5.4.3.2.

Residues of plant protection products are found in both imported and domestically produced food, but according to checks by the National Food Administration, the permitted levels are only exceeded in a few cases. Residues of plant protection products have been discovered in drinking water, in some cases over the EU’s limit values. None of the levels discovered in drinking water have reached hazardous levels however.

Residues of plant protection products have been found in both surface and ground water. The presence of several of the substances that are listed in Annex X to the framework directive for water (2000/60/EC) or are listed in Council Directive 76/769/EEC of 27 July 1976 on the approximation of laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (OJ L262, 27.9.1976 area 13 volume 5 p. 0229, Celex 31976 L0769) have been found in water in Sweden. Some substances are more frequent than others, and some of those found have been prohibited in Sweden for a long time. Most findings are from the two most southerly water districts. One special study (Vemmen- högsån river) shows that information and training are important instruments in reducing levels of plant protection products in water. Plant protection products that are released into the natural environment can affect flora and fauna in different ways. Indirect effects of plant protection substances on fauna are often caused by changes in these species’ access to food. These indirect effects are generally assessed as being much more extensive than the direct effects.

A new action programme was adopted in 2002, and applies up to 2009. The programme contains a number of different objectives: these apply to risk reduction, the properties of plant protection products, the presence of and risks associated with plant protection products in water, in vegetable consumption and in the working environment. A number of the measures previously mentioned continue to be important in achieving the established objectives.

3.1.4.6 Organic production Organic production is a stage in the development of sustainable food production and contributes to the achievement of a number of environmental objectives, particularly because chemical plant protection products are not used. Organic farming involves cultivation and livestock keeping that strives for environmental consideration, efficient use of resources and a high degree of self-support. Locally existing and renewable resources are preferred, both with respect to plant nutrition and fodder. Chemical plant protection products and easily soluble mineral fertiliser are not used in organic farming. Plant protection is instead based on crop rotation. Ley land, with its mix of grass and nitrogen-fixing legumes, plays a decisive role in plant nutrition supply. Together with adapted soil preparation and mechanical weeding, crop rotation is important in keeping

weeds down to a manageable level. The Swedish organic farming sector is large in an international perspective. The area of organically farmed land amounted to about 510,000 hectares in 2005, which is almost 19 per cent of the total area of arable land in Sweden. About 35 per cent of all organic cultivation in Sweden is certified. Figure 9 shows trends in organic farming and certified arable land in Sweden over the 1997–2005 period.

Figure 9 Trends in organically farmed arable land, hectares, 1997–2005

600 000 500 000 400 000 Total 300 000 Certifierad

Hectares 200 000 100 000 0

9 1 4 0 0 998 99 0 003 1997 1 1 2000 2 2002 2 20 2005 Year

Figure 9 shows that the certified proportion of organically cultivated land has grown much more slowly than the total for organically cultivated land. There are several reasons for this, including charges for certification and bottlenecks in the processing chain, which means that it can be difficult for the primary stage to profit from its products. About 38 per cent of the organic arable land is situated in the plains regions. The proportion of the total cultivated area that is organically farmed is, however, considerably smaller in the plains regions than in the country’s forested and central regions. Regional differences are much less pronounced however with respect to certified organic production.

Today, over 10 per cent of dairy cattle, beef cattle and lambs for slaughter are covered by environmental payment for organic forms of production. Looking at the type of animal, less than 7 per cent are dairy cattle, and most of these are certified. The number of certified beef cattle for slaughter is just over 5 per cent. About 40 per cent of all lamb is organically farmed, although only 9 per cent is certified. The proportion of pigs and chickens for slaughter in organic production is low, and almost all production is certified. For egg-laying chickens, however, 8 per cent are organic, of which all are certified.

In Sweden, certification can take place in accordance with the regulations set out in Council Regulation 2092/91/EEC of 24 June 1991 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs (OJ L198, 22.7.1991. Area 15 volume 10 p. 0124, Celex 31991R2092). This confers entitlement to call the product “organic” and to use the EU’s logotype for organic production. In addition to this certification, there is a private body of regulation (KRAV) with its own conditions. An overwhelming majority of certified organic producers in

Sweden are certified according to the KRAV regulations. Since 2006, in addition to Aranea Certifiering AB (KRAV’s certification company) there has been a further approved certification organ (SMAK AB).

The global and the European market for organic products are currently growing steeply. This is also true of Sweden, where the market for organic food has grown over the past 10 years. The number of organic products on the market has grown steeply since the mid- 1990s. There are currently about 4,000 certified organic products in Sweden. The sales value of organic food in the consumer stage is about SEK 4 billion (€ 0,4 billion). Despite positive trends in Sweden, organic food’s share of the food market is much smaller than in e.g. Denmark. In Sweden, most sales of organic products take place through retailers, and only about 7 per cent of organic food is sold directly from producer to consumer via farm shops and markets.

The price of organic produce is usually higher than for equivalent conventional produce. This is because of lower yields and higher production costs in agriculture, added costs due to special handling in later stages, and people’s willingness to pay. There are, however, very large variations in price depending on product, brand and type of shop, and it is difficult to find a pattern in the variation. Availability of organic food also varies between different food groups, and far from all shops have a broad range. There are also big differences in the range of organic foods between, and within, supermarket chains. One fifth of the total market for organic products consists of import. Fruit, berries and vegetables are among the products that are mostly imported. There is also export of organic products, such as cereal. Studies show that a large proportion of consumers have a positive attitude to organic products. This means that there is potential for further growth in the market.

Organic production is a stage in the shift towards sustainable food production. According to the new targets proposed by the Government (Govt. Comm. 2005/06:88), certified organic cultivation should cover at least 20 per cent of Sweden’s agricultural land by the end of 2010. New targets have also been set for other organic production. Demand for organic food, and market trends, including product development and distribution, will determine whether the targets can be achieved.

In order to stimulate positive developments, the Government feels that consumption of certified organic produce in the public sector should increase. The general aim should be that 25 per cent of public sector food consumption will be organic by 2010. Labelling and information measures are to make clear to consumers what added value the organic products have.

3.1.4.7 Land quality Under the FAO international classification system, sandy loam is the dominant soil type in Swedish topsoil. Heavy clay soils are found primarily around Lakes Mälaren and Hjälmaren in eastern Sweden.

Swedish arable land and its long-term production capacity are in a satisfactory condition. The humus content of the land varies between different parts of the country, but is on average 6.3 per cent. The variation is partly due to different types of operation. Livestock keeping with a large proportion of ley land usually leads to higher humus content as well as high precipitation and low temperatures during parts of the year. The climate with a surplus of precipitation over evaporation causes a wash-out of base cations from the soil and tends to reduce the buffering capacity and depress the pH of the soil solution. Mainly magmatic bedrock and thin soil layers also depress the pH and have an impact on the buffering capacity. The average pH value of topsoil in Swedish arable land is 6.3. Lower pH-values are primarily found in the forest-dominated areas. Measures undertaken on arable land to increase the pH and the buffering capacity are liming and use of commercial fertilizers containing lime. Access to phosphorous is relatively good. Soils with higher phosphorous classes (P-AL) are particularly common in the southern parts of the country.

The presence of heavy metals in the topsoil is in most cases related to the levels in the underlying layers. Only for a very small proportion of Swedish cultivated land are heavy metal levels over the Swedish limit values that apply in the use of sewage sludge. Swedish limit values for sewage sludge are much lower however than those that apply under Council Directive 86/278/EEC of 12 June 1986 on protection of the environment, and in particular of the soil, when sewage sludge is used in agriculture (OJ L181, 4.7.1986, pp. 6– 12, Celex 31986L0278). Particular attention has been paid in Sweden to cadmium, and it is prohibited to sell mineral fertiliser containing more than 100 g cadmium per tonne of phosphorous. Tax is also levied at SEK 30 (€ 3,3) for each whole gram of cadmium in the fertiliser where the cadmium content of mineral fertiliser exceeds five grams per tonne of phosphorous.

Wind erosion is not a threat to Swedish arable land. Sand loss can occur locally however, in the southern parts of the country and depending on what crop is cultivated. Swedish arable land experiences no significant problems resulting from water erosion and the incline of fields is usually small. Locally, in the more northerly parts of the country, erosion can occur during sudden snowmelts in spring and when there is heavy rain. Local problems with erosion can also occur in parts of the coastlines of southern and northern Sweden. The problems that occur are usually damage to buildings and the road network.

3.1.4.8 Animal welfare In Sweden, the general public and producers have long been very interested in animal welfare and disease prevention. Sweden also has a body of legislation that is more stringent than most EU directives39. Swedish animal protection regulations however make

39 Council Directive 98/58/EC of 20 July 1998 concerning the protection of animals kept for farming purposes (OJ L221, 8.8.1998, pp. 23–27, Celex 31998L0058). Council Directive 91/629/EEC of 19 November 1991 laying down minimum standards for the protection of calves (OJ L340, 11.12.1991, pp. 28– 32, Celex 31991L0629) Council Directive 91/630/EEC of 19 November 1991 laying down minimum standards for the protection of pigs (OJ L340, 11.12.1991, pp. 33–38, Celex 31991L0630). Council Directive 1999/74/EC of 19 November 1999 laying down minimum standards for the protection of laying hens (OJ L203, 3.8.1999, pp. 53–57, Celex 31999L0074). Council Directive 93/119/EC of 22 December

Swedish livestock production more costly than equivalent livestock production in other member states, but it gives rise to product and production quality that enables a higher price to be charged on the market. Labour costs for the farmer are the biggest single expense associated with the maintenance of good animal protection. Consumers place a premium on good animal protection and generally speaking pay more for Swedish animal foodstuffs compared to equivalent foodstuffs from the rest of the EU. Good animal protection also keeps animals healthier, which gives the farmer an economic advantage in the shape of lower veterinary and drug costs and in many cases also a better result from production. Import from third countries and introduction of foodstuffs into Sweden is growing steeply however, which may mean that Sweden’s farmers will experience poorer profitability, with a resulting risk that a smaller amount of food will be produced under Swedish animal welfare regulations.

3.1.5 Local development work In the late 1970s, the rural population began to react strongly to changes in their daily lives, such as withdrawal of service, school closures, and in the north, not least the building of hydroelectric power and other exploitation of natural assets. Village associations and local development groups began to form all over Sweden and demand a say in local development. The importance of an integrated approach to rural development was emphasised – that development issues cannot simply be confined to creating new workplaces, but must include housing, service, culture and other local infrastructure.

The Swedish part of the European Council’s European campaign “All of Europe must live” in 1988–1989 had great importance as a mobilising force, and rural issues gained prominence through the mass media and local activities. Local village and community associations experienced a renaissance, and spread around the country. Today, these associations are very important in the development work. “Village movement councils” were formed at regional level. These are regional associations of village development groups and other community associations. The campaign also led to the formation of the Folkrörelserådet (Popular Movements Council), which at national level supports and encourages the local development groups. There are today about 3,800 registered local development groups in Sweden, of which the overwhelming majority are in rural areas. In a 1995 study it was found that about 70,000 people were active in local development groups in Sweden, and that their work, counted as time and capital, was worth an estimated SEK 900 million (M€ 100).

The participation of women has great importance as a driving force for change at all levels in rural areas. Women in rural areas, and organisations with female representatives, have developed a network that draws particular attention to their need of measures, and supports initiatives. Women’s issues in rural areas are today one of the most important parts of regional and local development work.

1993 on the protection of animals at the time of slaughter or killing (OJ L340, 31.12.1993, pp. 21–34, Celex 31993L0119). Council Directive 91/628/EEC of 19 November 1991 on the protection of animals during transport and amending Directives 90/425/EEC and 91/496/EEC (OJ L340, 11.12. 1991, pp. 17–27, Celex 31991L0628).

A large number of popular movements, study associations and sector associations conduct local and development regional work with the support of their central bodies. Their work includes culture, education, local knowledge, study circles, environmental issues etc.

Development work is often run as organised projects with committed local enthusiasts. Changes in the agricultural sector and a new view of diversification has meant that traditional sector organisations like the Federation of Swedish Farmers and the county Agricultural Societies, through their central and regional organs, have important roles to play as actors to improve the utilisation of the resources of rural areas.

An important part of development work in the 1990s was to change and renew the rural economy; making use of the growth potential of existing companies, stimulating entrepreneurship and spreading knowledge that could led to new businesses. Different types of business networks have been formed at local, regional and national level to achieve good results through collaboration. Examples of these are “Svensk lantmat” (Swedish country food), “Bo på lantgård” (Stay on a farm), the “Telestugeföreningarna” (Telework centre associations), Farmartjänst (Farmers’ services), flax associations, small- scale wood processing and craft associations. Companies cooperate by sector to carry out training measures, market activities, product development and technology dissemination. For example, “Swedish country food” now includes 500 companies in what is now an independent sector association.

The start of Cooperative Development Centres in all counties has led to innovative development work in rural areas, in the shape of new cooperative solutions for childcare, housing, service and private enterprise. Most County Administrative Boards and municipalities have also produced development programmes for rural areas in collaboration with local groups and organisations. Overall, this is proof of great individual commitment to the survival of the area and that Sweden is a leader in mobilising and organising individuals in a strong bottom-up perspective.

The National Rural Development Agency was set up in the 1990 regional policy decision. This gave rural affairs an official position in Swedish society. Development work is coordinated through the Agency, which acts as an important source of support for new initiatives. The Agency also works to achieve greater cross-sectoral coordination, something that is important for an integrated approach to rural issues. Through its project and information work, the Agency has been active in encouraging new initiatives. Its work today covers all types of rural issues. Apart from cross-sectoral coordination, these include the labour market, enterprise, infrastructure, housing, public and commercial service, etc.

In recent years, environmental issues have gained increasing importance for development work in rural areas. Sustainable development, including care of natural resources and an ecocycle philosophy, now imbues many development projects in rural areas. These include eco-municipality work, eco-tourism and organic farming.

A rich and stimulating cultural environment and a wide range of cultural activities are important factors in making sparsely populated regions attractive. Awareness of their common cultural heritage is of great psychological importance to the inhabitants of an area when they need to gather their strength and come together in times of stagnation and decline. A strong link between culture and tourism is springing up around the country, and has become increasingly important in economic development, primarily in many sparsely populated areas.

3.1.5.1 Leader II The first period for Leader programmes was 1991–1994, which was before Sweden’s entry into the EU. A new round, Leader II, started in 1995, the year of Sweden’s entry into the EU, and lasted until 1999. Eligible areas in Sweden for Leader II were the then Objective 5b and 6 areas. Among 33 applications, twelve Leader groups were finally established in September 1996, of which 3 in the Objective 6 area (Norrbotten, Västerbotten and Jämtland counties). Final evaluations of Leader II show that about 1,200 projects were implemented. There was a significant volume of voluntary work, corresponding to 500 full-time equivalents. Evaluations also show that there were implementation problems in some places, with resulting delays in projects. A lot of work has had to be done on public co-funding, which was mandatory but not always easily forthcoming.

Conclusions drawn by the national partnership for LEADER II pointed to the fact that special collaboration in partnerships according to the Leader model, concentration to local, homogenous areas and the work method within Leader have brought significant value added to the Swedish countryside.

3.1.5.2 Leader+ In the 2002–2006 programme period, the programme is called Leader+, which is the third round of Leader programmes. Of the 32 applicant areas in Sweden, 12 Leader areas were chosen after a selection process. The work is lead by local action groups (LAGs) with representatives of the private and public sectors and NGOs. The 12 areas cover almost 57 000 square kilometre of Sweden’s total land surface, and are found in the southern and central areas of the country (see map). The Leader areas are home to a population of 677 000, of which about 430 000 in rural areas. This is a fifth of the rural population, according to the definition of the National Rural Development Agency.

The overarching objectives of Leader+ are: - to improve the conditions for a strong economy in the area, helping job creation, - to increase the value of the natural and cultural heritage, - to improve organisational opportunities in society.

There are also objectives about employment, participation of the young, gender equality, integration and the environment.

Results and experiences of local development work within the Leader+ framework are largely positive. The update of the mid-term evaluation of Leader+ carried out in 2005

indicates that the target for new jobs (1,500) will be achieved in the programme period40. Similarly, the objective of new cooperation constellations/networks and that of other participants in training measures will be achieved. Leader has contributed to local mobilisation and has in some cases made a clear contribution to development and growth. In some cases, the concrete results are not as clear. A general problem is the diversity of objectives within the programme, which can be one reason for the occasional lack of focus in the measures. Another problem that has attracted attention in some cases has been the transition from project to commercial viability. The Leader programme has an administration that is managed through one office per LAG. This high level of ambition with respect to service and proximity to the projects and the applications leads to relatively high overall costs. In the update of the mid-term evaluation, it is noted that there is greater focus on job-creating projects. The objective of almost 80 per cent of the projects is to create jobs. The same evaluation points to the fact that the horizontal goals of gender equality, integration and the environment are given varying priority by the local action groups.

Figure 10 Sweden’s Leader areas

40 National Rural Development Agency, 2005. Uppdatering av halvtidsutvärderingen av Leader + i Sverige (Update of the mid-term evaluation of Leader+ in Sweden).

The authors of the mid-term evaluation and the update emphasise the special nature of the LAGs’ right to make decisions. This is believed to bring more commitment to the partnership and be good for the implementation of the programme. In the update, the Leader method is described as a strategic tool for creating participation and cohesion.

Leader+ does not cover the northern part of Sweden –the Objective 1 area –. It is however possible to work with Leader-like projects within the Objective 1 area. Three Leader-like projects are currently being funded, apart from via voluntary work, through Objective 1 and other national public funding.

There are projects within other EU programmes that have some similarities with Leader. These may be part of the “municipal framework programmes” in e.g. Jämtland County (Objective 1) or the national project “Sustainable rural development” in the Environ- mental and Rural Development programme. The similarities are that their purpose has been to work for local development in a broad perspective on the basis of local conditions. The differences are in the first hand a matter of form, how decisions are made on the allocation of project funds.

There are many small active local groups in the Swedish countryside that are doing development work. According to information from the Popular Movements Council, a very large number, at least 4,000, have come into being all over the country over the past decades. About a third of the rural population is estimated to be involved in their active- ties. Many local groups were created through the European Council’s rural campaign in the 1980s. New groups have appeared over the years, and the trend is continuing. Activities in each group can vary greatly over the years.

3.2 Strategy selected to deal with strengths and weaknesses

3.2.1 Challenges and needs

The strengths, weaknesses and development needs of rural areas can be summarised as follows.

Strengths and opportunities: - modern and efficient production in agriculture, forestry and the food industry with high-quality production methods both with respect to the environment and animal welfare, producing in line with public regulations and consumer demand, - farming and forestry has a key role in the transition to sustainable development, - landscapes with high natural and cultural values; a clean environment including clean waters, - rural areas have great resources in the shape of natural assets, landscapes and social capital, that have growth potential as a basis for enterprise and better quality of life.

Weaknesses and threats: - entrepreneurship and self-employment are less common in rural areas than in urbanised areas and towns; this makes them more vulnerable to globalisation, - valuable landscapes and biodiversity are gradually threatened by changes in production methods, land use and social development, - sparse structures, vast distances and changes in service and infrastructure result in poorer growth conditions for inhabitants and companies in rural areas. This applies e.g. to farms in less favoured areas.

Needs and challenges - stimulate self-employment and entrepreneurship in farming and other sectors in rural areas, - preserve and develop the natural and cultural values of the landscape, continue to support role of the land-based industries as natural and cultural enterprises and as producers of public goods, and reduce the negative external effects of agriculture on the environment, - strengthen the conditions for economic development in rural areas, in a broad sense.

3.2.2 Overarching strategy and national priorities The overall objective of Sweden’s rural development policy is to promote economically, ecologically and socially sustainable development in rural areas. This encompasses the sustainable production of food, the creation of rural employment, due regard for regional conditions, and sustainable growth. The natural and cultural values present in the landscape are to be safeguarded and negative environmental impact kept to a minimum. Rural development policy in Sweden is closely linked to environment policy and the national Environmental Quality Objectives (EQOs). There are also strong links to regional development policy and forest policy.

The overarching policy objective for rural development policy will remain unchanged in the 2007–2013 programme period. However, in the light of developments in agriculture and Sweden’s rural areas, as well as lessons learned from previous programmes, policies in future programmes must be broadened and strengthened if the overarching objectives are to be achieved. This is also well in line with the common guidelines. Realisation of objectives will necessitate a continuing high level of ambition on the environmental front combined with further initiatives focusing on the key areas identified in the Lisbon Strategy. This will primarily involve greater efforts to promote long-term sustainable production and natural resource use in the land-based industries, a greater focus on policy contributions to growth and employment, the promotion of knowledge and skills acquisition, innovation, and efforts to facilitate the transformation of energy policy. This will foster a rural economy and competitive enterprises which will be able to produce food and other goods and services using natural resources sustainably while managing and enhancing the specific natural and cultural values of the landscape.

The strategic orientation of rural policy and the national Rural Development Programme is, in accordance with what has been set out in the National Strategy, as follows:

- Greater focus throughout the programme on measures that promote enterprise, growth and employment in rural areas, and that strengthens the competitiveness and economic viability of agriculture, forestry and other rural enterprises and contribute to a sustainable society and sustainable use of natural resources.

- There is a continued high level of environmental ambition in the programme, with a focus on effective measures aiming to contribute to efficient, high-quality and competitive production, in which natural resources are used in a sustainable fashion and environmental objectives are met which are coupled to agriculture, the natural and cultural values of the landscape and environmental impact. An integrated approach to the natural and cultural values of rural areas as a basis for development and sustainable growth in rural areas.

- The programme is to promote good development in rural areas as a whole. This implies a diversified rural economy contributing to income-generating employment and sustainable use of the natural resources of rural areas, stronger focus on rural resources in the shape of an attractive landscape for living and recreation and a stronger focus on local service and infrastructure. Local involvement e.g. through partnerships, local development groups and Leader and similar methods are to be supported. Participation from more target groups is to be fostered.

- Planning and implementation are to be characterised by an integrated approach to rural areas. On the basis of the overarching national strategy and priorities, coordination between different operations and policy areas is to be improved and there is to be greater regional influence over the application and implementation of measures.

Strategies and priorities for axes 1–4:

Axis 1: Overarching objective: Stimulate the competitiveness of agricultural and forestry enterprises, reindeer husbandry and food production and processing, based on a platform of the sustainable use of natural resources.

- Support the growth and competitiveness of enterprises through improved skills and know-how, modern technology and resource-efficient methods, ICT and new product development. - The measures are to be applied on the basis of the needs and demands of the company. - Coordination with business promotion measures in axis 3. - Simplified rules, terms and conditions. Support is to be based on business plans and national and regional priorities.

Special priorities/areas of focus: - Restructuring/modernisation: Growing competition, both globally and within the EU, requires modern and efficient production units able to meet consumer and regulatory demands for high production quality, a good working environment, sustainable use of natural resources (including reduced environmental impact) ethics and animal welfare. Alongside this, it is also important that companies can boost the value added of their products. The focus here could be on processing of a more traditional kind, e.g. of local or regional origin or with particular quality characteristics, or the development of new production, new technology, innovation and entrepreneurship in individual companies or in companies working in cooperation. Taken together, this will strengthen competitiveness in rural enterprises and create opportunities for an active agricultural sector even in less favoured areas, thus contributing to the quality of life in rural areas. - Skills and knowledge acquisition: A high level of know-how is an important competitive factor for a business. The measure is to address both axis 1 and axis 2 with the overall aim of reconciling modern, ecologically sustainable and ethically sound production with financial competitiveness. To support the CAP reform objective of greater market orientation, we need in the next few years to focus on supporting the skills of farmers as entrepreneurs and market actors. Operations are also needed to promote the transfer of knowledge from R&D to foster the development of new production, technology and innovations. - Increase the supply of bio-energy, with resulting positive impact on the environment and climate. - Quality-enhancing measures: Support for participation in quality systems, including information and marketing, is to be provided as part of a national endeavour to promote greater business activity in the field of food production with special qualities.

Target groups: Farmers, including reindeer husbandry and horticulture, forest holders and small processing firms that process raw materials from the land-based industries. For processing of forest raw materials however, the businesses in focus are micro-businesses

and micro-processing businesses within the forestry sector41; for skills acquisition, it also includes forest.

Axis 2: Overarching objective: To preserve and develop an attractive landscape and a living countryside, and stimulate the adjustment to resource-efficient and sustainable production with reduced environmental impact in order to contribute to the effective achievement of Community and national environmental objectives. It is important to create an integrated view of the countryside as an attractive place to live, and as a valuable resource in the growth of business that can provide employment opportunities and growth in these regions.

- Promote an integrated view of the countryside as a resource for recreation, development and sustainable growth and as a source of natural and cultural heritage. - Encourage the active use of farmland in less favoured areas. - Stimulate the production of public goods and thereby help maintain an attractive landscape. - Strengthen the development of farming practices that reduce negative environmental impact.

Special priorities/areas of focus: - Less favoured areas: Preserving an open and active cultivated landscape and taking steps to prevent the closure of farms, especially those with pastoral production in less favoured areas, which create the conditions for rich biodiversity and for the conservation of valuable cultural environments. An active agricultural sector can also foster business development and sustainable growth, and significantly affects the area’s ability to remain attractive as a place to live. - The landscape’s natural and cultural values: In order to preserve and develop an open and varied landscape in Sweden, with its diversity of biological and cultural heritage values, farmers must be supported in their role as entrepreneurs in nature and culture conservation and producers of public goods in their aims to achieve the environmental quality objectives. Preservation of biodiversity in the farming landscape is an important factor in achieving set objectives, where e.g. Natura 2000 is an important tool. The landscape, with its natural and cultural assets, also represents a significant resource for the development of enterprises in the visitor industry associated with hunting, fishing and outdoor life as well as in preventive health care, rehabilitation and so forth. - Environmentally friendly agriculture: Reduce the negative environmental impact of farming and boost efficiency in the use of resources. Agriculture is an important source of nitrogen, phosphorous and greenhouse gas emissions. The use of plant protection products in agriculture may also give rise to water pollution. Reducing plant nutrient loss and the risks involved in the use of plant protection products help achieve good water quality. Recreating the path of water through the landscape can help reduce the amount of plant nutrients that reach the sea, as well as boost biodiversity.

41 ”Micro-businesses” are companies with fewer than 10 employees.

- Plant protection products are not used in organic farming. This type of production thus contributes to good water quality, and also has positive effects on biodiversity, sustainable and efficient production, and the prospects of achieving several of the national environmental quality objectives. Organic production, including processing of organic products and other forms of value-added production may also stimulate new enterprises in rural areas. - Skills acquisition and guidance services are important in supporting environmental work in the land-based industries.

Target groups: Land users and other land managers, and in some cases livestock keepers with endangered domestic breeds, breeding associations, and Sami villages and Sami associations.

Axis 3:Overarching objective: To encourage diversification of the rural economy in order to promote employment, better quality of life of those living in rural areas, and the sustainable use of the combined resources of the countryside.

- Promote entrepreneurship, sustainable growth and innovation in rural areas: Opera- tions are to have the aim of making enterprises more competitive and promoting diversification of the rural economy, thus contributing to income-generating employment and the sustainable use of rural resources. Local entrepreneurship, enterprise, environmentally integrated production methods and local development work are to be encouraged. Information, guidance and cooperation are key factors. - Improve the quality of life in rural areas, for example with respect to access to basic services or infrastructure, thereby contributing to better development conditions for businesses and individuals. Focus is to be on solutions appropriate for the particular area. Coordination of action, skills acquisition, and solutions that are new and innovative from a local perspective are to be encouraged. - Measures undertaken should proceed from an integrated view of rural development in which the measures of the Rural Development Programme interact with other public measures to strengthen the attractiveness of rural areas and their sustainable development. National priorities will form the basis of adaptation to the considerable differences in conditions that prevail between different parts of the country. The need of measures based on an integrated view of rural development should be reflected in regional and municipal development programmes. - Conservation and development of the natural and cultural heritage of rural areas.

The initiatives and tools used must aim to develop and improve entrepreneurship, skills and local innovations including the take-up and use of ICT.

Special priorities/areas of focus: The potential for the development of new business ideas and activities and thereby creation of new jobs is principally to be found in relation to: - Attractive environments in the landscape: The rural landscape with its natural and cultural values represents a significant resource for the development of enterprises in the visitor industry associated with hunting, fishing and outdoor life, in preventive

health care and rehabilitation. It is also important as a source of housing and enterprise in general. - Multifaceted skills, broad entrepreneurial experience, social networks and a strong social capital among the rural population. - Labour that is partially or wholly unexploited. - Physical land resources that may be used for other forms of sustainable land-based production than that of the farming and forestry sectors but linked to farming, forestry or reindeer husbandry. - Buildings with development potential.

These development opportunities offer the prospect of new or expanded activities that can contribute to achievement of the overarching objectives. This may involve the diversification of agricultural and forestry holdings or the establishment and development of other small businesses.

Target groups: Agricultural holdings, micro-businesses/small rural businesses, local development groups and other actors. Axis 4: Overarching objective: To promote the efficient implementation of the Rural Development Programme by means of the added value that results from local support/endorsement, influence and cooperation. - Possible application of the Leader method nationwide in implementation of the programme measures in all axes, but particularly in axis 3. - Active participation in strategy work and implementation on the part of the business community, NGOs and the public sector is a precondition for the creation of local action groups. - Simplicity in administrative implementation.

Special priorities/areas of focus: - Local private and public sector actors as well as NGOs should be given every opportunity to influence and take responsibility for the goals, priorities and implementation of the new Rural Development Programme. Valuable experience of the method used to gain local support/endorsement developed within the Leader method should be utilised, and the method should be applicable throughout the country. Other forms of local cooperation should also be encouraged. All parts of the business community as well as the municipalities must engage actively in partnerships. Also vital to the success of the method is broad-based, active participation on the part of local NGOs representing different interests and population groups. The method has hitherto been used for operations under axis 3. The Leader method and other similar methods used to promote local support/endorsement and influence should be applicable in axes 1 and 2 as well. - The purpose of the Leader method is to link local knowledge and experience with national objectives – the bottom-up approach meets the top-down approach. The aim is for the development strategy, which derives from a bottom-up perspective, to utilise local know-how and generate an integrated view of rural development that is endorsed across sectoral boundaries. This makes it more likely that the measures undertaken will have enduring effects.

Below is a description of some nationally-prioritised development areas that are considered appropriate for development in all programme axes.

Sustainable development, natural resource use and environmental objectives A general point of departure for the programme is sustainable development and the sustainable use of natural resources, with reference to established environmental objectives. There is great potential in the land-based industries for production that makes effective use of resources and has minimum environmental impact. They also have a key role to play in the transition to sustainable development, including energy supply, and as caretakers of a valuable natural and cultural landscape. An important priority in this respect is the maintenance of pasture land.

Food production with added value In general, there is a need to promote the development of a more differentiated food production. Products with special characteristics or added value can be given development support: - Organic production: There is a growing national and international market for organic products. Consumer demand is a key factor in creating the conditions for more production, more value-added in production and innovations related to new products. It also provides opportunities for diversification of entrepreneurship in rural areas. - Local, regional and/or small-scale production and processing in the food and other sectors is an important factor in boosting entrepreneurship in rural areas, with a basis in the land-based industries. Quality production with regional or traditional origins can be one part of this. - Swedish food production is characterised by added value in the shape of e.g. food safety, animal welfare and high environmental standards. This also applies to large- scale production.

New production of goods and services The development of new goods and services connected with agriculture and forestry, other land-based industries and the countryside is important for broadening the economic base and promoting growth and employment in rural areas. Priority areas: - Renewable energy: There is a need of greater use and production of renewable energy, where agriculture and forestry can play an important role in an active energy and environment policy in pursuit of reduced greenhouse gas emissions and other objectives. More bio-energy production may also create new market openings for agriculture and forestry holdings. - Land and natural resource management: In order to preserve and enhance a varied landscape and its diversity, farmers and forest owners will be supported in their role as entrepreneurs in the management of natural and cultural environments and producers of public goods. The work of other managers of land and natural resources, e.g. in reindeer husbandry, is also to be compensated in the same way. Reindeer husbandry is one such example; its activities and cultural basis help preserve the unique natural and cultural values of the mountain landscape.

- Tourism and recreation: Tourism/recreation associated with rural resources e.g. nature, the cultivated landscape, forests, reindeer husbandry, and leisure fishing. Impact favourably on other kinds of local business. - The service trade and contract work: Diversification leading to efficient utilisation of free capacity (time, machinery) in agriculture and forestry and other enterprises in rural areas. Examples include snow-clearing, care of green zones and open spaces, and road supervision.

Know-how, innovation and entrepreneurship Sweden is well equipped to develop a high level of know-how and technology in general, and also in agricultural production. The diffusion of knowledge from universities, colleges and the research community should be strengthened, as should innovation and entrepreneurship and cooperation. Sustainable development and growth of overall rural resources in the shape of human, real and natural capital is to be sought. The take-up of ICT and access to Internet and broadband communications are a fundamental factor in development in this respect. It is also important to develop collaborative models for management, development and administration.

Integration of new groups and gender equality Young people, women, and particularly people of foreign origin, are under-represented in the Swedish agricultural and forestry sectors and in Sweden’s sparsely populated and rural areas. These groups of citizens are also under-represented in regional and local development work on rural development issues. Integration of new groups must therefore be improved, and the work to improve gender equality stepped up. The interests of mino- rities must also be taken into account in diversity and integration issues. This may also be an important way of vitalising the economic and social life of the country’s rural areas. Focus is to lie on the provision of information and networking, both to attract potential new businesses and make it easier for them to establish themselves, as well as to boost interest in the countryside in general.

These nationally prioritised thematic development areas can be supported by means of input from a number of different axes. Below are some examples: - Sustainable use of natural resources and environmental and climate objectives: Experience of skills acquisition and guidance in combination with agri-environmental support has been good. - New production of goods and services: Here, there may be a need for guidance and skills acquisition on the one hand and, on the other, development support in the form of investment funding. In some cases, collaboration with other actors may also be required. - Know-how, innovation and entrepreneurship: Knowledge transfer, guidance, support for innovative cooperation and support for entrepreneurship and micro businesses are all measures that can create the conditions necessary for the development of new production and a broader income base for land-based and other rural enterprises. - Production with added value: There may be a need for skills acquisition initiatives of various kinds, for carry-over aid and for support to networks and joint efforts. In many cases, environment payment may have a profound effect. For example, when combined with other forms of development funding, such as payment for organic

production, environmental payment may be of key importance in the development of products with special qualities in a local value-adding context. - Integration of new groups: Information activities may be needed, e.g. under axes 1 and 3. Integration issues should also be considered when setting up networks and local development groups.

All measures in the programme should be based on an ecosystems approach and contribute actively to a living countryside in line with national and common objectives for the environment and rural development. In order to ensure that synergies are achieved in the implementation of the measures there is a need to develop criteria to ensure a good balance between ecological, social and economic sustainability. For example, assessments can be made as to how different operations will impact on the local economy and employment, environmental objectives, animal welfare, gender equality and integration.

In summary, the aim must be to ensure that programme measures are able to support the market adaptation and development of existing and new enterprises in the land-based industries and in rural areas whose production contributes to a vitalisation of rural areas and their resources in terms of economic, ecological and social development.

3.3 Ex ante evaluation An ex ante evaluation has been carried out by the Swedish Institute for Food and Agricultural Economics (SLI). A preliminary evaluation is attached to the proposed Rural Development Programme as a separate Annex.

3.4 Effects of the previous programme period, etc. During the 2000–2006 programme period, Sweden has implemented three different programmes and Community initiatives funded by the European Agricultural Guidance and Guarantee Fund (EAGGF). The three programmes are the Environmental and Rural Development Programme for Sweden, the Objective 1 Programme for Northern Norr- land and the Objective 1 Programme for the Southern Forest Region. The Community initiative is Leader+. Results and lessons learned from these programmes and initiatives are described below. There is also a description of other programmes and types of support that have been important to developments in the area. Descriptions of results achieved so far and expected effects are primarily based on mid-term evaluations, follow-ups of these and annual follow-up reports.

3.4.1 The Environmental- and Rural Development Programme The Environmental- and Rural Development Programme is the most extensive of the three applied programmes with respect to resource allocation from the EAGGF. The “Berlin allocation” amounts to a total of EUR 1,129.9 million during the programme period. To that sum however we should add a modulation sum of (EUR 13.3 million) and a special allocation for 2006 (EUR 10.8 million). In total, this means that the EU’s share of the programme funding is EUR 1,154 million, which is equivalent to about SEK 10.4 billion.

The programme42 adheres to the objectives that the Swedish Riksdag (parliament) has laid down for the CAP. The import of these objectives includes attaining sustainable agricultural and food production, and providing a broad and varied range of safe foods. The emphasis is on environmental payment for public goods and other environmental measures to achieve the established objectives. Great importance is also attached to regional work. Special diversification and specialisation measures are also undertaken to facilitate adaptation during reforms of market regulations. In the issue of rural development within the programme, this part is very much oriented towards promoting developments in agriculture and less towards generally promoting rural development that includes other sectors than agriculture. The programme is divided into two priority areas, Priority Area I with measures to promote environmentally sustainable agriculture, and Priority Area II with measures to promote economically and socially sustainable rural development. Almost 95 per cent of the allocated funds for the programme are within Priority Area I.

42 This text is largely based on the report Levande kulturlandskap – en halvtidsutvärdering av Miljö och landsbygdsprogrammet (A thriving cultural landscape – a mid-term evaluation of the Environmental- and Rural Development Programme (SOU 2003:105).

The assessment of the mid-term evaluation is that environmental payment and project support for the conservation of semi-natural pasture land and mown meadows has clearly contributed to achieving the overarching EQO A varied agricultural landscape but requests further information on the extent to which valuable land is still unsupported. The evaluation wishes to particularly emphasise the importance of payment being of sufficient size, and arrives at the conclusion that it is well balanced, with the exception of mown meadows. The operative objective that 450,000 hectares of semi-natural pasture land and mown meadows are to be conserved will be achieved, in the view of the evaluation. Later information on outcomes confirms this. Adjustment of the levels of payment for all pasture payments, including mown meadows, was made in 2005. Payment for mown meadows was at that time increased steeply as a result of the evaluation’s assessment that the objectives were not being met for this type of land.

Environmental payment for the conservation of valuable natural and cultural heritage environments in the cultivated landscape is also to contribute to the EQO A varied agricultural landscape. The mid-term evaluation takes the view that this type of payment will not fully contribute to achievement of the EQO. It points to a relatively low degree of link-in to the payment in Norrland, and the fact that it transpired in a questionnaire to the County Administrative Boards that some sort of action plan should be produced for linked-in farmers in which they can receive guidance and advice on management. Mistakes in management are namely relatively common for this type of payment.

Conservation of valuable natural and cultural heritage environments in reindeer farming areas contributes to the EQO A magnificent mountain environment. The conclusion of the evaluation is that the payment has made only a slight contribution to the objectives and requests simplification and earlier payments. The payment was increased in 2005, which has partly boosted interest in it.

Payment for the conservation of local breeds threatened with extinction contributes to the overarching EQO A varied agricultural landscape. The view of the evaluation is that the operative aim that 5,000 livestock units threatened with extinction will be conserved will not be completely achieved. It calls into question whether the list of domestic breeds is sufficiently extensive to conserve all traditional breeds.

Payment for an open and varied agricultural landscape promotes ley cultivation in Sweden’s woodland and mixed woodland/flatland regions and in northern Sweden. Since the publication of the mid-term evaluation, payment for ley cultivation has been extended to cover the entire country, but is still formally a separate type of payment whose terms are somewhat different from the above mentioned. These types of payments contribute to the overall EQOs A varied agricultural landscape, A non-toxic environment and Zero eutrophication. The target for the payment to the wooded and wooded/flatland areas and northern Sweden is to improve, or maintain, the agricultural landscape and prevent large- scale abandonment of the agricultural land. In the view of the evaluation, the target is expressed in general terms and refers to conditions that are changing by degrees. It is therefore difficult to assess the degree to which the objective has been met. The conclusion is, however, that the payment, together with the natural handicap payment

and national support in northern Sweden has helped safeguard farming, and thereby contributed to the target of preventing abandonment of agricultural land in the wooded and mixed wooded/flatland regions of Sweden and in northern Sweden. Slowing of abandonment of agricultural land has also helped take an important step towards the EQO A varied agricultural landscape. The payment has also probably helped meet other objectives, since chemical plant protection products are not permitted in this undertaking, and ley cultivation reduces nitrogen leaching. The introduction of the general ley payment in 2005 can thus also be assessed as having good effects on the EQOs A non- toxic environment and Zero eutrophication.

Payment for organic production methods helps achieve the overarching EQOs A varied agricultural landscape, A non-toxic environment, Natural acidification only and Zero eutrophication. Indirectly, this type of payment is also to contribute to High quality groundwater, Flourishing lakes and streams, A balanced marine environment and Flourishing coastal areas and archipelagos. The specific aim is that environmentally friendly forms of production will increase. The aim is that the acreage of organically farmed land is to double to 20 per cent by the year 2005 and that organic livestock production is to increase so that 10 per cent of dairy cows and beef cattle and lambs are in organic production by 2005. The study’s assessment is that the aim will not be achieved for the country as a whole. With respect to acreages, very high proportions are reported for the northern counties, and generally for the Objective areas. Through the relatively low link- in in the flatlands of southern Sweden, however, the average is well under 20 per cent. A later figure for 2005 reports 19 per cent. The target for organic livestock production has been reached for slaughter animals. The evaluation’s view is that the objective for milk production will not be fully achieved. The evaluation also discusses the achievement of the specific aim, as well as the overarching EQOs, including A varied agricultural landscape and the extent to which organic production is more environmentally friendly than conventional production. There is, according to the evaluation, no sufficiently extensive scientific conclusion. The conclusion drawn in the evaluation is that organic cultivation has clearly contributed to achieving the specific aim as well as the overarching EQOs A rich agricultural landscape, A non-toxic environment and Zero eutrophication. The view of the evaluation is that further action is necessary to improve achievement of aims in the degree of link-in, particularly in the flatland regions and in farms without livestock. To improve achievement of several of the overarching EQOs, there may be reason according to the evaluation to look more closely at the possibility of bringing organic and conventional cultivation closer together, for example by promoting some organic cultivation among conventional cultivation.

Environmental payment for reduced nitrogen leaching is to help fulfil the EQO Zero eutrophication. The aim of the measure is to reduce nitrogen leaching from arable land, through the cultivation of catch crops and spring preparation. The target is that 50,000 hectares are to be planted with catch crops and/or prepared in spring. The target has been met several times over. The evaluation however is of the view that it is important that this excess is accepted and that it continues to be funded within the programme. The evaluation also takes the view that the specific aim of reducing nitrogen leaching has been achieved, as has the contribution to the overarching EQO Zero eutrophication. This type

of payment has also helped achieve the EQOs High quality groundwater, Flourishing lakes and streams, A balanced marine environment and Flourishing coastal areas and archipelagos.

Environmental payment and project support for wetlands and ponds is to contribute to the EQOs A varied agricultural landscape and Zero eutrophication. The evaluation is of the view that the EQO Thriving wetlands should also apply to these types of support. The aim is a reduction of leaching of plant nutrients to lakes, waterways and the sea, and greater biodiversity. The evaluation’s view is that the aim – that 6,000 hectares of wetland are to be established or managed – will not be achieved. One important reason for this is that the payment is not in proportion to the labour involved. The aim can only be partly regarded as achieved with reference to the acreage linked in. Guidance on the establishment and management of wetlands is, in the view of the evaluation, particularly urgent.

The overarching EQOs for payment for riparian strips are Zero eutrophication and A varied agricultural environment, but also A non-toxic environment. The aim is to link in approximately 5,500 hectares. The aim has been met, but the evaluation notes that there are not enough scientific studies and bases to more closely assess degree of contribution to the overarching EQOs.

The overarching EQOs for environmentally friendly cultivation of brown beans on the island of Öland are Zero eutrophication, A varied agricultural landscape and A non-toxic environment. The target is to conserve local varieties and maintain traditional cultivation of brown beans, reduce the risks posed by use of plant protection products and reduce leaching of plant nutrients. The aim is to link in 1,000 hectares. The evaluation is of the view that the aim will not be achieved. The target, and the overarching EQO A varied agricultural landscape are regarded as partly achieved. The same applies to the EQO A non-toxic environment. Generally, the evaluation is of the view that it is difficult to assess the degree of environmental benefit in this type of cultivation since there are no scientific data on effects on the environment.

Environmentally friendly methods of growing sugar beets on Gotland contribute to the overarching EQOs Zero eutrophication, Natural acidification only and A non-toxic environment. The evaluation is of the view that A varied agricultural landscape should also be included. The study notes that the aim has been achieved by a wide margin. The targets – preserve a varied agricultural landscape, reduce the risks associated with use of plant protection products, reduce plant nutrient leaching – have also been fulfilled, looking at the acreage linked in. The same applies for the overarching EQOs. The evaluation is of the view however that acreage link-in says little about environmental benefit, which is judged to be limited. Transports to sugar factories on the mainland are an environmental problem in this respect.

The evaluation found that the LFA natural handicap compensatory allowance, together with other types of payments, has helped prevent closure of farms and abandonment of agricultural land. Without the support, the number of holdings would probably have been fewer and the cultivated acreage smaller. The support is insufficient to entirely prevent closure however. This is particularly noticeable in the Objective 1 area and municipalities

in mountainous regions. In a number of support areas, the area of cereal has fallen while that of ley has risen. After publication of the mid-term evaluation, payment levels have been raised in all support areas and especially in municipalities in mountainous regions.

With respect to the measure training, the evaluation found that the measures are working well. It is pointed out however that there is noticeably less interest in the farmers’ environmental skills development programme (KULM). The conclusion is that the activities need to be developed on an ongoing basis and adapted to the needs and interests of the participants, and oriented towards reaching new participants in the target group. On economic and social sustainability, the evaluation takes the view that information on results must be improved for a full evaluation to be possible. For the forestry-oriented measure, the evaluation notes that the number of participants has not been achieved.

The overarching aim of Aid to investment, Priority Area 1, is to accelerate the transition to environmentally sustainable agriculture easier in order to help achieve the EQOs A varied agricultural landscape and Zero eutrophication. The specific aim is to partly compensate farmers for the high costs associated with high environmental and animal welfare requirements, reduce the nitrogen level in watercourses in agricultural areas, continue improve animal welfare and improve the work environment in agricultural holdings. For Priority Area II, the overarching aim is to improve the competitive ability of rural businesses and maintain employment in rural areas. The specific target is to accelerate the companies’ adaptation to new market and institutional conditions, and encourage diversification of agricultural activities. For both Priority Areas together, the operative aim is that 10,000 companies are to receive the aid and that each aid is on average to lead half a job or one full job. According to the assessment in the evaluation, the aim of 10,000 companies will not be achieved while the employment objective will. According to the evaluation, it is clear that the funds available are not in proportion to the objective. For the objective for Priority Area I, with respect to reduction of nitrogen levels, it is difficult to verify the link to the support. The assessment in the evaluation however is that organic production has been given priority in applications for support. For improvements in animal welfare, objectives have been well achieved in the shape of new animal stabling. Improved work environment is assumed to be an effect of improved animal environment. With respect to Priority Area II, only a small amount has referred to complementary activities and the body of regulation is therefore not believed to stimulate diversification. It is assessed that the aid has contributed to the overarching objective of improving competitive ability and maintaining employment. Results are therefore assessed as good.

With respect to setting-up aid to young farmers, the evaluation has not found any link between the aid and increased transfer of farms to the next generation. It is judged likely however that the aid has made it easier for a new farmer to get a bank loan. The evaluation’s view is that the aims of the aid can be better achieved through investment aid.

The overarching objectives for project support in Priority Area II are to promote employment, growth and settlement in rural areas. It is to be regarded as supplementary to other measures, and is to interact with these to the greatest degree possible. The aim is to double the proportion of rural enterprises with complementary activities. The targets differ between the various measures. The evaluation’s view is that the project supports

have not made any particular contribution to increasing the number of agricultural holdings with combination activities. It points to a complicated application process and the fact that the applicant has to be out of pocket for large sums. For the targets, the evaluation is of the view that the projects have contributed to these, apart from the measure “diversification” where results are poor. The evaluation is of the view that the supports, through their flexibility, have the potential to make a better contribution in the future to meeting the various targets. The evaluation is also of the view that the project support has not yet particularly contributed to sustainable development in rural areas. This is primarily due to the small number of projects and the often limited financial scope. The project supports do not supplement or interact with other more farm-linked measures to the extent intended. There is seldom collaboration.

Carry-over aid seems, according to the evaluation, to have contributed to the achievement of a number of objectives set for this measure. It is however difficult to establish whether the aid has helped to permanently promote a competitive processing industry. Since publication of the mid-term evaluation however, the objectives of the aid have been adjusted so that they to a greater degree are to be oriented towards small-scale processing, which has taken place. A tough selection process among support applications has had to be done because the funds in the programme have been too small in relation to demand.

Support for organic production methods in forestry began to be paid in 2005 and no effects of this support can be seen yet. Of the funds initially budgeted for the measure, most has been transferred to skills acquisition for forest holders when there was a great increase in the need of this measure after the severe storm in southern Sweden in early 2005.

3.4.2 Objective 1 Northern Norrland The EAGGF development section funds the following measures linked to agriculture, reindeer husbandry and forestry within the programme: - Investment aid - Setting-up aid - Carry-over aid - Skills acquisition - Environmental measures in forestry

The fund also finances project support (article 33 of Council Regulation (EC) no. 1257/1999 of 17 May 1999 on support from the European Agricultural Guidance and Guarantee Fund (EAGGF) and amending and repealing certain Regulations (OJ L160, 26.6.1999 pp. 80–102, Celex 31999R1257). In the programme complement, it is stated that support for Leader-like activity can be granted in the form of projects. In the programme, one project has been granted as a Leader-like activity. Support has also been provided to a number of local rural development programmes, which is simpler in administrative terms, has a bottom-up approach and is similar to Leader-like activity in content. The small-scale development work supported through these programmes is to establish, develop and encourage rural development work in the municipalities.

The following assessments of the support are based on the texts in the update of the mid- term evaluation.

Demand for investment aid has fallen successively over the past few years. The explanation for this is probably to be found in the decided amendments to the EU CAP. Many farmers are waiting to see what the Swedish model for decoupled farm support will be like before they make decisions about investments in their own holdings. In 2005 however, companies have had a more definite basis for their investment decisions. The support ceiling has also been changed and will most likely give rise to further effects on the willingness to invest during the last part of the programme period.

The demand for carry-over aid among companies, which are active in the processing of reindeer meat, has grown continuously during the programme period. This is probably because reindeer herds are growing in the region after a few years’ decline. Dairies in the region have also carried out extensive investment. Within this measure as well as in other measures, projects that have had strongly creative profiles and process-stimulating or environmental protection measures have been given priority, rather than projects oriented towards traditional agrarian activity.

Rural development measures have not created the number of jobs expected at the time of application. Nor have new businesses, or men’s or women’s networks, been created to the extent believed. On the other hand, more individuals have received skills acquisition and a number of mixed networks have been formed as a result of the programme. Many more men than women were expected to receive, and then did receive, skills acquisition. More women than men have started companies as a result of the operations.

The objective for the priority area that includes the above measure is a thriving countryside with good growth and employment. According to the update of the mid-term evaluation, the objective is too broad and generally expressed to allow a fair assessment to be made. The administering authority notes that funds for rural development have created opportunities for investment and implementation of ideas that would probably not have come about without the support. There is, however, a lot left to be done before we can speak of a thriving and flourishing countryside throughout the region. With respect to results, we can say for the priority area that with respect to new jobs, retained jobs, new companies and participation in skills acquisition, the results have clearly exceeded the objectives. However, with respect to new jobs and retained jobs, the outcome is lower than the objectives with respect to women. The assessment is that the levels aimed for will be achieved by the end of the programme.

With respect to the measures linked to farms, the mid-term evaluation has attached information with comments to the Commission’s evaluation indicators. It can be noted, for example, that investment aid has only to a small extent contributed to reorientation of agricultural activity. The level is 4 per cent, and is lower than in the area for the Environ- mental and Rural Development Programme. With respect to the investments’ contribution to improving the animal environment, there is a high proportion. For these, it is reported that 64 per cent of the total number of co-funded animal places concern environmental improvements. Setting-up aid has on average amounted to 20 per cent of

costs for setting up, which ought to be higher than in the area for the Environmental and Rural Development Programme. The proportion of women receiving setting-up aid is 26 per cent, and this agrees with the area for the Environment and Rural Development Programme. Carry-over aid in the area has helped boost the value added and competitiveness of agricultural products.

3.4.3 Objective 1 Southern Forest Region Support within the framework of the EAGGF development section is given to the same measures as in Objective 1 Northern Norrland. The following assessments of the support are based on the update of the mid-term evaluation.

Most of the investment aid has so far been used for traditional agricultural activity with dairy production, with associated equipment. Only 5 per cent of the number of support cases and probably an even smaller proportion of support volumes has been allocated to new activity. A smaller number of supports have also been given to horticultural enterprises and reindeer herding enterprises.

There has been some fear that the funds in this measure would not be used up during the programme period. Funds have also been moved from this measure to the measure “skills acquisition” to fund implementation within the framework of sustainable economic and social development. Today, officials who deal with investment support say that the remaining funds will be used, at least for the inland budget. The reason for this is primarily the increase in the support sums in 2005.

Demand for setting-up aid has been relatively stable during the programme period. The big question is whether setting-up aid has any importance in the decision to begin a career in farming, horticulture or reindeer husbandry. The evaluation of the national Environ- mental and Rural Development programme also draws attention to this issue. It is probably the case that the opportunity of receiving setting-up aid only has a marginal effect on the decision. The aid can, on the other hand, act in varying degrees as an encouragement for people to actually take the step of starting a business. Here, setting-up aid perhaps acts as bigger encouragement in reindeer husbandry than within milk production, for example, because of different start-up costs.

Carry-over aid has found it hard to get off the ground. The Administering Authority implemented an information measure in 2002. The County Administrative Boards in the Objective 1 area have also provided information on carry-over aid at local level. One factor that has affected the number of applications is that companies with their own primary production are able to apply for support for processing measures within the investment aid measure. Numbers of support and amounts have grown successively since 2003 however, and in Jämtland county in particular there seems to be a beginning demand for funds. Officials from other counties say that Jämtland is in the forefront and has a different tradition in processing. The importance of the work that the County Administrative Board in Jämtland has been doing for a number of years, and which in 2005 has led to establishment of a national centre for small-scale food processing, can probably have played a role. One ambition in the measure has been in the first hand to

grant support to small-scale companies. Demand from these was however non-existent, at least to start with. One reason, apart from information, was that the form to be filled in was in many cases regarded as difficult, because a lot of information that was hard to obtain is required. The number of applications has however grown significantly over time. A total of 38 applications have been granted so far; 13 of these, and about 55 per cent of the support funds, have been granted to a major dairy company in the region, and the rest has been distributed to 25 companies of varying sizes. The support to the dairy may seem large. The company however has a number of plants in several towns in the Objective 1 region and is also very important for agricultural infrastructure. It can therefore be strategically correct to support its growth potential.

It is estimated that the remaining funds will be used up. There is a growing interest in small-scale processing of food and a large actor is planning to start a new slaughterhouse in the area.

Skills acquisition carried out that involved both agricultural and forestry. The forestry part is implemented by the Forest Agencies in the region through its Greener Forest measure. One objective of this activity can be said to be training and information about e.g. site- adapted felling to boost biodiversity in forests.

The agricultural departments of the County Administrative Boards implement the agricultural part. To start with, this activity concentrated on the educational needs and requirements that are linked to environmental payment in the Environmental and Rural Development Programme. At the time of the mid-term evaluation of the programme, something called K2 was also implemented – this was skill acquisition oriented towards economic and social development. The training measures implemented in this measure are extensive. The activities implemented by the County Administrative Boards and Forest Agencies have been popular and have had many participants. Officials in the field however think that they see some training fatigue in some cases.

A broadened area of activity should be the answer to this. One shortcoming that educators in this measure have experienced is that the activity cannot be directed towards the consumer stage. This is steered by regulations. The possibility of educating consumers would in the long run lead to greater and more stable demand for food and products that are produced in an environmentally acceptable way. Demand for locally- produced food would probably also increase.

Environmental measures in forestry is a small measure and its delimitation means that it is mostly of interest to the forest agencies. Support for biotope protection areas has been co-funded within the measure, as well as projects for the inventory and production of plans for environmentally friendly forestry along Ammerån river in eastern Jämtland.

Project support under article 33 (“Rural development”) is a popular measure. All available funds were earmarked by 2005. One problem for this measure in Objective 1 is that national co-funding is not a prior given. Applicants must therefore make their own application for public co-funding. In reality, there are no such funds that can be used by an individual agricultural holding. This is a difference with respect to the Environmental

and Rural Development Programme, in that individual farmers are in practice unable to apply for support within the measure. This means that those projects that are oriented towards agriculture are carried out by other organisations that are closely associated with agriculture in some way, e.g. the Federation of Swedish Farmers. The type of activity that these projects can run will however not be of the close-to-farm type that an individual farmer could implement, and which there are examples of in the Environmental and County Council Programme. The “representative-led” projects are more of a collectively initiated, informative, encouraging nature, and the individual farmer benefits from the project in a more indirect way because markets have been worked, networks created, public authorities influenced etc. These are also important areas and many good results have been achieved. But a possible combination in which individual farmers could benefit directly from the support would in some cases be more efficient and more desirable.

3.4.4 Leader+ In 2005, the National Rural Development Agency carried out an update of the mid-term evaluation of Leader+. The evaluation reports information according to indicators given in support forms and according to a questionnaire sent to 200 projects. Below is an overview of the effects commented on in the evaluation.

The indicators are based on the registrations of the LAGs in the IT system STINS. The evaluation reports objectives and outcomes for the number of new tasks, the number of new cooperative constellations and the number of educational measures. Each subject area is in turn divided into gender and young people. The reports include the expected result for the project decision until end of October 2005 in relation to the programme as well as that of completed projects in relation to these projects’ results. The relationship between expected results in project decisions and the expected results of the project is for all indicators clearly positive, with the exception of the number of new tasks for women (90 per cent). The outcomes for completed projects in relation to expected results deviate somewhat from the previous picture. The number of new jobs is less than expected for all categories. It is possible that expectations are too high (230 new against expected 354). The number of new jobs may also be the result of a more long-term process after the new work method through collaboration in the Leader project has had time to mature. A new measurement could be considered in a year or so for this reason. With respect to new cooperation constellations, the outcome exceeds expectations by 42 per cent. The number of participants in training measures is 33 per cent over expectations, of which women 17 per cent and men 18 per cent.

According to the questionnaire sent to the projects, the assessment is that numbers of women exceed numbers of men in terms of participation in educational measures within the project framework. About 20 per cent of the projects had the aim of greater integration in society. One problem in this respect is that the LAGs often do not include suburbs with a lot of immigrants. The assessment that the project contributes to integration to a high or fairly high degree is no more than 11 per cent. The youth orientation of Leader programmes is clearer. Each LAG has a special youth representative. Of 85 submitted comments, just over 60 per cent have responded that young people participate in the project. With respect to environment, about 50 per cent say that their project aims to

improve the environment but that the outcome is no more than 27 per cent (contributes to a high or fairly high degree). Seventy-six per cent of the projects have greater employment as an objective. The outcome is assessed as being 43 per cent (contributes to a high or fairly high degree). Seventy-six per cent of the questionnaires had development of natural and cultural heritage as an objective. The outcome is assessed as being 60 per cent.

3.4.5 Other support measures The countryside and its economy are of course affected by a number of measures implemented in other programmes and support measures than those reported above. Some of these are briefly described below.

National support for agriculture in northern Sweden (support area 1–3) is provided to ensure that agricultural activity can be maintained in the region. The support is differentiated between the support areas and amounts to about SEK 318 million (M€ 35,3) per year. Through coordination with the LFA support and the environmental payment to keep the agricultural landscape open, the support helps maintain agriculture and the open landscape in northern Sweden. The support is part of Sweden’s treaty with the European Community (article 142). The support primarily covers a price supplement for milk, but also transport subsidies to dairies for milk, support for slaughter pigs, small pigs, she- goats, eggs and the cultivation of berries and vegetables. Support to potato growing is given within the framework of special notification. The aid is financed entirely by the Swedish State.

A number of measures have been used in recent years for the objective in regional development policy (Govt. Bill 2001/02:4) about “ a good level of service throughout the country.”

Support for commercial service can according to Regulation 2000:284 be given to maintain the supply of everyday goods and fuel in sparsely populated and rural areas. Regulation 2003:596 concerning support for project activities in regional development policy also allows grants to be made to central and regional project activity. As a phase in strengthening and supplementing these measures, the County Administrative Boards were assigned the task43 in 2002 of forming partnerships and together with these drafting and implementing local development programmes for commercial service (LUP). This work emphasises the importance of coordinated service solutions, greater integration, local solutions and local support, greater know-how etc. Extra funds (SEK 20 million, M€ 2,2)) were also allocated for 2002–2004 in order to counteract, in the short term, further deterioration in access to service for particularly vulnerable areas. The Swedish Consumer Agency was also allocated SEK 20 million (M€ 2,2) for 2002–2006 for Development and testing of new solutions in the commercial service area. Apart from these special operations, funds from the EU structural funds, the Community initiatives Leader+ and the Interreg programmes for

43 The assignment applied to all County Administrative Boards except those of Kalmar, Gotland, Skåne and Västra Götaland counties, where the assignment was given to the regional organs.

entrepreneurship and local development and municipal support were involved in co- funding of the implementation of various measures.

In 2006, the Consumer Agency reported a follow-up of the work methods and the biggest measures44. They note, for example, that the measures have led to the survival of strategically important rural stores and that the partnerships and programme work have provided a much better basis for decisions. It is not yet certain how long-term the effects are however. Present measures should also be extended to boost coordination between commercial and public service, where this is appropriate.

The objective of regional grants to company development is that it is to function as a tool to stimulate renewal and dynamism in companies. In assessing regional contributions to business development, reference is to be made to the gender perspective, the competition aspect and sustainable development. Grants are supplied for investments in e.g. buildings, machinery, product development and corporate collaboration.

In the autumn of 2002, the Government gave the County Administrative Boards the task of drawing up local programmes for entrepreneurship and local development work. The targets may vary between the counties but the programmes are to generally contribute to starting local development work in rural areas by encouraging and facilitating local involvement. This type of support will be a supplement to those that already exist, with the objective of stimulating rural development. The grant can for example be given in the form of vouchers to local development groups.

In several counties, the support is regarded has having made a great contribution to local voluntary commitment, which has begun to grow in the counties’ rural districts. The vouchers have been good in a number of ways. They have important value as a symbol, as recognition from the authorities, and raise the status of local commitment and development work. This functions as a catalyst for development processes. It also functions as a creator of contacts between people in the area, and between a municipality and its inhabitants. It has a clear leverage effect, i.e. the outcome is much greater than the effort put in. It leads to democratic development since people find it easier to make their voices heard and because channels are opened to the municipal offices and out to the villages. It is worth noting that endurance and a long-term view are necessary in work with this type of “slow” structure.

County Administrative Boards can apply to the National Heritage Board each year for cultural heritage grants for an actual object. Rural building preservation work can also be included here, which is a concrete contribution to the attractiveness of the area. The funds are intended for care of building monuments, care of ancient monuments (including ruins), care of the cultural landscape (including for culture reserves), information measures and some archaeological examinations. All this involves things that central government has a more or less clearly expressed responsibility for. Grants to building conservation etc. generally have a great effect on the public objectives that the funds

44 Stödet till kommersiell service och kompetens- och utvecklingsprogrammet “Affär på landet”. (Support for commercial service and the know-how and service programme ”Country Store”).

focus on achieving. Culture reserves enable active care of the land in valuable cultural landscapes. This conserves the environment for the future, and in the long run the funds paid can e.g. mean that a farmer will have the financial wherewithal to continue to run a farm that would otherwise be unprofitable.

Support for the care and management of national nature reserves is used to manage centrally managed nature reserves and make them accessible. Much of the work is purchased in the local market. Examples of such work are brush cutting, felling, fencing, grazing, meadow mowing, establishment and management of roads and car parks, building of birdwatching towers, production of information material etc. The budget (County Administrative Boards) is very important to preserve biodiversity in the nature reserves and to make them accessible for outdoor leisure pursuits. There is a risk that the cost of managing the high natural value of the small-scale cultivated landscape will climb considerably.

Within the structural fund programmes for Objective 1, Objective 2 and Objective 3, support can be provided to rural areas via the Regional Fund and the Social Fund. A number of municipalities are now working on local rural development programmes that are often funded by structural funds. In Jämtland county, for example, the municipalities have “framework programmes” for rural development, which have been funded within Objective 1 SSR through the Regional Fund. The framework programme means that the municipalities have been granted structural funds and that the municipalities then decided on projects that are in line with the programme. A project involving mountain pasture activity in Jämtland County and Trondheim County (Norway) has been carried out via Interreg III.

4 Priorities and expected effects of the programme

4.1 Justification of the programme’s priorities and action with reference to the EU strategy and Sweden’s national strategy Implementation of the programme as a whole is to be guided by the following development areas and priorities:

Sustainable development, natural resources and environmental objectives - Sustainable development and a sustainable use of natural resources in accordance with adopted environmental objectives form a general basis for the programme. Agriculture, forestry etc. have great potential for resource efficient production with minimal environmental impact and have a key role in the transformation to a sustainable development of society, incl. energy supply. They are also crucial in their role as land managers and as producers of public goods in nature and landscape, where grazing on pastureland is one central priority. - Production of food with special properties or added value should be developed. There is growing consumer demand for organic products Local, regional and/or small-scale production and processing in the food and other sectors is an important component in the search for enhanced business activity in rural areas deriving from agriculture and forestry, etc. Quality production that is regional or traditional in origin may constitute a part of this. - The development of new goods and services production connected with agriculture and forestry and other enterprises in rural areas is important for the broadening of the economic base and for promoting further growth opportunities in rural areas. Priority areas are renewable energy, tourism and recreation, service trade and contract work. - Knowledge, innovation and entrepreneurship are to be supported. It is also important to strengthen knowledge transfer from universities and other higher education and research institutions. We need measures that enable the transfer of relevant research findings to advisers and farmers. - There are a number of groups, including young people, women and people of foreign ethnic origin, who are underrepresented in the agriculture and forestry sectors. These groups are needed in the land-based industries, not just to boost gender equality but also to improve the economic and social life of rural areas.

4.1.1 Axis 1 Measures in axis 1 are intended to improve the competitiveness of the agricultural and forestry sector, reindeer husbandry and food production and processing, all based on sustainable use of natural resources.

The economy of rural areas needs to be strengthened through improved and diversified entrepreneurship in the agriculture, forestry and related industries as well as through the growth of new businesses and employment opportunities in rural areas. The agriculture, forestry and related industries continue to be highly important for production and employment in rural areas. They also play a key role as managers of the country’s natural

resources and an attractive landscape. The production that takes place in these holdings, and the resources they manage, are therefore key points of departure in the programme’s focus. Holdings must be supported during the ongoing shift to economically viable production in line with consumer demands and public requirements regarding the sustainable use of natural resources and animal welfare. For agriculture, this means supporting a shift to the new conditions occasioned by CAP reform. New green production and technology – in the field of renewable energy for example – is an important growth area for the agriculture and forestry sectors.

Approximately 15 per cent of the programme’s total budget will be allocated to measures within this axis. The measures will consist, in roughly equal parts, of combinations of measures to create the conditions for growth, and direct development support. Invest- ment support will also be important in underpinning the development of modern and efficient production units that comply with consumer demand and public requirements concerning economic viability, sustainable use of natural resources, a good working environment, ethics and animal welfare. Other key measures for the modernisation and development of the production of holdings are investment support for processing and for collaboration on the development of new products. Support will also be provided for the establishment of perennial energy crops on farmland. Setting-up support is designed to further stimulate entrepreneurship. Important components of this policy are training and skills acquisition as well as support for innovations and entrepreneurship. A high level of know-how in the sector is an important competitiveness factor, so support for training and skills acquisition will therefore be available under axis 1. We also need to promote the transfer of knowledge acquired through R&D, to enable the growth of new production and innovations.

The orientation of the measures is felt to be well in line with guidelines and priorities of the European Strategy. Priorities in the programme also follow the strategic orientation set out in the national strategy.

4.1.2 Axis 2 Measures under axis 2 are designed to preserve and improve an attractive landscape and living countryside, and stimulate the shift to efficient and sustainable production with lower environmental impact, in order to help achieve EU and Swedish environmental objectives as effectively as possible. An integrated approach is to be developed in which the landscape is seen as a resource for recreation, development and growth, as a place to live and as a site of natural and cultural heritage.

Because of the importance of the programme’s environmental measures in achieving national environmental quality objectives that involve natural resources managed by the farming and forestry sectors, the forthcoming programme will, in budgetary terms, be dominated by environmental measures. At least 73 per cent of the programme’s resources are allocated to measures in axis 2. Measures that will be of key importance are those designed to stimulate sustainable production and keep the agricultural landscape open, thus creating the conditions for rich biodiversity and a rich cultural environment rooted in this landscape. The programme will focus on operations to promote the public goods

of the agriculture, forestry and related industries and reduce the negative impact of production on the environment. Other land managers will be able to receive payment where this is justified as a means of achieving the environmental quality objectives. The measure “Environmentally friendly farming” will be the biggest one in this axis in budgetary terms. Other key measures in axis 2 are compensatory allowances to agriculture in less favoured areas in order to maintain an open and active agricultural landscape with maintained pasture land and to counteract the closing down of farms in these areas. Grants will also be paid to the forestry sector for selective measures within a framework of active maintenance measures to underpin biological diversity and protect the cultural heritage of the forest.

Another prioritised area is that of measures to reduce the loss of plant nutrients and the risks associated with use of plant protection products, with the objective of achieving good water quality. The measure “environmentally friendly farming” also includes payment for organic production. Skills acquisition that is important in underpinning environmental work in the agriculture, forestry and related industries will take place within the framework of this measure in axis 1.

Orientation of the measures and operations is judged to be well in line with the guidelines and priorities of the European strategy, e.g. with respect to biodiversity (in accordance with the objectives of Natura 2000) and the preservation of agriculture of significant natural and cultural values. A high level of ambition with respect to the environment, which is an important priority in measures and operations under the auspices of future rural development programmes, will open up opportunities to achieve the objectives set out in the Göteborg conclusions. Operations to contribute to good water quality and reduced dependency on fossil fuels and thereby reduced carbon dioxide emissions, are also well in line with the objectives for this axis. Priorities in the programme also follow the strategic orientation set out in the national strategy.

4.1.3 Axis 3 Measures in axis 3 aim to promote greater diversification of the rural economy with the objectives of promoting employment and a better quality of life for those living there, as well as sustainable use of the combined resources of the countryside. Measures within axis 3 are crucial if the programme is to be able to foster good overall development of rural areas. This presumes a diversified economy, greater focus on the resources of rural areas in the shape of attractive environments for living and recreation, and more focus on local cooperation on e.g. service and infrastructure.

Of the programme’s overall budget, about 12 per cent will be allocated to measures in axis 3. The measures will mostly focus on creating the conditions for growth in the shape of more new businesses and a broadened and diversified economy related to the combined resources of rural areas. The measures will thereby contribute to income-generating employment and sustainable use of the natural and cultural resources of the countryside. Local entrepreneurship, enterprises, environmentally-integrated production methods and development work will be stimulated. Operations will also be put in place to develop local solutions for a good living environment and high quality of life in rural areas, for example

regarding access to those services and infrastructure that provide individuals and enterprises with favourable conditions. The measures will be applied on the basis of a broad perspective on rural development and integrated into other regional and local development work. A relatively large proportion of the axis 3 measures will be implemented using the Leader method.

4.1.4 Axis 4 Axis 4 is oriented towards promoting effective implementation of the rural development programme through local support, participation, and cooperation. The ambition is that the Leader method should be able to be applied throughout the country. The work will build on active participation from the business community, NGOs and the public sector.

Of the total budget of the programme, approximately 7 per cent will be implemented within the framework of Leader. The Leader method will mainly be applied to measures and operations in axis 3, but the method –will also be applied within axes 1 and 2.

The ambition to broaden the economy and that of local development work are assessed as being well in line with the guidelines of the joint strategy and the national strategy for axes 3 and 4.

4.2 Expected effects of the programme according to the ex ante evaluation

4.2.1 Introduction An independent ex ante evaluation will, according to the council regulation, form a part of the rural development programme work. The ex ante evolution shall analyse and assess needs, proposed strategy and objectives, consistency with community priorities, how experiences from previous programmes have been addressed and appraise the system form monitoring, evaluation and management.

The ex ante evaluation of the proposal for the Swedish rural development programme was carried out by the Swedish Institute for Food and Agricultural Economics (SLI). The report is attached to the programme proposal as a separate annex. In the following, a summary of the report is given.

4.2.2 Summary of the ex ante evaluation

Can the measures of the Rural Development Programme be justified by market failures? Since the existence of market failures plays a central role in determining which effects can be expected from public intervention in the market economy, the evaluator first discusses the extent to which the proposed measures in each axis can be justified by the presence of such problems. Thereafter it is discussed in which extension knowledge from the previous Environmental- and rural development programme has been considered when shaping the measures and when allocating the financial resources and in which extension the rural development programme could be expected to contribute to the fulfilment of the overall objectives and the national environmental quality objectives. The section is concluded with a discussion concerning the expected environmental effects of the programme.

Measures under axes 1 and 3 The measures under axes 1 and 3 primarily consist of subsidies to private enterprises to help make them more competitive. According to the evaluator it is not explicitly clear that this is because of market failure. There are factors (including the climate) indicating that lower competitive capacity in agricultural holdings is due to the fact that Sweden lacks comparative advantages for agricultural production, other than in some parts of the country. The fact that there is generally a less well-developed business community in rural areas might be because there are comparative advantages attached to locating the activity in urban centres. Measures 111 (support for skills acquisition for agricultural holdings) and 125 (support for investments in local infrastructure) as well as 321 (support for basic service in rural areas), 322 (support for village development), 323 (support for the preservation of the natural and cultural heritage) and 331 (support for skills acquisitions for others than agricultural holdings) may, according to the evaluator, be motivated by the presence of market failures. With regard to skills acquisition, it can be asserted that human capital has positive external effects in that other individuals can share in the yield of the human capital of a certain individual by observing his or her behaviour. Local

infrastructure, such as a village’s attractiveness and its natural and cultural environment can, in turn, be regarded as public goods.

Against the background of theories in the research field “new economic geography”45, subsidies to individual rural enterprises may, according to the evaluator, be justified in order to avoid the negative external effects of company shutdowns in rural areas. The argument is that if labour and capital leave rural areas because salaries and returns on capital are better in urban centres, the situation for those who remain may deteriorate. This might be because companies find it harder to find skilled labour, and labour finds it harder to find well-paid work, and also because a smaller proportion of the goods and services consumed in rural areas is produced locally. The latter can lead to higher prices for goods due to the cost of transporting the goods from urban centres. These factors can be regarded as negative external effects of the emigration of capital and labour, if those emigrating do not take them into account when making their decisions. It may also be able to be asserted that a “living countryside” (with agriculture and other small-scale enterprises) is public goods. In that case, subsidies could be justified to avoid closure of farms and other rural enterprises.

Measures under axis 2 Since “the environment” in the view of the evaluator is a public good, arguments in favour of the measures under axis 2 do exist in principle. Possible exceptions are measures 211 and 212 (natural handicap payment) operation no. 6 (payment for organic production) under measure 214, where it is a case of subsidies for the production of private goods (animal and vegetable foodstuffs). However, grassland cultivation and pasture help keep the landscape open and boost biological diversity. Organic production methods also have positive effects on biodiversity, and help reduce emissions of plant protection and plant nutrient products. However, a study by the Swedish Institute for Food and Agricultural Economics (SLI) found that the environmental benefits are largely dependent on where the organic production takes place46. The effects are considerably greater in the plains of southern Sweden than in the northern part of the country. Finally, the use of bio energy instead of fossil fuels helps reduce emissions of greenhouse gases and acidifying substances. Payment for grassland cultivation and pastures could thus be justified by their positive external effects on the public good “environment”, while payment to organic production and the cultivation of energy crops could be justified by their contribution to reducing the negative external effects on the environment caused by agriculture and energy use.

Measures under axis 4 Measures under axis 4 aim to facilitate the implementation of the Leader method. It is difficult to speculate on the basis of past experience whether the Leader method can be expected to help create the conditions for economic, ecological and socially sustainable development in rural areas. In the end, this is determined by what type of projects can be designed using the method. The same general conditions apply here as for the measures

45 See e.g. Baldwin et al. (2003). 46 Carlsen (2003).

under the other axes – i.e. are the projects are designed to tackle problems caused by market failures, or not? Since it is indicated that the Leader method will primarily be used in projects within axis 3, this appears doubtful. In such cases it is also of limited interest whether the method is cost-effective or not in its implementation.

4.2.2.1 Have experiences from previous programme periods and evaluations been taken into account?

Axis 1 and 3 With respect to the measures under axis 1, it is noted that the effect of setting-up support (corresponding to measure 112 in the Rural Development Programme) was assessed as uncertain in the mid-term evaluation of the previous Environmental and Rural Pro- gramme47. Setting-up support was supposed to have primarily led to the transfer of income to the recipients, instead of to more new businesses.. For investment support, the conclusion was drawn that it furthered both environmental and employment objectives. This assessment however comes from estimates based on the orientation of the support, the assessments of farmers themselves and the general evaluations of the Board of Agri- culture.48. Since 2003, however, there has been an increase in the cultivation of energy crops on farmland. This is also interpreted as being a result of the EU’s 2003 CAP reform, which among other things introduced special support for the production of agricultural goods for energy purposes (the area of energy crops receiving EU support in 2005 was 32,000 ha)49.

With respect to the investment support for processing, the mid-term evaluation found that it was only possible to see trends against the background of unsatisfactory basic material. It was judged however that over 900 jobs (of the desired 1,500) would be created or maintained and that the degree of value added in the supported companies would increase. There were no measures corresponding to support for cooperation and infrastructure in the previous rural development programme. Regarding the equivalent of the measures in axis 3, the mid-term evaluation concluded that they had “not significantly helped promote employment and growth in rural areas” because too few projects had got off the ground at the time when the evaluation was made50. This was regarded as being partly because the application process was too complicated to attract individual agricultural holdings and also because the support was paid retroactively, so the recipients were forced to be out of pocket for large sums for a long period of time. Most of the grants were therefore applied for by organisations, and were for some sort of preliminary study or projecting. No measures existed that correspond to measures 312 and 331 in the Rural Development Programme.

47 SOU 2003:105. 48 Board of Agriculture (2001). 49 Ministry of Agriculture, Food and Consumer Affairs (2006). 50 The results of another SLI study of the effects of support to projects aiming to foster rural employment (Gustavsson, Johansson and Persson, 2004) also indicate that this type of support has significant displacement effects and that the effects on employment are therefore small.

Axis 2 According to the mid-term evaluation the measures natural handicap and environmentally friendly farming have been important in keeping the landscape open and maintaining livestock keeping in less favourable areas. It was not possible to distinguish the effects of each measure/operation, and on the whole, they were unable to prevent ongoing closure of farms.51 The combined effect of measures 211 and 212 and the operation for extensive ley management for the environment and the open landscape under measure 214 of the Rural Development Programme would thereby, through being coupled to livestock keeping, be to counteract an ongoing fall in livestock keeping, the evaluator concludes.

With respect to other operations under the measure environmentally friendly farming, the mid-term evaluation was of the view that payment for preservation of meadows and for the establishment and management of wetlands would lead to only 43 and 55 per cent, respectively, of the desired area of meadows (10,000 ha) and established/managed wetlands (6 000 ha) being created. According to the study, this was because the payment was insufficient to cover costs for establishment and management 52.

Preservation and sustainable use of biological diversity and its components is critical in the work towards the ambitious goal to halt the loss of biodiversity by 2010. This is also the main ambition for the agri-environmental payment for management of pastures, meadows and wetlands. For that reason, one important task in the process of designing this measure has been to take into consideration the biodiversity aspects and outcome of the mid-term evaluation of the previous measures. The mid-term evaluator commissioned the Swedish Biodiversity Centre to evaluate the impact on biodiversity of especially the agri-environmental measures for cultivation of pastures and meadows. The report from the Swedish Biodiversity Centre is annexed to the mid-term evaluation (Annex 2).The conclusions of the report is that the agri-environmental schemes have had a clear positive effect on preserving large areas of habitats of critical importance for the maintenance of biological diversity in the agricultural landscape. It is harder to say to what extent the biological quality of these areas have improved as a result of the payment. Still, the Swedish Biodiversity Centre refers to investigations also showing qualitative improvements in the compensated areas. The conclusion from the mid-term evaluation is that the agri-environmental measures clearly have contributed to fulfil the environmental objectives concerning preservation of biological diversity.

Payment for the preservation of natural and cultural environments in agricultural and reindeer herding areas was judged able to achieve good results with respect to the agricultural landscape (about 76 per cent of affiliated agricultural holdings and 100 per cent of the expected area), but very limited with respect to reindeer herding areas (about

51 Ministry of Agriculture, Food and Consumer Affairs (2006). 52 Support to meadows was SEK 1 000 (€ 111,1) per hectare and year in basic support + SEK 1 400 (€ 155,6) per hectare and year in additional support (the mid-term evaluation proposed that the additional support be raised to SEK 2 400 (€ 266,7) per hectare and year, and to SEK 6 000 (€ 666,7) per hectare and year for scythe-cutting. The grant for wetlands was SEK 3 000 (€ 333,3) per hectare and year in basic support + SEK 800 (€ 88,9) per hectare and year in supplementary support (the mid-term evaluation proposed no raises but proposed that the issue should be studied by the Board of Agriculture).

19 per cent of the 1,700 hectare of land in mountain areas regarded as particularly valuable) due to the payment being too low53. With regard to payment for the preservation of endangered domestic animal breeds and organic cultivation of brown beans on Öland 70 per cent of the desired area (1,000 ha) was estimated to consist of traditionally cultivated brown beans on Öland and about 77 per cent of the objective (5,000 animals) was achieved with respect to domestic animal breeds. Assessment of payment for the cultivation of catch crops and the establishment of protected zones concluded that the objectives would be exceeded for the area of catch crops and for the area of protected zones. No payment corresponding to operation 6 in the Rural Development Programme was included in the previous programme, while payment for organic production (corresponding to operation 7 in the Rural Development Programme) was assessed as having resulted in 80 per cent of the objective being met for arable land, more than 100 per cent for animals for slaughter and approximately 70 per cent for dairy cattle.

There were no equivalents to 227 (support for non-productive investments in forest), so these have not been assessed in the mid-term evaluation.

Changes in the Rural Development Programme With respect to axis 1, a raise in setting-up support is proposed, from SEK 200,000 (€ 22 222,2) to 250,000 (€ 27 777,8). It is proposed that total public support for the modernisation of agricultural holdings should remain unchanged at its highest level (30per cent of the cost). In less favoured areas, the compensation level may, subject to special assessments, amount to 50 per cent. The support should no longer be limited to only real property (buildings or land improvements, with accessories). This means according to the evaluator, that the investment support will become more generous because agricultural holdings’ means of financing investments will generally increase. Support for higher values in agricultural and forest products are proposed to have a highest level of 30 per cent of the cost. In sparsely populated areas of northern Sweden, the compensation level may, subject to special assessments, amount to 40 per cent. In principle, this means that the support will become more generous.

With respect to levels of compensation and payments for measures in axis 2, the following proposed changes in the Programme is noted: Natural handicap payment in extensive grassland cultivation and pasture land has been raised in most of the support areas while support for land cultivated with grain and potatoes remains unchanged. However, the support area for land cultivated with grain is increased with support area 4. The payment level for LFA support will be halved on areas exceeding 90 hectare on farm level.

For changes in agri-environmental measures compared to the 2000-2006 program, the guiding principle is to address as many as possible of the specific issues raised by rural organizations, agencies etc. during the consultation process and by the mid-term evaluator. One such overarching issue is the importance of reducing the number of

53 Levels were SEK 6 300 (€ 700) per year and hectare for reindeer grazing area (maximum SEK 26 475 (€ 2941,7) per year and unit of land), SEK 20 (€ 2,2) per year and metre of maintained reindeer pen and SEK 1 275 (€ 141,7) in travel compensation per reindeer grazing area or pen). The mid-term evaluation gave no proposals for new sums but proposed that the issue be studied by the Board of Agriculture.

measures to increase transparency, thus simplifying the program. This is done by merging measures with similar objectives and conditions. The table below shows the relation between new and previous measures and, briefly, other changes made compared to 2000- -2006. Table 8 Comparison between environmental rural development programme 2000-2006 and the rural development programme 2007-2013 with comments AEM 2007-2013 AEM 2000-2006 Comment 5.4.3.4 Biodiversity and - Conservation of Two AEMs from 2000-2006 cultural heritage in semi- biodiversity and cultural have merged into one. natural grazing lands, mown heritage values on grazing Criteria and payment level meadowland and wetlands land and mown meadows changed in accordance with - Wetlands and ponds proposal from mid-term evaluation. 5.4.3.5 Valuable natural and - Valuable natural and Two AEMs from 2000-2006 cultural environments in the cultural heritage have merged into one. Only agricultural landscape and environments minor changes in criteria reindeer herding areas - Valuable natural and and payment level. cultural heritage environments in reindeer farming areas 5.4.3.6 Payment for regional New measure, partly priorities* covering actions carried out under e.g. art. 33 during 2000-2006. 5.4.3.7 Traditional - Local breeds threatened Two AEMs from 2000-2006 cultivated plants and with extinction have merged into one. For livestock breeds - Environmentally friendly livestock breeds minor raise cultivation of brown beans in stock-specific payment to give incentive to bring small herds into the program. For brown beans a reduced payment level from SEK 2,400 (€ 266,7)/hectare to 1,700 (€ 188,9)/hectare as a result of the 2003 CAP- reform. 5.4.3.8 Reduced nutrient - Reduced nitrate leaching Two AEMs from 2000-2006 leaching from arable land - Riparian strips have merged into one. Minor changes of eligible area. Decrease in payment level, especially concerning riparian strips, as a result of the 2003 CAP-reform. 5.4.3.9 Environment New measure. protection measures

5.4.3.10 Organic forms of -Organic production Main conditions unchanged production methods for certified production. Payment level decreased by 50 per cent for non-certified organic production. 5.4.3.11 Extensive ley - Open and varied Two AEMs from 2000-2006 management for the agricultural landscape have merged into one. Only environment and the open - Perennial ley minor changes in criteria landscape and payment level. - Environmentally friendly This measure has been cultivation of sugar beet on deleted, following the the island of Gotland recommendation from the mid-term evaluator. * Includes both AEMs and non-productive investments

The most obvious amendments in the payment for biodiversity and cultural heritage in semi-natural grazing lands, mown meadowland and wetlands (5.4.3.4) concerns seasonal cottage. Investigations have shown that the former design of the measure in some cases resulted in over grazing since the payment level did not fully reflect the actual management costs. Changes have therefore been made in this scheme to avoid overpayment and its negative environmental consequences.

Payment for regional priorities (5.4.3.6) is a new measure with the aim to address specific regional or local environmental situations and problems. Such a measure has been asked for by several authorities and organizations involved during the consultation process.

The 2003 CAP-reform have changed the economical conditions for different kind of land use and activities on agricultural land. As a consequence, the basis for agri-environmental payments, especially the income forgone, has changed. This is reflected in the decreased payment level in the measures for traditional cultivated plants and livestock breeds (5.4.3.7) and reduced nutrient leaching from arable land (5.4.3.8).

For organic forms of production (5.4.3.10) the measure is designed to give better incentives for certified production than during 2000-2006. The share of the organic production that is certified by a certifying body is generally higher in the intensively cultivated flatland regions than in areas in the forest region and in northern Sweden where agriculture by tradition is more extensive. The ambition with the design of the measure is to ensure a high environmental efficiency by stimulating certified organic production, and at the same time establish a clear link to the market for organic products.

Payment for environmentally friendly cultivation of sugar beet on the island of Gotland has been granted during 2000-2006.This measure, however, have been criticized by the mid-term evaluator for not being able to motivate from an environmental point of view. Therefore such a measure is not proposed for the period 2007-2013.

For further details and motives for the different agri-environmental measures, see chapter 5.4.

In axis 3, it is proposed that the total public support for diversification of agricultural holdings, promotion of tourist activity, basic services for the economy and population of rural areas, renewal and development in villages and preservation and upgrading of the cultural heritage assets are to have a maximum level of 30 per cent of the cost if it applies to investment in an individual company and, subject to special assessments, an extra 20 percentage points to enterprises in sparsely populated areas of northern Sweden, but up to 100 per cent of the cost if it applies to projects of a more overarching nature.54 It is difficult to make direct comparisons between the equivalent supports in the present Programme because similar guidelines on maximum amounts do not seem to have existed.

No other change in the proposed programme (or strategy) but the different levels of support are commented on by the evaluator.

4.2.2.2 Are the objectives realistic in relation to the financial resources allocated for each respective measure?

Axis 1 and 3 According to the evaluator many of the objectives are expressed in terms such as to “increase”, “strengthen”, “improve” or “even out” something. These are qualitative rather than a quantitative objectives and might therefore seem easier to achieve. This is not certain however; it depends on whether the measures are focused on correcting for market failures or not. According to the evaluator it is doubtful whether the increases in the support will have any effect on the number of newly-started agricultural holdings (since there is a substantial risk that the grants will instead be capitalised in higher prices for holdings), the investments of existing agricultural holdings or other rural industries, or the degree of value added of the products of agriculture, forestry or other rural industries. With regard to the support for skills acquisition and the new support for collaboration in local infrastructure under axis 1, it is not apparent how big the amounts will be. The objectives for measures 323, 331 and 341 under axis 3 are, according to the evaluator vaguely worded and it is not clear how they are to be measured.

Axis 2 The objectives are quantified, (e.g. number of hectare of land of different types that is to be preserved/cultivated with a certain crop or in a certain way with the help of the support proposed). The higher levels of payment for natural handicap for extensive cultivation of grassland and pasture land, management of pasture land and meadows, preservation of natural and cultural environments in reindeer herding areas and the possibility of replacing non-certified organic production will most likely make the measures more attractive and boost the proportion of affiliated farms. It is difficult, on the other hand, to say how big the quantitative achievement of objectives will be. Regarding measures 211, 212 and operation 1 under measure 214, it has been noted that

54 For example: establishment of contacts with R&D, systematic gathering of experiences and improved opportunities to develop commercial and technical solutions that require more extensive resources and involve more companies.

their main effect will be to counteract ongoing reduction of livestock keeping. The basis of the calculation of the size of the support is only very sketchily described however and there is no expressed objective as to the effects on livestock numbers. The evaluator sees a risk that these types of support will primarily be capitalised in higher land prices. The comment regarding sketchily described bases for calculations also applies to some other operations.

The evaluator remarks that support that is designed on the basis of calculations of average costs risks leading to a small effect for a large amount of money. This, however, is to be weighed against the greater cost of administering the payment system that would result if the grants were to be based on calculations of each individual holding’s marginal costs for the environmental measures. One way of circumventing such increases in administrative costs could be to allow the support levels to be determined in an auction procedure. This is not without its problems however, since repeated auctions can result in strategic behaviour on the part of the companies55.

Axis 4 For measure 431, it is said that the objectives are to contribute to good fulfilment of the objectives of the local development strategy and that the measure is to be implemented in a cost-effective fashion. The objectives of the local development strategies are for the present not known. To determine whether anything is done in a cost-effective fashion be an alternative for comparison e.g. if the results of different local action groups are to be compared with each other. Even if this is the proposed, it is not clear how such a comparison could be made. It would be natural to compare running and administrative costs per target unit. If this is done, then the objectives must be defined in quantitative terms and quantified in the same units. If the objectives are defined on the basis of the local development strategies, it is far from certain that these requirements will be met.

4.2.2.3 Does the programme help meet the EU’s overarching objectives and the objectives of the Swedish national strategy? The overarching strategic orientation of the Rural Development Programme is deemed by the evaluator to agree with the National Strategy for Rural Development. The wordings are the same and the strategy/priority has been developed from the EU’s strategic guidelines for rural development56.

The priorities shown in the Strategy are thereafter developed in the Rural Development Programme in accordance with Directive 1698/2006 into Swedish priorities per axis and corresponding measures. The structure of objectives is thus stepwise broken down into measures that correspond to the overarching objectives; from the EU’s strategic objectives down to measures per axis in the Rural Development Programme. This is in accordance with the common structure for programme planning. Objectives are expected to be met the other way around, i.e. arise from the measures undertaken. If the measures

55 See e.g. Wicksteed (2002) or Elofsson (2004). 56 Council Decision on Community strategic guidelines for rural development (programming period 2007-2013) 5966/06 DG BII

are not effective and their scope not correctly adjusted in relation to the problems that are to be dealt with, they will not be able to contribute to meeting the objectives at different levels.

It is thus, according to the ex ante evaluator, doubtful whether the measures within axes 1,3 and 4 will help meet the EU’s overarching objectives and the objectives of the National Strategy for Rural Development. There is a considerable risk of displacement and distortion effects for measures within axes 1, 3 and 4. This is also clear from previous studies. These risks are lower for axis 2, since most measures focus on some type of market failure. According to the evaluator the EU’s restrictions on the reallocation of funds between the axes are perhaps not optimal if we are to maximise the effects of the Rural Development Programme. One can thus argue that the effects for Sweden would have been greater if the minimum levels for axes 1, 3 and 4 had not been binding, since it is doubtful to what extent there are market failures that can justify these measures. In other countries, the situation may be different. According to the ex ante evaluator, this indicates that the member states should be given greater freedom to determine allocation of the funds in accordance with each country’s needs. This is also in agreement with the EU’s subsidiary principle.

4.2.2.4 Impact of the programme on the environment The ex ante evaluator’s assignment includes making an assessment of the environmental effects of the Rural Development Programme, Annex 3 to this report57.

The overall picture of the state of the environment in Sweden is, according to the evaluator that it has improved, in some cases significantly. This applies to environmental load in the shape of crop nutrients and crop protection products as well as public goods such as pasture land, meadows and elements in the landscape that are of cultural value. However, in several cases work remains to be done if we are to achieve the environmental quality objectives and their interim objectives. The view is that it will be very difficult to achieve seven of the 16 Swedish environmental quality objectives within the given timeframe58. These are A non-toxic environment, Zero eutrophication, Sustainable forests, A rich diversity of plant and animal life, Reduced climate impact, Clean Air and Natural Acidification only. The measures in this proposal of Rural Development Programme are contributing to fulfil the first four of these environmental objectives.

The impact of the measures on the environment depends on a number of factors, including what type of measure is chosen and how the measures are oriented geographically/regionally, since conditions vary around the country. The regional differences in the country are highly significant in finding an effective design of various environmental measures that focus on agriculture.

57 In accordance with European Parliament and Council Directive no. EC 2001/42 on assessment of the effects of certain plans and programmes on the environment. 58 Miljömålen de Facto 2006 – miljömålen på löpet (The State of the Environmental Quality Objectives in 2006 – objectives in the headlines), Swedish Environmental Protection Agency (2006).

There are large regional differences in the impact of agriculture on the environment. Southern Sweden is home to intensive farming with sometimes negative environmental effects. Agriculture in northern Sweden and the forest regions is largely associated with positive environmental effects, in that it helps keep the landscape open and is also thought to improve biodiversity.

Some measures and operations in axis 2 are regionally-oriented (see below) to areas with pronounced problems, something that is decisive in achieving an optimal environmental effect. Measures pertaining to southern Sweden are very much about counteracting negative environmental effects of the intensive farming that takes place there. In northern Sweden, it is a matter of preserving what is left of the agricultural landscape. Measures are focused on areas in need.

Measures within axis 2 that are not regionally oriented are Environmental protection measures (214) and payment for Organic cultivation (214). The aim of the environmental protection measures is to improve the management of plant protection products and plant nutrients at farm level, a need which probably exists throughout the country. The conditions that are to be met primarily appear, at first glance, as rather fundamental for an agricultural holding being run as a business. The operation can be expected to have a positive effect on the environment, even if the effects are hard to assess. It should e.g. lead to improved adaptation to actual needs and improved handling of plant protection products. The operation is primarily oriented towards farmers with more intensive production, and to the agricultural plains, and is one of the few operations directed at conventional and more intensive agriculture.

Support is paid to organic farming all over the country, and contains an incentive for the user to certify the production (double the support compared to that for non-certified production). Certification in itself has no positive effects on the environment; its purpose is to build up a potential in anticipation of increased demand.

On the whole, the operations in axis 2 have been judged to have positive effects, both through a reduced environmental impact in the shape of lower use of plant nutrients and plant protection products, and because public goods such as pasture and meadow land, and culturally significant landscape elements, are preserved. The negative environmental impact of measures in axis 2 is largely indirect, and on the whole judged insignificant. In axis 1 most goes to information, advice and investment support. Any negative impact on the environment as a result of stimulated production is judged insignificant and is also counteracted by positive effects of specific environmental information, renewal of real capital and (possible) prioritisation of environmental investments. Axes 3 and 4, aim to get activities going in rural areas. This brings about both positive and negative environmental effects depending on what operations are being started up. No general pronouncements about environmental effects can therefore be made. Environmental assessment according to the SEA Directive An environmental assessment according to the European Parliament and Council Directive (EC) 2001/42 (SEA directive) has been conducted by consultants engaged by the Swedish Institute for Food and Agricultural Economics. The report is published as Annex 3 to the ex ante report. The scope of the assessment was to identify possible

negative environmental impacts of the proposed measures and sub-measures under axis 1, 2, 3 and Leader and was used as a prerequisite when finalising the different measures in the proposed programme.

A consultation with environmental authorities, environmental NGO’s and other organisations was held 19 June 2006. Point of views stated at the consultation meeting are published in annexes to the environmental assessment. The final programme and the ex ante report with the annexes will be available on the Governmental webpage.

The general monitoring of environmental effects in Sweden is conduced by the Environmental Protection Agency. The sixteen national Environmental Quality Objectives established by the Swedish Parliament are evaluated every fourth year and as especially the sub-measures under axis 2 are all related to one or more of these objectives, these evaluations will also include the measures. One of the assignments of the monitoring committee will be to follow up and monitor the results of the programme. Together with the yearly reports, half time and ex-post evaluations there will be good opportunities to follow-up, monitor and evaluated the environmental effects of the programme.

4.2.3 Concluding comment The ex ante evaluation has been assigned to independently assess the Swedish proposal for a rural development programme regarding the analysis of needs (SWOT), proposed strategy and objectives, consistence with Community guidelines and priorities and system for monitoring, evaluation and management. The purpose of the evaluation is to provide a constructive input into the programme planning and promote an optimal use of the total financial resources. The evaluator assessment is in short that the programme proposal is logical in respect of the identified needs and in line with the national strategy earlier presented. Further, the programme work is deemed to have been carried out in line with Community guidelines. However, the evaluator remarks that there are weaknesses in the analysis of the needs and the so-called market distortions that in the case of axis 1, 3 and 4 could motivate public intervention in the form of economic support of the kind supplied by the council regulation. The risk of displacement effects and distortion is therefore great. The insufficient analysis hampers the assessment of the possible results of the planned measures, concludes the evaluator. Measures within axis 2 are judged to be motivated by market failures, and may according to the environmental assessment of the programme have positive effects on the environment.

The ex ante evaluator discusses several important issues regarding the implementation of the programme Firstly, it is important to direct programme measures and financial resources to the areas that need it most and where they can be used efficiently, reflecting the objectives set out. On this basis, decisions have to be made at the more regional and local level, where information on enterprises and their markets are best known. In the implementation of the Swedish rural development programme, the regional and local influence on planning and implementation will therefore increase, especially in axes 1, 3 and 4. Regional implementation strategies will provide instruments for regional planning

and differentiation and will also ensure coordination with and demarcation against other policy areas.

An efficient implementation of the programme demands a strong focus on the monitoring of the activities and the results of the programme. The evaluator points out that the common system for monitoring and evaluation should be correctly applied. In line with this, the revised programme proposal has been further developed in terms of quantified objectives and indicators. In addition, supplemental national indicators may be needed in the monitoring and evaluation. In the implementation the managing authority in consultation with other authorities concerned on central and regional level (County Administrative Boards, the National Board of Forestry, the Sami parliament) will be responsible for the on-going monitoring of the programme in accordance with the established common framework. A part of this responsibility will be to ensure that sufficient data for the coming evaluation is collected already at the start of the programme.

To conclude, the analyses and the issues raised by the evaluator have been very useful in the programming process, partly as a general methodological support but also for the improvements in the design of the measures in the programme proposal.

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5 Description of the proposed measures

5.1 Ongoing contracts

Table 9 Disbursements chargeable to the European Agricultural Fund for Rural Development (EAFRD) for ongoing contracts awarded in the previous programme period

Measure Disbursements EU Total chargeable remaining financing to EAFRD, SEK after 06 10 15, share, per m SEK m cent Support for investment in agricultural 82.10 50 41.05 holdings Setting-up aid for young farmers 4.70 50 2.35 Skills acquisition (Action Area I) 104.00 50 52.00 Skills acquisition (Action Area II) 10.50 50 5.25 Compensatory payments for less 639.00 46 294.00 favoured areas Support for environmentally friendly 1 122.40 46 516.30 farming Investment aid for processing and 12.00 50 6.00 marketing of agricultural products Forestry support 0 46 0 Promoting adaptation and development 20.00 40 8.00 of rural areas (Priority Area I) Promoting adaptation and development 10.00 40 4.00 of rural areas (Priority Area II) Total 2 004.70 928.95 (€ 222,7) (€ 103,2)

Expenditure for ongoing contracts from the 2000–2006 programme period amounting to approximately SEK 925.95 million (€ 102,9 million) will be charged to the EAFRD. A full account of ongoing contracts and remaining disbursements for each measure after October 15 2006 is given in Annex 1.

5.1.1 Transitional rules

5.1.1.1 Support for investment in agricultural holdings On current estimates, the end of 2007 will make the relevant disbursements for the rural development programme 2000-2006. The terms and conditions set out in the earlier regulatory framework will therefore continue to apply.

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The managing authorities for both Objective 1 programmes have decided on a cut-off date 31 March 2007 for decisions concerning support in the Objective 1 programmes and the EAFRD development section. On current estimates, all disbursements for Objective 1 programmes can be made by 2008 at the latest and will thus only affect the development section for the 2000–2006 budget period.

5.1.1.2 Setting up of young farmers On current estimates, the end of 2006 will make the relevant disbursements for the rural development programme. The terms and conditions set out in the earlier framework will therefore continue to apply.

5.1.1.3 Skills acquisition in Action Area I (KULM) On current estimates for the rural development programme 2000-2006, the relevant disbursements will be made after 16 October 2006 and at the beginning of 2007. The terms and conditions set out in the earlier regulatory framework will therefore continue to apply. The managing authorities for both Objective 1 programmes have decided on a cut-off date 31 March 2007 for decisions concerning support in the Objective 1 programmes and the EAFRD development section. On current estimates, all disbursements for Objective 1 programmes can be made by 2008 at the latest and will thus only affect the development section for the 2000–2006 budget period.

5.1.1.4 Skills acquisition in Action Area II (K2) On current estimates for the rural development programme 2000-2006, the relevant disbursements will be made during 2007. The terms and conditions set out in the earlier regulatory framework will therefore continue to apply. The managing authorities for both Objective 1 programmes have decided on a cut-off date 31 March 2007 for decisions concerning support in the Objective 1 programmes and the EAFRD development section. On current estimates, all disbursements for Objective 1 programmes can be made by 2008 at the latest and will thus only affect the development section for the 2000–2006 budget period.

5.1.1.5 Compensatory payments for less favoured areas On current estimates for the rural development programme 2000-2006, the relevant disbursements will be made mainly in December 2006. Certain residual payments will be made in 2007. No transitional rules on compensatory payments will be applied. Beneficiaries with ongoing commitments are required to adhere to the terms and conditions applying from 2007.

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5.1.1.6 Support for environmentally friendly farming Article 21.2 of Commission Regulation (EC) No 817/2004 of 29 April laying down detailed rules for the application of Council Regulation (EC) No 1257/1999 on support for rural development from the European Agricultural Guidance and Guarantee Fund (EAGGF) (Official Journal L153, 30.4.2004, pp 30–83, Celex 3200R0817) can be applied where on-the-spot checks or other form of inspection have revealed a discrepancy between the data provided in the beneficiary’s application for support and the actual scope of the undertaking. In such cases, the scale of the undertaking can be brought into line with the findings of the inspection. On current estimates for the rural development programme 2000-2006, the bulk of the disbursements will have been made in 2010 at the latest, leaving a strictly limited amount to be charged to the EAFRD. The conditions embodied in the previous set of regulations will continue to apply to commitments approved in 2000–2006. Exceptions to this are the rules relating to good agricultural practice and cross-compliances respectively. The good agricultural practice principle must be respected in the case of commitments entered into before 2005. In the case of commitments entered into in 2005 and 2006, however, cross-compliances are to be observed. A clause to this effect has been included in the application forms for these years. Sweden will exercise the option of terminating ongoing commitments before time and carrying these over to new five-year commitments in accordance with the EU Commission Regulation59 so as to benefit from the environmental and administrative advantages offered under the new programme.

5.1.1.7 Investment aid for processing and marketing of agricultural products On current estimates for the rural development programme 2000-2006, the end of 2007 will make the relevant disbursements. The conditions set out in the previous regulatory framework will therefore continue to apply. The managing authorities for both Objective-1 Programmes have set a cut-off date 31 of March 2007for decisions on support in the Objective-1 Programmes and the EAFRD development section.. It is estimated that all disbursements for Objective 1 programmes can be made by 2008 at the latest and will therefore only affect the development section for the 2000–2006 budget period.

5.1.1.8 Forestry support All disbursements for forestry support during the 2000–2006 rural development programme period will have been made by 15 October 2006. The managing authorities for both Objective 1 programmes have decided on a cut-off date 31 March 2007 for decisions concerning support in the Objective 1 programmes and the EAFRD development section. On current estimates, all disbursements for Objective 1

59 The Commission regulation laying down rules for the transition to the rural development support provided for by Council Regulation (EC) 1698/2005. The Commission’s regulation is still pending.

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programmes can be made by 2008 at the latest and will thus only affect the development section for the 2000–2006 budget period.

5.1.1.9 Promoting the adaptation and development of rural areas

Priority Area I of the rural development programmes 2000-2006 It is estimated that the relevant disbursements will be made in 2007 and 2008. The conditions embodied in the previous set of regulations will continue to apply to commitments decided in 2000–2006.

Priority Area II of the rural development programme 2000-2006 On current estimates, the relevant disbursements will be made in 2007. The conditions embodied in the previous set of regulations will therefore continue to apply to commitments decided in 2000–2006.

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5.2 Requirements concerning all or several measures Detailed rules for all measures and operations in the programme will be laid down in a national ordinance and in managing authority regulations.

For a detailed comparison between the national legislation, the cross compliance conditions and the conditions set out for the agri-environment payments, see table in section 17.6 Annex 6.

5.2.1 Cross-compliances Under Article 51 of Council Regulation (EC) No 1698/200560, a recipient of any of the following forms of payment: - payments in naturally disadvantaged areas such as mountain areas or other areas presenting special difficulties - payments for environmentally friendly farming must comply with the requirements laid down in Articles 4 and 5 of Council Regulation (EC) No 1872/200361 and in Annexes III and IV to the same.

5.2.1.1 Statutory management requirements Statutory management requirements are set out in Article 4 of Council Regulation 1782/2003. Annex III lists items of community legislation in the following areas: public and animal health, plant protection, the environment and animal welfare. Article 4 also states that the provisions set out in Annex III shall apply within the framework of the Regulation in the version as amended from time to time and, in the case of Directives, as implemented by the Member States. This is also expressed in the Swedish ordinance on direct support62.

Provisions in force containing articles bearing on the statutory management requirements:

- Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds (Bird Directive). - Council directive 80/68/EEC of 17 December 1979 on the protection of groundwater against pollution caused by certain dangerous substances (OJ L120, 26.1.1980, area 15, vol. 2, p. 0211, Celex 31980L0068).

60 Concil regulation (EC) No 1698/2005 of the 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD). 61 Council regulation (EC) No 1782/2003 of establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulation (EEC) No 2019/93, (EC) No 1452/2001, (EC) No 1453/2001, (EC) No 1454/2001, (EC) 1868/94, (EC) No 1251/1999, (EC) No 1254/1999, (EC) No 1673/2000, (EEC) No 2358/71 and (EC) No2529/2001. 62 Ordinance (2004:760) on direct EC support for farmers, etc. (Förordning (2004:760) om EG:s direktstöd för jordbrukare, m m).

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- Council Directive 86/278/EEC of 12 June 1986 on the protection of the environment, and in particular of the soil, when sewage sludge is used in agriculture (Sludge Directive). - Council Directive 91/676/EEC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources (Nitrates Directive). - Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (Habitat Directive). - Council Directive 92/102/EEC of 27 November 1992 on the identification and registration of animals (OJ L355, 5.2.1992, area 3, volume 46, p. 0090, Celex 31992L0102). - Commission Regulation (EC) No 2629/97 of 29 December 1997 laying down detailed rules for the implementation of Council Regulation (EC) No 820/97 as regards ear tags, holding registers and passports in the framework of the system for the identification and registration of bovine animals, now replaced by Commission Regulation (EC) No 911/2004 implementing Regulation (EC) No 1760/2000 of the European Parliament and of the Council on the establishment of a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products (OJ L204, 11.8.2000, pp. 1–10, Celex 32000R1760). - Regulation (EC) No 1760/2000 of the European Parliament and of the Council of 17 July 2000 establishing a system for the identification and registration of bovine animals and regarding the labelling of beef and beef products, and repealing Council Regulation (EC) No 829/97. - Council Regulation (EC) No 21/2004 establishing a system for the identification and registration of ovine and caprine animals (OJ L5, 9.1.2004, pp. 8–17, Celex 32004R0021), and amending Regulation (EC) No 1782/2003 (OJ L270, 21.10.2003, pp. 1–69, Celex 3200R1872) and Directives 92/102/EEC and 64/432/EEC. - Council Directive 91/414/EEC of 15 July 1991 concerning the placing of plant protection products on the market (Plant Protection Directive). - Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of ß-agonists in livestock production (OJ L125, 23.5.1996, p. 3–9, Celex 31996L0022). (Hormone Directive). - Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety (OJ L31, 1.2.2002, pp. 1–24, Celex 32002R0178) (‘food law’). - Regulation (EC) No 999/2001 of the European Parliament and of the Council of 22 May 2001 laying down the rules for the prevention, control and eradication of certain transmissible spongiform encephalopaties (OJ L147, 31.5.2001, pp. 1–40, Celex 32001R0991). - Council Directive 85/511/EEC of 18 November 1985 introducing Community measures for the control of foot and mouth disease (OJ L315, 26.11.1985, area 3, volume 19, p. 0209, Celex 31985L0511).

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- Council Directive 92/119/EEC of 17 December 1992 introducing general Community measures for the control of certain animal diseases and specific measures relating to swine vesicular disease (OJ L62, 15.3.1993, area 3, volume 48, p.0213, Celex 31992L0119). - Council Directive 2000/75/EC of 17 November 2000 laying down specific provisions for the control and eradication of bluetongue (OJ L327, 22.12.2000, pp. 74–83, Celex 32000L0075). - Council Directive 91/629/EEC of 19 November 1991 laying down minimum standards for the protection of calves (Calf Directive). - Council Directive 91/630/EEC of 19 November 1991 laying down minimum standards for the protection of pigs (Pig Directive). - Council Directive 98/58/EC of 20 July 1998 concerning the protection of animals kept for farming purposes.

A number of requirements have been drawn up for each provision, bringing the relevant articles into line with Swedish conditions. Only the sections relating to agricultural activities constitute statutory management requirements. To be eligible for full support, the beneficiary must comply with all requirements pertaining to his/her agricultural activities. ‘Agricultural activity’ is defined in Article 2c of Council Regulation No 1782/2003 as “the production, rearing or growing of agricultural products including harvesting, milking, breeding animals and keeping animals for farming purposes, or maintaining land in good agricultural and environmental condition as established under Article 5”.

5.2.1.2 Good agricultural and environmental condition Article 5 of Council Regulation (EC) No 1782/2003 states that Members States shall ensure that all agricultural land, especially land which is no longer used for production purposes, is maintained in good agricultural and environmental condition. Member States shall define, at national or regional level, minimum requirements for good agricultural and environmental condition on the basis of the framework set up in Annex IV, taking into account the specific characteristics of the areas concerned, including soil and climatic conditions, existing farming systems, land use, crop rotation, farming practices and farm structures.

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Table 10 Framework for good agricultural and environmental condition set up in Annex IV, referred to in Article 5

Issue Standards Soil erosion – Minimum soil cover – Minimum land management reflecting Protect soil through appropriate measures site-specific conditions – Retain terraces Soil organic matter – Standards for crop rotations where applicable Maintain soil organic matter levels through – Arable stubble management appropriate practices Soil structure – Appropriate machinery use

Maintain soil structure through appropriate measures Minimum level of maintenance – Minimum livestock stocking rates and/or appropriate regimes Ensure a minimum level of maintenance – Protection of permanent pastures and avoid the deterioration of habitats – Retention of landscape features – Avoid the encroachment of unwanted vegetation on agricultural land

The defined minimum requirements for good agricultural and environmental condition – the so-called management requirements – differ for grazing land, mown meadowland and arable land respectively. In the case of grazing land and mown meadowland, the land must be grazed or mown and harvested. The land must be also be managed in such a way that encroachment of unwanted vegetation is prevented. In the case of arable land, there are two basic management requirements: fields must be kept clear of perennial scrub, bushes and trees and existing drainage systems maintained so that the ground does not become waterlogged. Some management requirements for land lying fallow vary according to the locality. The basic principle is that all arable land must be under a crop by 15 July at the latest in order to prevent nutrient leaching and un- necessary weed growth. This requirement does not, however, apply to land that has already been harvested and where the yearly crop has been ploughed under early, or where preparations for autumn sowing have previously started after 1 July.

5.2.2 Investment support That investment support can only be provided for easily identifiable, specific objectives follows automatically from the structure of the application procedure, which is described in section 5.3.3. Modernisation of agricultural holdings. With regard to investment support for primary producers and processing enterprises, these objectives are primarily increased profitability and enhanced competitiveness. Operations must also contribute to the realisation of national goals and priorities of relevance to the Rural Development Programme. The objectives are defined in greater detail by the goal

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indicators set up for each type of investment support. The most important criterion is the company’s development over the succeeding three-year period.

Benefiting the enterprises concerned in this way may be regarded as satisfying the structural and territorial needs embodied in the concepts of competitiveness and market adaptation. Sustainable development in agriculture may also be mentioned in this context.

Submission of business plans along with the general structure of the application may be seen as a guarantee that investments will fall within the scope of the Rural Develop- ment Programme’s regulatory framework. Prioritisation of measures will take place under the guidance of regional and local rural development strategies and in accordance with the quality of project and business plans.

Counties are required to specify in their implementation plans how they intend to achieve each objective with the support provided. They must also identify those areas in greatest need of support. Projects are then prioritised on the basis of the plans.

5.2.3 Criteria and administrative rules for avoiding double financing in Article 5.6 of Council Regulation (EC) No 1698/2005 The following section deals with criteria and administrative rules concerning exceptions referred to in Article 5.6 of Council Regulation (EC) No 1698/2005 and mentioned in Article 2.2. of Commission Regulation (EC) No 1974/2006.

The primary rule laid down in relevant EU regulations is that no support is payable for schemes eligible for support under common market organisations. Support, however, may be extended to recognise producer organisations in the common market organisation for fruit, berries and vegetables. Thus, according to the primary rule, although support for investment, skills acquisition and other measures can be applied for under common market organisations, farmers/enterprises are not eligible for support within the framework of the Rural Development Programme.

Owing to the geographical and economic conditions prevailing in Sweden, it is not always practicable for farmers/enterprises to combine and carry on activities in producer organisations. Exceptions to the rule are therefore considered necessary, primarily with regard to the application of investment support to agricultural holdings, carry-over aid and support for skills acquisition. Other types of support within the framework of the Rural Development Programme could also be considered. Such exceptions are necessary if support for enterprises in the sector is not to distort competition by placing enterprises, which are not members of a producer organisation at a disadvantage.

Freestanding enterprises must have access to support within the framework of the Rural Development Programme, including investment aid of the kind that can be supported by producer organisations. Enterprises, which are members of a producer

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organisation, may only be granted support for one investment not supported by the organisation.

To ensure that double community financing does not occur with respect to the measures in the fruit, berry and vegetable sector in the Rural Development Pro- gramme, the competent authority will apply the following verification procedures. See also figure 11.

The Intervention Division in the Board of Agriculture is responsible for matters relating to support for producer organisations under Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ L297, 21.11.1996, p. 1–28, Celex 31996R2200).

- The competent authority receives all applications for support. The supporting documents must show that the application relates to activities involving primary producers in the fruit, berry and vegetable sector and that the latter are members of a producer organisation. The competent authority sets aside any applications that could entail a risk of double financing. - In each case, a draft decision is sent to the Intervention Division before any such applications are selected and approved. To verify that the investment in question has not been granted support through a producer organisation, the Intervention Division conducts a verification check. - After the competent authority and the Intervention Division have completed their verification and eliminated any risk of double community financing, the delivery body duly grants support. - When the project has been implemented and the investment paid, the competent authority conducts administrative checks and field inspections in accordance with the relevant EU regulations. These verification procedures include checks to ensure that no double community financing takes place. Similar procedures are also followed in the case of projects receiving support under common market organisations.

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Figure 11 Chain of verification procedures adopted by the competent authority to eliminate risks of double community financing

Companies/organisations in the fruit, berry and vegetable sector

Applications

1. Competent authority 2. Intervention Division for the Rural Development Programme

3. Support granted 3. Support granted

Support paid to recipient

4. Checks conducted 4. Checks conducted within within the Rural the common market Development Programme organisations

5.2.4 Controls under Article 48.2 of Commission Regulation (EC) No 1974/2006

Under Article 48.2 of the above Regulation, the Commission is empowered to check the calculations on which approved measures are based. Responsibility for ensuring that the measures meet the requisite conditions lies with legally designated national authorities. Similarly, decision support data, calculations, etc. should be kept available for scrutiny by the authorities concerned.

One of the tasks of the Swedish Institute for Food and Agricultural Economics (SLI) as an independent ex ante evaluator is to act as a guarantor that all background calculations are properly performed. Statements relating to checks carried out in connection with the Rural Development Programme are given in Annex 4 to the ex ante evaluation. In the general summary of the statements it is recognized that the calculation of the support levels for each sub-measure is based on variable cost calculations. The evaluator has examined the calculations and considers them to be of a

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very solid character based on relevant sources and gives a verifiable reflection of the additional cost or income forgone.

Sources used for the calculations are mostly from the variable cost calculation database at the Agricultural University (Agriwise) or from official studies published by the Board of Agriculture, the Agricultural University, the Rural Economy and Agricultural Societies or other public authorities or organisations. In some cases an estimation from scientific expertises with particular knowledge in a specific field has been used as the source. The Agriwise database contains costs and time consumption of standard agricultural practices. The data collection is established by 200 associations of experts and organisations (source: www.agriwise.org).

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5.3 Axis 1 Improving competitiveness in the agricultural and forestry sector Measures under axis 1 are aimed at encouraging competitiveness among enterprises in the agricultural and forestry, reindeer herding and food production and processing sectors, on the basis of the sustainable use of natural resources. Development and competitiveness must be supported through the development of skills, know-how and learning, new technology and resource efficient methods, ICT and new product development. Business plans and national and regional priorities must form the basis of support. Efforts must be made to coordinate such measures with enterprise-promoting measures under axis 3. Regulations and conditions governing axis 1 measures must be transparent. Another requirement is the development of simple, user-friendly application procedures. As part of the task of restructuring and adapting to tougher competitive conditions, support must be made available for measures aimed at encouraging modern, efficient production units capable of responding to society’s and consumer demands for high-quality production, good work environments, sustainable use of natural resources including reduced environmental impact, ethical production methods and animal welfare. Meanwhile, the food processing industry must be encouraged to develop the technologies and innovative approaches that will enable it to add more value to its products. A suitable approach would be a combination of more traditional food processing methods, e.g. of local or regional origin or having special quality characteristics, with the development of new production facilities, technologies and infrastructure backed up by innovation and entrepreneurship, either within individual enterprises or in collaboration with others. Skills and knowledge development may be regarded as an important factor in strengthening competitiveness in this sector. Taken together, such measures should serve to boost the competitiveness of enterprises in rural areas and create conditions conducive to an active agricultural sector, even in less favoured areas, and thereby help promote the viability and vitality of the countryside. Synergies with other axes of the Rural Development Programme should be sought during programme implementation.

5.3.1 Skills acquisition, information and dissemination of knowledge The measure is based on Articles 21 and 24 of Council Regulation (EC) No 1698/2005 and Article 15 of Commission Regulation (EC) No 1974/2006.

Activity codes: 111 and 11463

63 The financial allocation for the measure Skills acquisition, information and dissemination of knowledge is merged under Training in chapter 7. It is estimated that approximately 10 per cent of the total public funding allocated towards the measure will concern activity code 114 and approximately 90 per cent for activity code 111. When it comes to monitoring, follow-up and evaluation, activities will be treated separately depending on which activity code they fall under (see also indicators below).

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Underlying considerations Ongoing change and development in the agricultural and forestry, reindeer herding and food sectors at national, EU and global level are placing increasing pressure on enterprises to adapt, be more flexible and adopt strategic approaches to competition, innovation and new ways of working, all against a background of growing demands for the sustainable use of natural resources. This calls for a stronger focus on forward- looking investment in people, knowledge and capital in the agricultural and forestry sectors, and for new ways of delivering synergies of benefit to the environment.

Support for the transfer of knowledge and expertise is needed if enterprises are to adapt to new conditions aimed at facilitating higher quality in the production of good and services, and strengthening their ability to develop and compete successfully. This is essential to the sustainable development of rural areas. Skills acquisition of entrepreneurs and knowledge building within enterprises play a vital role in achieving the objectives for axes 1 and 2. In the previous national Rural Development Programme, the emphasis in the context of skills acquisition measures was on the environment. Enterprises should continue linking their operations to ongoing environmental programmes and projects and seek to ensure that they contribute to the achievement of national environmental quality objectives. Emphasis should be placed on the development needs of the various target groups and on reaching new participants. A better environment and environmentally driven growth also generate new development opportunities and help boost competitiveness both in terms of products and of the countryside as a resource.

Research and development must play a fundamental role in the formation and implementation of rural development measures. Skills acquisition initiatives and activities involving advice and guidance for entrepreneurs and other stakeholders are in constant need of inputs from research work and research findings. This calls for coordinated structures. New forms of collaboration and new ideas can also lead to research projects, innovation and other activities which could facilitate access to the 7th EU Research Framework Programme. Innovation and entrepreneurship must be encouraged with a view to increasing the number of new business starts and revitalising rural industries.

Objective Increased know-how and skills in areas relating to production quality, the application of new knowledge and technologies, sustainable resource use and the development of profitable enterprise.

Description of the measure The measure comprises training, advice and dissemination of information which does not form part of normal agricultural and forestry-related education at secondary school level or higher. It also includes the dissemination of scientific knowledge, innovative methods and awareness raising activities. Activities need to be carried out at national as well as regional level and take national, regional and local rural development strategies as their point of departure.

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Support concerning individual guidance will be given directly to the person/the enterprise that is given the guidance. When support is granted for providing training, the final beneficiary is the provider, not the participant.

All initiatives must be based on the following principles: - Skills acquisition must as far as possible be customer-oriented, demand driven and target-based. Initiatives must be tailored to target group needs, both nationally and regionally, and implemented with a view to reaching new participants. - Entrepreneurs must be free to seek out suitable skills acquisition training schemes themselves and receive support for costs incurred through participation in training courses or equivalent activities. - Rules and financial frameworks must be designed for flexibility in implementation at national and regional level. - Skills acquisition linked to other axes is to be coordinated at the implementation stage in order to: − simplify procedures for target groups by providing a single point of contact for skills acquisition schemes, − facilitate coordination of activities, and − ensure uniform, cost-effective administrative procedures. Coordination with training/education within axis 3 will be achieved through regional implementation strategies (cf section 11.1) - The choice of training/education provider should increasingly be made with other contractors competing, thereby offering target groups a broader selection of options and greater freedom of choice.

Specific obligations Activities must include courses, advice to individuals, seminars, information activities, etc., primarily in the following areas:

Improvements to the environment and the landscape: skills acquisition with links to axis 2. The starting point for these measures from the environmental perspective are the common EU environmental quality objectives and their interim targets, as well as regional and local environmental objectives, animal welfare and other production qualities.

Areas of activity: - Advising farmers on the preservation of an open, vibrant agricultural landscape with its natural and cultural assets, environmental protection and the promotion of ecological production methods, the conservation of endangered livestock breeds, and animal health and welfare. - Encouraging improved knowledge about environmental technology. - Advising reindeer herders and others in the sector on how to meet requirements governing sustainable herding, Sami natural and cultural heritage assets, and animal health and welfare.

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- Advising forest holders and others active in the forestry sector on issues relating to sustainable forestry. - Advising farmers and others on preventing accidents at work and improved work environment.

Enterprise development aimed at encouraging the development of existing and new products and activities. Examples of activities: - Guidance and development measures aimed at a) strengthening producers in their role as entrepreneurs and b) enhancing knowledge and skills in areas such as business administration, marketing, product development and production methods, business intelligence, the work environment, hygiene, the environment, etc. - Increased use of ICT in business administration, marketing, knowledge transfer, funding applications, the Internet, etc.

Agricultural advice Advice to agricultural holdings in accordance with the provisions of Council Regu- lation (EC) No 1782/2003. The purpose of the farm advisory system is to help farmers become more aware of material flows and on-farm processes relating to environmental standards, food safety, occupational safety, animal health and welfare, without affecting their obligation and responsibility to observe these standards.

Research and development: Examples of activities: - The creation of arenas for the transfer of knowledge from research and development work. These must also serve as meeting places for the exchange of information among researchers, advisors and producers, and could form part of the national network to be set up under the Rural Development Programme. - Creation of a knowledge bank or web portal to ensure access to information on research and development work for advisors and private actors in the agricultural and forestry, reindeer herding and food production sectors. Promotion of research and development cooperation among higher education institutions, advisors and other stakeholders. - The financing of further education for advisors in new research findings and knowledge should be possible from within the Rural Development Programme.

Target group Persons active in the agricultural, horticultural, reindeer herding, food production and forestry sectors or in the processing of products from these sectors (annex I products or forestry products prior to industrial processing).

Amount of support and financing The share of support allocated to different types of initiative should be allowed to vary. For activity code 114 however the maximum support is 80 per cent of the eligible cost per advisory service and € 1 500 maximum eligible amount. Community co-financing of the measures is limited to 50 per cent of total eligible public expenditure.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of participants in activities per year Activity code 111 60 000 participants Activity code 114 (number of farmers supported) 600 farmers Activity code 114 (number of forest holders not relevant supported) Number of training days received per year Activity code 111 70 000 days Activity code 114 900 days Result Number of participants successfully completing a training activity per year Activity code 111 60 000 participants Activity code 114 600 participants Impact Increase in labour productivity, SEK/FTE Activity code 111 2 030 SEK/FTE (€ Activity code 114 225,6) 2 030 SEK/FTE (€ Increase in net value added, MSEK 225,6) Activity code 111 500 MSEK (M€ 55,6) Employment creation, per year Activity code 111 1 000 employment

Programme-specific indicators and quantified goals None

5.3.2 Setting up of young farmers The measure is based on Article 22 of Council Regulation (EC) No 1698/2005 and Article 13 of Commission Regulation (EC) No 1974/2006.

Activity code: 112

Underlying considerations A vigorous agricultural sector is crucial to the achievement of sustainable development in the countryside. The overall aim of setting-up aid is to promote long-term, profitable and competitive farming with good development prospects. Consideration should also be given to the development potential of reindeer herding. The measure can help achieve this aim by supporting young people who want to set up as first-time owners of an agricultural holding. In order to facilitate this, the setting-up time may for example need to be brought forward and necessary investments may have to be made. It may also mean that people who would not otherwise have started up an agricultural holding will now be setting up. Lack of access to loans and capital generally

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poses a greater obstacle to start-ups than to established enterprises. Setting-up aid can therefore be valuable as it facilitates the obtaining of bank loans. It can also serve to promote generation change in agriculture, including reindeer herding.

Objectives A rise in the relative number of young entrepreneurs in the agricultural sector. All farmers receiving setting-up aid will still be in operation three years after their establishment.

Description of the measure Support is payable in the form of a premium for young people who wish to set up as owners of an agricultural holding for the first time. Its purpose is to provide young farmers with a secure source of income in the establishment stage. Setting-up aid thus resembles other forms of start-up support in other sectors of society. To ensure maximum possible benefit, support should be granted as early as possible.

Priorities Priority should be given to prospective entrepreneurs who, on the basis of their business plan, are considered to have the best chance of achieving long-term profitability for their enterprise and contributing to greater sustainable compete- tiveness in the agricultural sector, priorities may also be made according to national objectives and priorities (cf section 3.2) as to the development of value-added food production in line with consumer demand, and integration of young people, women and people with foreign backgrounds. Regional and local (Leader) strategies may also serve as guidelines for priorities.

Target group Persons who are setting up as owners of an agricultural holding, including horticultural and reindeer herding enterprises, for the first time.

Amount of support and financing A maximum single premium of SEK 250 000 (€ 27 777,8) is payable. The premium is not payable until the applicant is regarded as established. Where the applicant is granted a period of grace to satisfy the Council Regulation condition that he/she possess adequate occupational skills and competence, half the premium shall be paid at the time the support decision is made and the remaining half when the condition has been met. Community co-financing of this measure is limited to 50 per cent of eligible public expenditure.

Conditions To be eligible for support, the applicant must be under 40 years of age. In addition, the following criteria must be met: - The applicant must own the holding. - The applicant must be responsible for the holding’s operations.

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- The applicant must be active in the holding. - To qualify as having relevant occupational skills applicants must have completed a basic education course at an agricultural college, an upper-secondary school specialising in natural resource utilisation programmes, or have acquired business management skills in agriculture or reindeer herding. Under the Commission Regulation, a period of grace not exceeding 36 months may be granted to allow the applicant to meet the occupational skills and competence standards laid down in the Council Regulation. All applications for support must be accompanied by a business plan. The plan must show that the newly started enterprise is economically sustainable and capable of long- term sustainable development. It must include a description and/or analysis of the enterprise’s current status, its business concept, objectives and strategies for its planned development, and a market analysis, including financing prospects. The plan shall be followed up not later than three years after the decision granting support has been taken.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of persons who have received support per year 160 persons Total volume of investment (at the time of 320 MSEK establishment), MSEK per year (M€ 35,6) Result Increase in gross value added in supported 15 MSEK (M€ holdings/enterprises, MSEK per year 1,7) Number of agricultural holdings started per year 160 holdings Impact Increase in labour productivity, SEK/FTE 405 SEK/FTE (€ 45) Increase in net value added, MSEK per year 60 MSEK (M€ 6,7) Employment creation, per year 130 employment

Programme-specific indicators and quantified goals None

5.3.3 Modernisation of agricultural holdings The measure is based on Article 26 of Council Regulation (EC) No 1698/2005 and Article 17 of Commission Regulation (EC) No 1974/2006.

Activity code: 121

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Underlying considerations Tougher competition combined with changed conditions in the agricultural sector resulting from agricultural policy reforms has increased the need for investments in agricultural holdings. Farm investment aid can facilitate conversion to sustainable and competitive production, in accordance with existing food and rural development policy goals. The measure is an important input for the holdings to speed up conversion of the production to meet new market conditions and demands. It may also give positive side-effects as it can be used as an instrument to boost biodiversity and sustainable use of natural resources, to promote animal welfare, environmentally friendly production and work safety and to develop a more differentiated production with clear added value in food quality, etc. Investment aid must be used to support ‘offensive’ investments in a holding, i.e. development of new or existing production in response to consumer demand and the requirements of the community. Agriculture, including reindeer herding and horticulture, along with the agricultural sciences, have a significant part to play in the transition to a sustainable society. Support for such investments in order to facilitate increased production of renewable energy in agriculture may be justified. The priority given to investment aid for improving the animal environment beyond the statutory standard is at least as high as in the 2000–2006 programme period (equivalent to at least SEK 70 million (€ 7,8 million) per year). Another reason for initiatives under the measure is the need for investment facilitating the type of animal husbandry required for the continued cultivation of valuable natural grazing land.

Objective Improvement in the relative profitability of agricultural holdings in terms of increased gross value added of the beneficiary’s holding. The objective for planting of energy crops is 30 000 hectares during the programme period.

Description of the measure The aim of investment aid is to speed up the transition to profitable, sustainable, environmentally sound agricultural and ecologically sustainable production, and to help bring about improvements in the agricultural holding’s general performance. This could, for example, involve support for efficiency enhancing measures in the holding, or developing the quality of its products, or other product attributes, with a view to improving its financial results. It could also involve support for investment in improved environmental practices and environmental technology, the work environment, hygiene and animal health and welfare, as a way of improving the holding’s competitiveness and profitability.

Support will thus be given to e.g. the following types of investments: - New technology, i.e. production and environmental technology, - Rational production facilities,

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- Production facilities contributing to long-term sustainable and competitive production with improvements in animal welfare, environment, hygiene or occupational safety, - As a separate activity investment support for the establishment of permanent energy crops for energy purposes on farmland incl. set-aside. For the planting of energy crops to qualify for support, permission must be obtained from the funding authority for the establishment of these crops on the land in question. In the case of Salix, the area planted must be at least 1.0 hectare of contiguous land. Poplar or hybrid aspen stands should cover at least a consecutive area of 0.1 hectares in order to qualify for support. A basic provision in this connection might for instance be that such a course should not have an unacceptable effect on the physical appearance of the countryside, on cultural heritage or on biodiversity. This implies as a prerequisite for the measure that the county board has to accept the planting of energy crops on the land in question and could prohibit the plantation if a negative environmental impact on the biodiversity will arise.

Priorities Priority should be given to holdings which, on the basis of their business plan, are regarded as having the best chance of achieving long-term profitability following an investment aid measure contributing to greater competitiveness in the sector as a whole. Attention must be focused on the holding’s overall development and investment aid measures must therefore be aimed at the project as a whole as opposed to a particular type of individual investment. This calls for an integrative approach to the entrepreneur and the holding’s development. Priorities should be made according to national objectives and priorities (cf. section 3.2), the territorial and structural disadvantages identified in regional and to local (Leader) strategies. Gender equality and integration of under-represented groups must also be observed in the implementation. The following examples constitute guidance to what kind of investments that will be given priority: - In areas with intensive production, priority will be given to investments promoting environmental performance, increased animal welfare, work environment, e.g. investments in better stables. - In areas where the conditions for agriculture are less favourable, such as LFA areas, investments in modern, more efficient and environmentally sustainable technology/facilities will be prioritised, aiming at preventing closures of farms in these areas and exploring synergies with grazing cattle and their contribution to an a maintained landscape, biodiversity and an attractive countryside. - Investments supporting a restructuring of agriculture, aiming at developing new (knowledge based) technology and new products based on renewable resources, e.g. biomass for energy purposes, improved energy efficiency in line with new climate demands, common biomass action plans, but also in order to develop new market opportunities for farmers.

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Target group Agricultural holdings, horticultural enterprises and reindeer herding enterprises that invests in primary production. Aid for investment in supplementary activities and for the development of other rural enterprises is provided under axis 3.

Amount of support and financing The aid intensity of the Fund will be 50 per cent of the total public support. Support is limited to a maximum of 30 per cent of the eligible investment. Subject to special assessment, a further maximum contribution of 20 percentage points may be granted to enterprises in less favoured areas of northern Sweden. Further restrictions may be imposed at national level. Support for plants and planting of permanent energy crops is payable up to a maximum of 40 per cent corresponding to this measure and a further 10 per cent in accordance with Council Regulation (EC) No 2012/200664 as national aid of the costs associated with establishing permanent crops for bio-mass production on set-side land (article 56.4) and as national aid of the costs associated with establishing permanent crops for areas which has been subject to an application for the aid for energy crops (article 90a) of eligible investments, however not exceeding a maximum of SEK 5000 (€ 555,6) per hectare.

Eligible costs Support may be extended for a) fixed and mobile installations, b) new machines or equipment, c) general overheads relating to a) and/or b) (for example fees for services by consultants, architects or engineers, implementation studies, patents, licences, etc.). d) plants and planting of permanent energy crops of the species of Salix, hybrid aspen and poplar. Replacement investments are not eligible for support. Support is not available for investment undertaken in order to comply with existing community standards having the force of law.

Conditions All applications for investment aid must be accompanied by a business plan. The plan must show that the holding is economically sustainable and capable of contributing to the sustainable use of natural resources. It must include a description and/or analysis of the enterprise's current status, its business concept, objectives and strategies for its planned development, a market analysis, including financing prospects, and the estimated impact of the investment on the environment, animal welfare, etc. where relevant. Relevant national rules about environmental concerns in agriculture with

64 Council Regulation (EC) No 2012/2006 of 19 December 2006 amending and correcting Regulation (EC) No 1782/2006 establishing common rules for direct support schemes under the common agricultural policy and establishing certain support schemes for farmers and amending Regulation (EC) No 1698/2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) /2003.

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regard to plant nutrients and animal welfare must be fulfilled. For applications concerning energy crops, a business plan is not compulsory. Investment may be made in any raw materials sector, i.e. no raw materials sector is to be excluded from the support scheme.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farm holdings that received investment 870 holdings support per year Total volume of investments, MSEK per year 1 940 MSEK (M€ 215,6) Result Increase in gross value added in supported holdings, 110 MSEK (M€ MSEK per year 12,2) Number of holdings/enterprises introducing new per cent products and/or new techniques, per cent 30 Contribution of the measure to climate change, 30 000 hectare hectare over the period Impact Increase in labour productivity, SEK/FTE 3 540 SEK/FTE (€ 393,3) Increase in net value added, MSEK per year 500 MSEK (M€ 55,6) Employment creation, per year 1 100 Contribution of the measure to climate change, employment hectare over the period, Ktonnes oil equivalent 152 000 Ktonnes

Programme-specific indicators and quantified goals None

5.3.4 Adding value to agricultural and forestry products The measure is based on Article 28 of Council Regulation (EC) No 1698/2005 and Article 19 of Commission Regulation (EC) No 1974/2006.

Activity code: 123

Underlying considerations The overarching purpose of the measure is to promote profitable further processing and development of agricultural and forestry products, and thereby help boost competitiveness, economic sustainability and entrepreneurship in the enterprise. Vertical integration, i.e. processing within the same enterprise that deals with the primary production, is one way for enterprises in the agricultural and forestry sector, including reindeer herding and horticulture, to achieve greater profitability by benefiting from the added value created. Further processing also lends itself to innovation thanks to

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newly emerging technologies and know-how. The measure shall also apply to local or regional small-scale, traditional processing of food and agricultural and forestry products offering special characteristics or qualities.

Objectives Improvement in the relative profitability of agricultural holdings.

Description of the measure Support is payable in the form of investment aid for further processing of food from agriculture and forestry including reindeer herding and horticulture. The following activities are eligible for support: - Further processing of agricultural and forestry products - Sale of processed agricultural and forestry products (excl. marketing) - Development of new products, processes and technologies.

Priorities Priority should be given to holdings which, on the basis of their business plan, are regarded as having the best chance of achieving long-term profitability following an investment aid measure and contributing to increased competitiveness and entrepreneurship in the sectors and the rural economy as a whole. Priorities should be made according to national objectives and priorities (cf. section 3.2) and territorial conditions and priorities identified in regional and local (Leader) strategies. Gender equality and integration of under-represented groups must also be observed in the implementation. The following examples constitute guidance to what kind of investments that will be given priority: - Investments supporting the development of new bio-based products based on new knowledge, technique or innovation, promoting an increased competitiveness within the agriculture and forestry sector contributing to the rural economy. Investments concerning the forestry sector may only include operations prior to industrial processing. - Investments projects concerning the development of local and regional food production and processing, often on a small-scale basis, incl. small-scale, local processing of forestry products (prior to industrial processing), will be given priority in certain regions. In some regions, focus will be on developing local and regional food as a part of tourism activities. - Investments supporting the supply on the market of food products with added value, e.g. the processing of certified organic food products, products from animals grazing semi-natural pastures in the region, etc.

Target group Enterprises that process agricultural and forestry products, including products from the reindeer herding and horticultural sector. The eligibility is limited to processing of annex 1 goods and forestry products prior to industrial processing resulting in annex 1 or non-annex 1 goods and forestry products.. Support is only granted for micro

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enterprises and small and medium-size enterprises. In the forestry sector, support is payable to micro enterprises only.

Amount of support and financing Support is limited to a maximum of 30 per cent of the eligible investment. Subject to special assessment, a further maximum contribution of 10 percentage points may be granted to enterprises in sparsely populated areas of northern Sweden. Further restrictions may be imposed at national level. The aid intensity of the Fund will be 50 per cent of the total public support.

Eligible costs Support may be extended for a) fixed and mobile installations, such as mobile units, b) new machines or equipment, c) general overheads relating to a) and/or b) (for example fees for services by consultants, architects or engineers, implementation studies, patents, licences, etc.). Support is not payable for investment undertaken in order to comply with existing community standards having the force of law.

Conditions All applications for support shall be accompanied by a business plan. The plan must show that the enterprise is economically sustainable and capable of long-term sustainable development. It must include a description and/or analysis of the enterprise's current status, its business concept, objectives and strategies for its planned development, and a market analysis, including financing prospects.

Investments undertaken may concern raw materials sectors of any type, i.e. no raw materials sector will be excluded from support. First priority is to be given to raw materials coming from EU countries. Under the terms of the Council Regulation, incoming raw materials (except fishery products) must be covered by the provisions set out in Annex 1 of the Treaty of Amsterdam, or constitute forestry products.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of enterprises supported per year 100 Total volume of investments, MSEK per year enterprices 560 MSEK (M€ 62,2) Result Number of holdings/enterprises introducing new 30 holdings products and/or new techniques, per cent Increase in gross value added in supported 25 MSEK holdings/enterprises, MSEK per year (M€2,8) Impact Increase in labour productivity, SEK/FTE 710 SEK/FTE (€ 78,9) Increase in net value added, MSEK per year 80 MSEK (M€ 8,9) Employment creation, per year 220 employment

Programme-specific indicators and quantified goals None

5.3.5 Support for cooperation for the development of new products, processes and technologies in the agricultural and food sector and in the forestry sector The measure is based on Article 29 of Council Regulation (EC) No 1698/2005 and Article 20 of Commission Regulation (EC) No 1974/2006.

Activity code: 124

Underlying considerations The aim is to increase the number of competitive enterprises in land-based industries by encouraging enterprises in the agricultural, food, reindeer herding, forestry and horticultural sectors to cooperate on innovative development of new products (goods and services), processes and technologies that will simultaneously enhance their long- term sustainability in economic and general terms. In general, cooperation may be of particular importance to enterprises in rural areas as these are often more isolated. Small enterprises may be greatly in need of broader and more effective cooperation with other companies as this could help them raise the added value of their products. Cooperation with external actors such as research institutions can stimulate innovation and entrepreneurship to the benefit of product development in the sector.

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Objective Improved competitiveness among enterprises in the land-based industry resulting from cooperation aimed at developing new products (goods and services), processes and technologies, or restructuring their existing operations.

Description of the measure The measure focuses on the benefits accruing from cooperation among actors for example enterprises, research institutions and organisations for the promotion of trade and industry in the value chain. Projects should be customer-driven, i.e. driven by rising short- and, more importantly, long-term demand. This will create favourable conditions for more and growing enterprises all along the value chain.

Examples of cooperation projects: - Projects where one or more producers join forces with processing enterprises, business promotion actors or research institutions to develop a new product, process or method. - The creation of enterprise networks aimed at improving information access and promoting knowledge transfer, skills acquisition or the exploitation of new development possibilities. Closer cooperation involving primary producers, processing enterprises, catering establishments and restaurants, the research community, etc. can serve as a node, where enterprises can find suitable customers and/or cooperation partners. Cooperation can also involve developing sales and distribution channels, e.g. with restaurant and catering personnel, consumers, representatives of consumer organisations, or with market development projects targeting different links in the processing chain, e.g. locally/regionally produced food. Cooperation between enterprises and higher education institutions on the development of new products, technologies or innovations. Cooperation can also serve as a basis for further applications for research funding from the 7th EU Framework Programme for Research, Technological Development and Demonstration. - Support to networks for participation at national and/or international trade fairs with a view to marketing products to potential customers.

Priorities Priority will be assigned on the basis of a duly submitted project plan for cooperation and an assessment of the extent to which the initiative will help boost competitiveness and development in the sector in line with; national objectives and priorities (cf. 3.2) priority will be given cooperation with clear innovative direction as to the development of products, technique, method, forms of cooperation. Cooperation including new actors should be prioritised, e.g. cooperation with universities and research institutions.

Target group Cooperation involving agricultural and forestry holdings including reindeer herding enterprises, enterprises that process agricultural and forestry products, industrial

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research institutes, higher education institutions, organisations for the promotion of trade and industry, etc.

Amount of support and financing Support shall help cover costs incurred in connection with cooperation initiatives. Support is payable for up to 60 per cent of costs incurred. Community co-financing of this measure is limited to 50 per cent of total eligible public expenditure.

Eligible costs Applicants may be compensated for external services and for the development of a product, process or technology creating business advantage. Examples include consultancy services, training initiatives and fixed-term employment contracts. Support may also be granted to defray development costs involving prototypes, patents and patent applications or marketing activities.

No support is provided for own work (or materials), i.e. for work undertaken by the holdings’/enterprises’ own employees or for indirect costs such as overheads. If an actor has been engaged to undertake the administrative implementation of a cooperation initiative due to lack of capacity for such a task among any of the enterprises in the network, financial support may be granted. However, no support is payable for the preparation of an application or requisitions by an external actor.

Conditions The cooperation project must involve at least two holdings/enterprises, one of which must always be a primary producer.

Only one holding/enterprise may act as applicant. The beneficiary is financially responsible for the project and for all contact with the funding authority.

The holdings/enterprises are required to draw up a cooperation agreement confirming the project and all internal financial transactions. Applications must be accompanied by a project plan containing details of the background to the initiative, its aims and objectives, the holdings/enterprises and other actors in the network, the organisation of the project, planned activities, a project timetable and a budget.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of cooperation initiatives supported per year 40 initiatives Total volume of investment, MSEK per year 90 MSEK (M€ 10) Result Number of holdings/enterprises introducing new 50 holdings products and/or new techniques, per cent Increase in gross value added in supported 15 MSEK (M€ holdings/enterprises, MSEK per year 1,7) Impact Increase in labour productivity, SEK/FTE 305 SEK/FTE (€ 33,9) Increase in net value added, MSEK per year 40 MSEK (M€ 4,4) Employment creation, per year 95 employment

Programme-specific indicators and quantified goals None

5.3.6 Infrastructure of importance to the development and adaptation of agriculture and forestry The measure is based on Article 30 of Council Regulation (EC) No 1698/2005.

Activity code: 125

Underlying considerations A well-functioning infrastructure is fundamental to a competitive agricultural and forestry sector. In this context, infrastructure includes roads, energy supply, water management, telecommunications and rational ownership structures. It also refers to other overarching measures designed to promote the structural conditions conducive to sustainable development in agriculture and forestry.

Efficient management of local infrastructure is not only vital to competitiveness in agriculture and forestry but also to the successful cultivation and preservation of remote areas which are often of great value in terms of biological conservation. The local infrastructure so essential to the agriculture and forestry sector is also crucial to other groups who live in the countryside, and to other commercial operations such tourism and activities relating to visitors. Any development of local infrastructure for agricultural and forestry needs must take account of the goals and priorities of the community as a whole.

The setting up of cooperative societies or community associations is one way of meeting the urgent need for cooperation when it comes to managing important

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infrastructure in rural areas. An example of local infrastructure often managed by community associations is small private roads. Such bodies need knowledgeable, active executive committees to ensure efficient management. Major rebuilding or maintenance work may require new functions, procedures or more extensive planning, involving costs beyond the resources of small associations – or landowners where no association exists. Closer cooperation in the planning stages between the landowners involved should therefore be promoted.

A secure, safe energy supply is important to agricultural holdings, particularly for farms where livestock is kept. Increased local energy production is an important part of any effort to ensure a secure energy supply.

In some parts of the country, improved consolidation of agricultural and forest land can contribute to more efficient production and thereby boost competitiveness within the sector.

Objective A well-functioning local infrastructure that strengthens agriculture and forestry and enhances the competitiveness of rural areas.

Description of the measure Support may be granted to finance cooperative small-scale solutions on a local basis involving farm and forest owners, other owners and people living in rural areas. Project support is payable for projects clearly intended to strengthen local infrastructure of significance for economic competitiveness and sustainable development in the agricultural and forestry sector. Compensationis conditional on submission of a project plan. This must set out objectives and include a description of the project, a timetable and a financing plan. A further condition is that the proposed measures do not conflict with existing environmental quality objectives. Yet a further condition of support for small-scale local infrastructure designed to promote sustainable development in the forestry and agricultural sector is absence of opportunities for development on the basis of commercial initiatives or public commitments at national or municipal level.

Examples of costs eligible for support: - Costs relating to procedures involved in the establishment of new local associations for the building or maintenance of private roads, and for planning work in connection with major rebuilding or upgrading of such roads. - Costs incurred in connection with the planning of local energy production facilities. - Costs arising in connection with the preparation of land consolidation plans.

Target group Landowners, agricultural holdings and forestry enterprises (micro enterprises), and organisations and associations of the above, cooperative societies and community associations.

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Amount of support and financing Support may be granted to cover 50 per cent of eligible costs. Community co- financing of this measure is limited to 50 per cent of total eligible public expenditure.

Eligible costs Support is only payable for the purchase of planning, project planning and training services.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of operations supported per year 300 operations Total volume of investment, MSEK per year 60 MSEK (M€ 6,7) Result Increase in gross value added in supported 7 MSEK (M€ holdings/enterprises, MSEK per year 0,8) Impact Increase in labour productivity, SEK/FTE 304 SEK/FTE (€ 33,8) Increase in net value added, MSEK per year 35 MSEK (M€ 3,9) Employment creation, per year 50 employment

Programme-specific indicators and quantified goals None

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5.4 Axis 2 Improving the environment and the landscape

5.4.1 Natural handicap payments in mountain areas or other areas presenting special difficulties

The measure is based on Article 37 of Council Regulation (EC) No 1698/2005.

Action codes: 211 and 212

Underlying considerations The purpose of the measure is to strengthen regional economies and promote an open, varied agricultural landscape.

Agriculture and forestry are important to regional economies in the country’s less favoured areas where alternative forms of employment are normally lacking. Forests and high mountain terrain dominate the landscape in the north of Sweden, and arable land accounts for only a small percentage of the total area. Forest is the predominant land cover in central Sweden. Cultivated land contains areas of great value in terms of biological assets. Taking arable land out of cultivation or afforestation of such land thus involves a potential threat to the cultural environment and could lead to a reduction in biodiversity. An open, varied landscape is vital if the countryside in these areas is to be attractive to residents, for outdoor activities and for tourism.

Areas identified as mountain areas and less favoured areas are divided into support areas (LFA areas) code-labelled 1–5b or F. Natural conditions for agricultural production in these areas are less favourable than in other parts of the country. The harsh climate and short growing season in northern Sweden mean lower incomes and higher costs for farmers. Low population density and long distances to main population centres with a range of services are further hindrances to development in rural areas in the north. Some regions of central and southern Sweden, mainly forested areas, have a more pronounced inland climate than coastal areas. Here, too, the growing season is shorter and harvest yields are lower. These regions are also sparsely populated. However, distances to the nearest population centres are usually considerably shorter than in northern Sweden, which makes employment outside agriculture and forestry easier to find. Farming thus contributes to the preservation of a vital rural environment and the promotion of an open, living agricultural landscape. The latter is of major importance in these areas, where farmland is in real danger of becoming overgrown if taken out of production.

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Objective The objective of the payment is an incorporation of 530 000 hectares distributed as follows: Approximately 20 200 holdings are expected to apply for payments.

Areas eligible for grants 1–3 and F 190 000 hectares 4, 5a and 5b 340 000 hectares Total 530 000 hectares

Description Natural handicap payments are restricted primarily to agricultural areas used for ley on arable land and pasture to eligible holdings in the support areas. The preservation of livestock farming is central to efforts to achieve the objectives for this measure. The payment is granted per hectare. In support areas 1–3, 4a and F, payment is also granted for grain cultivation, and for the cultivation of potatoes in areas 1–3 and F.

The minimum livestock density (expressed as the number of livestock units needed to keep one hectare open) adjusted for regional conditions, is:

Northern Sweden areas 1–3 and F 1.0 Forested areas area 4 1.1 Forested areas area 5 1.3

The maximum livestock density is restricted through maximum amount of farmyard manure per hectare, which corresponds to 22 kilogram phosphorus per hectare and year. These provisions serve to restrict the number of livestock units per hectare that may be kept on a holding.

Under Council Regulation (EC) No. 1782/2003, no payment is granted for cross- compliances.

Eligible areas Support areas 1–3 and F refer to the whole of Norrland and parts of northern Svealand. Support areas 4–5 refer to the forested areas of Götaland and Svealand.

The geographical area for which support is payable is shown on the maps in the Annex. Existing boundaries delimiting the areas eligible for support will be retained.

Target group Farmers with a minimum of 3 hectares of agricultural land under cultivation within the supported areas.

Farmers applying for payment for ley on arable land and pasture land must keep a corresponding number of livestock, expressed in livestock units. Approved animals are beef cattle, ewes and goats.

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Payment Payment for grain cultivation is granted in support areas 1–3, 4a and F. Payment for potato production is granted in areas 1–3 and F. Payment for ley on arable land and pasture land is granted in areas 1–5b and F. The level of payment varies according to the severity of economic handicaps related to natural conditions in the area concerned.

1. Grain cultivation The rate of payment is SEK 1 000 (€ 111,1) per hectare for 90 hectares or less in areas F, 1–3, and at SEK 500 (€ 55,6) per hectare in area 4. For areas over 90 hectares, the rate is halved, i.e. SEK 500 (€ 55,6) and SEK 250 (€ 27,8) per hectare respectively.

2. Potato cultivation The rate of payment is SEK 1 750 (€ 194,4) per hectare for 90 hectares or less. For areas over 90 hectares, the rate is halved, i.e. SEK 875 (€ 97,2) per hectare.

3. Ley on arable land and pasture land The rate of payment for different support areas is shown below (SEK/hectare). The indicative rate in euros is shown in brackets.

Support area 0–90 hectares >90 hectares

F and 1 2 550 (€ 283,3) 1 275 (€ 141,7) 2 and 3 1 950 (€ 216,7) 975 (€ 108,3) 4a 1 950 (€ 216,7) 975 (€ 108,3) 4b 950 (€ 105,6) 475 (€ 52,8) 5a 1 350 (€ 150) 675 (€ 75) 5b 760 (€ 84,4) 380 (€ 42,2)

In line with what is stated in article 93.1 of the Regulation 1698/2005 the maximum amount per hectare according to the Annex for LFA payment will be applied from 2010. It is not foreseen that the maximum levels of payments will be exceeded. However before decision on payment a calculus on the average payment in the different regions will be made. If the average goes beyond the maximum payment level there will be a percentage cut made for all beneficiaries in the region.

Method of calculation and underlying assumptions Payment is based on economic inequalities due to natural handicaps. These inequalities are calculated using a weighted average for different branches of production in a reference area in central Sweden and correspond to the average value for each of the less favoured areas. A differentiation has been made on the basis of the degree of severity of the handicap. National support for areas 1–3 and F in northern Sweden and the payment for extensive ley management (5.4.3.11) are included in the calculation.

The level of payment for grain and potato cultivation are based on an estimate of the higher cost of producing these crops in support areas 1–3, 4a and F compared with plain areas, where production costs are lower.

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Financing - National public financing: 53.3 per cent - EU financing: 46.7 per cent

Ongoing contracts See section 5.1.1.5: Compensatory payments for less favoured areas and Annex 1, 17.1.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of agricultural holdings in mountain areas with 6 500 holdings natural handicaps supported Number of agricultural holdings in other areas with 13 700 natural handicaps supported holdings Number of hectares of arable land in mountain areas with natural handicaps supported 190 000 Number of hectares of arable land in other areas with hectares natural handicaps supported 340 000 hectares Result Number of hectares successfully farmed/managed (the 530 000 land is neither overgrown nor abandoned). hectares Number of hectares successfully farmed so that the 80 000 natural- and cultural values are preserved hectares Number of hectares promoting improved water quality Effects of the leakage, not the balance

Number of hectares that promotes improved soil 0 hectares quality 0 Ktonnes The contribution to combat climate changes Impact Extent to which the measure has contributed to 5 per cent preserve the biodiversity, percentage change in farmland bird index Extent to which the measure has contributed to 60 per cent preserve high nature-value farmland, percentage change of HNVF in the LFA:s

Programme-specific indicators and quantified goals None

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5.4.2 Natura 2000 support and support linked to Directive 2000/60/EC Actions that contribute to the preservation of Natura 2000 areas and the implementation of Directive 2000/60/EC are described in section 5.4.3 Payment for Environmentally friendly farming. Thus payments for initiatives listed under section 5.4.3 are also available in Natura 2000 areas.

5.4.3 Payments for environmentally friendly farming

5.4.3.1 Swedish environmental legislation: Description of national provisions concerning certain areas eligible for agri-environmental payment The Swedish Environmental Code (SFS 1998:808) incorporates the main provisions of Swedish environmental legislation. The Code is supplemented by ordinances and regulations issued by the Government and its agencies. Agri-environmental standards are an integral part of this coordinating legislation. A general principle is that exceptions may be made if there are special grounds for doing so.

Regulations concerning grazing land, mown meadowland and natural and cultural assets in the agricultural landscape Three sets of regulations apply to grazing land, mown meadowland and natural and cultural assets in the agricultural landscape. These are the Environmental Code provisions on protected biotope zones, respect for the environmental in agriculture, and the provisions on ancient monuments in the Cultural Heritage Act (1988:950).

Protected biotope zones Under Chapter 7 Section 11 of the Swedish Environmental Code, small areas of water or land that serve as habitats for endangered flora and fauna or which are otherwise especially worth protecting may be declared Protected Biotope Zones by the Govern- ment or a county administrative board. Such decisions may apply to individual areas or to all areas of a particular type in the country or in a certain party of the country. Examples include country avenues, springs, stone mounds/cairns, willow hedgerows, non-arable outcrops, ponds, wetlands and stone walls. Under the Site Protection Ordinance (1998:1252), county administrative boards can declare an individual semi- natural grazing land, mown meadow or fertile or lime-rich fen on arable land a protected biotope zone. Actions that are typically prohibited in a protected biotope zone include the removal of valuable cultural features or the destruction of biological assets through the spreading of mineral fertiliser, large quantities of manure or chemical weed killers.

Consideration for national and cultural assets Under the provisions of the relevant ordinance (1998:915), farmers must notify the county administrative board at least eight months in advance before taking arable land out of production. Under the Regulations on Consideration for Natural and Cultural Values in Agriculture (1919:119) issued by the Swedish Board of Agriculture, any agricultural measures or practices likely to damage biological or cultural heritage assets

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is prohibited. Examples include the removal of culturally significant landscape features, the removal of old trees whose foliage may be used for fodder, the destruction of biological or cultural heritage assets by spreading commercial fertiliser or farmyard manure, or dumping stones, gravel or refuse on farm or forest land.

Ban on cutting vegetation on set-aside land In order to protect birdlife in farming areas, the Regulations on Consideration for Natural and Cultural Values in Agriculture contain provisions prohibiting the cutting of vegetation on set-aside land between 1 March and 30 June. In certain cases, however, cutting is permitted, e.g. after 15 June in some counties during autumn sowing of oleaginous crops; and all year round where the set-aside is located near fields with seed-producing crops, and where ecological farming methods are used.

Ancient monuments Culturally significant landscape features include ancient monuments or remnants thereof. In such instances, the Act concerning Ancient Monuments and Finds (1998:950) is applicable in individual cases. Under the Act, it is forbidden to change or damage an ancient monument in any way without authorisation.

The Reindeer Husbandry Act The Reindeer Husbandry Act (1971:437) ban destruction of some valuable traces of traditional reindeer husbandry. The rules of such environmental considerations apply for features like traditional reindeer pens originally used summertime for milking and for shelter from predators, enclosures of logs or stones, fences used for forcing the herds to sorting enclosures, dwellings, old trees with traces from traditional Sami life and reindeer husbandry etc.

Notification of intent to take arable land out of production Under Section 3 of the Ordinance on Environmental Concerns in Agriculture (1998:915), arable land may not be taken out of production until 8 months after notification has been made to the relevant county administrative board, unless otherwise authorised by the board. Notification is not required if the action is of minor importance to the farm’s operations or will have a negligible impact on the natural and cultural environment. Nor is it required in cases where the land will be used for specifically authorised purposes.

Notification and licensing of certain activities

Notification and licensing of large-scale operations involving livestock Under the Ordinance on Environmentally Hazardous Activities and Public Health Protection (1998:899), holdings with more than a certain number of livestock units are required to apply to the county administrative board for a licence. The licence requirement applies if the holding’s installations have more than 40 000 places for poultry, 2 000 places for production pigs (over 30 kilogram), 750 places for sows, or more than 200 livestock units (reindeer excepted) if the holding keeps other types of livestock.

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The Ordinance also stipulates that holdings with places for 100–200 livestock units must be registered with the municipality.

The term livestock unit is defined in the Annex to the Ordinance. To give an example here, however, one dairy cow is equivalent to one livestock unit. If there is no definition, one livestock unit is equivalent to the number of animals needed to produce either 100 kilogram of nitrogen or 13 kilogram of phosphorus per year in fresh faecal material and urine, whichever yields the smallest number of animals per livestock unit is applied.

Greenhouse cultivation Under the Ordinance on Environmentally Hazardous Activities and Public Health Protection (1998:899), commercial greenhouse cultivation must be registered with the municipality if the total area of cultivation is greater than 5 000 sq. m.

Provisions governing water operations Provisions governing water operations and water structures are set out in Chapter 11 of the Environmental Code (SFS 1998:808), the Water Operations Ordinance (SFS 1998:1388) and the Act Containing Special Provisions concerning Water Operations (SFS 1998:812).

The term ‘water operations’ refers among other things to the construction, alteration, repair and removal of dams or other water structures in water areas, the removal of water from or digging, blasting and cleansing in water areas, as well as other measures in water areas whose purpose is to change the depth or position of the water. The creation of wetlands, dam construction or laying underground drainage pipes on farmland thus come under the heading of water operations.

Under Section 9, Chapter 11 of the Environmental Code, a permit must be obtained for water operations. The environmental courts except in the case of land drainage, where the county administrative boards consider applications, assess permit applications. Land drainage is subject to a general ban in many parts of southern Sweden. Persons wishing to carry out such an operation must have a permit. Where a general ban is in force, they must be granted an exemption from the ban by the county administrative board.

If it is evident that neither public nor private interests will be harmed by the operator’s action in terms of its effect on water conditions no permit is required except in the case of land drainage. ‘Effect on water conditions’ refers not only to the depth and position of the water but also to its effect on the quality of the water, including muddying caused by digging operations and lowering of the water table by water abstraction. The operator has the responsibility to show that the exemption rule applies, and the burden of proof is high. It must be clearly established that no harm will be done. No permit is required for cleansing operations or for the purpose of maintaining the depth or position of the water or for land drainage.

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Under regulations currently in preparation, notification of water operations must be made to the country administrative board. A water operation requiring notification may not commence until 8 weeks after due notification has been made, unless otherwise provided by the supervising authority.

5.4.3.2 National minimum standards and other relevant national provisions concerning the use of fertilisers and plant protection products

Provisions for fertilisers

Limits on amounts of farmyard manure and other organic fertilisers that may be applied The Swedish parliament and the Government have tasked the Swedish Board of Agri- culture with drawing up regulations on the precautions to be observed when applying fertilisers. These will include provisions specifying the maximum permitted amounts of farmyard manure and other organic fertilisers that may be applied on a given holding. Sections 8–21 of the Regulations on Environmental Concerns in Agriculture with Regard to Plant Nutrients issued by the Swedish Board of Agriculture specify the amounts of farmyard manure that may be applied. The new regulations will also set limits on the application of other types of organic fertiliser. For further information see the Annex to the above Regulations.

Precautions to be observed when handling fertilisers, including storage capacity requirements Special requirements must be met in sensitive areas as defined in Council Directive 91/676/EEC of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural sources. The Ordinance on Environ- mental Concerns in Agriculture (1998:915) lists the following sensitive areas: - The counties of Blekinge, Skåne, Halland and Gotland, coastal areas in the counties of Stockholm, Södermanland, Östergötland, Kalmar, Västra Götaland and Öland, and - Other parts of the county of Stockholm and parts of the counties of Uppsala, Södermanland, Östergötland, Västra Götaland, Örebro and Västmanland.

In the areas listed under paragraph 1 above, holdings with more than 10 livestock units are required to maintain suitable storage capacity equivalent to at least 8 months’ production of farmyard manure, where livestock production involves beef cattle, horses, sheep or goats; and at least 10 months where livestock production involves other animals. These provisions also apply to holdings with more than 100 livestock units located in other parts of the country. Holdings in areas under 1 above with fewer than 10 but more than 2 livestock units are required to have suitable storage capacity equivalent to 6 months’ production of farmyard manure. Holdings in areas under 2 above with more than 10 but fewer than 100 livestock units are required to have storage capacity equivalent to at least 6 months' production of farmyard manure. As of 1 July 2007, these holdings in areas under 2 will be required to have storage capacity equivalent to 10 months' production of farmyard manure in cases of livestock production not involving beef cattle, horses, sheep or goats. The corresponding requirement is applied to holdings in the rest of the country as of 1 July 2013. As of 1 July 2007,

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holdings in the sensitive areas listed under 2 above with fewer than 10 but more than 2 livestock units will be required to have storage capacity equivalent to at least 6 months’ production of farmyard manure. The ordinance contains special provisions governing the design and construction of storage facilities for farmyard manure. These must be constructed so as to prevent run-off or leakage of their contents into the surrounding environment. In holdings with more than 10 livestock units in the counties of Stockholm, Uppsala, Södermanland, Östergötland, Jönköping, Kronoberg, Kalmar, Gotland, Blekinge, Skåne, Halland and Västra Götaland, and flatter, low-lying areas of the counties of Värmland, Örebro and Västmanland, liquid manure and urine tanks must additionally be protected by a stable floating crust or other covering which effectively reduces ammonia loss. Tanks must be replenished with covers in place.

Precautions to be observed when applying fertiliser Provisions governing the application of farmyard manure and other fertilisers are set out in Sections 22–28 of the Regulations on Environmental Concerns in Agriculture with Regard to Plant Nutrients (SJVFS 2004:62). For further information see the Annex to the above Regulations.

Regulations governing the share of autumn or winter-planted land A minimum of 60 per cent of the arable land belonging to holdings in the counties of Blekinge, Skåne and Halland with more than 5 hectares of arable land must be autumn or winter-planted. The corresponding minimum figure for the counties of Öster- götland, Jönköping, Kronoberg, Kalmar, Gotland and Västra Götaland is 50 per cent. For further information see the Annex to the above Regulations.

Concern for natural and cultural heritage assets on applying fertilisers The Regulations on Concern for Natural and Cultural Heritage Assets in the Agri- cultural Landscape (1999:119) issued by the Swedish Board of Agriculture stipulate that the spreading of mineral fertilisers, farmyard manure, sludge or other organic waste is to be confined within field or pasture boundaries. In addition, mineral fertilisers, farmyard manure, sludge or other organic waste may not be spread on meadow or grazing land if there is a risk of damaging natural or cultural heritage assets.

Provisions governing plant protection products

Precautions to be observed when applying plant protection products Provisions concerning precautions to be observed when applying plant protection products are set out in the Regulations on the Application of Chemical Plant Protection Products (1997:2).

Plant protection products may only be used professionally if the product is approved for the purpose intended or is exempt from this requirement under Section 4 and 5 of the Plant Protection Product Ordinance (2006:1010).Anyone who uses plant protection products must ensure that these can be applied without risking contamination of the water table. Protection zones must be defined and observed whenever plant protection products are applied or otherwise handled. Safety distances

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are to be defined in accordance with prevailing conditions with regard to the need to protect water catchments, lakes, watercourses, the surrounding landscape and property. Spraying equipment must be appropriate, properly maintained and calibrated. Operators of towed or motor-driven sprayers must be equipped with suitable instruments/devices for determining appropriate, wind-adjusted safety distances, temperatures, wind direction and wind speed. Anyone who applies Class 1 or Class 2 plant production products is required under Section 20 of the Plant Protection Product Ordinance to keep a record of each such application. The ban on the application of plant protection products without a permit applies inter alia to water protection areas. In the event of an accident occurring while spraying is in progress, resulting in actual or feared leakage of significant quantities of the plant protection product, the emergency and rescue services must be alerted immediately. If an area has been sprayed unintentionally, e.g. due to wind drift, the owner or tenant of the land must be notified. If a lake or watercourse has been contaminated, the municipality must be informed. Plant production products may not be applied on natural grazing land or mown meadows.

Required training for the use of plant production products Anyone using Class 1L and 2L plant production products must be over 18 years of age and meet certain knowledge and skills requirements. Persons who have successfully undergone the prescribed training courses are considered to have met these requirements. Persons using Class 1L products must have certain practical skills. A quaili- fication received after completion of an approved training course is considered valid for a period of 5 years. To extend the validity period for a further 5 years, a person must attend a new course of training. These provisions are set out in the Regulations on Permits and Skills Requirements for the Use of Certain Plant Production Products (2005:51) issued by the Swedish Board of Agriculture.

Storage of plant protection products Provisions on the storage of plant protection products are set out in Sections 6 and 7 of the Regulation concerning Chemical Products and Biotechnological Organisms (1998:8) issued by the National Chemicals Inspectorate. Chemical products hazardous to health must be stored out of reach of small children and separately from products intended for eating or drinking. Chemical products requiring permits for use under Sections 14–21 of the Ordinance concerning Chemical Products and Biotechnological Organisms (1998:941) must be stored out of reach of unauthorised persons.

5.4.3.3 Elements common to all activities eligible for payment for environmentally friendly farming In case of amendments or changes of the relevant mandatory standards according to article 39 (3) of Regulation (EC) No 1698/2005, the conditions and requirements to receive payment for environmentally friendly farming shall be adjusted accordingly.

The article 46 of Commission Regulation (EC) No 1974/2006 is regulating the circumstances if the beneficiary does not accept such amendments or changes.

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Maximum payment level The maximum payment level is set out in the Council Regulation (EC) No 1698/2005.The area with commitments under environmental friendly farming is used as a basis for calculating the maximum amount, with the exception for local breeds in danger where number of livestock units is used. The area with commitments is divided into one of the groups Annual crops, Specialized perennial crops or Other land uses according to the type of crop that is grown on the area. In order to avoid overcompen- sation the competent authority will check the average amount of payment per hectare for each applicant. If the total payment level for environmentally friendly farming is exceeding the maximum level set out in the Council Regulation, the payment will be reduced according to the exceeding amount of payment.

In some specific cases, the maximum level of payment is exceeding the limits set out in the regulation and is notified as national top-up. This is relevant for specific and targeted measures in order to increase the biodiversity such as scything(5.4.3.4), to preserve valuable natural and cultural environments in the agricultural landscape and reindeer herding areas in northern Sweden (5.4.3.5) or special land management (5.4.3.6).

Target group The target group for the most sub-measures is farmers. However in certain cases other land manager are eligible for payment. The reason for this is that, in some cases, there are other actors than farmers that may manage the land in line with the support conditions. Example of these other kind of land manager is NGO´s such as local history association or nature conservation organisations. This applies for sub-measure 5.4.3.4 Biodiversity and cultural heritage in semi-natural grazing land and mown meadow land and wetlands and for sub-measure 5.4.3.6 Payment for regional prioritises.

Method of calculation and underlying assumption An overall description of the method of calculation is given in section 5.2.4. Specific information for each sub-measure is given under respectively section under section 5.4. For a comparison between the national legislation, the cross compliance conditions and the different sub-measures, see table in section 17.6 Annex 6.

Financing - National public financing: 53.3 per cent - EU financing: 46.7 per cent

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Ongoing contract See section 5.1.1.6. and Annex 1 in section 17.1.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output See under respectively sub-measure. Result See under respectively sub-measure Impact Extent to which the measure has contributed to 15-20 per cent preserve the biodiversity, percentage of change in farmland bird index Extent to which the measure has contributed to 30 per cent/40 preserve high nature-value farmland, percentage of per cent of the change of HNVF semi-natural grazing lands

Extent to which the measure contribute to improve Do not affect water the balance, only Quality the leakage

Marginally Extent to which the measure contribute to combat climate change

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Programme-specific indicators and quantified targets Type of indicator Indicator Target Result Number of hectares of 1 200 000 hectares agricultural land successfully managed in such a way to prevent overgrowing or abandonment Result Number of farmers with 60 000 hectares more than one agri- environmental commitment Result Number of hectares of 2 500 000 hectares agricultural land covered by at least one agri- environmental commitment Result Number of hectares covered 1 000 000 hectares by an agri-environmental commitment with the objective to reduce the risk of plant protection products Impact The share of semi-natural 80 per cent grasslands and mown meadows designated as Natura 2000 sites receiving payment for the preservation of semi-natural grasslands and mown meadows Impact Reduced nitrogen leakage* 2 600 tonnes *This indicator will be monitored twice during the programme period by using model calculations

5.4.3.4 Biodiversity and cultural heritage in semi-natural grazing lands, mown meadowland and wetlands The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and on Article 27 of Commission Regulation (EC) No 1974/2006. Some of the actions are described in section 5.4.3.6: Payment for regional priorities.

Activity code: 214

Underlying considerations This sub-measure aims at encouraging farmers and other land managers to use agricultural production methods which promote the protection and improvement of the biodiversity, the landscape and its features.

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The following 9 land types are included in this sub-measure:

Semi-natural 1. Semi-natural grazing land of general value grazing land 2. Semi-natural grazing land of particular value 3. Woodland pasture 4. Limestone pasture 5. Mountain pasture Mown meadows 6. Mown meadowland of general value 7. Mown meadowland of particular value Wetlands 8. Management of wetlands on arable land 9. Management of wetlands on grazing land One parcel may only belong to one of the land types mentioned above.

Some of the semi-natural grazing lands and mown meadows (land types 1-7) coincide with the designated Natura 2000 areas in the agricultural landscape. However, the environmental value is maximized by directing the payment to these land types, and not to Natura 2000 land specifically. Further, it is only those Natura 2000 areas of semi-natural grazing lands and mown meadows that requires some kind of continually management that can be included in the sub-measures. Sweden’s efforts in this area are aimed at achieving the interim target under the Swedish environmental quality objective “A Varied Agricultural Landscape”, which states that all mown meadowland and semi-natural grazing land must be preserved and managed in such a way that their value is maintained.

Many plant and animal species that have their habitats in the cultivated landscape are now only found in the scattered residual populations. This is further explained in section 3.1.4.1. Semi-natural grazing lands and mown meadowlands (land types 1-7) are highly rich in species and among the most species dense types of land in Sweden. Among 1500 of the red listed species in Sweden have their domicile in these grassland types. This amounts to more than 40 per cent of the red listed species in the country. Examples of red-listed species are Botrychium simplex (sv. dvärglåsbräken), Euphydryas aurina (sv. ärenprisnätfjäril) and Bombina bombina (sv. klockgroda). These are rare species living in semi-natural grazing lands and meadows and are also species included in the Habitat directive. Other examples of birds included in the Wild bird directive for which these grasslands are the natural domicile are Crex crex (sv. knornknarr), Lanius collurio (sv. törnskata) and Circus pygargus (sv. ängshök). These extensively farmed types are significant as regards the physical appearance of the countryside.

The function of wetlands as ecosystems and their importance for the landscape contribute to the achievement of the environmental quality objectives set out in: “A Varied Agricultural Landscape”, “Thriving Wetlands”, and “A Rich Diversity of Plant and Animal Life”. Wetlands help reduce the run-off of plant nutrients into the sea, lakes and watercourses. The establishment, restoration and management of wetlands is therefore crucial to the achievement of the environmental quality objective “Zero Eutrophication”, and by extension to the achievement of other water-related objectives,

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namely: “Flourishing Lakes and Streams”, “A Balanced Marine Environment”, “Flourishing Coastal Areas and Archipelagos”, and “Good-Quality Groundwater”.

Obligations Obligations which are not payable are cross-compliances under Council Regulation (EC) No 1782/2003. The same applies to obligations specified in section 5.4.3.1 or as specified in section 5.4.3.2. For comparison between the cross-compliance conditions and this sub-measure to preserve the biodiversity in semi-natural grazing lands and mown meadows, see table in section 17.6 Annex 6.

Objectives The purpose of this sub-measure is to contribute to the fulfilment of the objective to halt the loss of biodiversity by 2010. By preserving these biotopes, maintenance status of threatened species will be improved. The objective of the present sub-measure is the management of at least 500 000 hectares of land. A further aim is to maintain the biodiversity and cultural values at 230 mountain holdings. Its aim is to help achieve the interim target regarding the management of mown meadowland and grazing land under the environmental quality objective set out in “A Varied Agricultural Landscape” and to maintain semi-natural grasslands and mown meadows designated as Natura 2000 sites.

Areas eligible for payment Payment for the preservation of biodiversity and cultural heritage assets on semi- natural grazing land and mown meadowland (land types 1-7) may be granted throughout Sweden.

Payment for the management of wetlands (land types 8 and 9) may be granted anywhere in the country for wetlands established or restored in 2007 or later. Wetlands establish earlier than 2007 is to a very high extent allready covered by a simular commitment in former programme periods. Extra payment for income loss due to loss of high yield harvests may only be granted in regional support area 9 in the counties of Skåne, Halland and Blekinge.

Target group Farmers or other land managers managing grazing land, meadowland or wetlands that meet the requisite conditions. See also section 5.4.3.3.

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Payment Semi- 1 Semi-natural grazing land of general value SEK 1 100 (€ natural 122,2)/hectare grazing land 2 Semi-natural grazing land of particular SEK 2 500 (€ value 277,8)/hectare Supplementary payment for pollarding for SEK 100 (€ 11,1) each, but leaf fodder¤ max SEK 2 000 (€ 222,2)/hectare 3 Woodland pasture SEK 1 800 (€ 200)/hectare 4 Limestone pasture SEK 850 (€ 94,4)/hectare 5 Mountain pasture SEK 700 (€ 66,7)/hectare Mountain holding in use SEK 3 000 (€ 333)/hectare Mown 6 Mown meadowland of general value SEK 1 100 (€ meadowland 122,2)/hectare 7 Mown meadowland of particular value SEK 3 500 (€ Supplementary payment** for 277,8)/hectare - Pollarding for leaf fodder¤ - SEK 100 (€ 11,1) each, but max SEK 2 000/tree (€ 222,2)/hectare - Post-mowing grazing¤ - SEK 700 (€ 77,8)/hectare - Scything¤ - SEK 7 000 (€ 777,8)/hectare Wetlands * 8 Wetland on arable land SEK 3 000 (€ 333,3)/hectare Supplementary payment for income loss due SEK 1 000 to loss of high yield harvests (€ 111,1)/hectare 9 Wetland on grazing land SEK 1 500 (€ 166,7)/hectare *Payment for this type of management is also granted in the case of areas of wetlands managed as semi-natural grazing land or mown meadowland. ** The three types of supplementary payment on mown meadows are possible to combine on the same parcel. ¤ Top-up notification.

Semi-natural grazing land and mown meadowland (land types 1-7)

Description Granted for payment is the preservation of semi-natural grazing land and mown meadowland when using management practices that preserve the natural and cultural value of such land where the requirements go above and beyond cross-compliance.

Commitment plan (land types 1-7) The competent authority establishes a Commitment plan that is given to the farmer. The plan contains all parcels in the commitment, the area of the land, and the management obligations for the land in question.

Concerning the following land types: (2 and 7) semi-natural grazing land and mown meadowland of particular value, (3) woodland pasture, (4) limestone pasture and (5)

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mountain pasture, the competent authority will determine the area eligible for payment and sets special management requirements for the area in question. Information of these requirements is included in the Commitment plan. The national inventory of semi-natural grazing land and mown meadowland provides an assistance for selection if the area has particular values (land types 2 and 7).

Farmers who have applied for a commitment must manage the area in accordance with the terms specified. This commitment runs for a period of five years, and the same area is to be managed throughout the commitment period.

General management obligations for semi-natural grazing land of general value (land type 1) To be eligible for payment, the applicant must carry out certain actions. These are: - The farmer must manage the pastures in such a way as to prevent accumulation of harmful litter/organic debris65. This implies regulating the grazing density, normally on an annual basis, by fencing in or fencing out the grazing animals. When necessary, this should be carried out in combination with cutting of vegetation left ungrazed. - The land is to be managed in such a way that undergrowth causing substantial harm to natural or cultural assets is avoided, the farmer has to ensure that all encroaching vegetation is be removed, i.e. all trees and shrubs of undergrowth type are to be cleared at the beginning of the commitment period and be kept clear for the remainder of the period. Exceptions can only be made in specific cases where the land is directly affected by an action programme for endangered species and where such an exception benefits the existence of such species or strengthens their chances of survival. - The use of chemical plant protection products, fertilisers, liming, irrigation, stone or earth pits, or other practices having an adverse effect on the environment, is prohibited to avoid damaging the land’s natural and cultural heritage assets.

General management obligations for mown meadows of general value (land type 6) - To be eligible for payment, the applicant must carry out certain actions. These are: - The mown meadow must be tidied up in spring to prevent acculmulation of harmful litter. Fallen sprigs and leaves must be raked and removed. - The mown meadows should be harvested and the hay should be removed every year, and the timing for harvest is restricted to after mid-summer avoid harvesting too early. An early harvest hampers the natural spreading of seeds of the meadow flora. - Only cutting tools may be used for mowing, implying a higher labour cost for the farmer compared to using a tractor carried rotary mower. - The land is to be managed so that undergrowth causing substantial harm to natural or cultural assets is avoided, and the farmer has to ensure that all encroaching vegetation is removed, i.e. all trees and shrubs of undergrowth type are to be cleared at the beginning of the commitment period and be kept clear for the

65 Harmful litter/organic debris is dead plant material on the land, which still has a structure and is not decomposed.

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remainder of the period. Exceptions may only be made in specific cases where the land is directly affected by an action programme for endangered species and where such an exception benefits the existence of such species or strengthens their chances of survival. - The use of chemical plant protection products, fertilisers, liming, irrigation, stone or earth pits, or other practices having an adverse effect on the environment, are prohibited to avoid damaging the land’s natural and cultural heritage assets.

Land of particular value (land types 2 and 7) To be eligible for payment (land types 2 and 7) the land must either contain high cultural heritage assets or contain types of vegetation, animal species or plant species showing that it has been used for grazing or as meadowland over an extended period of time.The land must only have been exposed to minimal fertilisation or other yield- enhancing management measures. Semi-natural grazing land (land type 2) of high cultural or biological value not connected with the ground cover may however be subjected to a moderate degree of fertilisation or of other yield-enhancing measures. These land types often coincide with designated Natura 2000 areas in the agricultural landscape.

To be eligible for payment, the applicant must carry out certain actions in addition to the above mentioned actions for land type 1 and 6. These are: - Grazing or mowing should be carried out at a specific time, including a prohibition on winter grazing when such grazing is considered harmful to the natural or cultural assets. Requirements on the types of animals to be used for grazing, i.e. prohibition of horse grazing when such grazing is considered harmful to the natural or cultural assets (Land types 2 and 7). - Specific land management such as tidying, raking and removal of undergrowth (Land types 2 and 7). - The timing for harvest is restricted to specific time in the late summer instead of at the optimum time for harvest which results in reduced fodder quality. The date is fixed by the competent authority for each specific parcel (Land type 7). - The farmer has to regulate the grazing density in order to avoid both over-grazing or under-utilisation. This is a detailed instruction, from the competent authority, in order to adept a management regime to the needs of rare species of flora and fauna, resulting in higher labour cost for the farmer (Land type 2). - The farmer has to regulate the apperance of the vegetation. This implies a regulation that trees and bushes that should be left on the area. - Prohibition against supplementary feeding of grazing animals, resulting in a lower animal growth (Land type 2).

Supplementary measures to land types 2 and 7 Land of particular value (land types 2 and 7) is eligible for supplementary management measures aimed at preserving natural and cultural values requiring special management.

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These are: − Pollarding for leaf fodder on semi-natural grazing land and mown meadowland Every tree in the commitments must be pollarded once during the five-year period. Pollarding trees creates holes in the tree trunk and decayed wood which is a prerequisite for many species in the agricultural landscape such as lichens, mosses, fungies, insects, bats and several bird species (i.e. Strix aluco (sv. kattuggla), Srurnus vulgaris (sv. stare), Jynx torquilla (sv. göktyta) and Dendrocopos minor (sv. mindre hackspett)). − Scythe mowing on meadowland The meadowland is to be managed with manual tools where tractor mowing is impossible due to impediments such as stone and cultural heritage elements, or that the meadow has biologically valuable busches or trees that are dependent on a longterm management. − Post-mowing grazing on meadow land The farmer has to let animals graze the land after harvesting the meadow to remove the amount of nutrients in order to promote the flora. For the farmer, this means an increased cost as the area must be fenced before the release of the animal. Post- mowing grazing may not take place before mid-summer.

Woodland and limestone pasture (land types 3 and 4) The management obligations that should be carried out on these land types (3 and 4) are the same as for semi-natural grazing land of particular value (land type 2). Eligible land and management actions is set out in the Commitment plan. For woodland pastures, the competent authority may lay down the special requirements on selective cuttings.

Mountain pasture (land type 5) The management actions that should be carried out are the same as for semi-natural grazing land of general value (land type 1). To qualify for payment of mountain pastures, a mountain holding must be approved as such by the competent authority.

Mountain holdings are parts of a farming system that helps to preserve biologically and culturally valuable landscapes and habitats originating from grazing mountain pastures (land type 5). Every mountain holding is a part of and connected to a main farm located in the valley, where the main part of the production takes place. The farm buildings are located at the main farm and the mountain holding, nowadays, consists of traditional buildings not adapted for rational farming. In the case of mountain pasture, the action is divided into two parts.

The first part consists of a higher payment level for at maximum six hectares to pay for the cost incurred by managing the pastures surronding the mountain holding. Such costs include transport of animals up to the mountain pastures and the daily travel expenses for animal surveilling during the grazing period. Costs for transport of the animals and travel expenses for the farmer needed to comply with the cross- complince is not included in the calculation.

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The second part consists of a lower sum per hectare as a payment for the variable cost incurred by management of the mountain pasture. In order to preserve the cultural values and the high biodiversity such as vascular plants, lichens and fungi, a high grazing density is needed. Costs related to this high density are covered by this part of this action . The payment consists of labour cost of animal surveillance and income forgone due to the lower animal growth. The fodder quality of mountain pastures is lower compared to most of the other grazing areas. The competent authority also restricts the types of animals to be used for grazing and the length and time of grazing season. The grazing animals have to be at the mountain pasture during the whole grazing period. These restrictions are motivated according to the specific mountain pasture flora and cultural heritage values. See also section 5.4.3.6 Compensation for regional priorities.

Mangement of wetlands (land type 8 and 9)

Description By wetlands it is understood an area covered with vegetation there the water label during most of the year are under or close to the land surface and where the level is permitted to fluctuate according to seasonal variations. To be eligible for compensation, an established or restored wetland must be preserved for at least 20 years. Mowing and grazing of wetlands and their borders for a period of five years are eligible for payment. The same land is to be managed throughout the commitment period. During the programme period 2007-2013, there will be possibilities to extend the 10 years contract agreed in the last programme period, to another 10 years.

The management of the wetlands should be carried out in such a way that their functions remains throughout the entire commitment period. This implies that the applicant must:

- Manage the land in such a way that undergrowth causing substantial harm to natural or cultural assets is avoided, all trees and shrubs of undergrowth type are to be cleared at the beginning of the commitment period and be kept clear for the remainder of the period. Exceptions can be made if the wetland biodiversity relies on overgrowth and trees, e.g. shading of the water to protect endangered species that need trees and bushes in parts of their surroundings, e.g. corn-crake (Crex crex), grass snake (Natrix natrix) and many beetles. - Properly maintain dam embankments, wells/springs and the like in a manner that preserves the function. The embankment should not be allowed to be undermined by roots, wells, pumps and pipes are to be clean and in good working order. Requirements may be imposed concerning the physical configuration of the wetland, with respect to dam embankments, the slope angles, etc. - Not spread fertilisers, biocides and lime. Exceptions may be made in specific cases to the liming ban in order to improve the water quality if it is of particular importance for protecting the wetland biodiversity by increasing the pH value in the water.

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- In many cases, fish and crayfish farming may be prohibited in wetlands to enhance the retention capacity or the biodiversity of the wetland. Fish and crayfish are competitors to other species, like horned grebe (sv. svarthakedopping) Podiceps auritus and black-necked grebe (sv. svarthalsad dopping) Podiceps nigricollis. The bioturbation and grazing of fish and crayfish may also reduce the retention capacity of the wetland.

The requirement to remove the mown hay may be deleted if it involves considerable difficulty or if a more ample supply of organic material can boost denitrification. Under certain special conditions it is possible to prohibit emting the wetland. In addition, certain special conditions governing wetlands management and their physical configuration apply; these go beyond the general management obligations. Payment for wetlands management is considered on a case-by-case basis on application by the farmer. Eligibility and management obligations are determined by the competent authority who also decides on exceptions and prohibitations.

Payment for management of wetlands only covers the costs incurred by actions motivated to maintain or enhancce biodiversity and its function to act as a retention source for plant nutrients (see above).

The cost for the management of wetlands varies in different parts of the country, depending on the loss of yield.Only limited activities can be carried out on the land, since the land is taken out of plant production. The most profitable way of using the arable land is normally cereal production. Additional payment for management of the wetlands may be granted in cases where independent valuation has shown that the yield forgone is substantially higher than the average yield for arable land in the area, according to public statistics.

Method of calculation and underlying assumptions The cost of fulfilling the management obligations for semi-natural grazing land and mown meadowland is estimated on the basis of management measures that go beyond cross-compliance requirements for such land. It is estimated that the required grazing density is about twice as large on semi-natural grazing lands in order to to fulfill the management requirements in this sub-measure compare to the density required to fulfill the cross-compliance. Since semi-natural grazing lands and mown meadows have a lower productivity in terms of fodder, modern farming in general use more rational, higher-yield ley production on arable land or fertilised agricultural land. For a detailed discription, see table in section 17.6 Annex 6 and for details on source of calculations, see section 5.2.4.

Grazing semi-natural grazing land (land types 1 and 2) The baseline is a farmer fulfilling the cross-compliance. Only additional costs are compensated within this sub-measure. Since grazing of the land is required to fulfil the cross-compliance, no cost for fencing is included in the calculation. The increased cost estimated for payment for managing semi-natural grazing land of general values includes higher expenditures for materials and labour due to fencing maintenance as

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well as removal of all encroaching vegetation. The fodder value of semi-natural grazing land is lower compared to arable pasture, resulting in a reduced animal growth and thus an income forgone of the farmer. Maintenance of grazing pasture land to create the grazing dependent biodiversity needs a higher animal density than the cross- compliance provisions which increase costs associated with fence damage. A scientifically study shows that half the amount of animals are required to fulfil the cross-compliance obligations compared to the requirements of this sub-measure.

When the grazing animals use the semi-natural grazing land instead of grazing on arable land, the farmer is able to carry out a second harvest of ley on the arable land. This however creates costs for the farmer related to the use of machinery, labour costs and cost for inputs such as fertilizer. According to the database (Agriwise) for the standard agricultural assumptions, the net income is negative for the second harvest because of the much lower yield the second time. The calculations are made for support region 5, where the most of the Swedish semi-natural grazing lands are located. The net income of the second harvest of ley production is lower the further north one gets.

The semi-natural grazing lands of particular value have very high biological or cultural values that requires a more specific, precise and targeted management. To be eligible for land of particular value (land type 2), the farmer has to fulfil the requirements for semi-natural grazing land of general value, including the cross-compliance, and the additional requirements. The increased costs include higher expenditures as more animal units per hectare are needed to maintain the grazing dependent biodiversity values (see above). In the calculation the prohibition of supplementary feeding entails a further loss of income regarding animal growth and the costs incurred by a later release of the animals in the growing season is included. Further, more exemptions from grazing may be granted in certain years if this is warranted by the biological values of the semi-natural grazing land. In such years, the costs associated with these practices are saved. However, this is to a minor extent offset by the additional costs incurred the following year, when an extra effort is needed. Years in which the land is not grazed reduce the fodder value the following year and involve extra work in terms of increase need of removal of encroachment.

Mown meadows (land types 6 and 7) The baseline is a farmer fulfilling the cross-compliance. Only additional costs are compensated within this sub-measure. Compared to the cross compliance conditions, this sub-measure requires more extensive obligations on the mown meadowlands with more thorough, labour intensive management. The main cost of management of the mown meadows is the cost of raking the land, which is a requirement in addition to the cross-compliance. Additional cost is also incurred due to the requirement that cutting tools shall be used, compared to using a more labour efficient machinery such as tractor carried rotary mower. The payment also covers the more extensive obligations compared to the cross-compliance provisions for the removal of undergrowth.

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As for the semi-natural grazing lands of particular value, mown meadows of particular values have very high biological or cultural values that requires a more specific, precise and targeted management. To qualify for land of particular value (land type 7), the farmer has to fulfil the requirements for mown meadows of general value, including the cross-compliance, and the additional requirements. In the case of land of particular value, additional costs are incurred by the higher requirements of tiding and raking. The requirement of removal of undergrowth is higher for land of particular values, resulting in higher labour cost. Also, increased costs in incurred due to the restriction of time of mowing the meadow. The timing for harvest is restricted to specific time in the late summer instead of at the optimum time of harvest which results in a reduced fodder quality. The date is fixed by the competent authority for each specific parcel.

Supplementary management measures (supplementary to land types 2 and 7) The cost associated with the supplementary management measure scything of manual tools corresponds to the difference between the cost of work using tractor and manual tools when mowing and harvesting. These meadowlands which contain impediments such as stone and cultural heritage elements, often contain a biodiversity of lichens and vascular plants. Scything involves manual mowing and to obtain a high biodiversity manual raking may also be necessary. This entails particularly high amount of labour cost.

In the case of pollarding/foliage production, the payment covers the cost of pollarding. Every tree has to be pollarded once during the commitment period. The main cost of pollarding is manual work. Cutting equipments and the necessity to use a tractor also create costs when pollarding trees. At the same time the foliage could be used as fodder and thus the fodder value is considered as revenue in the calculation.

In case of the post-mowing grazing sub-measure, payment may be granted for grazing the regrowth once the meadow has been mown and the crop removed. Labour costs, fencing and stock-minding costs are included in the calculation. The value of the fodder is reduced in the calculation.

Woodland and limestone pasture (land types 3 and 4) The calculations concerning woodland and limestone pastures includes the same factors regarding expenditure and revenues as mentioned above for the management obligations for semi-natural grazing lands of particular value (land type 2). The baseline is a farmer fulfilling the cross-compliance. Only additional costs are compensated within this sub-measure. The payment level differs however between the different types of land depending particularly on the various amount of labour hours needed for the maintenance of the land. For woodland pasture, extra labour costs are imposed due to the requirement of selection cutting. In the calculation of the payment for woodland and limestone pastures, the prohibition of supplementary feeding entails a further loss of income regarding animal growth and the costs incurred by a later release of the animals in the growing season are included.

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Mountain pastures (land type 5) The calculations concerning mountain pastures includes the same factors regarding expenditure and revenues as mentioned above for the general management obligations for semi-natural grazing lands (land type 1). The baseline for managing a mountain pasture is a farmer fulfilling the cross-compliance. Only additional costs are compensated within these sub-measures. Maintenance of mountain pasturelands requires a higher yearly grazing density in order to maintain the specific flora, which increases labour costs for surveillance of the animals. The grazing animals have to be at the mountain pasture during the whole grazing period. The fodder value of semi- natural grazing land is lower compared to arable pasture, resulting in a reduced animal growth and thus an income forgone of the farmer. The payment only covers cost for the reduced fodder value for the additional grazing animals or for the longer grazing period required to fulfil the requirements, compared to the cross-compliance. In the calculation of compensation for mountain pastures, the prohibition of supplementary feeding entails a further loss of income regarding animal growth.

The mountain pastures are situated in the LFA areas. The level of payment for mountain pastures is based on the costs of managing the land in order to obtain the specific biodiversity. In order to receive this specific biodiversity, a higher grazing density is required than the requirements to fulfil the LFA conditions.

When the grazing animals are using mountain pasture instead of grazing on arable land, the farmer is able to take a second harvest of ley on arable land. This creates however costs for the farmer related to the use of machinery, labour costs and cost for inputs such as fertilizer. According to the database for the standard agricultural assumptions, the net income is negative of the second harvest because of the much lower yield the second time. The calculations are made for support region 4, where the most of the Swedish mountain pastures are located. The net income of the second harvest of ley production is lower the further north one gets.

In addition to the cost of managing the mountain pastures, there are also costs unique to the areas surrounding the mountain pastures. These costs varies only to a minor extent with the size of the holding or to the area surrounding the holding. To meet the conditions for “mountain holding in use” animals must be transported up from the main farm to their mountain holding and the surronding pastures in early summer and taken home again at the end of the season. During the summer, the animals graze at the pastures around the holding. Every day, the farmer must travel from his or her home farm to the mountain holding in order to keep an eye on the animals. This added cost of commuting to and from the holding is included in the calculation. The cost is based on the average distance between the home farm and the mountain holding, which amount to 22 kilometre. The payment only covers the costs of transportation for the additional grazing animals required to fulfil the condition, compared to the cross-compliance. Likewise, the payment only covers the cost of surveillance due to the longer grazing period. Costs for maintenance of the buildings at the mountain holding are not eligible for payment under this action . The holdings are located up in

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the mountains and there is very often no proper road all the way to the holding. A mountain holding in use requires six hectares of mountain pastures.

Wetland management (land type 8 and 9) The baseline is a farmer fulfilling the cross-compliance concerning wetlands. The land does not qualify for single farm payment on estimated 60 per cent of the wetland area, and for 40 per cent of the area is the farmer receiving a reduced single farm payment. The payment covers additional costs of managing the wetland and payment for the opportunity cost of the land and is based on the management and maintenance costs, loss of yield and costs arising from compliance with certain restrictions. The loss of yield is based on the average yield from the most profitable alternative use (cereal production). In areas where the income forgone of the land substantially goes beyond the average, based on the forgone yield, the land management could be eligible for an extra payment. For a correct management that enhances the environmental values, maintenance of a wetland involves from time to time the need to excavate parts of the wetland area, maintenance or exchange of pipes and wells/springs, cleaning of the in- and outflow, cutting down undesirable vegetation on the embankment, harvest of aquatic plants (e.g. reed) in the water and, and transportation of the materials. Costs included in the calculation is labour and machinery, deteriorated farm layout and for example issues as prohibition of growing fish, crayfish or ducks in the wetland.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other land managers who receive 38 000 hectares payment for the preservation of semi-natural grasslands land, mown meadows and the management of wetlands Number of hectares for which payment is payable for 500 000 hectares the preservation of semi-natural grasslands land, mown meadows and the management of wetlands Number of mountain holdings in use receiving payment 230 holdings The share of semi-natural grasslands and mown 80 per cent meadows designated as Natura 2000 sites receiving payment for the preservation of semi-natural grasslands and mown meadows Result Number of hectares successfully farmed/managed (the 500 000 hectares land is neither overgrown nor abandoned). Number of hectares successfully farmed so that the 500 000 hectares natural- and cultural values are preserved Number of hectares promoting improved water quality 0 hectares Number of hectares promoting improved soil quality 0 hectares The contribution to combat climate changes 0 Ktonnes

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5.4.3.5 Valuable natural and cultural environments in the agricultural landscape and reindeer herding areas The sub-measures are based on Article 39 of Council Regulation (EC) No 1698/2005 and Article 27 of Commission Regulation (EC) No 1974/2006. Parts of the sub- measure is dealt with in section 5.4.3.6 Payment for regional priorities.

Activity code: 214

Underlying considerations This sub-measure should encourage farmers to serve society as a whole by introducing or continuing to apply agricultural production methods compatible with the protection and improvement of the biodiversity, the landscape and its features, in accordance with preamble 35 in Council Regulation (EC) No 1698/2005. The sub-measure aims to protect and enhance valuable environments in the traditional agricultural landscapes, which is in line with the Community strategic guidelines and the Swedish strategy plan for rural development. As stated in the Community strategy, this is also in many areas, an important part of the cultural and the natural heritage and of the overall attractiveness of rural areas as place in which to live and work.

The sub-measures to preserve valuable natural and cultural environments in the agricultural landscape and reindeer herding areas are aimed primarily at achieving the national environmental quality objectives “A Varied Agricultural Landscape” and “A Magnificent Mountain Landscape”. In the case of the former objective, this means that the number of maintained landscape features of cultural importance is to increase by 70 per cent by 2010 and that the number of small biotopes in the agricultural landscape should be preserved in least the present extent. Thus the aim is to: - Preserve valuable agrarian environments of biologically varied small biotopes and habitats in or around arable land and of cultural and historical importance showing traces of older land use. - Help ensure that distinctive local and regional features in the agricultural landscape are preserved in all parts of the country. - Preserve representative areas of high natural and cultural value in parts of the country where reindeer herding is commonly practised. Removal an dovergrowth of small biotopes have resulted in reduced number of habitats for many species. Small biotopes and cultural remains are open ditches, stone walls, field islets and solitary trees. These are elements that are most common in arable land. In the present context, the term valuable natural and cultural environments in the agricultural landscape refers to the historical traces in the countryside of farming from bygone times. These are essential elements in a varied landscape distinguished by cultural and historical diversity. Over the past 50 years, agricultural development has brought major changes in farming practices. Mechanisation has entailed often radical readjustments in terms of field sizes and boundaries and measures to improve field access. In flatter, low-lying areas in particular, holdings have become larger and fewer,

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and obstacles to cultivation in the form of landscape features and small biotopes have largely been removed. The need to exploit landscape features for fodder production as a component of rational, modern farming is now very limited. Ensuring the continued care and maintenance of such features in the agricultural landscape is therefore of pressing concern if Sweden is to preserve its cultural heritage assets and ensure the continued survival of the country’s distinctive cultural and historical dimension. These features, moroever, provide important habitats for plants and animals which would otherwise have little room to live in today’s modern farm landscape. To preserve the biological and cultural values of the small biotopes, they have to be managed in order to avoid overgrowth.

Reindeer herding is one of the more extensive farming systems in the Community. In Sweden all reindeers are semi-domesticated; there are no wild reindeer remaining. The Sami in Sweden herd reindeer on just over a third of Sweden’s surface, concentrated to the northern parts of the country. Reindeer husbandry is based on the natural migration patterns of reindeer and their need of natural grazing. Reindeer grazing is promoting biodiversity in the mountain areas, as long as it is not too intensive. By grazing the mountain areas, and thus preventing growth of bushes and shrubs, the open and varied landscape in preserved. Traditional reindeer fences made out of twigs or sprigs is a habitat well suited for many species of lichen since many species prefer living on dry dead wood in open areas with a lot of light. The arctic fox (Alopex lagopus) and the snowy owl (Budo scandiacus) are threatened and labelled as critically endangered on red list of endangered species. Both species rely on rodents that use old reindeer fences of wood or stone as corridors when moving from one part of the territory to another. Thus, the traditional reindeer fences indirectly provide food for two of most endangered species in Sweden, species that also are unique in the European perspective.

The important natural and cultural assets associated with reindeer herding are unique – both from a national and European perspective – and in danger of disappearing altogether unless properly managed. The aim of the sub-measure at hand is therefore to preserve valuable natural- and cultural landscape features in the reindeer herding areas. These elements are associated with older forms of reindeer herding and should be managed in such a way that they illustrate and preserve those traces of Sami tradition, work and life still to be found in Sweden. A further advantage is that the present action will strenghten the public awareness of Sami values of natural and cultural importance at European, national, regional and local level.

Natural and cultural environments in the agricultural landscape

Objectives The purpose of this sub-measure is to preserve the biological and cultural values of small biotopes in the agricultural landscape. The acreage of land committed to this sub- measure should cover about 30 per cent of Sweden’s arable land and this acreage should be evenly distributed across the country. This will facilitate the preservation of valuable natural and cultural values and enhance their visibility.

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Description Payment may be granted for the management of small biotopes (landscape features) of biological and/or cultural and historical importance in or around arable land. Arable land is defined in the present document as land that is used or may be used for crop cultivation or grazing and which is suitable for ploughing. The table below lists the type groups of rural features eligible for payment. Payment may be provided for management practices directed at preventing small biotopes from decaying or becoming overgrown . This ensures the long-term preservation of cultural heritage remains and of biologically diverse environments in or around farmland. Such management must contribute to the preservation of plants and animals that flourish in such surroundings, and seek to preserve traditional methods of management. The requirements for this sub-measure go above and beyond the cross- compliance which states that the arable land must be kept free from perennial shoots of coppices, buches and trees. The cross-compliance do not include restrictions for the management of the landscape elements. However, according to national legislations, it is not allowed to remove valuable landscape features or destroy them through spreading og mineral fertilizers, large quantities of manure or chemical weed killers. Nevertheless, the farmers are only compensated for management of landscape features. Eligible landscape features, therefore, are to be managed in accordance with the following requirements:

- Trees and shrubs of undergrowth type are to be removed or grazed. Built landscape features are to be maintained in order to preserve the biological and cultural values connected to its original function This implies for example repairing stonewalls, screes and traditional drying plants. - Landscape features consisting of trees are to be managed in accordance with the conditions specified, such as pollarding. - Stockpiles, refuse and the like are to be removed.

These are all management requirements that goes beyond the normal agricultural pratice. Detailed management obligation for the different landscape features will be layed down in the national ordinace and regulation. Obligations pertaining to the management of landscape features comprising trees will be decided on a case-by-case basis by the competent authority. The same applies to times of year and forms of grazing.

The commitments run for a five-year period and the same land is to be managed throughout the commitment period. Applications for payment for the preservation of valuable natural and cultural environments must cover all the eligible landscape features on arable land that naturally belong to the company’s home farm. Quali- fication for the payment is based on the existence of eligible landscape features within this area.

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Eligible type groups of valuable rural features Category Unit Group 1 Line-shaped rural features that constitute an obstacle to cultivation or which metre were originally constructed for the purpose of draining farmland, fencing in and leading livestock or marking the boundaries of properties or holdings, etc, such as open ditches.

Group 2 Concentrated rural features that constitute an obstacle to cultivation or number comprise ancient remains, relics, constructions and monuments associated with farming, etc, such as field islands and clearance cairns.

Group 3 crop acreage Traditional drying plant for farm crops. for drying

Obligations which are not compensated include cross-compliances under Council Regulation (EC) No 1782/2003 and obligations specified in section 5.4.3.1; or in section 5.4.3.2. For comparison between the cross-compliance requirements and this sub-measure to preserve the natural and cultural elements in the agricultural landscape, see table in section 17.6 Annex 6.

Areas eligible for payment Payment for the preservation of valuable natural and cultural environments is eligible throughout the country.

Target group Farmers of valuable natural and cultural environments throughout the country, assuming that the management requirements are met.

Payment Rural features Payment Basic sum SEK 100 (€ 11,1) per type of feature Group 1 SEK 6–60 (€ 0,7-6,7)/10m Group 2 SEK 60–180 (€ 6,7-20) each Group 3 SEK 2 000 (€ 222,2) /hectare ¤ Top-up notification in northern Sweden (support area 1-3 and F)

The payment is based on the numbers of elements or on metres of the elements. However, the payment is transferred to a payment per hectare by dividing the total payment for all eligible landscape features on arable land that naturally belong to the company’s home by the hectares of arable land on the farm.

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management measures that go beyond cross-compliance requirements and national legislation. Only additional costs are compensated within this sub-measure. For a detailed discription, see table “Eligible type groups of valuable rural features”. For details on source of calculations, see section 5.2.4.

The costs of managing rural features in accordance with the specified obligations largely comprise labour costs for clearing the undergrowth and labour cost for removing the vegetation and costs for use of special equipment for the clearing of undergrowth. These activities are outside of the normal agricultural activities. According to national legislation, the farmer is not allowed to remove valuable landscape features or destroy them through use of fertilizers, large amount of manure or chemical weed killers. The prohibition of removal of the landscape features implies for the farmer, extra time taken when managing the arable land. This cost is however, not included in the calculation of this sub-measure. Neither is the extra cost induced by to prohibition of fertilizers, manure of chemical weed killers included in the calculation.

The basic payment per landscape feature amounts to SEK 100 (€ 11,1) and compensates the farmers for transaction costs incurred by set-up time including information collection. The calculation contains costs for information collection on the specific management for each element type and cost for set-up time between the normal agricultural practice and the landscape management. These are costs related to letting the transaction take place and not directly attributable to the implementation cost of the commitment it relates to (Commission regulation (EG) nr 1974/2006, art 27.10). Based on results from previous programme period, the average farm has six types of landscape elements and thus received SEK 600 (€ 66,7) in basic payment. The total average payment level in the former period for this sub-measure amounted SEK 11 300 (€ 1255,6) per year. Thus, the transaction costs constituted five per cent per commitment. There are no major changes in the sub-measure compared to the previous programme period.

Natural and cultural environments in reindeer herding areas

Objective The purpose of this sub-measure is to preserve the biological and cultural values of small biotopes in the reindeer herding area. The objective is to preserve 2 500 hectares of natural and cultural heritage assets in the reindeer herding area.

Description of the measure The reindeer farming has very old traditions which have influenced its surroundings in the form of flora and fauna which benefit from cultivation. In addition, it has left a number of remains valuable from a cultural historical point of view, for example, living in a land which has no roads. Payment may be provided for the management of valuable natural and cultural environments in the reindeer herding area. The items eligible for payment are of two types: reindeer corrals of the traditional type and traditional wood and stone fencing. A reindeer corral is a grazing area that traditionally

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has been used summertime for milking or for shelter from predators. Due to the grazing intensity of the area, it contains a specific grazing dependent flora.

Payment may be provided for management measures that will prevent these landscape features from becoming degraded and overgrown. Reindeer corrals may or may not include traditional Sami settlements. Fencing includes enclosures of both stone and wood. The criteria below must be met if payment is to be granted. Each case is assessed individually to determine whether the application qualifies for funding. The following obligations apply:

- Trees and shrubs of undergrowth type must be removed. - No harmful accumulations of litter/organic debris are allowed on the land. Harmful litter/organic debris is dead plant material on the land, which still has a structure and is not decomposed. - Landscape features and trees that show clear signs of having been used in reindeer herding may not be damaged or removed. - Fencing is to be maintained in order to preserve the biological and cultural values connected to its original function. The fence have to be maintained according to the traditional way in correspondence with natural materials found at the site.

The specified general management obligations concerning reindeer fences require that an area of five metres on both sides of the fence is maintained according to the conditions mentioned above. It is not possible to combine the payment for management of fences and the reindeer corrals on the same piece of land. The commitments run for a period of five years and the same land is to be managed throughout the commitment period.

The cross-compliance requirements are not applicable for the reindeer herding areas and the landscape elements covered by this sub-measure. However, the national legislation, the Reindeer Husbandry Act, ban destruction of some valuable traces of traditional reindeer husbandry. The obligations are set out in section 5.4.3.1. See also table in section 17.6 Annex 6.

Areas eligible for payment The payment is granted in those parts of the reindeer herding area where reindeer herding is allowed all year round under Section 3, Article 1 of the Reindeer Husbandry Act (1971:437).

Target group Sami villages, Sami organisations or individual managers who have been approved by the competent authority and who utilise/farm valuable natural and cultural environments, primarily those located on year-round land in the reindeer herding area in accordance with Section 3, Article 1 of the Reindeer Husbandry Act (1971:437). A Sami village or villages affected by a decision have the right to express an opinion.

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Payment Proposed payment rates are as follows:

− For the management of reindeer fencing: SEK 20 (€ 2,2)/running metre − For the management of reindeer corrals: SEK 6 300 (€ 700)/hectare* − For a distance from the sami settlement to the landscape elements of - maximum 75 kilometres, the payment for the travel amounts to SEK 640 (€ 71) per feature, - more than 75 kilometres, the payment for travel amounts SEK 1 275 (€ 141,7) per feature. Although travel expenses are paid per feature, no more than 5 features per commitment are liable for payment. * top-up notification

The payment for management of traditional fences is based on the length of the element. Per metre of fences, the reindeer farmer has to maintain an area of 10 square metres surrounding the element. The payment is therefore transferred to a payment per hectare, in order to guarantee the limits of payment level set out in annex of the Council Regulation (EC) nr 1698/2005.

Method of calculation and underlying assumptions The cost of fulfilling the management obligations for preservation of valuable natural and cultural landscape elements in the agricultural landscape estimated on the basis of management measures that go beyond national legislation. Only additional costs are compensated within this sub-measure. For a detailed discription, see table in section 17.6 Annex 6. For details on source of calculations, see section 5.2.4.

The costs of managing the landscape features in the reindeer herding area in accordance with the specified obligations largely comprise travel costs, labour costs for clearing the undergrowth and labour cost for removing the vegetation and costs for use of special equipment for the clearing of undergrowth. These activities are outside of the normal agricultural activities (reindeer herding). According to national legislation, the farmer is not allowed to remove valuable landscape features or destroy them through use of fertilizers, large amount of manure or chemical weed killers. Farmers are compensated for clearance of bushes and sward and for the removal of undergrowth.

The elements are located very far from roads, which makes it expensive for the land manager to reach the elements. The target group of this sub-measure lives in Sami settlements or in nearby towns quite far from the grazing lands. Reindeer farmer as part of the target group is only temporarily tendering the herd and it is not a part of the production to maintain the traditional landscape elements. Eligible for payment are therefore travel costs but these costs are limited to 5 travels per commitment. The travel cost is based on the average distance between the Sami villages and landscape elements, which amounts to 150 km. The travel expenses is based on the cost when travelling by a four-wheels veichle. In order to not over-compensate those land

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manager that have a shorter distance to the elements, the travel payment is divided into two levels.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other managers receiving 15 000 farmers payment for the purpose of preserving natural and cultural environments in the agricultural landscape Number of Sami villages, Sami organisations or 200sami individual managers receiving payment for the purpose settlements etc of preserving natural and cultural environments in reindeer herding areas Land area receiving payment, as a percentage of total 30 per cent arable land Number of hectares receiving payment for the purpose 2 500 hectares of preserving natural and cultural environments in reindeer herding areas Total number of farmers or other land manager 15 200 farmers receiving payment for the purpose of preserving natural and cultural environments in the agricultural landscape and in reindeer herding areas Result Land areas successfully farmed so that the natural- and 30 per cent cultural values are preserved, as a percentage of total arable land Number of hectares successfully managed so that the 2 500 hectares natural and cultural values in reindeer herding areas are preserved Number of hectares promoting improved water quality 0 hectares Number of hectares promoting improved soil quality 0 hectares The contribution to combat climate changes 0 Ktonnes

5.4.3.6 Payment for regional priorities The sub-measure is based on Articles 39, 41 and 49 of Council Regulation (EC) No 1698/2005 and Articles 27 and 29 of Commission Regulation (EC) No 1974/2006.

Activity codes: 214 and 21666

66 The financial allocation for the sub-measure Compensation for regional priorities is merged under Agri-environmental payments in chapter 7. The estimated financial allocation for activity code 216 is estimated at approximately 60-65 per cent of the total public funding of the sub-measure Compensation for regional priorities (3-4 per cent of the total public funding in the programme for activity code 214). When it comes to monitoring, follow-up and evaluation, activities will be treated separately depending on which activity code they fall under (see also indicators below).

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Underlying considerations The basic reasons for this sub-measure are set out in section 5.4.3.4 Biodiversity and cultural heritage in grazed pasture, mown meadowland and wetlands, and in section 5.4.3.5 Valuable natural and cultural environments in the agricultural landscape and in reindeer herding areas.

Payment for regional priorities makes it possible to tailor measures to regional conditions and to each region’s special needs based on a landscape perspective, both in biological terms and in terms of cultural and historical importance. This facilitates exploitation of regional expertise and commitment. Payment for regional priorities is suitable for small-scale actions and is adapted for local requirements. It also facilitates measures which are crucial to the achievement of the environmental quality objectives and which go beyond other, more generalised forms of measure. In addition, it allows other regionally important assets to be to given due consideration, such as recreation, identity and social values.

Objective See under sections 5.4.3.4 and 5.4.3.5.

Description As part of the Rural Development Programme, each competent authority will be allocated an appropriation for priorities that promote natural environments and cultural heritage assets associated with land-based industry. The regional implementation strategies that every county administrative boards and the Sámi parliament (competent authorities) are required to present should contain a description of which of the actions within payments for regional priorities it plans to take, what its priorities will be and the reasons for this. The strategy must also show how payment for regional priorities contributes to the achievement of the national environmental quality objectives and priorities and regional environmental objectives. The strategies must have been established in cooperation with the different stakeholders in the county/area. For a more detailed account of the distribution of resources to the competent authorities, see section 11.1.

Beneficiaries have the option of applying for the payment themselves if they are interested in doing so, but it should also be possible for the competent authority to engage in outreach activities on the basis of the regional implementations strategy. The competent authority decides what the user is to achieve under the commitment, what are the obligations and what payment the user will receive.

The sub-measure “payment for regional priorities” offers two options: A. Payment for regional management initiatives in the form of five-year commitments according to article 39 of Council Regulation (EC) No 1698/2005. B. Payment for environmental non-productive investments according to article 41 of Council Regulation (EC) No 1698/2005.

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A. The regional management initiatives provide for payment for items of special priority from a regional perspective and are designed to supplement other forms of payment under sections 5.4.3.4 Biodiversity and cultural heritage in grazed pastures, mown meadowland and wetlands, and 5.4.3.5 Valuable natural and cultural environments in the agricultural landscape and reindeer herding areas. In addition to complement the other more general forms of measures, there are managemenet initiatives to promote the biodiversity on arable land. A menu of the possible regional management initiatives is described in Annex 3 of section 17.3. It is the competent authority that makes priorities and selects from the menu list the management initiatives applicable to each region.

Regional management measures run for a period of five years. In order to achieve set objectives satisfactorily, activities must be carried out on the same land throughout the commitment period, with the exception of the payment for threatened arable land weeds. Payment is granted annually per hectare in accordance with Article 39 of Council Regulation (EC) No 1698/2005.

B. The regional payment programme also provides for investment aid for non- productive investments which are considered important from an environmental standpoint, in accordance with Articles 41 of Council Regulation (EC) No 1698/2005. The payment for non-productive investments is payable according to actual costs or according to standard cost. Payment is granted for investments that promotes, preserves or restores natural- or cultural values of the landscape. Below are some examples of environmental investments around Sweden:

Improving the land quality to reduce land wear in the reindeer herding areas. The cost may consist of purchase of land cloth or duckboards and marking of specific routes for terrain vehicles.

Establishment and restoration of wetlands. Payment is granted for a certain share of the costs for establishing and restoring wetlands in the agricultural landscape. Land covered by the investment support shall, after preparation, with the exception of some specific restoration projects, be eligible for payment for the management of wetlands according to section 5.4.3.4. Applications will be assessed and given priority on the basis of inter alia, the Swedish Board of Agriculture’s quality criteria, the national action plan for endangered species, and regional data.Applications contain a preliminary plan describing what is to be done and at what point in time. They also contain details of costs and time required. Costs that qualify for payment are subject to decision. Regional allocation of financial resources for restoration and building of wetlands as well as the selection between applications is indirectly targeting the vulnerable zones according to the Nitrates Directive.

The creation, restoration and management of wetlands is crucial to the achievement of the national environmental quality objective “Zero Eutrophication”, and by extension to the achievement of the other water-related objectives, “Flourishing Lakes and Streams”; “A Balanced Marine Environment”, “Flourishing Coastal Areas and

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Archipelagos”; and “Good-Quality Groundwater”. (see also section 5.4.3.4.) The restoration will make it possible for wetland plants species such as Potamogeton, Lemna, Phragmites to colonize the area. These plants and others have a positive effect on macro-invertebrates and birds as source of foraging, for resting and breeding and are in overall increasing the biodiversity. The aim is the creation or restoration of at least 6 000 hectares of wetland.

Standard cost payment for restorations of landscape elements. For investments where the variation of costs between the farmers is little, there are possibilities to compensate investment according to assumptions of the standard cost according to article 53 of the Commission Regulation (EC) no 1974/2006. Payments are granted to restore or rebuild cultural-historical elements in the agricultural landscape and for specific activities to improve the efficiency of wetlands and are compensated as follows:

Category Unit Group 1 Restoration of old agricultural buildings and traditional SEK 14 300 (€ Sami settlements* 1588,9)/building Rebuilding of traditional wooded fence in the agricultural SEK 270 (€ 30) /metres landscape Restoring of avenues SEK 2 300(€ 255,6)/tree Restoring of stone walls SEK 320 (€ 35,6) /metres Restoring of valuable arable field SEK 13 500 (€ 1 500)/hectare Improvement of the efficiency of wetlands SEK 900 (€ 100) /hectare * the restoration shall be done with the purpose to maintain the traditional function. Payment for regional priorities does not generally apply in the case of measures that are already being compensated via the general subsidies available under the Rural Development Programme. Nor is such payment provided in the case of cross- compliances under Council Regulation (EC) No 1782/2003 or for obligations specified in section 5.4.3.1, or as specified in section 5.4.3.2. Se also table in section 17.6 Annex 6.

Areas eligible for payment Farmers and other land managers anywhere in the country may apply for payment for regional priorities. What measures under this programme are undertaken in each individual county/area depends on the priorities of the county/area concerned.

Target group Farmers in the land-based industries, other land managers, associations and organisations. Applications are assessed, and those projects regarded as the most cost- effective are given priority.

Payment The payment for regional management initiatives within this sub-measure are paid on the basis of a fixed sum, see Annex 3 in section 17.3.

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Method of calculation and underlying assumptions Costs for implementing the regional management measures in accordance with the conditions largely comprise labour costs, costs of machinery, etc. The sum provided is expected to compensate the beneficiary for the additional costs arising in connection with the management activity. For a detailed description of each specific sub-measure, see Annex 17.3.

Under the support for environmental non-productive investmenst on the basis of actual costs, own work undertaken when making the environmental investment and own material in accordance with article 54 of the Commission Regulation (EC) no 1974/2006 may be the basis for support Actual cost and costs of other resources, such as own work, may be the basis for support. However, the support can never be higher that the amount of the actual costs. Only the costs which the competent authority regards as contributing to environmental improvements qualify for support. Appli- cants are compensated on requisition and presentation of invoices and payment receipts. The sum provided is intended to compensate the recipient for the additional costs arising in connection with the investment. The share of actual costs compensated may vary according to the type of and within the investment. The support rate is maximum 90 per cent of eligible costs, exceptions from this may be done in specific situations.

Support for environmental non-productive investments may also be provided on the basis of the assumption of standard costs including the assumption of income forgone, according to article 53 of the Commission Regulation (EC) no 1974/2006. Basically, these costs consist of costs for own work undertaken when making the environmental investment, materials and equipments. The support rate is 90 per cent of eligible costs.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Total volume of investment, MSEK (activity code 216) 100 MSEK (11 M€) Number of hectares wetland areas created or restored 6 000 hectares during the programme period (activity code 216) 18 000 hectares Number of hectares of restored grazing land and meadowland during the programme period (activity code 214) See also sections 5.4.3.4 and 5.4.3.5 Result See also sections 5.4.3.4 and 5.4.3.5

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5.4.3.7 Traditional cultivated plants and livestock breeds The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and Article 27 and 28 of Commission Regulation (EC) No 1974/2006.

Activity code: 214

Underlying considerations The sub-measure contributes to achievement of the national environmental quality objective A Varied Agricultural Landscape. This implies:

- The continued cultivation of local brown bean varieties, and - Measures to ensure the long-term survival of a sufficient number of native livestock breeds in Sweden.

Without the proposed measures, there is a danger that the growing of local brown bean varieties may cease and be replaced by grain cultivation, and that a number of livestock breeds may become extinct.

In the case of cultivated plants, the measures aim to secure the continued traditional growing of local varieties of brown beans in Öland. This area of farming is an important part of the island’s cultural heritage. The countryside of southern Öland, where most brown bean cultivation takes place, is a UNESCO world heritage site and a designated Natura 2000 area. The cultivation of brown beans was a contributing factor in the designation. Due to a market recession and declining commercial interest, the traditional cultivation of relatively low-yield varieties is gradually being replaced by conventional grain growing. Further cultivation of brown beans means that local varieties can be preserved, but also means the preservation of one of the grounds for choosing the area as a world heritage site. The payment also serves to encourage an environmentally sound method of cultivation that helps reduce nitrogen leaching and the use of chemical plant protection products.

As regard to traditional livestock breeds, genetic variations among domesticated animals is important to preserve. As a result of changes in the outside world, attributes once found in older breeds may now be taken in good account. Many of our older breeds in fact represent a living cultural heritage. Those breeds requiring payment are unable to compete with breeds chosen for their high yields of milk and meat. A number of breeds are only kept for subsistence farming or to maintain our cultural heritage. Without payment, several breeds risk dying out altogether.

Breeding associations play a key part in preservation work by monitoring the status of each breed. These associations are unable to cope with all the preservation work on the basis of fees paid by livestock owners. Targeted measures are needed that are important for the breed, but which entail excessive costs for individual livestock farmers. Endangered species of poultry, horses, bees and rabbits are kept in such small units that individual commitments are not an effective alternative. A more effective

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approach is to provide direct payment to those activities undertaken by breeding associations which are essential to the preservation of the species/breed.

Traditional cultivation of brown beans

Objective The aim is the annual cultivation of 700 hectares of brown beans in Öland. The effect would be to preserve an important part of the island’s cultural heritage and also ensure that local varieties are preserved and grown in situ.

Description The payment involves traditional farming of brown beans in Öland. The cultivated varieties of brown beans should be found on the Swedish list of varieties and should be of Swedish origin.

To qualify for payment, growers may only add nitrogen fertiliser to the field as a starting input in direct conjunction with sowing. Brown beans are to be grown in such a way that mechanical weed control can be practised. During the growing season, chemical plant protection products targeting fungus or insects may not be used. Unless the harvesting of brown beans is followed by the sowing of an autumn crop, the land may not be cultivated until the end of the year (November/December) in order to reduce the risk of nitrogen leaching.

Each year during the commitment period, the farmers is required to grow brown beans on an area equivalent to at least 70 per cent of the area used for growing brown beans during the first year of the commitment period. Throughout the five-year period, the farmer must apply annually for receiving payment for the entire area on which brown beans are grown. It is not necessary to use the same land every year.

Obligations which are not compensated are both cross-compliances under Council Regulation (EC) No 1782/2003 and obligations as specified in section 5.4.3.1, or as specified in section 5.4.3.2 See also table in section 17.6 Annex 6.

Areas eligible for payment Payment for the traditional cultivation of brown beans is only granted for cultivation in Öland.

Target group Farmers engaged in the cultivation of brown beans in Öland and who meet the conditions specified.

Payment The proposed amount is SEK 1 400 (€ 155,6)/hectare.

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Method of calculation and underlying assumptions The additional costs of traditional cultivation of brown beans have been calculated on the basis of estimated income forgone for such cultivation compared to grain cultivation within the same geographical area. The income forgone is the result from comparing the gross margin for grain cultivation compared with brown bean cultivation. This comparison has been chosen as in most crop rotations in the area, grain growing is preferred to the growing of brown beans because it is a more profitable crop. On the revenue side is the yield multiplied by the price for the different crops. Seed, fertilizer, fuel, transport, drying and cleaning, maintenance of equipment, equipment depreciation and rate and labour cost is the items on the cost side. Costs regarding plant protection products are much higher for grain cultivation as herbicides only may be used when cultivating brown beans. Labour costs for the cultivation of brown beans are greater than for cereal growing, due in particular to the need for mechanical weed control, harvesting difficulties and, in some cases, the need for irrigation. Irrigation in early summer with periods of drought reduces the risk for poorer growth during the vegetation period with subsequently less uptake of nitrogen and a higher risk for nitrogen leakage in early autumn with high precipitation. An average between two third none irrigated and one third irrigated brown beans are used in the calculation as about on third of the brown bean cultivated area is irrigated each year. The sub-measure does not include any payment for irrigation.

Endangered livestock breeds

Objective To affiliate 5 000 livestock units and ensure that no breed needs to be classified as endangered by the FAO Domestic Animal Diversity Information Sytem (DAD-IS).

Description Payment is granted to livestock farmers who, each year throughout the comittment period, keep breeds of animals that are included on the EU list of endangered livestock breeds. These are breeds which in the EU zone are only found in Sweden and for which Sweden is responsible as regards to the registration and the keeping of livestock pedigree records.

Livestock breeds eligible for payment Cattle Fjällko Rödkulla Allmogeko (väneko, ringamålako, bohuskulla) Sheep Ryafår Finullsfår Gutefår Allmogefår (dala pälsfår, roslagsfår, skogsfår) Goats Lantrasget Allmogeget (göingeget, jämtget) Pigs Linderödssvin

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Livestock keepers are required to maintain a certain number of livestock units over a five-year period and to ensure that the number of units during this period does not fall below 50 per cent of the commitment. The number of livestock units is allowed to vary as headage per herd is usually low and natural variations in the herd would have drastic consequences in terms of sanctions. Applying a five-year commitment is nevertheless advisable as preservation work must be long-term.

Livestock keepers are required to comply with the breeding plans drawn up by the Swedish Board of Agriculture for each breed. Animals eligible for payment must be kept free from intermixing with other breeds, which means that females may only be covered by males of the same breed. Herds must be affiliated to an approved pedigree testing system for each breed, and the animals’ pedigrees must be certifiable through parentage or gene bank certification. This programme is also intended to help maintain a good state of health among livestock, which is why sheep stock are required to take part in the EU programme for combating the maedi visna virus. The aim of the programme is active preservation, and castrated animals are therefore not eligible for payment.

Obligations which are not paid are cross-compliances under Council Regulation (EC) No 1782/2003 and obligations as specified in section 5.4.3.1 or as specified in section 5.4.3.2. See also table in section 17.6 Annex 6.

Areas eligible for payment The whole of Sweden.

Target group All keepers of livestock engaged in preservation, who runs some type of agricultural activity.

Payment The proposed amount is a fixed sum of SEK 800 (€ 88,9) per type of livestock and herd/flock, and SEK 1 000 (€ 111,1) per livestock unit except in the case of the Linderödssvin (pig) variety, for which a sum of SEK 1 500 (€ 166,7) per unit is proposed.

The sub-measure will contribute to the preservation of a sufficient number of domestic livestock breeds in Sweden.

Method of calculation and underlying assumptions The conditions for payment state that herds must be affiliated to an official pedigree testing system or gene bank operation, and that flocks of sheep must be included in the sub-measure in order to combat the maedi visna virus. A fixed sum of SEK 800 (€ 88,9) per type of livestock is designed to defray the bulk of the stock’s fixed costs, the aim being to bring small herds into the programme as well.

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Economic comparisons have been made between keeping conventional production breeds and keeping endangered livestock breeds. In the case of dairy cows, there are differences in income deriving from lower milk yields from endangered breeds, a lower slaughter value on culled cows, and a lower value for calves. Costs are higher for bulls and insemination but comparable for work and buildings. However, although the total cost of fodder is lower due to the difference in milk yields, the same income per litre of milk has been allowed for. Beef cattle can also be kept as sucker cows for meat production. Calculations have been made using comparisons with beef cattle breeds, and the result is a lower value for weaned suckling calves and a lower slaughter value for culled cows. Costs for fodder, labour and buildings are considered equal, while the cost of pedigree testing is higher. Payment levels for grazing land are judged to be equal.

The various breeds of sheep have been compared to conventional lamb production with lambing in the spring and slaughter in the autumn. The difference lies in a lower slaughter weight for lambs in the former category, and the fact that they do not attain the highest paid quality classes. The different breeds’ fertility and wool value have been taken into account. Inspection costs are higher. Labour, buildings and fodder are deemed to be independent of the breed chosen, and payment for grazing land has not been taken into consideration.

Goats are kept for cheese production and in many herds exclusively for preservation reasons. The goat breeds found in Sweden are on the list of endangered livestock breeds and no comparison with other breeds can therefore be made. There is considerable difference between keeping pigs of the Linderrödssvin variety and managing a conventional pig farm. Herds of the former tend to consist only of a sow and a boar. Often, there is just one litter a year. Labour input is much greater in herds of this size. Boar keeping is also expensive when there are only one or two sows.

Breeding associations for the preservation of endangered livestock breeds

Objective The participation of all authorised associations.

Description Breeding associations can apply for payment for measures aimed at creating and maintaining pedigree registers and herdbooks, health-promoting measures for the breed in question, breeding advice, payment for the transport of genetically important animals between herds, mating stations for Nordic bees, payments to gene bank herds and flocks, and payment to help defray costs for covering mares and keeping livestock pedigree records.

When applying, breeding associations specify what activities they intend to undertake. The Swedish Board of Agriculture selects priorities from among these proposed activities on the basis of whether they contribute to the fulfilment of the interim target concerning the genetic resources of domestic animals under the national

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environmental quality objective A Varied Agricultural Landscape. Following a decision by the Board of Agriculture, the breeding associations implement their proposals, and, after submitting financial accounts, are compensated for their costs up to a set amount.

Obligations which are not compensated are both cross-compliances under Council Regulation (EC) No 1782/2003 and obligations as specified in section 5.4.3.1 or as specified in section 5.4.3.2 See also table in section 17.6 Annex 6.

Areas eligible for payment The whole of Sweden.

Target group Payment is granted to breeding associations responsible both for breeds on the EU list of endangered Swedish livestock breeds and for endangered Swedish species among food-producing animals listed for national conservation.

Payment The total cost for this form of payment has been ccalculated on the basis of the number of gene banks for endangered species of poultry, rabbits and horses and the number of keepers of Nordic bees. The total amount is estimated at SEK 3 million per annum. Payment to breeding associations is granted on submission of costs for activities undertaken and reported. The Swedish Board of Agriculture distributes funding during the programme period. It is also responsible for selecting priorities from among the proposed activities to ensure they contribute to fulfilment of the interim target concerning genetic resources among domestic animals in the environmental quality objective A Varied Agricultural Landscape.

The sub-measure is intended to help ensure that no breed is classified as endangered under the FAO’s Domestic Animal Diversity Information Sytem (DAD-IS).

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other land managers receiving 70 farmers etc payment for cultivating brown beans Number of farmers or other land managers receiving 1 000 farmers etc payment for preserving traditional livestock breeds Number of breeding associations receiving payment for 15 associations the preservation of traditional livestock breeds Number of hectares receiving payment for growing 700 hectares brown beans Number of livestock units receiving payment for the 5 000 LU preservation of traditional livestock breeds

Result Number of hectares successfully farmed/managed (the 700 hectares land is neither overgrown nor abandoned). Number of hectares/LU successfully farmed so that the 700 hectares + natural- and cultural values are preserved 5 000 LU Number of hectares promoting improved water quality 0 hectares Number of hectares promoting improved soil quality 0 hectares The contribution to combat climate changes 0 Ktonnes

5.4.3.8 Reduced nutrient leaching from arable land The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and on Article 27 of Commission Regulation (EC) No 1974/2006.

Activity code: 214

Underlying considerations The sub-measure is intended to contribute to achievement of the national environmental quality objective Zero Eutrophication. A vital part of this endeavour is the interim target which states that Swedish waterborne anthropogenic emissions of nitrogen compounds into marine areas south of the Åland Sea will have been reduced by at least 30 per cent compared with 1995 levels. The sub-measures will also have a favourable effect on the environmental quality objective A Varied Agricultural Landscape.

The cultivation of a catch crop following the autumn harvesting of a main crop is an effective means of reducing the risk of nitrogen leaching during the autumn months and of conserving nutrients in the soil. The extent to which the catch crop affects the leaching depends on its ability to absorb nitrogen during the autumn, but is also dependent on the soil not being cultivated further. Non-cultivation during the autumn

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months, therefore, has in itself a beneficial effect on the leaching problem by preventing the release of nitrogen. The purpose of riparian strips (protection zones) is to reduce soil surface runoff and nutrient leaching from arable land. By establishing a grassy zone alongside waterways and lakes, surface runoff from farmland is reduced, particularly in autumn and winter, and this means fewer losses, primarily of phosphorous stored in soil particles. Riparian strips also benefit flora and fauna.

Measures aimed at increasing both catch-crop cultivation and acreage farmed in the spring supplement the Swedish Regulations on governing the share of autumn or winter-planted land. The Regulations represent one of the additional measures undertaken in accordance with Article 5.5 in an effort to achieve the objectives of the Nitrates Directive. Under these rules, farms with more than five hectares of arable land in the counties of Blekinge, Skåne and Halland are required to autumn-plant or winter- plant at least 60 per cent of their soil. In the case of Östergötland, Jönköping, Kronoberg, Kalmar, Gotland and Västra Götaland, 50 per cent of the soil must be autumn-planted or winter-planted. Approved crops that must be used if the soil is to be considered autumn-planted or winter-planted are listed in the Regulations on Environmental Concerns in Agriculture with Regard to Plant Nutrients (SJVFS 2004:62) issued by the Swedish Board of Agriculture. However, these Regulations do not specify that planted land must comprise a catch crop. The area specified in Swedish legislation on autumn-planted and winter-planted land is somewhat larger than the area designated for sub-measure.

Neither the Nitrates Directive nor Swedish legislation contains any specific rules on the distribution of plant protection products or fertilisers requiring the existence of riparian strips beside waterways.

In the period leading up to 2009, action programmes are to be drawn up in accordance with the Water Framework Directive (Article 11 in Directive 2000/60/EC of the European Parliament and the Council establishing a framework for Community action in the field of water policy). Efforts in this area will provide a better overall picture of the eutrophication situation in the country and enhance our understanding of where counter-measures, such as catch crops, spring cultivation and riparian strips targeting nitrogen and phosphorous need to be introduced. The issue of eutrophication and how it can be dealt with may thus become an important component in many action programmes. This may in turn necessitate a change in the measures, for instance with regard to their scale and scope and to the selection of areas qualifying for payment, but may also lead to new measures being considered in respect of phosphorous. This could also be the case concerning regional allocation of financial resources for restoration and building of wetlands. As the action programmes is not jet developed, it has not been possible to designate the areas eligible for support for these sub-measures in accordance with the action programmes.

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Objectives The objectives with the sub-measures are to reduce nutrient losses from arable land by:

A. Planting 135 000 hectares with catch crops and bringing 65 000 hectares under spring cultivation. The effect of such a measure will be to reduce waterborne nitrogen leaching from arable land by some 2 000 tons of nitrogen per annum.

B. Establishing of approx. 7 000 hectares of riparian strips alongside waterways. Such management measures can be expected to reduce surface runoff and leaching of both phosphorous and nitrogen from the area. Flora and fauna in the strips also stand to benefit.

Description

A. Reduced nitrogen leaching Payment is granted for two sub-measures:

1. Cultivation of catch crops 2. Spring cultivation (soil cultivation after 1 January). Payment in accordance with conditions 1 and 2 (see below) may be combined on the same land.

Conditions: 1. Cultivation of catch crops Catch crops are defined as crops established to catch plant nutrients, especially nitrogen, following the harvesting of a main crop, thereby reducing the risk of nitrogen leaching. Payment is available to farmers who each year thoughout the commitment period grow catch crops over an area equivalent to at least 20 per cent of the spring grain acreage on the holding.

2. Spring cultivation Spring cultivation means in the present context that the land is not worked following the harvesting of a main crop or of a planted fallow before the year’s end. Payment is provided to farmers who each year throughout the commitment period refrain from working the soil over an area equivalent to at least 20 per cent of the spring grain acreage on the holding.

Farmers applying for payment for activities under the scheme must undertake to fulfil at least condition 1 or condition 2. The payment is also available for the further cultivation of catch crops. Further acreages of catch crops, stubble, fallow and ley that are not worked during the current year are similarly eligible for payment for spring cultivation. The commitment runs for a period of five years but the same land need not be used throughout the period.

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To be granted for payment under conditions 1 and/or 2, requirements are also imposed concerning the latest time of year for the sowing of catch crops and the earliest acceptable date for incorporating the catch crop into the soil, and the earliest date for spring cultivation. These times will be specified in a special regulation.

B. Riparian strips alongside waterways Payment is granted for the planting of riparian strips, i.e. ley strips of arable land alongside waterways, lakes or seas. Arable land is defined here as land suitable for ploughing and used for plant cultivation or grazing.

The watercourses or lake adjoining the riparian strip must be marked on a topo- graphical map or be water-bearing all year round. To qualify for a grant, the farmer must sow the riparian strip (6–20 meters wide) no later than Spring of the first year of the commitment period. The riparian strip may not be turned over until Autumn of the final year of the commitment period. The use of fertilisers or plant protection products is prohibited in the riparian strip.

The commitment runs for a period of five years. To ensure that targets are fully met, the measures only apply to the same land throughout the commitment period.

The following obligations are not payable in respect of A and B above cross- compliances under Council Regulation (EC) No 1782/2003 and obligations specified in section 5.4.3.1 or as specified in section 5.4.3.2. See also table in section 17.6 Annex 6.

Areas eligible for payment - Arable land in areas 5c, 5m and 9 in the counties of Skåne, Blekinge, Kalmar, Gotland, Västra Götaland and Halland, and in areas 5a and 5b in the county of Halland and Västra Götaland in respect of reduced nitrogen leaching. - Arable land throughout development areas 5 and 9 in respect of riparian strips.

The vulnerable zones in Sweden according to the Nitrates Directive are mainly the same as the areas eligible for support under this sub-measure. There are however some differences. The sub-measure has been addressed to areas with high precipitation during the autumn months and mainly light soils. In these areas growing catch crops and spring cultivation could effectively reduces the risk of nitrogen leaching. On clay soils spring cultivation could lead to irreversible soil compaction and effectiveness of the growing of catch crops is less significant if the precipitation is low during the autumn months. Such areas are for that reason excluded in the sub-measure even if they are designated as vulnerable zones.

For the sub-measure riparian strips the area eligible for support is much wider than the areas designated as vulnerable zones as riparian strips have a positive effect on both light and heavy soils during the whole year.

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Target group A and B. Farmers of arable land who meet the conditions specified are eligible for payment.

Payment Proposed rates of payment: − For growing catch crops: SEK 800 (€ 88,9)/hectare − For spring cultivation: SEK 300 (€ 33,3)/hectare − For combining catch crops and spring cultivation on the same acreage: SEK 1 300 (€ 144,4)/hectare − For riparian strips: SEK 1 000 (€ 111,1)/hectare.

Method of calculation and underlying assumptions A 1. Cultivation of catch crops

To fulfil the commitment, farmers must sow a specific crop in the spring in a field where they had previously sown a main crop for harvesting. Alternatively, in certain cases for example after potatoes, the catch crop may be sown in the autumn after harvesting of the main crop. The increased costs incurred by the farmer in this undertaking are for seed, sowing and labour. When a catch crop has been sown, harvesting of the main crop becomes more difficult than if no catch crop had been sown, and more time has to be spent on harvesting work. Crop losses are greater and the water content of the crop is higher. Moreover, catch crops tend to increase the cost of weed control to some extent and reduce the amount of main crop harvested. As the catch crop may not be harvested, used for grazing or used for some other form of production, the farmer does not earn any income from it. Catch crops allow farmers to reduce the amount of nitrogen used to fertilise the main crop on the same soil the following year, and this is included as an item of income in the calculation, as specified in Annex III 3 (ii) of the Nitrates Directive.

A 2. Spring cultivation

Farmers may not cultivate the soil until after 1 January the following year. Spring cultivation of the land entails higher costs in terms of machinery and labour, a greater risk of soil compaction and a delay in the sowing of the next crop, due to the limited time available for spring sowing and the delayed sowing date. At the same time, however, the farmer must reduce nitrogen delivery to the next crop in the same field, as specified in Annex III 3 (ii) of the Nitrate Directive.

Items on the cost side is additional costs assigned to growing demand for soil cultivation and weed control but also costs related on some soil structural damages and yield reduction in the coming years. On the revenue side the factor is less purchases of nitrogen fertilizer the coming year.

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B. Riparian strips alongside waterways

By creating a riparian strip, the farmer is committed to foregoing the cultivation of any other crop on the land in question. The level of payment for riparian strips has been calculated on the basis of loss of income when no crop can be planted on the land and the cost of sowing the riparian strips.

Costs for riparian strips are seed, sowing of the riparian strip and labour cost plus loss of net income from grain cultivation on an area corresponding to the riparian strip during a period of five years.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other land managers receiving 5 500 farmers payment for reduced nitrogen leaching Number of farmers or other land managers receiving 3 500 farmers payment for the establishment of riparian strips alongside waterways Number of hectares receiving payment for reduced 140 000 hectares nitrogen leaching Number of hectares receiving payment for the 7 000 hectares establishment of riparian strips alongside waterways

Result Number of hectares successfully farmed/managed (the 147 000 hectares land is neither overgrown nor abandoned) Number of hectares successfully farmed/managed so 147 000 hectares that plant nutrient loss from agricultural land is reduced Number of hectares successfully farmed so that the 0 hectare natural- and cultural values are preserved Number of hectares promoting improved water quality 147 000 hectares Number of hectares promoting improved soil quality 0 hectares The contribution to combat climate changes 0 Ktonnes

5.4.3.9 Environment protection measures The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and on Article 27 of Commission Regulation (EC) No 1974/2006.

Activity code: 214

Underlying considerations This sub-measure is primarily intended to contribute to achievement of the national environmental quality objectives A Non-Toxic Environment and Zero Eutrophication.

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The sub-measure will also have a favourable effect on the environmental quality objective A Varied Agricultural Landscape.

It is aimed at reducing the risks associated with the use of plant protection products by improving the management chain at farm level and by reducing the risks with plant protection products polluting water by using a bio-bed when filling the sprayer and establishing spray-free edge zones. A further aim is to improve manuring practices on the farm and thereby reduce the risk of plant nutrient losses. These aims can be achieved by soil mapping including soil analysis, farm gate nutrient balance and by determining the nitrogen content of liquid manure used in crop production.

Evaluation of the work under way on Sweden’s environmental quality objectives have shown that A Non-Toxic Environment is among the hardest to achieve. Swedish farming still largely involves the use of plant protection products to a greater or lesser extent. Such products are sometimes found in water in intensively farmed areas, although quantities tend to be small. In addition to the campaign for organic production, therefore, further efforts are needed in the agricultural sector to reduce the risks associated with plant protection products. The environmental quality objective Zero Eutrophication has also proved very difficult to achieve. Recently published findings show that the measures introduced so far have been highly successful but that there is still a long way to go. There is therefore a need for further measures to supplement those dealing with reduced nitrogen leaching, riparian strips, and wetlands.

The obligations that the applicant has to fulfil beyond the existing national legislative measurers to reduce nutrient losses and to minimize risks associated with the use of plant protection products. The national rules are stipulated in the Ordinance (SFS 1998:947) on Plant Protection Products and the Regulation (NVFS 1997:2) on use of Plant Protection Products and the Regulation (SJVFS 2004:62) on Environmental Concerns in Agriculture. The obligations to achieve farm gate nutrient balance, aim at determine the nitrogen content of liquid manure and require soil mapping including soil analysis, which are also additional measures in relation to Article 5 and annexes 2 and 3 of the Nitrates Directive.

Objectives

To link in approx. 600 000 hectares.

To help reduce the risks associated with the use of plant protection products and reduce the risk of plant nutrient losses.

Description To qualify for payment, applicants must:

- Achieve a farm gate nutrient balance for the holding. - Determine the nitrogen content of liquid manure used in crop production on the holding.

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- Undertake soil mapping, including soil analysis of the arable land used by the holding. - Use biobeds or other approved loading position/method for farm sprayers. - Use a tested farm sprayer. - Provide ongoing documentation of weed control requirements on each occasion, and determine what opportunities exist for needs-based control when spreading plant protection products. - Create special ‘check’ areas each year for following up the impact of weed control practices in connection with spring and autumn sowing respectively, and also, where relevant, of insect control. - Establish spray-free edge zones on the farm equivalent to 20 meters per hectare of grain.

A more detailed description what the applicant has to do to be eligible for payment is given under methods of calculation and underlying assumptions. All acreage is eligible for payment, with certain exceptions. Payment is not granted for acerage under organic forms of production, land set aside with perennial industry- and energy crops, ley or other fallow land. Farmers must, however, manage all land on the holding in accordance with the requirements for this form of payment, with certain exceptions. They are not required as part of the commitment to use the same land every year. The commitment runs for a period of five years.

To be granted for the payment the applicant must have a current crop management plan for the holding. Other non-payable obligations are cross-compliances under Council Regulation (EC) No 1782/2003 and obligations specified in section 5.4.3.1 or as specified in section 5.4.3.2. See also table in section 17.6 Annex 6.

Areas eligible for payment The whole of Sweden.

Target group Farmers of arable land who meet the specified conditions.

Payment The proposed payment rate is SEK 200 (€ 22,2)/hectare for 0–50 hectares and SEK 80 (€ 8,9)/hectare for 50–300 hectares. Total maximum payment per holding is thus SEK 30 000 (€ 3333,3).

Method of calculation and underlying assumptions Payment under the environment protection measure is intended to reimburse the recipient for the additional costs incurred when actions listed under ‘Description’ are taken. Labour and investment costs and costs arising from loss of income are calculated on a national basis for a typical farm holding. Costs which are not acreage- dependent are spread over 5 years and 50 hectares. Costs which are acreage dependent are calculated on a per hectare per annum basis. Payment is not granted for more than 300 hectares per farm holding.

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The actions listed involves that the recipient each year must have zones along border of fields with grain cultivation there plant protection products shall not be used. Such zones involve loss of income because of more harvest difficulties and lower yields and are acreage dependent. The same applies to the establishment of control plots where no plant protection products shall be used. These plots make it possible for the farmer to estimate if use of plant protection product during the year in the rest of the field has been essential or not. These costs are acreage dependent and are calculated on a per hectare per annum basis.

A biobed or impermeable platform shall be used when filling and empting the sprayer and have to be constructed. The construction includes material and labour costs. These costs are divided over a five years period. The farmer could also choose to fill and empty the sprayer on the field. If the farmer chooses such a place he have to have a mobile equipment for filling the sprayer and portable and lockable storage place for plant protection products. Costs related to mobile equipments are higher than the costs of building a biobed or impermeable platform and is hence not used as basis for the calculation of the costs for this activity.

The spraying equipment has to be tested every second year. The costs includes both a charge to the tester, transport and labour costs for transportation of the equipment to the testing place and costs related to cleaning the equipment before testing.

The recipient shall analyse the content of nutrients in liquid manure used at the farm. This action applies both to manure produced on the farm or received from outside the farm. The analysis has to be done each year with specific equipment. The analysis shall at least include the ammonium content and be documented. The costs for the analysis include purchases of the equipment divided on five years and labour costs in relation to the analysis.

The recipient also has to establish a farm gate nutrient balance for the farm. A farm gate balance is a balance on farm level involving products transported in to the farm containing nutrients for instance animal feed, fertilizer etc and products transported out from the farm such as sold harvest products, animal for slaughter etc. This type of balance concerning the amount of nutrient input on the farm level from different inputs is needed to diminish how to reduce nutrient losses to water and air and improve the nutrient efficiency on the farm level.

Soil mapping including soil analysis shall be conducted according to detailed conditions laid down in the national ordinance and regulation. These rules involves details how to make the specific soil sampling, the analysis of pH, phosphorus, potassium, the clay content, the organic matter content etc. The soil mapping including the soil analysis shall cover the arable land used by the holding. In the calculation the initial cost regarding soil mapping and soil analysis are spread over 5 years and 50 hectares. All other costs regarding soil mapping and soil analysis are acreage dependent and calculated per hectare and spread over 5 years. The detailed soil map and soil analysis

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are a detailed source for each part of a field to diminish the input of the nutrients to reduce losses to water.

The documentation of the need of plant protection usage shall be done considering thresholds and dosage keys for different weeds and pests. Costs concerning this documentation are included in the estimation of the payment. This documentation concerning the need of plant protection usage goes beyond the obligations described in 5.4.3.2. National minimum standards and other relevant national provisions concerning the use of fertilisers and plant protection products. This is an important and detailed source how to further reduce the usage of plant protection products.

A mandatory condition, not included calculation of the support level, is that the farmer has to have a current crop management plan. Such a management plan involves details about all the different blocks of arable land on the holding. For each block, information about preceding crop, the crop of the year and variety of this crop, the calculated needs of nitrogen, phosphorus and potassium shall be noted in the plan. The needs of nitrogen shall be calculated from the estimation of the yield, the effect of the preceding crop and the long-term effect of manure used on the block. The amount of nitrogen, phosphorus and potassium calculated, estimated or noted from the package for the mineral fertilizers, manure and other organic fertilizers, which will be used on the plot shall be documented in the management plan. In the plan time of spreading and type of fertilizer, the amount of manure and other organic fertilizers shall be given as nitrogen, phosphorus and potassium in the fertilizers for each spreading occasion shall be noted. Finally the harvest on each block shall be documented.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other land managers receiving 10 000 hectares payment for environment protection measures Number of hectares receiving payment for 600 000 hectares environment protection measures Result Number of hectares successfully farmed so that plant 600 000 hectares nutrient loss and risks associated with the use of plant protection products are reduced. Number of hectares successfully farmed/managed 600 000 hectares (the land is neither overgrown nor abandoned) Number of hectares successfully farmed so that the 0 hectares natural- and cultural values are preserved Number of hectares promoting improved water 600 000 hectares quality 600 000 hectares Number of hectares promoting improved soil quality 0 Ktonnes The contribution to combat climate changes

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5.4.3.10 Organic forms of production The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and on Article 27 of Commission Regulation (EC) No 1974/2006.

Activity code: 214

Underlying considerations The sub-measure is divided in two parts: A. Certified organic production B. Sustainable agricultural production adapted to organic production systems The purpose of this sub-measure, as stated in Council Regulation (EEC) No 2092/91, is to promote sustainable use of farmland. Organic production is spearheading efforts to adapt agriculture to environmental imperatives and to develop farming practices that take greater account of animal welfare. This form of production is based on the utilisation of local and renewable resources. Plant nutrient supply and plant protection are based on varied crop rotation. Chemical plant protection products and mineral fertilisers are not used. Organic animal husbandry is an important part of the production system, and livestock density is adapted to the farm’s capacity for fodder production.

Certified organic production as well as sustainable agricultural production adapted to organic production systems has a favourable impact on biodiversity both due to varied crop rotation, usually involving a substantial ley component, and the fact that chemical plant protection products are not used in production. The adaptation of livestock density to fodder production capacity is beneficial to the environment as it gives the farmer an incentive to conserve the plant nutrient resources present in farmyard manure. Ley farming and the use of organic fertilisers have a favourable effect on the soil’s long-term production capacity, primarily through their effect on soil structure and humus content. Organic animal husbandry benefits animal welfare as feeding practices, the animal environment and rearing methods should correspond as far as possible to the animals’ natural needs.

In the present context, certified organic production is taken to mean crop production or animal husbandry, both during and after the qualifying period, that are inspected in accordance with Council Regulation (EEC) No 2092/91 by an approved control body. Farmers applying for support for sustainable agricultural production adapted to organic production systems have to follow the production rules for organic production as laid out in Council regulation (EEC) No 2092/1991. Products from this production system may not be labelled as organic. Both part A and part B will be inspected in accordance with the Commission regulation (EC) No 1975/2006.

A higher volume of certified organic production affords opportunities for the processing of organic products. This can be developed further both locally and regionally through increased marketing and selling of organically certified products in the market. Organic production is dependent on a higher level of demand for organic foodstuffs and market growth. This is essential if consumer demand for such products is to be met.

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Objective 20 per cent of Swedish farmland is certified as organic. Increased organic production and sustainable agriculture production adapted to organic production systems contributes directly and indirectly to the achievement of several of the environmental quality objectives.

Description Payment for certified organic crop production and sustainable crop production adapted to organic production systems is only eligilbe for arable land. To prevent target achievement rates from falling off, five-yearly reviews ensure that the production is carried out on the same land throughout the commitment period. Payment for certified organic animal husbandry and animal husbandry adapted to organic production systems is extended on the basis of the number of dairy cows, suckler cows, heifers, ewes, goats (females), sows, production pigs, laying hens and table chickens the holding has. Payment is provided in the form of an extra contribution for arable land with a five-year commitment and for semi-natural grazing land and mown meadowland, subject to commitments under the sub-measure for the preservation of such land. One hectare of arable land corresponds to one livestock unit and one hectare of grazing land corresponds to 0.5 livestock units.

For both parts of the sub-measure, the management requirements are taken from Articles 6 and 6a and Annex 1 in Council Regulation (EEC) No 2092/91 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs. In the event that Regulation 2092/91 is changed, or should changes relevant to the measure be made in documents associated with this Regulation, these changes are to apply as conditions for payment.

Obligations not compensated are cross-compliances under Council Regulation (EC) No 1782/2003 and obligations as specified in section 5.4.3.1, or as specified in section 5.4.3.2. See also table in section 17.6 Annex 6.

Areas eligible for payment The whole of Sweden.

Target group Farmers of arable land or grazing land used for certified organic cultivation or animal husbandry and sustainable agricultural production adapted to organic production systems (both cultivation and animal husbandry)who meet the conditions laid down for payment according to part A and B.

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Payment The rates of payment are defined in the following table. To be eligible for payment for part A the entire crop production within the sub-measure has to be certified as organic.

Organic Sustainable production adapted to production (part organic production systems (part B) A) 2007-2013 2007-2008 2009 and onwards Crop production Grain, protein crops, flax, SEK 1 300/hectare SEK 975/hectare SEK 650/hectare fodder beets, other annual (€ 144,4) (€ 108,3) (€ 72,2) crops except grass and leguminous plants for ley production Oleiferous plants, linseed SEK 2 200/hectare SEK 1 650/hectare SEK 1 100/hectare flax, brown beans, preserved (€ 244,2) (€ 183,3) (€ 122,2) peas, grass seed ley Potatoes, sugar-beet, SEK 5 000/hectare SEK 3 750/hectare SEK 2 500/hectare vegetables (€ 555,6) (€ 416,7) (€ 277,8) Fruit and berries67 SEK 7 500/hectare SEK 5 625/hectare SEK 3 750/hectare (€ 833,3) (€ 625) (€ 416,7)

Animal husbandry Arable land SEK 1 600 SEK 1 200 SEK 800 (€ 177,8) (€ 133,3) (€ 88,9) Semi-natural grazing land SEK 800 (€ 88,9) SEK 600 SEK 400 (€ 66,7) (€ 44,4)

Method of calculation and underlying assumptions The payment level for the sub-measure has been calculated by comparing them to the incomes and costs for conventional production and estimating the additional costs deriving from certified organic production and sustainable production adapted to organic production systems.

Crops The average gross margin for barley, rye and wheat, which is the most common organically produced are compared with the average gross margin for same conventional produced cereals. A lower yield both as grain and straw for organic produced cereals entails together with higher costs for seed, weed control in

67 Strawberry growing is counted as a perennial crop. The first year is for planting/establishing, and the crop is harvested for at least two years thereafter. Strawberry growing may be compared with other perennial berry cultures as regards problems with weeds and harmful insects and the need for specialised cultivation methods. The additional cost of ecological production of strawberries corresponds to SEK 7 500/hectare.

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connection to weed harrowing and stubble treatment and the use of specialized fertilizers the most prominent differences compared to the gross margin of conventional production of cereals. Other factors that influence the costs for organic production are the yearly fee to the certification body and the need for one year of fallow/green manuring during crop rotation period. On the other hand there are no costs regarding the use of chemical fertilizers or plant production products in organic production. A higher premium price is also a positive factor for organically produced products.

For oilseed, preserved peas, brown beans, linseed flax and grass seed ley a corresponding comparison between organic production and conventional production is made. Lower yields, higher costs for seed, weed and pest control are factors that create the largest differences regarding costs between organically and conventional produced products. A higher premium price, no costs for the use of chemical fertilizers and plant protection products are factors that are positive in relation to organic production. For potatoes, sugar beets and vegetables the same corresponding comparison is made as mentioned above. The most commonly grown vegetables organically are carrots and as more reliable data was able to obtain the comparison is hence made between organically and conventionally grown carrots.

All of the acreage with organic grown fruit and berries are covered with different specialised perennial crops such as strawberries, hips and currants. In Sweden strawberries gives full harvest the second year after the plantation year. The same type of comparison between organic and conventional production are made to calculate the payment level for these crops. The yield losses are the major factor which creates a large deficit for organic production together with high cost for weed and pest control and specialised fertilizer. Especially the weed and pest control create the large differences between organically and conventionally produced fruits and berries. A careful accomplished weed and pest control are for these type of crops of great importance to get a harvest and achieving a premium price on the market.

Animals The average gross margin for organic milking cows, cattle, sheep, goats, pigs (sows and slaughter pigs) laying hens and slaughter chickens are compared with the gross margin for the same conventional produced animals.

In organic production the output as milk, meat and eggs is lower than in conventional production. On the other hand it is possible to get a higher premium price for these products if they are produced organically. Organically produced fodder (cereals and concentrated feedstuffs), larger fodder consumption are factors that creates higher costs in organic animal husbandry. The same is valid for factors such as larger indoor space, possibility to outdoor stay, higher consumption of straw material and more work in organic production. These factors differ for different animal groups and have been considered in the comparison between the various gross margin calculations. For milking cows on the revenue side income related to meat from the slaughter of the cow and a higher price for organic produced calf is included. On the cost side the buying of

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a mother animal but also a lower classification of the meat is considered in the calculation. Correspondingly for young cattle only the buying of calf and for sucking cows a price for meat from the slaughter of the cow is included in the calculation. As there is no market for meat from the slaughter of ewes, goats and laying hens this factor has not been inserted in the calculations concerning these animals. Finally the fee for certification of organic production is incorporated. The calculated income forgone is finally divided on animal units in accordance with Annex V in the Commission Regulation 1974/2006/EC.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers or other land managers receiving 21 000 payment for organic forms of production Share of agricultural land with certified organic 20 per cent production. Number of animals in certified organic forms of 150 000 production animals Result Share of agricultural land successfully farmed 20 per cent organically Share of agricultural land successfully farmed/managed 20 per cent (the land is neither overgrown nor abandoned) Number of hectares successfully farmed so that the 0 hectare natural- and cultural values are preserved Share of agricultural land promoting improved water 20 per cent quality Share of agricultural land promoting improved soil 20 per cent quality The contribution to combat climate changes 0 hectare

5.4.3.11 Extensive ley management for a better environment and an open landscape The sub-measure is based on Article 39 of Council Regulation (EC) No 1698/2005 and Article 29 of Commission Regulation (EC) No 1974/2006.

Activity code: 214

The sub-measure is divided in two parts: - Part A is eligible in forest-dominated areas with the objective of enhancing biodiversity. - Part B is eligible in areas in the southern part of Sweden with an intensive agricultural production. The objective of part B is to reduce nutrient losses.

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Underlying considerations Arable land utilised for extensive ley management in a sustainable manner has a favourable impact on the environment in a number of respects.

Part A of the sub-measure: An open, varied agricultural landscape is vital to the achievement of the environmental quality objective A Varied Agricultural Landscape. The agricultural landscape with its wide variety of habitat types is of major importance to flora, fauna and the natural- and cultural environment essential for maintenance of biodiversity, valuable cultural heritage assets and an open landscape. The landscape in the forest-dominated areas and in northern Sweden includes a mosaic of mountain, forest, small lakes and agriculture land created by the natural structure such as a stony land mixed with peat land and land with thin soil layer as a result of melting of the ice after the glacial period. These natural conditions have created a agricultural landscape with a mixture of small and isolated areas of arable land and natural pastures. The variation in the landscape with ley management on the arable land with numerous borders and corridors are crucial for preserving the biodiversity and the high nature values. However, ley management in this type of agricultural landscape means additional costs for the farmer because of e.g. longer transports and logistical problems.

Part B of the sub-measure: Extensive ley management on arable land is beneficial from a plant nutrient standpoint and therefore contributes to the achievement of the environmental quality objective Zero Eutrophication. Extensive ley management with a prolonged rotation period with longer intervals between ploughing, contributes to decreasing plant nutrient leaching, reducing soil surface runoff from arable land and reduces risks of negative impact when using plant protection products.

Objective The main objective of part A of the sub-measure is to encourage sustainable land management and maintain a rich biodiversity on 700 000 hectares of arable land in the agricultural landscape.

The objective of part B of the sub-measure is a reduced leaching of nutrient from 200 000 hectares of arable land.

Description Arable land eligible for payment under both part A and part B of the sub-measure must: - Be ploughable and suitable for extensive management of grass or leguminous plants for forage, grazing or seed. - Be actively cultivated, i.e. grazed or harvested annually, and the harvested crop must be collected and removed. - Remain unploughed for at least three consecutive years.

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Furthermore: - Application of chemical plant protection products is prohibited, but the land may be ploughed chemically with at least three years interval instead of the normal two years.

Farmers are required to comply with the commitments on an annual basis during a five year period. Each year during the commitment period, farmers must declare the number of hectares grown with ley for which he/she is claiming payment. The commitment does not require that the same land be used every year.

Obligations which are not granted for payment are cross compliances under Council Regulation (EC) No 1782/2003 and obligations as specified t in section 5.4.3.1 and in section 5.4.3.2. See also table in section 17.6 Annex 6.

Part A of the sub-measure comprises one basic and one supplementary agri- environmental payment to farmers managing ley extensively on arable land in the more forest dominating areas of the country.

Part B of the measure comprises a basic payment for arable land used for extensive ley management in a sustainable way mainly to reduce nutrient losses. The requirements for the basic payment of part A of the measure are the same as those required for part B of the measure.

The supplementary payment under part A of the sub-measure is eligible for farmers for maintaining biodiversity by grazing livestock management. This restriction is justified by that fact that agri-environmental payments are long-term investments in environmentally friendly farming methods. To maintain biodiversity on and around the arable land and for keeping the agricultural landscape open for the future there is a need for cultivating arable land with ley. From an environmental point of view the areas considered to be most threatened are also those which are most valuable for the biodiversity in the agricultural landscape.

It is required that the farmer should respect a minimum agricultural intensity to secure a sustainable active maintenance of the biodiversity of the agricultural landscape through keeping a minimum average number of livestock per hectare. The rules specifying a maximum and a minimum livestock density set out in section 5.4.1 shall also apply to the supplementary payment under part A of the sub-measure.

Eligible areas The payment under part A of the sub-measure will be eligible in the forest-dominated areas (support areas 1-5).The basic payment for extensive ley management on arable land under part B of the sub-measure will be eligible only in intensively managed agricultural areas in the south of Sweden (support area 9).

Target group Farmers who cultivate arable land with ley.

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Payment The payments under part A and B of the sub-measure will be the following:

Support area Basic payment per Supplementary hectare eligible Payment per arable land, SEK hectare eligible arable land, SEK Part A 1–3 300 (€ 33) 1 800 (€ 200) 4 300 (€ 33) 700 (€ 77,8) 5c, 5m 300 (€ 33) 400 (€44.4) 5a, 5b 300 (€ 33) 250 (€27,8 Part B 9 300 (€ 33)

Method of calculation and underlying assumptions For part A of the sub-measure the calculation of the payment covers the cost of maintaining the biodiversity and an open landscape through ley management in forest- dominated areas. The payment will compensate for additional costs not covered by the market revenues from sold products, natural handicap payment and, in the north of Sweden, the national Nordic aid. The most important part of the extra costs for cultivating marginal arable land are related to higher labour costs for the managing of arable land with ley located on many small plots spread out over large areas, often 1030 kilometre from the farm centre. The long distance increases the costs for transporting machines needed for harvesting silage and hay but also to transport the harvest back to the farm. It also involves higher costs for transporting and spreading manure on different remote small plots. When circulating manure it is of great importance not to create negative environmental effects why the speading should take place on every plot disregarding its remoteness. To manage and harvest small and narrow marginal plots with an irregular structure will also take a longer time and is costly as regards the larger use of fuel.

The payments are calculated to cover extra costs for the following numbers of additional working hours:

Support are Calculated additional hours per cultivated hectare with extensive ley 1–3 12,5 4 5,9 5c, 5m 4,2 5a, 5b 3,2

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The calculated supplementing payments together with market revenues, natural handicap payment and other payments will only cover approximately 80 per cent of calculated costs per hectare.

For part B of the sub-measure environmentally friendly extensive ley-farming, the calculation of the level of payment is based on a comparison between a five year crop rotation system with three years of ley management and a possibility to grow winter cereals only once and one year with spring cereals and a five year crop rotation system with two years of ley and a possibility to grow winter cereals twice and one year of spring cereals. A cultivation of winter cereals is more profitable than cultivation of spring cereals. The first crop rotation system implies that there will be a continued plant cover without ploughing during three autumns which will decrease the risk for nutrient losses. It will also promote a variation in the more specialized grain cultivating areas.

The level of payment is based on the income foregone calculated by comparing the gross margins for the two above mention crop rotation systems. The revenue side for both cereals and ley includes average harvest for the area and average price for the crops. Calculated costs include seed, fertilizers, fuel, drying costs, maintenance of equipment especially related to harvesting and depreciation on special equipment for harvest ofley.

The requirements concerning harvesting extensive ley for both part A and part B of the sub-measure go beyond the cross-compliance provisions because extensive ley management eligible for payment must be harvested and the crop must be transported away or grazed each year. Furthermore, it is not allowed to use plant protection products during the growing season besides when the ley area is terminated at the most once under the five year period.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of farmers receiving the basic payment for 34 000 farmers part A of the measure. Number of farmers receiving the basic payment for 13 000 farmers part B of the measure. Hectares of arable land receiving the basic payment 700 000hectares for under part A of the measure. Hectares of arable land receiving the basic payment 200 000 hectares for part B of the measure. Hectares of arable land receiving the supplementary 500 000 hectares payment according to part A of the measure Result Number of hectares successfully farmed/managed 700 000 hectares (the land is neither overgrown nor abandoned) according to part A. Number of hectares successfully farmed so that the 700 000 hectares natural- and cultural values are preserved according to part A of the measure Number of hectares promoting improved water 200 000 hectares quality according to part B of the measure

Number of hectares promoting improved soil 200 000hectares quality according to part B

The contribution to combat climate change Marginally, according to both part A and B of the measure Ktonnes

5.4.4 Non-productive investments – agriculture The measure is based on Article 41 of Council Regulation (EC) No 1698/2005 and on Article 29 of Commission Regulation (EC) No 1974/2006.

Activity code: 216

For an overall picture of the payment for regional priorities measure, reference is made to the types of support available for non-productive investment in agriculture described in section 5.4.3.6. With regard to financing and indicators, this measure is described jointly in section 5.4.3 Payment for environmentally friendly farming.

5.4.5 Non-productive investment – forests The measure is based on Article 49 of Council Regulation (EC) No 1698/2005 and on Article 29 of Commission Regulation (EC) No 1974/2006.

Activity code: 227

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5.4.5.1 Preserving and developing the biological diversity in forest

Underlying considerations Many biological and cultural values in the Swedish forests have been developed due to historical human utilization. Free development of the habitats will result in a successive loss of biological diversity as a lot of these species need different kind of disturbance to survive. To maintain and preserve these biological values and cultural heritage, it is therefore necessary to treat the habitats with adapted management trying to imitate the disturbances from ancient time.

According to national legislation, the forest owner has to take general consideration of the environment, e.g. when clear cutting. However, adapted management is required for certain areas in order to preserve and develope biodiversity and cultural values and is not regulated in legislation. Adapted management is, e.g selected cutting, burning, clearance of undervegetation and measures to increasing the amount of dead woods. The dead wood is specially important for many of the red listed species found in forest areas. In combination with enhancing the biodiversity and envisage the cultural landcsape values in forest, actions to improve the possibilities for recreation and outdoor life could be promoted. These adopted management activities goes above and beyond the present national legislations and nature conservation agreements. This sub- measure can make an active contribution to the fulfilment within the prescribed time frame of commitments under the Convention on Biological Diversity and to the national environmental quality objective Sustainable Forests.

Objectives The objective is to preserve and develop biodiversity and cultural heritage values in Swedish forest land. This sub-measure will contribute to fulfill the national environmental quality objective Sustainable Forests. The sub-measure will include 65 000 hectares of high valuable forest land in terms of biodiversity and cultural values.

Description Support will be given to activities that strenghten the biodiversity and cultural values of forest land in Sweden. The sub-measure is based on a property-level approach, meaning that a targeted management is directed to private forest owners who have forest estates with high share of nature and cultural values.The property-level approach is a complement to existing protection tools. The environmental benefit is greater since measures are concentrated on high-value standsor on properties with a large proportion of such stands. Landowners with only one or two objects of high natural or cultural value may in special cases be eligible for inclusion in the sub-measure.

The competent authority will compile a list of all private forest owners who have estitates with a large amount of forest land with key habitats and objects with high nature and culture values. Parks are not included in the list. Specific information will be directed to these private forest owners.

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The first step for the forest owner is to make a goal classification68 of the forest estate. This implies an inventory of the forest assets including an assessment of the nature value of the different stands.

The second step in this non-productive investment support, is to set up a management plan based on the goal classification on those areas that are considered as particularly valuable for biodiversity and cultural heritages.This management plan must be approved by the competent auhtority. This second step is a part of the measure described in section 5.3.1 Skills acquisition, information and dissemination of knowledge, axis 1.

The third step is to conduct those activities that are set out in the management plan. Eligible activities for support in this sub-measure is, e.g. selected cutting, burning and different actions to increase the amount of dead wood.

Once the forest owner has performed the activities, the outcome must be inspected by the competent authority. On approval, suppport may be paid out for eligible costs up to a specified ceiling.

Areas eligible for support The whole of Sweden.

Target group Private individual forest owners with properties rich in natural and cultural assets or in social assets. Private individual owners of forest properties with only one or two objects of high natural or cultural value may also be included in the measure.

Priorities The sub-measure is primarily directed at individual forest owners in areas identified as valuable in the regional strategies for site protection, and at properties with forested land with varied natural and cultural heritage assets or social assets.

Support Support is paid out against requisitions, and on presentation of invoices and payment receipts. The aim of this type of sub-measure is to compensate the recipient for additional costs incurred in connection with this investment. Calculation is based on actual costs including own work arising out of the investment, in accordance with Article 54 of Commission Regulation (EC) No 1974/2006.

Manual input such as work with a clearing saw or chain saw, horse driving or nature conservancy burning qualifies for support up to a maximum SEK 3 000 (€ 333,3)/hectare, at maximum 100 per cent of the cost. A maximum of SEK 4 000 (€ 444,4)/hectare, at maximum 100 per cent of the cost, is granted for mechanical

68 Goal classification means that forest management plans specify a long-term approach to management of the population that strikes a balance between production and environment.

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inputs such as work involving a harvester, a scooter or a tractor. A maximum SEK 75 (€ 8,3) per hectare is eligible for the Goal Classification.

Measurements in stands with high nature, culture or social values can be similar to cleaning, thinning and cutting of selected trees. In order not to destroy the values the measures must be carried out carefully which means that it will take longer time than normal forest measures. According to official Swedish statistics the cost for manual work like cleaning is SEK 2 340 (€ 260) per hectare. Adapted cleaning takes about 30 per cent longer time than normal and costs therefore SEK 3 060 (€ 340) per hectare.

Machine work in stands with high environmental values can be compared to thinning operations. The costs according to the Swedish official statistics are about SEK 5 175 (€ 575) per hectare for normal harvest. Also for machine work the adapted measures result in more time needed, approx 30 per cent. The costs will rise to SEK 6 795 (€ 755) per hectare. Some of the timber (about 20 per cent) is assumed that the forest owner can utilize and therefore the support will be reduced to SEK 3 870 (€ 430)/hectare for the more expensive measures.

The forest owner is to be compensated for the more expensive costs otherwise the measures will not be carried out and the environmental and cultural values could slowly be lost. Harvesters and forwarders are very expensive and must have a high utilization. The need of careful driving and harvesting of trees in stands with nature, culture or social values will result in low productivity. Therefore the higher subsidy for machine work than manual work.

Eligible costs Support is available for manual and mechanical input that strengthens natural, cultural and social assets in forests. The support is also available for material costs.

Conditions A condition of support is that a management plan is drawn up and approved by the competent authority and that an agreement is concluded between the forest owner and that authority. Secondly, the forest owner has to conduct the needed management actions according to the management plan.

Financing − National public financing: 53.3 per cent − EU financing: 46.7 per cent

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of forest owners receiving support 10 000 forest owners 87,5 Total investment volume, MSEK MSEK(M€ 9,7) Result Number of hectares successfully farmed to preserve and 65 000 develop valuable natural and cultural assets as well as hectares recreational values in forests

Programme-specific indicators and quantified targets None

5.4.5.2 Promote biodiversity in broad-leaved deciduous forest

Underlying considerations The Convention on Biological Diversity states that the biological values should be preserved. Biodiversity can be viewed upon in two aspects, both the diversity of species but also the diversity in ecosystems.

The past 200 years, a drastic reduction of Sweden’s mature (>130 years) broad-leaved deciduous forest has occurred. The reduction amount to 98 per cent and today, only one per cent of the forest land is covered with broad-leaved deciduous. This is most severe as more than 50 per cent of all red listed species in Sweden are dependant on the environment that broad-leaved forest can present. For many species, and their habitats, there is a situation where species or groups of species are close to or beneath the threshold values69. In a European context, Sweden has a unique broad-leaved deciduous forest, the boreonemoral broad-leaved forest. The boreonemoral broad-leaved forest (9020) and broad-leaved forest in steep (9180) are in the EU habitat directive pointed out as prioritised habitat types. For those types Sweden has the largest area in absolute terms, despite the low percentage of broad-leaved forest. Species that belong to these types which can be found in Sweden are e.g. lycanus cervus, osmoderma eremite, dendrocopos minor, ficedula parva, columab and hapalopilus coceus. In order to preserve the biodiversity, it is of great importance to create such habitats.

By increasing the broad-leaved deciduous forest, this sub-measure will contribute to fulfil the national forest policy and the national environmental quality objective Sustainable Forests. Today, the national forest policy states that forest land covered

69 Threshold value is when the pace of extinction has accelerated.

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with broad-leaved deciduous must remain being broad-leaved deciduous forest. The main reason for this is nature conservation.

There is no remunerative to establish and manage broad-leaved deciduous forest in Sweden70. Presently, the Swedish spruce forests are three to four times more profitable than beech and oak forests. The reasons for this are that regeneration costs are much higher and that spruce forest can be harvest after 60 years and oak forests after 120 years.

Objectives The objective is to create habitats of broad-leaved deciduous forest for increased biodiversity. Broad-leaved deciduous trees are the domestic varieties of elm, ash, hornbeam, beech, oak, wild cherry, lime and sycamore. This sub-measure will increase the area of broad-leaved deciduous forest by 2 500 hectares.

Description The baseline is plantation of spruce forest. This sub-measure concerns the new establishment of broad-leaved deciduous forest. Forest owners who meet the conditions specified below could be eligible for support. Once planting is completed, an inspection has to be carried out by the competent authority to ensure that the conditions have been fulfilled. The operations to be supported are planting inclusive plant costs and fencing inclusive fence costs. The cost of establishing broad-leaved deciduous forest in parks is not eligible for support.

Areas eligible for support Suitable land in southern and central Sweden, with the exception of the county of Dalarna.

Target group Individual private forest owners who meet the specified conditions.

Selection Where approved, support is provided in the order in which applications come in.

Support Support is paid on requisition, and on presentation of invoices and payment receipts. The aim of this type sub-measure is to support the recipient for additional costs incurred in connection with an investment rather than investing in spruce forest. Calculation is based on actual costs including own work arising out of the investment, in accordance with Article 54 of Commission Regulation (EC) No 1974/2006. The maximum sum eligible is SEK 20 300 (€ 2 255,6)/hectare, at maximum 100 per cent of the cost. This is a non-remunerative investment for forest-owners as they are only

70 see e.g. the study “Increment and economic performance in mixed stands with Quercus robur and Picea abies compared to monocultures – a case study” by Magnus Lindén and Per Magnus Ekö at the Swedish University of Agriculture

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compensated for additional costs incurred in connection with the investment compared to if they would have invested in spruce forest.

Eligible costs Support may be provided for soil conditioning, plants and planting, and for fencing.

Conditions Forest owners may only receive support for the establishment of broad-leaved deciduous forest in areas where this is appropriate. The conditions for the minimum area, minimum amount of plants that must be planted, soil conditioning and fencing requirements will be determined by the competent authority.

Following Storm Gudrun in January 2005, Sweden introduced a special additional forest-regeneration support scheme. Suppport is provided to forest owners hit by the storm who choose to regenerate with deciduous or hardwood forest. This sub-measure is not possible to combine the present form of suppport following Storm Gudrun on the same land.

Financing − National public financing: 53.3 per cent − EU financing: 46.7 per cent

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of forest owners receiving support 1 000 forest Total investment volume, MSEK owners 22,5 MSEK (M€ 2,5) Result Number of hectares successfully farmed to preserve 2 500 hectares valuable natural assets in forests

Programme-specific indicators and quantified targets None

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5.4.6 Elements common to all activities eligible for support for environmentally non-productive investments in forest

Type of Indicator Target indicator Output See under section 5.4.5.1and 5.4.5.2 Result See under section 5.4.5.1and 5.4.5.2 Impact Extent to which the measure has contributed to 55 per cent preserve and develop forest with high natural and cultural values (in percentage of total area of forest in need of specific management) Extent to which the measure has contributed to develop 1 per cent forest with high nature-value (in percentage of total area of broad-leaved deciduous forest Extent to which the measure contribute to improve 0 per cent water quality Extent to which the measure contribute to combat 0 Ktonnes climate change

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5.5 Axis 3 Diversification and a better quality of life in rural areas

5.5.1 Measures to diversify the economy in rural areas Rural areas offer economic development opportunities that local, regional and national measures under axis 3 should be able to strengthen. These measures aim to enhance the competitiveness of enterprise and promote the diversification of rural trade and commerce, thereby contributing to income-generating employment and the sustainable use of the rural areas’ aggregate resources. The potential for the development of new enterprise, new business ideas and activities, and thereby new employment opportunities, is primarily to be found in connection with (see also section 4.1.3):

- The landscape with its attractive natural and cultural assets represents a significant resource for the development of enterprises in the visitor industry associated with hunting, fishing, outdoor life and in the preventive health care and rehabilitation sector. It is also important for housing and enterprise in general. - Multifaceted skills, broad entrepreneurial experience, social networks and a strong social capital among the rural population. - Labour that is partially or wholly unutilised. - Physical land resources that may be used for other forms of sustainable land-based production than those in the farm and forest management sector, but which are connected with farming, forestry or reindeer husbandry. - Buildings with development potential.

These development opportunities can give rise to new or expanded activities capable of contributing to the achievement of the general objective of Sweden’s rural development policy. This can come about through the diversification of farming, forestry and reindeer husbandry enterprises or through the development of tourism and other micro-enterprises in such areas as the production and processing of renewable energy sources, horse-based services and experiences, green rehabilitation and preventive health care, and small-scale activities in the manufacturing and service spheres. In areas with a stable population base, the quest for alternative sources of income could eventually lead to a more dynamic economy.

The intervention field for the axis will be rural areas including, smaller cities and urbanised areas with a population of not more than 20 000 inhabitants.

For the sake of simplicity for the target groups and the beneficiaries during the implementing phase and in order to secure that each applicant will be treated equally the following definition of eligible operations within each measure has been drawn up. Axis 3 will be open for both an individual and a Leader approach.

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Enterprise Support Operations supporting individual enterprises where the benefit of the activity stays within the supported enterprise (support for starting-up, investments, purchasing external services and competence).

Project Support Support to enterprises, groups of enterprises, organisations, associations, etc., where the benefit of the activity reaches more parties than just the applicant(s). A project shall have clear limits in time, money and work effort. Projects are run outside the ordinary business of an individual firm (the target group must be larger than the individual beneficiary).

When it comes to training, the enterprise support includes those who want to purchase/acquire training and the project support includes those who want to provide training/information to the benefit of other larger target groups.

The enterprise support in axis 3 includes enterprises that want to diversify the economy in the rural areas in order to make own economic gains, for example engage in canoeing for tourists, renovating and reusing cultural buildings and performing feasible training concerning its possibility of providing basic services to the area, etc.

Project aid in axis 3 is mainly granted to local, regional or national actors that will carry out projects with a more general approach and where the gain will benefit a whole group of actors. Project support may include productive investments. In this case the relevant state aid rules are to be respected. Project aid under axis 4 may include contribution in kind The project support will be an important complement to the enterprise support.

The aid intensity of the Fund will be 45 per cent of the total public support.

5.5.1.1 Diversification into non-agricultural activities Legal basis: Article 52 (a) (i) and 53 of Council Regulation (EC) No 1698/2005. Article 35 and point 5.3.3.1.1 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 311

Qualification of the measure Common Agricultural Policy (CAP) reforms are changing the structure of Swedish agriculture. The decoupling of farm support and closer alignment with market demand and conditions has boosted competition and altered the economic situation of agricultural enterprises. There is every sign that the long-term trend towards fewer farms will continue and be reinforced as a result of the current reforms.

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The ongoing restructuring process and the shrinking number of agricultural enterprises affect the prospects for sustainable economic development in rural areas. Unless steps are taken, a further decline in the number of full-time enterprises will eventually lead to loss of employment, reduced economic activity and inadequate exploitation of aggregate rural resources. This adversely affects opportunities for settlement, and the drawing power of rural areas is reduced. Traditional primary production in agriculture and animal husbandry therefore needs to be supplemented by other business concepts and activities that can generate work and income. The development of new products and services should be promoted to offset the continuing phase-out of agricultural enterprises and the reduction of income-generating employment therein. Business skills, buildings, machinery, natural resources and financial capital that are no longer being used in the primary production sector can be adapted, developed further and used in new areas of activity.

Diversification offers means of boosting profitability in enterprises and thus improving the economic outcome per hour worked. Better profitability also paves the way for new types of employment on the farm for entrepreneurs, their families and any employees they may have. This can reduce both the need to commute to jobs else- where and dependency on other income than that derived from the enterprise. New activities in agricultural enterprises can also lead to an increased supply of services and products of importance for the general attractiveness of rural areas – for housing, entrepreneurship and tourism.

The Sami region needs to be developed so that unexploited resources are put to use in moving towards a more differentiated Sami business sector and a broader Sami labour market. The prime task is the creation of sustainable Sami employment opportunities, especially for women, young people and Samis who are underemployed or risk unemployment. Creating better prospects for these groups involves making good use of the forces available for local and regional development.

Objectives Increased number of agricultural/reindeer husbandry enterprises developing, producing and commercialising products or services in areas other than traditional agricultural production. Increased turnover in diversified agricultural and reindeer husbandry enterprises.

Description Individual agricultural enterprises, including those engaged in reindeer husbandry, may find it difficult to develop new activities on their own, using only their own expertise, experience and financial resources. There may be a need for support both during the initial phase and at a later stage of development. The measure should, therefore, be sufficiently flexible to adapt to the situation in hand, locally, regionally and at enterprise level.

Input to enterprises/members of farming households may take the form of investment aid or support for the purchase of external services. Investment aid is payable for costs

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associated with the erection, acquisition of adaptation of buildings or premises, and for the purchase of new machinery and other equipment, as well as for general costs associated with real property or new machinery and equipment. The support available for the purchase of external services is designed to cover part of the cost of purchasing knowledge and services for the development of the operation. This may apply to feasibility studies, product development, including design, market investments such as market surveys and merchandising, and networking in various forms.

There is also a need for more general efforts to improve the prospects for competitive diversification and to speed up sustainable development of new business and operational concepts in agricultural enterprises. These may include development efforts of a more overarching nature involving collaboration on research and development centres, extensive mapping and dissemination of experience gained, pilot-type efforts that improve the enterprises’ ability to develop commercial and technical solutions requiring more extensive resources than can be reasonably expected at enterprise level, etc. Such measures may take the form of project aid at national, regional and local level to actors with the capacity to pursue enabling development activities. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

Target group Support for diversification into activities other than agriculture and reindeer husbandry may be provided to: - Member or members of a farming household exercising agricultural activity on the farm. This is defined as a household in which one or more members are farmers according to the definition in article 35 of the Council Regulation (EC) No 1782/2003. - Regional, local and to a limited extent national actors, e.g. groups of agricultural enterprises, reindeer husbandry enterprises or Sami communities, or organisations or groups in this category.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. A maximum total public support of 30 per cent of the amount eligible for support to enterprises for investment and for the purchase of external service is payable. Subject to special assessment, a further maximum contribution of 20 percentage points may be granted to enterprises in sparsely populated less favoured areas of northern Sweden. In the case of project aid, a contribution amounting to 20– 100 per cent of eligible costs is payable. Any further restrictions are to be decided at national level.

Conditions Support may only be provided to the start-up and development of activities relating to products or services that do not involve primary production or the processing of farm or forestry products.

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Diversification through processing of agricultural or forestry products which results in an output of non-annex I agricultural or food products or means any form of industrial processing of wood or forestry products could be supported under this measure if it’s an integrated part of a broader diversification action.

Investment aid and support for the purchase of external services is only provided to enterprises for the promotion of the sustainable development or production of goods or services that are in demand in the market and which have a chance of being competitive and profitable in the long term. Support is only payable if the enterprise has a business plan that also encompasses the new activity, except in cases where support is for the development of such a plan. A business plan must include a description and analysis of the enterprise’s present situation, its business idea, its goals and its strategy for future development, including a market analysis, its prospects for obtaining financing and how the enterprise’s activities relate to sustainable resource usage. The requirements concerning business plans are adapted to the individual enterprise’s area of activity, size and planning situation.

Project aid is payable for projects clearly intended to enable agricultural enterprises/reindeer husbandry enterprises to develop and implement business or operational concepts that contribute to the sustainable use of natural resources and lead to activities, income generation and employment in competitive and growing business sectors, locally, within a region or nationwide. Projects must also seek to contribute to the dissemination of outcomes to large numbers of entrepreneurs and other actors in rural areas. Project aid will not be payable to individual firms if the only purpose is to promote their own development. Support is conditional on the submission of a project plan. This must include a project concept, specific objectives and a strategy aimed at significantly improving the enterprises’ ability to develop competitive operations. The plan must also show how knowledge and experience gained in previous projects of a similar nature at national, regional or local level, can be turned to account in its planning and implementation. It must also include a financing plan and a timetable for implementation.

Operation selection Operations will be selected on the basis of national objectives and priorities, regional and local rural development strategies and of the quality of the project and business plan. The general national priorities as described in section 3.2 should be a guideline. High priority should be given to operations with a potential to promote growth, new jobs and to improve the competitiveness of the firm. Horizontal requirements concerning environment, gender equality and integration should always be considered.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of beneficiaries 700 beneficiaries Total volume of investments, MSEK 420 MSEK (M€ 46,7) Result Increase in non agriculture gross value added, per cent 5 per cent Gross number of jobs created 600 jobs Impact Increase in net value added, MSEK 250 MSEK (M€ 27,8) Employment creation 560 employment

Programme-specific indicators and quantified goals Type of Indicator Target per year indicator Impact Increase in number of enterprises with new products or 6 per cent services, per cent

5.5.1.2 Business development in micro-enterprises Legal basis: Article 52 (a) (ii) and 54 of Council Regulation (EC) No 1698/2005. Point 5.3.3.1.2 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 312

Justification of the measure Competitive enterprises and a diversified business sector are both crucial to sustainable rural development. As in the country as a whole, many enterprises in rural areas are small businesses, often either single-person enterprises without any employees or micro-enterprises with only one or a few employees. Part-time entrepreneurship in combination with some form of gainful employment is also common. Studies show that the average age among small business operators is high, and that many enterprises face generational shifts over the next few years. Rural entrepreneurs are no exception in this respect.

Historically, agricultural and forestry-based industries have dominated enterprise in rural areas and accounted for the bulk of employment. With the ongoing structural transformation of farming and forestry, other business areas have in relative terms become increasingly important in terms of opportunities for business development, subsistence and employment. The rural population is therefore more reliant today on other sources of employment than land-based industry. To maintain a flourishing business sector, new enterprises are needed along with the further development of

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existing businesses. New business sectors and products need to be developed, preferably ones with higher knowledge content.

In the Sami region, there are a number of different types of Sami service enterprises in areas such as economic/financial/accounting services, inquiries and reports, inter- preting and translation services, computers, services relating to Sami art and handicraft, and child care. This type of entrepreneurship is relatively new, but as the demand for services of this kind is growing, the sector shows considerable development potential.

Conditions, which promote and facilitate entrepreneurship, are a key factor in achieving a sustainable, efficient business sector. The extent to which the rural population is willing to develop entrepreneurship and enterprise is vital to future development. The most favourable attitudes towards enterprise are found in areas with a large proportion of newly-established businesses. Measures that affect people’s attitudes, such as how they view self-employment and their willingness to set up themselves, can be an important part of efforts to strengthen local industry. The creation of supportive environments for entrepreneurship is another area of considerable importance to development. Special attention should be focused on measures that eliminate obstacles to setting up among women, young people and immigrants.

In areas lacking strong entrepreneurial traditions or well-established networks, there is a need to encourage the creation of local development environments and clusters. Through cooperation with established businesses, prospective entrepreneurs, local development groups, institutions of higher education, municipalities and other stakeholders, a platform can be established for the transfer of knowledge and experience. Support can be provided for building and participating in networks or clusters.

Enterprises that focus on new and relatively unproven business areas or products – innovative ventures – or that invest in costly technology may find it difficult to set up or expand with the aid of general measures or traditional financing alone. Support for the development of ‘key enterprises’ of major importance to other business activities in the area may also be considered. Accordingly support should also be made available to rural entrepreneurs and micro-enterprises in the form of investment aid and support for the purchase of external services.

Lack of local financial capital may be an obstacle to the development of small-scale enterprise in rural areas. There are examples of people coming together to form local credit guarantee associations or similar ventures, with good results. It should be possible under the present measure to support the creation of organisations aimed at improving access to local capital for the development of rural industry.

Objectives Increased number of micro-enterprises developing, producing and commercialising products or services in rural areas. Increased turnover in micro enterprises.

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Description Individual entrepreneurs may find it difficult to develop new activities on their own, using only their own expertise, experience and financial resources. There may be a need for support both during the initial phase and at a later stage of development. The measure should, therefore, be sufficiently flexible to adapt to the situation in hand, locally, regionally and at enterprise level.

Support for micro-enterprises may take the form of investment aid or support for the purchase of external services. Investment aid is payable for costs associated with the erection, acquisition of adaptation of buildings or premises, purchase of new machinery and other equipment, and general costs associated with real property or new machinery and equipment. Support for the purchase of external services is designed to cover part of the cost of purchasing knowledge and services for the development of the operation. This may apply to feasibility studies, product development, including design, market investments such as market surveys and merchandising, and networking in various forms.

There is also a need for more general efforts to improve the prospects for competitive entrepreneurship and to speed up the development of new business and operational ideas. These may include development efforts of a more overarching nature involving collaboration on research and development centres, the mapping and disseminating of experience gained, initiatives that improve the enterprises’ ability to develop commercial and technical solutions that require more extensive resources than can be reasonably expected at enterprise level, the promotion of local development opportunities, cluster formation, etc. Such measures may take the form of project aid at national, regional and local level to actors with the capacity to pursue enabling development activities. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

Target group Support for business development in micro-enterprises may be extended to: - Entrepreneurs/enterprises in rural areas employing fewer than ten employees (full- time equivalents, FTEs) and with a turnover or balance sheet total not exceeding EUR 2 million per annum, as specified in Commission Recommendation of 6 May 2003 concerning the definition of a micro, small or medium sized enterprise (2003/361/EC). - Regional, local and, to a limited extent, national actors, e.g. groups of micro- enterprises in rural areas, organisations or groups in this category.

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northern Sweden. In the case of project aid, a sum amounting to 20–100 per cent of eligible costs is payable. Any further restrictions are to be decided at the national level.

Conditions The activities of the micro-enterprise must be related and of significance to rural development. An operation also could include support for the encouragement of tourism activities as long as support for business development in micro-enterprises is the largest part of the support. Processing of agricultural or forestry products which results in an output of non-annex I agricultural or food products or means any form of industrial processing of wood or forestry products could be supported under this measure, if it’s an integrated part of a broader development of micro-enterprises.

Investment aid and support for the purchase of external services is only provided to enterprises for promotion of the sustainable development or production of goods or services that are in demand in the market and which have the potential of being competitive and profitable in the long term. Support is only payable if the enterprise has a business plan that also incorporates the new activity, except in cases where support has been granted for the development of such a plan. A business plan must include a description and analysis of the enterprise’s current situation, its business concept, goals, and strategy for future development including a market analysis, financing prospects and how the enterprise’s activities relate to sustainable resource usage. The requirements concerning business plans are adapted to the individual enterprise’s operations, size and planning situation.

In the case of start-ups, the business plan must encompass a business concept with goals and a strategy for the future development of the enterprise.

Project aid is payable for projects clearly aimed at helping micro-enterprises develop and implement business or operational concepts that involve activities, income generation and employment in competitive and growing business sectors, locally, within a region or nationwide. Projects must also seek to contribute to the dissemination of outcomes to large numbers of entrepreneurs and other actors in rural areas. Project aid will not be payable to individual firms if the only purpose is to promote their own development. Support is conditional on the submission of a project plan. This must include a project concept, specific objectives and a strategy aimed at significantly improving the enterprises’ ability to develop competitive operations. The plan must also show how knowledge and experience gained in previous projects of a similar nature at national, regional or local level, are turned to account in its planning and implementation. It must also include a financing plan and a timetable for implement- tation.

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jobs and to improve the competitiveness of the firm. Horizontal requirements concerning environment, gender equality and integration should always be considered.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of micro-enterprises supported 1 000 micro- enterprises Total volume of investments, MSEK 600 MSEK (M€ 66,7) Result Increase in non agriculture gross value added, per cent 5 per cent Gross number of jobs created 1 000 jobs Impact Increase in net value added, MSEK 360 MSEK (M€ 40)

Employment creation 800 employment

Programme-specific indicators and quantified goals Type of Indicator Target per year indicator Impact Increase in number of enterprises with new products or 6 per cent services, per cent

5.5.1.3 Promoting the tourist industry Legal basis: Article 52 (a) (iii) and 55 of Council Regulation (EC) No 1698/2005. Point 5.3.3.1.3 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 313

Justification of the measure Tourism can have a significant impact on economic development and employment in all parts of the country. Its growth potential is substantial and it is in fact identified as a growth factor in regional growth programmes. In 2005, the Riksdag approved a new national objective for tourist policy (Govt. Bill 2004/05:56, Committee Report 2004/05:NU13, Parl. Communication 2004/05:295). The aim is to make Sweden an attractive tourist country with a sustainable, competitive tourist industry, contributing to sustainable growth and increased employment nationwide.

A characteristic feature of the tourist industry is its many sub-category industries, while the sector as a whole comprises a few large enterprises and many small ones. In rural areas in particular, activities tend to be conducted either in the form of family businesses or as a small part of an enterprise’s total operation. Tourism has had a particularly strong impact on local economies and employment in sparsely populated

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areas. As a rule, tourist enterprises are personnel-intensive, even where they only operate during certain times of the year. When the volume of tourists rises, employment opportunities increase not only in the tourist enterprises themselves but also in other sectors of importance for the local community, such as local production of goods and services, trade and transportation.

Sweden has an estimated 8 000 enterprises in the tourist industry distributed among 20 000 workplaces spread throughout the country. Approx. 2 500 agricultural enterprises engage in some form of rental/hiring out activity or in some other business activity associated with the visitor industry or recreation. The number of agricultural enterprises involved in tourist activities has increased considerably in recent years.

The term tourism embraces many different kinds of travel and use of services. Besides the traditional categories of business and private travel, there are other established forms such as cultural tourism, ecotourism and rural tourism. It has become increasingly important for enterprises wishing to remain competitive in the market to offer interesting or exciting experiences and other activities.

Visits to natural attractions, handicraft centres, manufacturing sites and events have grown in popularity faster than the average rate for tourism around the country. These activities are often advertised under the heading of rural tourism. Living on the farm, horse riding, regional food and flavours, and activity packages offering fishing, hunting, sport or other outdoor pursuits, are all examples of market concepts that have developed well and are attracting growing numbers of visitors.

Package deals or other combinations of travel, accommodation, food, activities and experiences are increasingly in demand from customers. Success in this area calls for a thorough knowledge of the business and quality products. Accessibility and logistical solutions for travel and transport are other factors of importance for the development of tourism in rural areas.

The interplay between nature, the cultural landscape and Sami cultural practices can pave the way for unique types of experiences and activities in the Sami community. Sami influence and properly exploited resources can provide a basis for initiatives in such areas as ecotourism and cultural tourism. Product development, information and the marketing of Sami culture and products should all reflect Sami culture in content. Such a goal is best achieved through the participation of individuals with Sami cultural skills and local knowledge.

Unlike other products, tourist services cannot be displayed physically or be subjected to any great extent to advance inspection by potential buyers. Most tourist products are purchased prior to consumption, and often in a different place to that in which they are ultimately consumed. In the market, therefore, the products depend on descriptions to attract buyers. The development of ICT-based services is changing the roles of enterprises, other actors and customers. New opportunities are opening up in terms of marketing, distribution, communication and reservations. Increased

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cooperation with other actors in the tourist industry is needed, both at home and abroad, and this should be encouraged.

Micro-enterprises and small businesses in the tourist sector may find it difficult to make major investments themselves in areas such as product development, marketing and logistics. Closer cooperation between enterprises in the same district and between districts within a region is usually crucial to the proper realisation of the area’s development potential. Besides the need for coordination between tourist enterprises, the Swedish Tourist Authority has also identified a need for greater professionalism and competence in the industry.

There is a link between this measure and activities under agri-environmental payments or under non productive investments, which are geared towards strengthening the attractiveness of the landscape. These activities will have an effect on the attractiveness of the supported areas, which in turn may lead to direct investments in tourist facilities. Agri-environmental payments and support for non productive investments are not eligible for support under axis 3 but only under axis 2.

Objectives Increased number of enterprises offering services or products to tourists and other rural visitors. Increased turnover in rural tourist enterprises.

Description of the measure Support for enterprises may take the form of investment aid and support for the purchase of external services. Investment aid is payable for infrastructure that makes rural tourism more attractive and competitive. Investment aid may be granted for costs associated with the construction, acquisition or adaptation of buildings and premises, the purchase of new machinery and other equipment, and small-scale infrastructure. This may for instance involve the building of overnight cabins on a small scale, or the renovation and conversion of existing buildings for renting by tourists. It may also apply to the establishment of hiking, cycle, canoeing or riding trails, or the adaptation of facilities to the needs of the disabled in order to improve access to tourist attractions and activities. Investment aid is also payable for small-scale infrastructure, such as signposting.

General overheads associated with real property or new equipment are eligible for support. The support available for the purchase of external services is designed to cover part of the cost of purchasing knowledge and services for the development of the operation. This may include feasibility studies, the development of tourist products (packages), market investments such as market surveys and merchandising, and networking with other parts of the travel and tourist industry in and outside Sweden, especially in the EU.

There is also a need for more general efforts to facilitate and promote the growth of a competitive tourist industry and to speed up the development of new business and operational concepts in agricultural enterprises. These may include development

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efforts of a more overarching nature involving collaboration on research and development centres, the mapping and disseminating of experience gained, efforts to improve the ability of enterprises to develop commercial and technical solutions requiring more extensive resources than can be reasonably expected at enterprise level, the promotion of local development opportunities and clusters, etc. Such measures may take the form of project aid at national, regional and local level to actors with the capacity to pursue enabling development activities. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

Target groups - Micro or small enterprises active in the tourist industry in rural areas. - Networks of tourist enterprises and/or other relevant enterprises and organisations. - Regional, local and, to a limited extent, national actors associated with rural tourism.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. A maximum total public support of 30 per cent of the amount eligible for support to enterprises for investment and purchase of external services is payable. Subject to special assessment, a further maximum contribution of 20 percentage points may be granted to enterprises in sparsely populated areas of northern Sweden. In the case of project aid, a sum amounting to 20–100 per cent of eligible costs is payable. Any further restrictions will be decided at national level.

Conditions Support is extended to tourist enterprises or other actors involved in rural tourism. Investment aid and support for the purchase of external services is provided primarily to micro-enterprises but also to small enterprises and to other local actors in rural tourism. An operation also could include support for diversification into non- agricultural activities or business development in micro-enterprises activities as long as support for promoting the tourist industry is the largest part of the support.

Investment aid and support for the purchase of external services is only provided for enterprises for the promotion of development or production of goods or services associated with tourism that are in demand in the market and potentially competitive and profitable in the long term. Support is only payable if the enterprise has a business plan that also incorporates the new activity, except in cases where support has been granted for the development of such a plan. The business plan must include a description and analysis of the enterprise’s current situation, its business concept, goals, and strategy for future development, including a market analysis, financing prospects and how the enterprise’s activities relate to sustainable resource usage. The conditions governing business plans are tailored to the individual enterprise’s operations, size and planning situation.

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Project aid is payable to projects clearly intended to enable tourist enterprises to develop and implement business or operational concepts that contribute to sustainable resource use and lead to activities, income generation and employment in competitive and growing business sectors, locally, within a region or nationwide. Projects must also seek to help disseminate outcomes to large numbers of entrepreneurs and other actors in rural areas in order to contribute to skills acquisition in the rural tourist industry. In the longer term, this will also boost turnover and employment in tourist enterprises and improve the competitiveness of rural tourism. Project aid will not be payable to individual firms if the only purpose is to promote their own development. Support is conditional on the submission of a project plan. This must include a project concept, specific goals and a strategy for significantly improving the enterprises’ ability to develop competitive activities. The plan must also show how knowledge and experience gained in previous projects of a similar nature at national, regional or local level are turned to account in the planning and implementation stages. It must also contain a financing plan and a timetable for implementation.

Selection of operations Operations will be selected on the basis of national objectives and priorities, regional and local rural development strategies and of the quality of the project and business plan. The general national priorities as described in section 3.2 should be a guideline. High priority should be given to operations with a potential to promote growth, new jobs and to improve the competitiveness of the firm. Horizontal requirements concerning environment, gender equality and integration should always be considered.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of new tourism actions supported 1 000 actions Total volume of investments, MSEK 600 MSEK (M€ 66,7) Result Increase in non agriculture gross value added, per cent 5 per cent Gross number of jobs created 1 000 jobs Additional number of tourists, per cent 5 per cent Impact Increase in net value added, MSEK 360 MSEK (M€ 40) Employment creation 800 employment

Programme-specific indicators and quantified goals Type of Indicator, Target per year indicator Impact Increase in number of rural tourism enterprises, per 6 per cent cent

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5.5.2 Measures for improving the quality of life in rural areas

5.5.2.1 Basic services for the rural economy and population Legal basis: Article 52 (b) (i) and 56 of Council Regulation (EC) No 1698/2005. Point 5.3.3.2.1 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 321

Justification of the measure A good general level of service provision is essential to development in rural areas. Development measures in rural policies act as a local supplement to these basic public services. The measures provided for in the Rural development programme will be based primarily on rural resources, including the natural resources used and managed by land-based industries, but also on local conditions for development and on micro- enterprise activities within this framework.

Access to services of various kinds is often worse in rural areas than in urban ones. In the case of public service provision, changes have been introduced, e.g. in the Post Office’s service network, affecting levels of service for many people in rural areas. In many places, service provision has improved, due both to fruitful collaboration between different actors and through skills acquisition schemes targeting service providers. There is still a need for flexible service solutions, e.g. in the form of innovative solutions at local level. The National Rural Development Agency and the Swedish Consumer Agency are constantly monitoring how service provision is developing in sparsely populated and rural areas, and special measures are available in this policy area to facilitate such solutions (see section 3.4.5)

The range of available services and their accessibility to people and enterprises are influenced by a wide range of factors. Public decisions and measures are of considerable importance, but the way individuals think and act in their everyday lives is at least as important. Changes in the international environment, market forces, new patterns of consumer behaviour and revised business strategies are all factors that profoundly affect development in the service sector. In some cases, these factors have a greater impact in sparsely populated and rural areas. Access to convenience stores (retail outlets for food and household supplies) and to filling stations has steadily declined. The impact on communities that are deprived of their stores or other service facilities is frequently severe.

The convenience store often functions as an agent for other services such as postal services, banking, pharmaceutical services, fuel sales and alcohol retailing. With the disappearance of the store, other services disappear from the area as well. Finding new solutions bringing together local actors and providing both commercial and public services becomes more difficult in the absence of a store that can act as a hub for the area. Nor should the importance of the store as a natural gathering place for the local population and for other business activities be underestimated.

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Limited to access to a comprehensive range of cultural and recreational activities is often the reason why young people in particular move away from rural areas.

Objective A rural structure that contributes to sustainable social-economic development, e.g. at least a preserved number of residents in rural areas, better access to local services for consumers and businesses and more communities with broadband connections.

Description of the measure Input to enterprises may take the form of investment aid and support for the purchase of external services. Investment aid may be granted for costs associated with the construction, acquisition or adaptation of buildings and premises, the purchase of new machinery and other equipment, and for general costs associated with real property or new equipment. Investment aid may also be granted for small-scale infrastructure such as broadband connections offering synergies with other measures in the Rural development programme. A condition of support to small-scale local infrastructure is that, due to long distances and a sparse population, there is no likelihood of such infrastructure being developed by means of purely commercial initiatives. Support for the purchase of external services may apply to feasibility studies, drawing up and developing development plans for improving local service supply and accessibility to services, market surveys of service needs for residents and SMEs in the area, and collaborative ventures. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

There is also a need for more general measures that will improve prospects for a good quality of life in rural areas, in the form of local commercial and public services and cultural and recreational activities. Such measures may comprise project aid at regional or local level to actors capable of pursuing enabling development efforts. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

Target group - Enterprises coordinating local services individually or in groups. - Local development groups and organisations. - Municipalities and county councils acting as partners in local projects.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. A maximum total public support of 30 per cent of the investment amount eligible for support to enterprises and for the purchase of external service is payable. Subject to special assessment, a further maximum contribution of 20 percentage points may be granted to enterprises in sparsely populated areas of northern Sweden. In the case of project aid, a sum amounting to 20–100 per cent of eligible costs is payable. Any further restrictions will be decided at the national level.

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Conditions Support is only payable for measures that contribute to the strengthening and development of basic social services at local level for a village/community or a group thereof. Measures must be essential to the achievement of sustainable social and economic development at local level. They must go beyond statutory or non-statutory public responsibility for access to services and infrastructure, where responsibility and costs lie with municipalities, county councils or central government.

Investment aid and support for the purchase of external services is only provided for coordinated solutions to such development, where such support is not available under the Support for Commercial Services Ordinance (2000:284). Support is only payable if a business plan has been produced that also incorporates the new activity, except in cases where support has been granted for the creation of such a plan. The plan may include a description and analysis of the enterprise’s current situation, its business concept, goals and strategy for the coordinated solution and its future development including a market analysis, financing prospects and how the enterprise’s activities relate to sustainable resource usage. The requirements concerning business plans are tailored to each enterprise’s operations, size and planning situation.

Project aid is payable to projects that are clearly intended to strengthen and develop basic local services. Project aid will not be payable to individual firms if the only purpose is to promote their own development. Support is conditional on the submission of a project plan. This must include a project concept, specific goals and a strategy for significantly improving local services for residents and enterprises in rural areas and contributing to sustainable resource usage. It must also contain a financing plan and a timetable for implementation. In addition, projects must aim to contribute to the dissemination of outcomes to large numbers of entrepreneurs and other actors in rural areas.

Selection of operations Operations will be selected on the basis of national objectives and priorities, regional and local rural development strategies and of the quality of the project and business plan. General national priorities as described in section 3.2 should be a guideline. Priority will be given to initiatives that lead to sustainable community development, to a stable or increased resident population or to an improved age structure as well as to operations with a potential to promote growth, new jobs and to improve the competitiveness of the rural economy. Horizontal requirements concerning environment, gender equality and integration should always be considered.

Projects initiated by local groups with an integrated purpose to generally improve the quality of life and the conditions for competitive economic activities in a village or in a limited local rural area should be classified as a project under the measure code 322, village renewal and development. If the purpose of a project is limited to only cover improvement of basic services in the local area it will be classified as a project under measure code 321.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of supported actions 135 actions Total volume of investments, MSEK 100 MSEK (M€ 11,1) Result Population in rural areas benefiting from improved 0,32 per cent services, per cent Increase in internet penetration in rural areas, per cent 0,5 per cent Impact Increase in net value added, MSEK 100 MSEK (M€ 11,1) 220 Employment creation employment

Programme-specific indicators and quantified goals Type of Indicator Target indicator Impact Number of permanent residents in rural areas, 2013 ≥3,4 M permanent residents

5.5.2.2 Village renewal and development Legal basis: Article 52 (b) (ii) of Council Regulation (EC) No 1698/2005. Point 5.3.3.2.2 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 322

Justification of the measure In order to reverse the trend whereby some villages and districts have stagnated and found themselves in a negative development spiral, measures are needed that can launch a sustainable development process. The situation varies considerably between villages in different parts of the country. Basic conditions and thereby prospects for favourable development differs between sparsely populated areas on the one hand, and villages and districts near densely populated areas on the other. A common denominator, however, is that commitment and interest among local residents is essential in both cases if these communities are to take proper advantage of their resources. There are several good examples of local groups who have contributed in a very tangible way to economic and social development in villages and other locations where stagnation had long prevailed. Initially, it may be advisable for the measure to target groups and networks equipped with a strategy outlining how they intend to make the village more attractive and promote sustainable development in the area. The aim of such a strategy should be to encourage activities aimed at improving both living conditions among the citizens and prospects for enterprise and settlement in the area.

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Examples of activities that might be included in a sustainable local strategy are measures that offer a potential for investments, resettlement, setting up of new businesses, solutions for basic services and efforts in the cultural and recreational sphere. Support for housing for permanent inhabitants will not be granted.

Objective A rural structure that contributes to sustainable social-economic development, e.g. at least a preserved number of residents and increased number of new enterprises in the rural area.

Description Support is payable in the form of project aid for initiatives that enhance opportunities for settlement and income generation, and for initiatives that help make the area more attractive and which contribute to the sustainable use of its aggregate resources. Projects may include aid for investment-related costs that meet the eligibility requirements for such support.

The term “village” describes a small limited local area with an economic, social and cultural identity where people could be able to organise themselves to develop the local area. The “village” could be a small agglomeration of houses, a parish or other geographic small areas without any significant agglomerated settlements, which is quite frequent in Sweden. Approximately 4,000 local groups more or less well organised exist representing different types of local areas from small areas with less than 100 inhabitants up to villages or small towns. Normally a local area has less than a thousand inhabitants but could exceptionally be larger with a few thousand inhabitants. For information: About 20 per cent of the Swedish population lives in spread out settlements or in small villages with less than 200 inhabitants.

Target group - Local networks/development groups and organisations, Sami communities and Sami organisations. - Municipalities involved in partnerships in local area projects.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. In the case of project aid, total public support amounting to 20–100 per cent of eligible costs is payable. Any further restrictions will be decided at the national level.

Conditions The aim must be to improve conditions for enterprise and settlement in the area. Support is conditional on the submission of a project plan. This must include a project concept, specific goals and a strategy for promoting sustainable development in the village/area. It must also contain a financing plan and a timetable for implementation. In addition, projects must seek to contribute to the dissemination of outcomes to large numbers of entrepreneurs and other actors in rural areas.

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Selection of operations Operations will be selected on the basis of national objectives and priorities, regional and local rural development strategies and of the quality of the project plans. The general national priorities as described in section 3.2 should be a guideline. Priority will be given to initiatives that strengthen the prospects for sustainable development as well as to operations with a potential to promote growth, new jobs and improve the competitiveness of the rural economy. Horizontal requirements concerning environment, gender equality and integration should always be considered.

The focus of operations under measure 322 will be to support broad local initiatives carried out by local groups with the purpose of developing their own local community; for example a small village or a parish without any agglomerated settlements. The measure is expected to be an important tool for the LAGs to promote rural development with a bottom-up approach. Projects of local groups in rural areas which are not covered by a LAG under axis 4 are eligible for support under axis 3. Individual support to business firms will not be eligible.

An important part of the measure will be on supporting voluntary work on a local level with the objective of improving quality of life and the conditions that encourage inhabitants to stay, people to move into the community and to make it more attractive for businesses to set up and develop economic activities, utilising the local natural and human resources as well as attracting tourists and other visitors.

Support for developing individual firms must be applied for under measures such as 311, 312, 313, 321, 323 and 331. Projects with a single purpose that clearly coincides with any of the purposes of the measures 311, 312, 313, 321, 323, 331 or 341 will be classified as a project under any of those measures.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of villages where actions took place 350 villages Total volume of investments, MSEK 70 MSEK (M€ 7,8) Result Population in rural areas benefiting from improved services, per cent 2 per cent Increase in internet penetration in rural areas, per cent 0,5 per cent

Impact Increase in net value added, MSEK 130 MSEK (M€ 14,4) Employment creation 280

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Programme-specific indicators and quantified goals Type of Indicator Target indicator Impact Number of permanent residents in rural areas 2013 ≥3,4 M permanent Increase in number of enterprises with new products or residents services, per cent per year 6 per cent

5.5.2.3 Conservation and upgrading of rural heritage assets Legal basis: Article 52 (b) iii and 57 of Council Regulation (EC) No 1698/2005. Point 5.3.3.2.3 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 323

Justification of the measure Conserving and upgrading natural and cultural assets in the countryside is frequently vital if the area is to remain attractive. Properly promoted, the natural and cultural landscape in a village or district can become part of the area’s local identity and thus help make the place an attractive prospect for settlement or to create better conditions for tourism. Locally initiated nature and culture conservancy projects often have a distinct local development perspective, and the work undertaken tends to promote social commitment and participation in the area, leading to the establishment of new enterprises and improved demographic trends. This in turn can favourably affect the situation both for new enterprises and for commercial and public services in the area.

Local nature conservancy projects also present opportunities for pursuing the kinds of efforts that can be extremely valuable for the achievement of some of the objectives in this field. Here, local skills and commitment may be of decisive importance for the implementation of nature conservancy measures.

In rural parts of Sweden, there are many buildings that have fallen into disuse and which are valuable from a cultural heritage viewpoint or are important to the identity of the local area. These include old farm buildings of various kinds, old industrial premises, communal facilities in villages and unused residential buildings. They represent an aggregate structural capital and a cultural asset which, used for new purposes, could contribute to the sustainable development of rural areas, while preserving valuable local buildings and cultural sites. Conversion or restoration undertaken with respect for valuable heritage features can help meet local demand for buildings suitable for service provision, or cultural or commercial activities. There are good examples of buildings that have been converted and hired out for such purposes restaurant activities, trade and small-scale manufacturing, and which have thus generated income and employment.

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Objective To restore, maintain and upgrade the local natural and cultural landscape, e.g. by establishing new commercial, social and/or cultural uses for old buildings.

Description Support may take the form of project aid, investment aid or support for the purchase of external services. Investment aid and support for the purchase of external services are payable for costs associated with the restoration of buildings of cultural and historical value for use in new contexts, and for restoring, maintaining and upgrading the local natural and cultural landscape. Project aid is payable to projects that clearly aim to improve prospects for preservation and upgrading activities, and for studies/analyses in connection with the maintenance, restoration and upgrading of natural and cultural heritage assets. Projects may include aid for investment-related costs that meet the eligibility requirements for such support. Natura 2000 areas or other areas of high nature value will not be eligible for support for the setting up of protection and management plans.

Target group - Local networks, development groups and organisations. - Enterprises. - Municipalities involved in partnerships in local projects. - Landowners involved in partnerships in local projects.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. A maximum total public support of 30 per cent of the investment amount eligible for support to enterprises and for the purchase of external service is payable. Subject to special assessment, a further maximum contribution of 20 percentage points may be granted to enterprises in sparsely populated areas of northern Sweden. In the case of project aid, a sum amounting to 20–100 per cent of eligible costs is payable. Any further restrictions are to be decided at the national level.

Conditions Support is not payable for measures where responsibility and financing lies with the municipality or the central government. Support for investments and the purchase of external services is conditional on the submission of a plan showing how the measure will contribute to development in the area and to natural and cultural conservancy goals. A financing plan must also be included. Support is only granted for projects if there is a project plan that includes a clear-cut project idea as well as specific goals and a strategy for implementation. The project plan must also contain a financing plan. Restoration of buildings for residential purposes is not eligible for support. Actions eligible according to agri-environmental payments (code 214) or support for non- productive investments (code 216 and 227) are not eligible under this measure (code 323).

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Selection of operations Support is payable to operations that improve prospects for settlement and income generation, make the area more attractive and contribute to the fulfilment of regional and local nature and culture conservancy objectives. The general national priorities as described in section 3.2 should be a guideline. Measures are selected on the basis of national objectives and priorities, regional and local rural development strategies and of the quality of the project and business plan. Priority will also be given to operations with a potential to promote growth, new jobs and improve the competitiveness of the rural economy.

Indicators

Quantified targets for Community-wide indicators Type of Indicator, annually Target per year indicator Output Number of rural heritage actions supported 175 actions Total volume of investments, MSEK 45 MSEK (M€ 5) Result Population in rural areas benefiting from improved 4 per cent services, per cent Impact Increase in net value added, MSEK 130 MSEK (M€ 14,4) Employment creation 280

Programme-specific indicators and quantified goals Type of Indicator, annually Target per year indicator Result Number of restored old buildings 100 buildings

5.5.2.4 Training and information measures Legal basis: Article 52 (c) and 58 of Council Regulation (EC) No 1698/2005. Point 5.3.3.3 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 331

Justification of the measure An important measure in the quest for social and economic development is the provision of information and training that can have an impact on people’s attitudes and capabilities. Rural enterprises are often producers of both raw materials and input goods that are subsequently processed by other enterprises in the same location. The knowledge content in the goods and services produced is frequently low. Nor is the increasingly important service sector developing at the same rapid pace in rural areas as in the country as a whole. In order to achieve long-term sustainable development of enterprise in rural areas and create the potential for growth, knowledge content in products and services needs to be increased.

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For many entrepreneurs and prospective entrepreneurs, development potential can be improved significantly if they can exchange experience with other entrepreneurs active in other socio-economic fields and environments.

Long distances and little tradition of cooperation both with the research community and with other forms of development activity are inhibiting progress in rural areas. Measures that lead to a wider range of contacts and further knowledge transfers are vital to achievement of the objectives in axis 3.

Objective To increase knowledge content, entrepreneurial capacity and innovative ability in rural enterprise.

Description Support for training and information is payable for skills acquisition of various kinds, such as courses, study circles, study trips, guidance, exchanges of experience, knowledge dissemination and practical workplace training. The supply of different types of training and information must be governed by locally identified skills acquisition needs. Entrepreneurs and enterprises which want to diversify into non agricultural activities or create business and development in micro-enterprises or tourism activities must have the opportunity to seek out skills acquisition schemes appropriate to their own needs, and apply for support to compensate for the costs of participating. Implementation of measures here must be coordinated with the measure for skills acquisition in axis 1 (Article 20 a) i)). Training operations concerning general management, business development etc. could be organised coordinated for the target groups of axis 1 and axis 3. Operations should be registered under the axis covering the majority of participants. Eligibility for support will comprise training, guidance and informational initiatives that are not found in the regular educational system at secondary level or in higher education. Training of leaders will be included as an eligible activity under measure 341, “operating costs for local actions groups and information and animation measures”.

Target group - Entrepreneurs/enterprises. - Employees. - Citizens active in local rural development groups.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. A total public support amounting to 20–100 per cent of eligible costs is payable. Any further restrictions will be decided at national level.

Conditions Support is payable for the type of skills acquisition that meets the needs specified in business plans for enterprise development, in well-grounded local or regional

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development strategies reflecting the objectives in the fields covered by axis 3, or for skills acquisition otherwise required by the target group.

Selection of operations Priority will be given to skills acquisition undertakings that strengthen prospects for a sustainable enterprise development, employment, service provision and local development. The general national priorities as described in section 3.2 should be a guideline as well as regional and local strategies for rural development.

Indicators

Quantified targets for Community-wide indicators Type of Indicator, annually Target indicator Output Number of participating economic actors to supported 15 000 activities activities Number of days of training received by participants 30 000 participants Result Number of participants that successfully ended a 15 000 training activity activities

Programme-specific indicators and quantified goals None

5.5.2.5 A skills acquisition and animation measure for the preparation and implementation of a local development strategy Legal basis: Article 52 (d) and 59 of Council Regulation (EC) No 1698/2005. Point 5.3.3.4 of Annex II of Regulation (EC) No 1974/2006.

Measure code: 341

Justification for the measure An important aim of the Leader approach is to mobilise and establish cooperation between broad-based partnerships within a delimited local rural area. This is to be followed by the formulation of a local development strategy for the area. Targeted skills acquisition and information efforts are essential to the task of building up capacity for the purpose of implementing measures of various kinds in the local area and ensuring that a bottom-up perspective informs the work undertaken. It is of importance to ensure high quality standards and cost effectiveness in the establishment and implementation of Leader as an implementing approach in the Rural Development Programme as well as to heighten awareness of what Leader represents among the rural population and among relevant municipalities, organisations and enterprises.

During the initial phase, the various actors and resource staff will need the type of training that helps bring about the establishment of representative partnerships and the

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preparation and implementation of local development strategies. During 2007-2008 operations are needed to encourage and speed up the creation of Local Action Groups and the formulation of local strategies.

Description The Managing Authority will together with the network for Leader+ and the new national network carry out information activities. Measure 341 will finance the area related activities for LAGs under the preparation phase as e.g. studies of the region, local information and for skills acquisition for participants during work with the local strategies.

Information and animation measures designed to support and facilitate the introduction and implementation of rural development measures via the Leader approach should be drawn up on the basis of the needs expressed and determined when the approach is developed and applied. Support is payable for skills acquisition and information measures relating to: a) Studies focusing on those local areas in which a local action group may be established/already exists. b) Measures for the dissemination of information on the area and the local development strategy. c) Training of staff involved in the formulation and implementation of a local development strategy. d) Promotional events and information efforts.

Target group Public, private and voluntary stakeholders and actors affected by the establishment and implementation of Leader as part of the Rural Development Programme.

Amount of support and financing Community co-financing of the measure is limited to 45 per cent of eligible public expenditure. In the case of project aid, a contribution amounting to 20–100 per cent of eligible costs is payable. Any further restrictions will be decided at national level.

Objective To promote the establishment of local action groups and the delimitation of Leader areas.

To ensure high quality standards and cost effectiveness in the establishment and implementation of Leader.

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Indicators

Quantified targets for Community-wide indicators

Type of Indicator Target indicator Output Number of skill acquisition and animation actions 200 actions Number of participants in actions 10 000 actions Number of supported public/private partnerships 0 partnerships Result Number of participants that successfully ended a training activity 10 000 activities

Programme-specific indicators and quantified goals Result Number of LAGs 60 groups

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5.6 Leader

5.6.1 Justification for Leader Legal basis: Articles 61 to 65 of Council Regulation (EC) No 1698/2005. Articles 37 to 39 and point 5.3.4.1 of Annex II of Commission Regulation (EC) No 1974/2006.

Measure code: 41

The purpose of Leader in the RDP is to mobilise the rural areas’ own development potential, with the aid of the special approach that the Leader initiative represents. Through the implementation of local development strategies, Leader seeks to achieve the horizontal objectives of the RDP, the economically, ecologically and socially sustainable development of rural areas, and the aims of one or more of the objectives in axes 1, 2 and 3. Objectives common to all axes and priorities set out in local strategies may also be part of the implementation. One of the great advantages of the Leader approach is that it combines local knowledge and national public aims – the bottom-up perspective meets the top-down perspective. The requirement that development strategies are to be formulated from the bottom up, through local participation and with local decision-making powers, means that local knowledge can be turned to advantage and that an integrated approach to rural development becomes possible. Endorsement and support across sector lines is also anticipated. The bottom-up perspective should help ensure that the measures implemented are more sustainable than measures implemented without a bottom-up commitment. The fact that local action groups (LAGs) themselves decide on Leader measures means that the responsibility for project decisions remains in the area and that the distance between decisions and implementation is shortened.

A further aspect that makes the Leader approach so valuable in the implementation of rural measures is local and private co-financing. Local co-financing also helps inspire greater commitment to the task of ensuring that the implementation of local strategies genuinely yields favourable results for the area.

Leader is intended to support innovative approaches to rural development. Thanks to their local origin, local action groups are able to see the need for interaction and coordination in the area and to work actively to bring about projects that meet these needs. Regional authorities are not in a position to approach matters in the same way. Strategies for future development tend to vary between different Leader areas. It is important, therefore, that Leader be given the opportunity to work towards the objectives of all axes. The way in which each local action group intends to work must be described in the strategy drawn up by the group.

Leader areas have to be carefully delimited towards other local partnerships financed by EU and national funds. The Managing Authority and the County Boards are

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required to control that a clear delimitation will be made in the local strategies in order to secure that support within the same thematic subject will not be granted from different programmes and initiatives. In the official checklists for handling Leader applications it is also required that consultation is carried out with relevant local and regional authorities implementing programmes co-financed by the EFF and ERDF. Consultations and coordination between management authorities for different programs and initiatives will be required. The delimitation principles are further described in section 10.

5.6.2 Establishing local action groups

Timetable All rural areas in Sweden will be given the opportunity to implement the RDP with the help of the Leader approach. This presupposes a voluntary commitment in the area to this approach. Before an area can be approved as a Leader area in the RDP, certain requirements must be met with regard to the composition, work methods and strategy of the local action group. The choice of groups will be based on how well they describe and fulfil these requirements.

Applications for the establishment of a Leader area will be accepted in both 2007 and 2008. Thus groups whose applications are rejected in 2007, or who have not had the time to form properly, will have a further chance to apply in 2008.

Leader areas and number of local action groups The aim is for Leader to engage approx 50 per cent of the rural population by the end of 2007. The target for the end of the following year is approx 75 per cent of the rural population. The twelve areas that are currently part of the LEADER+ programme in Sweden contain over 485 000 people or 20 per cent of the rural population (2004), according to the National Rural Development Agency’s definition of rural population. In addition, an urban population of approx 213 000 is included.

Selection of local action groups A massive information campaign to promote Leader was started in 2006 by the Board of Agriculture (SJV) in close cooperation with the Swedish LEADER+ network, LEADER+ LAGs, the County Boards and rural organisations. All municipalities and representatives for NGOs on regional level have also been directly informed. NGOs on national level involved in rural development were also invited to inform their member organisations on the LAG selection process.

The managing authority (Board of Agriculture) will launch a call for tenders on national level in which the applicants will be informed that the requests for support are to be presented to the county boards. The selection of the LAGs will take place on regional level on the basis of a common checklist which will be established by the Managing authority and include the selection criteria which have been approved in the Rural Development Program. The Managing Authority will monitor and control the

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selection procedure and participate in the selection procedures where it judges this to be useful. The contracting with the LAGs will also take place on regional level after consultation with the local and regional partnerships. An adequate sample of selection documents and contracts will be selected for ex-post control by the Managing Authority.

Selection of local action groups - general criteria for LAGs All Swedish local action groups fulfilling the formal criterion for Leader could apply to be selected as a LAG.

The local development strategy should cover the whole Leader dimension and its implementation during the programming period for a geographic area defined in the application. The strategy shall be independently prepared and decided by the local partnership. The local development strategy document will be the basic document for application or tender for selection as a LAG.

Specific information and criteria for selecting LAGs will be available on the webb-site of the managing authority. As for the procedure see above.

Before a selected LAG can start the implementation of the strategy, a number of formal requirements have to be met, such as selection of an administrative lead actor and a secured plan for public local co-financing. The LAG also has to sign a contract with the authority regarding a number of public principles.

Criteria for the establishment of local action groups Local action groups can only be considered to have adopted the Leader approach as a basis for their activities if they meet certain criteria. These are partly mandatory and partly qualitative, and apply both to the composition of the group and its strategy. The mandatory criteria must be met before a local action group is allowed to establish a Leader area and formulate a local development strategy for it. The qualitative criteria apply to the formulation and elaboration of the strategy and to the extent to which a local action group is competent to implement it. All selection criteria are included in the programme as follows

Mandatory criteria The mandatory criteria must be met if the group is to be allowed to establish a local action group in a delimited rural area. The following criteria are mandatory:

- At least 50 per cent of the representatives at decision-making level in the local action group (the decision-making board/committee in the association) must come from the private and voluntary sector. - The percentage of men and women in a local action group must be at least 40 per cent in each case. - No more than one local action group is allowed in each Leader area, i.e. there must be no geographical overlapping with other local action groups.

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- The number of inhabitants in a Leader area must be between 10 000 and 100 000. Urban areas containing less than 20 000 may be included in the area, but any further restrictions are to be decided at national level. - A local action group must establish a voluntary association or the equivalent no later than two months after the group has been approved. - A local action group must appoint a leader for its activities no later than four months after the group has been approved. This person must primarily seek to initiate and develop activities that ensure effective achievement of the objectives specified in approved local strategies.

A Leader area may encompass a number of different municipalities in more than one county.

In exceptional cases, Leader areas with a population of less than 10 000 inhabitants may be approved. Such exceptions may be necessary in northern Sweden and other areas where population density is low.

Once the development strategy has been approved, local action groups must establish a voluntary association or the equivalent and recruit leaders for their activities within the above time frames. Otherwise, the decision to approve the group ceases to apply.

Qualitative criteria for local action groups and their strategies The qualitative criteria apply to the more detailed descriptions of local action groups and their strategies. These criteria will be used as a basis for approving or rejecting the strategies submitted. Strategies must cover different sectors and be based on the national objectives and thematic priorities as they are specified in the Rural Develop- ment Programme for each respective axis in section 3.2, and on a more straightforward SWOT analysis of the Leader area. In its strategy, the local action group is required to justify its delimitation of the Leader area, to state what consideration has been given to the bottom-up perspective in establishing the group, and to demonstrate the partnership’s competence to implement the strategy. How the strategy is to be implemented must also be made clear. In addition, the group must draw up a budget for its activities and show how co-financing will operate. Finally, the strategy must be harmonised with regional development plans and other local plans.

Clarity will be required in the descriptions of homogenous conditions within the proposed rural territory. Primarily positive factors but also negative factors relevant to the strategic priorities chosen should be considered such as natural and cultural assets, basic services and quality of life, structure of rural business and micro-enterprises, specific traditions or other resources which could create added-value during the implementation of the strategy.

A bottom-up approach when local partnerships and local action groups are formed will be considered to be of great importance. Decision-making power must be guaranteed for private and public sector as well as for competence and capacity for an efficient and correct implementation of the local strategy during the whole implementing period.

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Competence should be available to support the horizontal priorities in the programme such as gender equality, women, youth, integration, training, environment and sustainable development.

Clarity will be required in descriptions, analysis, justification and delimitation of priorities in the local development strategy from the local action groups. Great importance will be attached to how distinct the LAGs will put focus on priorities with expected high fulfilment of objectives and on consistency between planned measures and objectives for the different axis in the national rural development program. How the local strategy is formulated in general and in relation to different economic sectors, how well it covers the population, lines of business, organisations and different partners of the territory related to the Rural Development Programme and its objectives will also be taken into consideration. A further requirement for the local strategy plan is that it has to be prepared in partnership between the actors representing different sectors of the territory. The amount of integration of operations to cover objectives of more than one axis of the Rural Development Programme will be considered as well as to what extent the strategy covers plans for trans-national and interregional cooperation. The scrutinizing of the quality of the strategy will also include to what extent it could contribute to fulfilment of the objectives at EU and national level. The specification and identification of indicators and how the strategy will contribute to a sustainable development in the area in the long run will be considered. Great importance will be given to an innovative approach showing new opportunities to changing or strengthening the development of the rural area and to introducing new methods of work and cooperation for implementation. An assessment will be made of the compliance with horizontal priorities in the Rural Development Programme concerning gender equality, women, youth, integration and sustainable development. The quality of the criterions for the selection of projects will be assessed according to their compliance with the focus, priorities and objectives of the strategic plan.

In the situation of competition between more than one LAG in the same geographic area the fulfilment of the required criteria will be weighted after the following scale: Not fulfilled 0 point Approved quality 1 point High quality 2 points

For seven important criteria the value of the points will be doubled. These criteria are: - Innovative approach. - Integrated approach. - Trans-national and interregional cooperation. - The quality of bottom up approach when the local partnership and the LAG was formed and when the board was elected. - Influence by the private and the public sector in the process of forming the local development strategy and the planned role of the three-partnership during the implementation of the strategy.

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- The consistency between strategic priorities and the specific conditions in the area and the result of the SWOT-analysis. - Consistency with the common and national objectives and strategies as described in the approved rural development program.

Cut-off date and transition from LEADER+ As a general rule for Sweden, no decisions on support to projects within LEADER+ can be taken after 31 December 2007 without a special permission from the deciding authority. All project activities should be completed by 31 of March 2008, except for the administration of the LAGs. All claims for payment, except for the administration of the LAGs within measure 1:5 and 1:6, must be logged in to the paying agency no later than 30 June 2008. Derogations could be admitted, mainly for trans-national operations.

The LAGs have commitments with the management authority that including preparedness to decide on payments, if needed, up to 31 December 2008. The paying agency will also be prepared to execute such payments.

Possible transition to Leader within the new Rural Development Programme for a geographic territory covered by LEADER+ will be decided for each Leader territory concerned. A new LAG may not start making decisions on support concerning a territory within LEADER+ until the old LAG has cut off its decision-making. Payments to projects within LEADER+ can be executed also after the date the new LAG has started to make decisions.

Administration of payments concerning LEADER+ will be financed from the budget of LEADER+.

5.6.3 Implementing local development strategies Legal basis: Article 64 of Council Regulation (EC) No 1698/2005.

Measure code: 411, 412 and 413

Justification for projects covering more than one axis The aim of Leader axis support is to implement local development strategies in such a way that the objectives for one or more of the other three axes can be achieved by means of measures under each individual axis or across axes.

The development strategies concern development in delimited rural areas , which means that the approach is best suited to axis 3, where the various measures aim to promote development in rural areas as a whole. Strategies for future development may differ between Leader areas; which means Leader must be given the chance to operate in axes 1 and 2 as well. Cooperation projects in the diversification and quality of life area are likely to include one or more of the objectives found under axes 1 and 2. This means the Leader approach can generate synergies between the different parts of the

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programme. There may also be horizontal measures that are based directly on one or other of the objectives in axes 1 or 3.

Reasons for Leader projects under axis 1 The overall aim of axis 1 is to promote competitiveness in the farming, forestry and reindeer husbandry sectors and to encourage the development of food production and processing, based on the principle of the sustainable use of natural resources. In most rural areas, a competitive farming and forestry sector is essential to the survival of a living countryside. It should be possible, therefore, as a component of Leader projects, to work with the objectives of axis 1 as well. Measures, which should target a number of different enterprises in the area, could focus on finding opportunities to enter into partnerships that further strengthen competitiveness and/or boost growth and create additional jobs. Leader can facilitate broad, projects covering more than one axis that give farming and forestry enterprises, reindeer husbandry enterprises and other rural enterprises alike the opportunity to cooperate in identifying common needs and means to develop the area and its land-based firms.

Reasons for Leader projects under axis 2 The overall aim of axis 2 is to preserve and develop an attractive landscape and a living countryside, and to encourage the transition to resource-efficient and sustainable production. Measures in Leader areas on behalf of projects dealing with quality or life or tourism, for instance, may include parts relating to the objectives found in axis 2. One such example is the adoption of a landscape perspective in projects seeking to enhance the quality of life or opportunities for rural tourism. The landscape perspective may embrace both natural environments and cultural environments. Measures on behalf of diversification may also contain elements of new entrepreneurial production associated with objectives found in axis 2.

Reasons for Leader projects under axis 3 The overall aim of axis 3 is greater diversification of rural enterprise in order to promote employment, a better qualify of life for people living in rural areas and the sustainable use of the rural areas’ aggregate resources. Under the Council Regulation (EC) No 1698/2005, local development strategies can reinforce territorial coherence and synergies between measures intended for the broader rural economy and population. It is felt, therefore, that such measures should preferably be implemented through local development strategies. Accordingly, the main focus of the Leader approach should be found under axis 3. In local development strategies, the overall objectives of the axis should be given priority. Achievement of the objectives relating to employment opportunities and growth can be particularly encouraged through measures under axis 3.

Objective Interaction/Partnership projects or horizontal projects that contribute to the fulfilment of the objectives specified for axes 1-3.

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Description Measures may involve project aid and extend to one or more axes in the programme. LAGs may decide on project aid which may include costs for productive investments. Direct support for individual businesses is however not covered by the measure. Swedish law does not allow public support from the local authorities to individual businesses. Since the local authorities are responsible for a considerable part of the public co-financing of Leader it will not be desirable or possible, to accept support to individual businesses within Leader. However, LAGs are free to integrate the measure 311, 312, 313, 321 and 323 in their strategies and by project aid promote innovations, employment and generally better conditions for the local enterprises. In that way new opportunities for productive investments in local business and enterprises could be supported. Private natural persons are not excluded as final beneficiaries for projects with a wider scope than just supporting the persons own business.

Target group The public, the private and the voluntary sector within a Leader area.

Amount of support and financing Community co-financing of these measures is limited to 40 per cent of eligible public expenditure. In the case of Leader projects, a total public support amounting to 20–100 per cent of eligible costs is payable. Private co-financing may take the form of voluntary work, other kinds of contributions in kind, or cash.

Conditions Projects will only be approved if they comply with the strategy that applies to the Leader area. Projects will be assessed on the basis of a project plan containing a description of the project, its purpose and goals, and a financial cost estimate.

Selection of operations Operations in the framework of the strategies of the LAGs will be selected on the basis of the general selection criteria for operations which will according to article 78(a) of regulation 1689/2005 have to be presented to the Monitoring Committee within 4 months of the decision approving the programme as well as on the basis of the local strategy and the quality of the project plan Priority will be given to measures of importance to young people, to women and to Swedes of foreign descent. Priority will also be given to operations with a potential to promote growth, new jobs and improve the competitiveness of the rural economy. A description of the procedure for selection of operations by the LAGs, see section 11.3.

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Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of local action groups supported 60 LAGs Total size of LAGs are (in square kilometre) 300 000 square kilometre Number of projects financed by LAGs 9 000 projects Result Gross number of jobs created per year 1 000 jobs Number of successful training results per year 5 000 results Impact Increase in net value added,, MSEK per year 750 MSEK (M€ 83,3) Net additional FTE jobs created per year 970 Net FTE

Programme-specific indicators and quantified goals None

5.6.4 Cooperation Legal basis: Article 63 b of Council Regulation (EC) No 1698/2005.

Measure code: 421

Motives Cooperation between local action groups or between local action groups and other partnerships both inter-territorially and transnationally allows exchanges of experience that can generate new and/or more effective methods and ideas for development in the local area.

Objective Participation by all local action groups in cooperation projects.

Description of the measure Support for inter-territorial or transnational cooperation projects is payable in the form of project aid in the framework of the implementation of the local strategies.

Support is payable to cooperation projects where at least one of the partners is a local action group under the Rural Development Programme. Cooperation may take place within the country or between Sweden and one or more EU countries or other countries.

Target group The public, private and voluntary sectors in a number of Leader areas or in one or more Leader areas along with other types of partnerships. The target group may be inter-

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territorial or trans-national. Cooperation with partnerships in the other Nordic countries should be given high priority.

Amount of support and financing Community co-financing of the measure is limited to 40 per cent of eligible public expenditure. A total public support amounting to 20–100 per cent of eligible costs is payable. Only expenditures for joint actions, for running any common structures and for preparatory technical support are eligible for support. Funding of coordinating costs should be shared among partners on the basis of the cooperation agreement. Expenditures in area in a non-member country and not related to a Leader will not be eligible. The Commission guide for the implementation of the measure will be recognized when adopted and published on the website.

Selection of operations Operations will be selected on the basis of the local strategy and the quality of the project plan. The orientation of cooperation with other groups should primarily be an integrated part of the implementation of the local strategy plan. Priority will be given to measures of importance to women and to Swedes of foreign descent.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target indicator Output Number of supported cooperation projects 300 projects Number of cooperating LAGs 60 LAGs Result Gross number of jobs created per year 100 jobs Impact Net additional FTE jobs created per year 60 Net FTE

Programme-specific indicators and quantified goals None

5.6.5 Operating costs for local action groups and information and animation measures Legal basis: Article 63 c of Council Regulation (EC) No 1698/2005

Activity code: 431

Justification If the work of the local action groups is to proceed as intended, a leader is required whose primary task will be to initiate and develop group activities with the group members. Particularly in the early stages, the leader’s principal aim will be to ensure that the local action group begins work and that tripartite partnerships become properly involved in the task of implementing local development strategies and cooperation projects in accordance with the frameworks specified in the national

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ERDP. In order to conduct their work, the local action groups will also require administrative assistance and funds for information, preliminary analyses and skills acquisition within their area of operation.

Objective Effective achievement of local development strategies and cooperation projects.

Description of the measure Initiatives for managing the implementation of local development strategies and cooperation projects may be financed under the measure. Support for information dissemination, skills acquisition and animation initiatives seeking to promote and facilitate such implementation in the local action group’s area of operation is also included.

Amount of support and financing Community co-financing of the measure is limited to 40 per cent. A maximum 18 per cent of the local action group’s total public budget may be used for operating costs. Support is payable to members of the local action group from the non-public sector for costs and fees in connection with meetings.

Conditions The organisational setup and budgeted costs for the measure must be set out in the local development strategy. Budgeted costs for information and animation operations, are to be detailed separately.

Indicators

Quantified targets for Community-wide indicators Type of Indicator Target per year indicator Output Number of skill acquisition and animation actions 600 actions Number of participants in actions 30 000 participants Result Number of successful training results 600 results

Programme-specific indicators and quantified goals None

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6 Financial plan The exchange rate used for the financial tables in chapter 6, 7 and 8 is 9,0 SEK/euro. The same exchange rate is also used in other chapters of the programme for information purposes in order to show indicative amounts in euro.

The starting date for eligible expenditure in accordance with the programme is the 1st of January 2007.

The financial information in this chapter is attached in section 17.9 Annex 9.

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7 Indicative allocation per measure The exchange rate used for the financial tables in chapter 6, 7 and 8 is 9,0 SEK/euro.

The starting date for eligible expenditure in accordance with the programme is the 1st of January 2007.

The financial information in this chapter is attached in section 17.9 Annex 9.

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8 Additional national financing (Article 16(f) of Regulation (EC) No 1698/2005) The exchange rate used for the financial tables is 9,0 SEK/euro.

The financial information in this chapter follows below.

Table 11 Additional national financing (Article 16(f) of Regulation (EC) No 1698/2005)** In euro, total period Axis 1 Measure 121* 4 044 444 Axis 2 Measure 214 5 444 444 Grand total 9 488 889 * The indicated amount reflects the allowed additional 10 per cent national aid for planting of permanent energy crops in accordance with Council Regulation (EC) No 2012/2006. ** The exchange rate used for the financial tables in chapter 6,7 and 8 is 9,0 SEK/euro.

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9 Compatibility with Articles 87, 88 and 89 of the Treaty The choice of measures provided for under Council Regulation (EC) No 1698/2005 and the design and implementation of the Rural Development Programme (RDP) must be compatible with other areas of Community policy. This means inter alia that implementation of these measures must conform to the basic principles of Community law, including the rules governing state aid laid down in Articles 87–89 of the Treaty establishing the European Community. The main import of these provisions is that any aid granted by a Member State or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, insofar as it affects trade between Member States, be incompatible with the common market.

The Rural Development Programme contains no support measures that favour a certain business category while disadvantaging other enterprises in the same industry/sector. In cases where certain type of support measure does not apply throughout the territory Programme, the motives are stated in chapter 5. For example, the support within LFA is by definition and as a prerequisite for the measure limited to certain areas. Another example is that the possibility for higher aid intensity for investment support in northern Sweden is justified by a less favourable agricultural structure and severe climate conditions. Regional differentiation also applies to some operations under the measure ‘Support for environmentally friendly agriculture’. The higher levels of compensation in northern Sweden reflect the shorter growing season and higher building investment costs, etc. In addition, care has been taken to ensure that the measures chosen in the Programme are not eligible for aid under any other Community support scheme insofar as this is incompatible with Council Regulation (EC) No 1698/2005. See also section 5.2.

Regarding compatibility with Community competition policy, efforts have been made since Sweden joined the EU in 1995 to bring national measures in EU policy areas into line with the large body of Community competition law. The measures proposed in the Rural Development Programme are also in line with Community rules on state aid, and the state aid Sweden intends to provide has been approved and notified.

To ensure that measures proposed under Council Regulation (EC) No 1698/2005 do not distort or threaten to distort competition by favouring certain enterprises or a certain type of production, an assessment has been made on the basis of objective criteria that in certain cases aid pursuant to the programme may also be granted to enterprises in the common market organisations.

The aim is to ensure that aid granted for the measures itemised in section 5 will as far as possible be financed in accordance with the respective contributions from EC financing and national co-financing specified therein.

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Under Article 88.1 of Council Regulation (EC) No 1698/2005, the rules concerning state aid do not apply to financial contributions provided by Member States within the scope of Article 36 of the Treaty, i.e. production of and trade in agricultural products.

Measures under Article 52 of Council Regulation (EC) No 1698/2005 and actions under Articles 28 and 29 will be nationally co-financed via aid ordinances notified in accordance with each area’s current regulatory framework on state aid, or will be applied under the de minimis rule. See also Annexes in section 17.

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10 Links to other financial instruments The measures in the Rural Development Programme are aimed at promoting the development of existing and new rural enterprises whose products will help vitalise rural areas and their resources within an economically, ecologically and socially sustainable development framework. Thus the measures in the Programme are closely linked to measures and operations implemented with support from other financial instruments.

10.1 Links to the Common Agricultural Policy Measures aimed at promoting rural development must support and supplement the Common Agricultural Policy. As of 2005, Sweden will implement the 2003 policy reform by introducing decoupled support payments in the form of a regionalised aid model with elements of farm support. Under this model the allocation of aid entitlement is decided on the basis of who is farming the land at the time the system enters into force. The size of each individual aid entitlement is based partly on a regionalised basic amount and partly on the amount of support received previously during the reference period, and the size of the milk quota. Certain livestock support payments have been decoupled. In addition, to qualify for full farm support, the farmer must keep the land in good condition and comply with the specified cross-compliances including statutory management requirements and good agricultural and environmental conditions. The cross-compliances rules are regarded as basic requirements with respect to relevant measures and operations in the Rural Development Pro- gramme. Compliance with the cross-compliance obligations is not eligible for payment (For further information on complementarities with cross-compliance, good agricultural practice and the common market organizations see 5.2.1, 5.2.3 and 5.4.3.).

Restructuring programme for the sugar sector The restructuring programme for the sugar sector and the rural development programme will both be used to promote development of enterprises and business ideas in rural areas. The measures included in the restructuring programme correspond to those in axis 1 and 3 of the Rural Development Programme. The rates of support for the measures are the same as in the Swedish Rural Development Programme 2007-2013. The target group is sugar beet growers in possession of a delivery right for sugar beets for the marketing year 2005/2006. The target group also includes local groups of for example enterprises, organisations or municipalities in areas or villages affected by the restructuring of the sugar sector.

The Swedish Board of Agriculture will be the paying agency for aid from the restructuring programme. To make sure no double financing will take place the County Administrative Boards will control applications for aid in cases where there might be a risk of double financing (see also section 11.2). There will be both administrative controls and field controls in line with the relevant regulations when the eligible measures are carried out. Similar controls are also carried out within the common market organisations and the rural development programme.

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The County Administrative Boards will administer the transitional aid and the diversification aid. The County Administrative Boards are obliged to make controls to avoid double financing, and control for consistency with the rural development policy and with measures and actions under other Community funds.

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10.2 Delimitations with respect to ERDF, ESF and EFF Synergies between priorities and measures targeted towards regions, rural areas, agriculture, forestry and other rural businesses should be further developed. Consequently the coordination between actions financed under the European Agricultural Fund for Rural Development (EAFRD), the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the European Fisheries Fund (EFF) should be strengthened during the programme period.

Simultaneously, it is necessary to clarify the different objectives and priorities and the results. The target groups differ between funds and this has to be addressed. In the operational implementation there is a need for demarcation/delimitation lines preventing double financing, bringing clarity to what each fund should finance, and simplifying for beneficiaries applying for support and that enhances the potentials for synergies between the programmes. For more information on administrative routines carried out in order to avoid double payment, see chapter 11.2. For information on the process whereby a clear delimitation between EAFRD and other EU-funds is ensured see figure in section 10.2.2.

10.2.1 Delimitation with respect to strategy and measures in regional development policy The national strategy for regional competitiveness, entrepreneurship and employment aims to further develop harmonisation between regional development policy and EU cohesion policy in Sweden. Its purpose is to provide a basis for the implementation of EU structural funds in Sweden and to serve as a guide for regional growth programmes and national public authorities. It also aims to strengthen the dialogue and interaction that exists between actors at local, regional, national and Community level. Dialogue is to be based on the priorities in the national and regional development strategies. Regional development strategies as referred to here are the regional development programmes, which in practice are strategies for the counties’ future development. The regional Structural Funds programmes will be developed in partnerships based on those existing at county level.

The national strategy for regional competitiveness, entrepreneurship and employment will help create sustainable development and competitive regions and individuals in Sweden. The following national priorities for regional competitiveness, entrepreneurship and employment for the period 2007–2013 are identified: innovation and renewal, skills supply and increased labour supply, accessibility, and strategic transboundary cooperation. Sparsely populated areas of northern Sweden and metropolitan areas are deemed to require special attention.

The national strategy for regional competitiveness, entrepreneurship and employment will serve as a strategic basis for the implementation of the Structural and Social Fund programmes for the period 2007–2013. This strategy will also provide an overall

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framework for rural development efforts and is therefore one of several important starting points for the national strategic plan and the Rural Development Programme.

Common to the various policy areas is the overarching objective of regional development and sustainable growth as part of the sustainable development of Swedish society. The strategic focus of the Structural Funds programmes will be on sustainable growth and improved competitiveness and employment, and the regional growth programmes will continue to be an instrument for process-oriented growth at county level. The measures in the Rural Development Programme will be based primarily on the aggregate resources of rural areas, including the natural resources farmed and managed by land-based industries, and on local development conditions and micro enterprise activities within these frameworks. The measures in the Rural Development Programme are also more clearly delimited with regard to target groups defined in the pertinent EU regulations.

Operatively, synergies will be found between the various programmes in areas such as promotion of enterprise, growth, and innovation in rural areas aimed at boosting competitiveness and employment. In terms of the Rural Development Programme, this applies primarily to operations under axis 3, where the target group is more broadly defined. However, it also applies to operations in other axes. Here, operations pursuant to the relevant policies and programmes will need to be well coordinated, in both the planning and implementation stages. To ensure that operations help add value and do not replace more appropriate forms of financing, clear delimitations will be required within and between programmes. Where there is a clear link to rural policy goals and to natural resources and industries in rural areas, local support measures targeting archipelagos and islands, the Sami, reindeer husbandry and other Sami business and services will primarily be implemented under the Rural Development Programme. Delimitations relating to local conditions for tourism, Sami people, skills acquisition, renewable energy and broadband investment are therefore particularly important.

The delimitations have been more closely defined within the implementation planning of the Rural Development Programme in accordance with the implementations strategies developed by the county administrative boards and the Sami Parliament (see section 11.1).

During the implementation, the County Administrative Board will consult with the Managing Authority for the respective regional structural funds programme concerned (8 in total) in order to ensure that further national delimitation principles will be adjusted to the specific conditions of each region. In the actual handling of application regular consultation will be made to ensure that synergies between programmes are fully explored, and the risk of double financing eliminated (see also chapter 11.2) and that sound information is given to potential beneficiaries on support and including information about to which authority application should be sent to. A close consultation and sufficient administrative routines is especially needed for actions/operations under Rural Development Programme axis 3 and the Structural

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Funds Programmes. It is the responsibility of the authorities on national, regional and local level to further develop specific detailed routines that will prohibit inefficient overlapping or double financing and to explore the potentials for synergy between the programmes and their operations during the implementation.

With regard to the Social Funds programme, skills acquisition/training is an action area found in both policy areas. The main principle is that skills acquisition/training measures in the Rural Development Programme is targeting the development needs of enterprises, entrepreneurs and employees in agriculture, forestry and processing, and other rural and local development actors. In the case of Rural Development Pro- gramme, axes 1 and 2, the target group is clearly delimited to agriculture, forestry and processing of agricultural products. For axes 3 and 4, skills acquisition measures constitute an intergatated part of measures supporting diversification and other business creation within the intervention field of the Rural Development Programme.

Measures within the Social Funds programme will be of a more general nature and be a part of the Swedish labour market policy and also support common strategies such as the EU employment strategy. It is the responsibility of the authorities on national, regional and local level to further specify detailed routines that will prohibit inefficient overlapping or double financing and to explore the potentials for complementarities between the programmes during the implementation.

10.2.2 Delimitation with respect to strategy and measures in the European Fisheries Fund Priorities and measures under the national strategy plan and the operational programme for the fishery sector will support a sustainable development of the fishery sector through operations promoting entrepreneurship, employment and innovation in rural areas. The programme will mainly support the restructuring of the fishery sector. Support for the sustainable development of fishing areas is payable for a wider range of operations.

Synergies with the Rural Development Programme and the operational fisheries programme will be in the development of sustainable and viable rural areas. Improved coordination between the programs is therefore necessary. Simultaneously, clear demarcation lines are necessary for some measures.

Training will occur in both programs, but will be delimitated by the different target groups and is not expected to overlap. Support for productive investments in aquaculture will be a part of the European Fisheries Fund Program.

Overlapping between the agri-environmental measures in the Rural Development Programme and the aqua-environmental measures in the European Fisheries Fund programme are not foreseen. Activities in connection to aquaculture ponds/fishponds will be supported by the EFF. When ponds or other wet areas are located on agricultural land, support may be given by the Rural Development Program, but not

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include any payments for aqua-environmental or production costs. Agri-environmental payments will not be granted, and such payments from previous years under the five year contract period will be reimbursed, in cases where aqua-cultural payments which counteract the agri-environmental objectives are granted.

Tourism or recreation activities will mainly be supported by the Rural Development Program. In the European Fisheries Fund, support for tourism and other wider range of actions will be supported mainly in selected fisheries areas. Fishers may be supported in activities of tourism also outside selected fisheries areas.

Support for food processing will, in the EFF programme, be limited to fishers, aquaculture producers and associated processing industries. Support within the Rural Development Programme will target agriculture, forestry and other rural actors (se further under axis 1 and axis 3).

Delimitation of areas for sustainable development in selected fisheries areas will be coordinated with the delimitation of Leader areas. In case Leader and fisheries areas overlap each other geographically, the local development strategies and their implementation have to be coordinated through the partnerships and competent authorities to firmly promote complementarity and to avoid double financing.

Competent authorities on national, regional and local level will be responsible for further developing of routines that will prevent inefficient overlapping or double financing of measures and operations and to explore the potentials for complementarities between the programs and operations during the implementation.

10.2.3 Summary of demarcations An overview of demarcations lines between the EAFRD, ERDF, ESF and EFF is presented in the following table.

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Table 12 Delimitation between Funds in the Swedish Rural Development Programme 2007-2013. EAFRD measure Delimitations Skills acquisition and use RDP axis 1 is directed towards people engaged in agri- of advisory services" culture and forestry or in processing of products from (ESF)71 those sectors (annex 1 products and forestry products) in order to better their competence in these sectors. It includes activities directed towards land management and animal welfare. Training in axis 3 is directed to actions linked to support within other measures in the axis. Training financed through ESF will be more general and constitute a part of Swedish labour policy as well as connecting to the EU Employment Strategy. Modernisation of Investment for modernisation in the agricultural agricultural holdings" sector (including horticulture and reindeer husbandry) (EFF, e.g. aquaculture) belongs only to axis 1. Modernisation in the framework of diversification fully outside annex 1 will be handled within RDP, axis 3. In general, the delimitation between EAFRD and EFF will follow by the different target groups for the programmes. Aqua- culture is financed through EFF. See also section 10.2. Adding value to Investment support for adding value involving the agricultural and forestry processing of agricultural annex 1 goods and forestry products" (ERDF) products prior to industrial processing resulting in annex 1 or non-annex 1 goods and forestry products belongs to EAFRD, axis 1. Investments for adding value fully outside annex 1 in micro enterprises belongs to EAFRD, axis 3. Other investments belong to ERDF. Cooperation for Only processes of products linked to annex 1 development of new (products) and from forestry will be supported by products…" (EFF and EAFRD. ERDF) Infrastructure related to Support is intended for improving planning and the development and cooperation on a local level, i.e. in a village or through adaptation of agriculture cooperation between farm or forest holders or in a and forestry” such as local partnership group (LAG). Larger projects and roads, planning of local projects beyond local level could find support from energy production. other funding sources, such as ERDF. (ERDF) Non productive EAFRD will only support activities directed towards investments” (ERDF, land management (agriculture and forestry) and animal EFF) welfare. Investments in aquaculture ponds/fish ponds

71 Reference to Fund in brackets indicates the Fund towards which the delimitation is directed.

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will be supported in EFF. Business development in RDP support will be focused on micro businesses in micro enterprises (ERDF, rural areas. Support to larger enterprises will be EFF) handled through the ERDF programmes. Business development in EFF will be limited to the fisheries sector/fishermen/aquaculture (axes 1-3) and for a wider target group within fisheries areas. Encouragement of tourist Support for tourism in the EAFRD will be limited to activities” (ERDF, EFF) small and micro enterprises with a clear connection to agriculture, forestry and rural areas/development. ERDF support will be focused on large-scale/strategic projects. Tourism support in EFF will be limited to fishers and fisheries areas. Basic services..."(ERDF) Support for basic services in the EAFRD will be limited to projects on local level, primarily as a part of a local development strategy. General infrastructural public commitments are not eligible. Village renewal and The target area for EARDF will be small local villages development or rural areas with less than approximately 1 000 inhabitants. Projects will have a clear connection to the natural resources and business conditions important to small and micro size enterprises and for people in the area. A bottom up and Leader approach will be applied. Conservation and Support for conservation and upgrading in the upgrading of rural EARDF will be limited to local projects /within local heritage assets" (ERDF) development strategies. Training and information The delimitation will follow by the different target measures (EFF, ESF) groups. Leader Local action groups (LAGs) can support all types of projects eligible under EAFRD or the other Funds as long as they support the objective of one, two or all of the axes of the Rural Development Programme. Coordination must be carried out on a regional level and respect the delimitation requirements described in section 5.6.1.

In the figure below part of the application process is outlined whereby a clear delimitation is ensured between different the EAFRD and other EU-funds.

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Figure 12 Part of application process as regards ensuring delimitation between EU- funds

Applicant Application submitted to a county board

County Board Application is registered, scrutinized and checked at the Board. If the application lays in the grey area (bordering to other funds) it is separated and a summary of the application is submitted to concerned units at the board or to other authorities concerned. Regular consultations are carried out with all other authorities concerned. (below).

Board of Fisheries NUTEK ESF-council Summary of grey area Summary of grey area Summary of grey area applications submitted applications submitted applications submitted to the County Board. to the County Board. to the County Board. Regular consultations Regular consultations Regular consultations with County Board. with County Board. with County Board.

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10.2.4 Demarcations concerning regional and local partnerships For all the described policy areas and programmes there is a common and national ambition of increased local partnership in programming and implementing of development strategies and programmes.

In the Rural Development Programme the promotion of local involvement will mainly be implemented through axis 4, Leader. According to the programme more than 6 per cent of the total programme budget will be carried out through local development groups. The ambition is that Leader groups should be established all over the country. Coordination on regional level will be administered by the County Administrative Boards under full control of the Management Authority.

Eight regional structural funds programmes (ERDF) will geographically cover all Sweden. Decisions on support are intended to be the responsibility of the Managing Authority, the Swedish Agency for Economic and Regional Growth (Nutek). During the administration process preparing decisions on support the MA shall pay due attention to coordination as well as delimitation against other programmes being implemented on regional level, among others the Rural Development Programme.

After the Management Authority (ERDF) has checked the legitimacy of the project applications, approved applications will be forwarded for consultations with the regional structural funds partnership concerned to decide on priorities between projects. The regional structural funds partnership shall comprise elected representatives from municipalities and county councils, labour market organisations, county labour boards, and interest groups and associations. In the two northern structural funds partnerships the Sami Parliament will also be represented. The decisions within the national social fund programme (ESF) are also intended to be established firmly on regional level. The Managing Authority will consult the structural fund partnerships on regional level asking for priorities between projects.

In the case of delimiting areas, selecting local partnerships and forming local action plans supporting sustainable development of coastal fishing areas within the framework of the fisheries programme (EFF) there will be an obligation for the competent authorities concerned to coordinate with the corresponding proceedings for establishing the Leader-method in the Rural Development Programme and with priorities under relevant measures in axis 1-3 of the Rural Development Programme.

For the Rural Development Programme, the fisheries programme and the Restruc- turing programme for the sugar sector, the county administrative boards will be the competent decision-making authority. In the management of applications for support coordination between the county administrative boards and the managing authorities for the structural fund programmes will be required. The county administrative boards will in the assessment of local development strategies check that clear thematic areas for intervention/action have been identified. In that way it will be ensured that the

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same type of action is not implemented and financed in the same geographic area from more than one program. The county administrative board will also be responsible for developing efficient coordination routines to eliminate the risk of double financing and explore the complementarities between the different programmes. County administrative boards and other competent decision-making authorities concerned will be obliged to have regular consultations.

Requirements foreseen for coordination between programmes are for instance when applications for support have been sent to the wrong authority as a consequence of the close connection between the programmes or when they are applications which contain eligible elements for more than one fund.

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10.3 Links to other financial instruments in the Community

10.3.1 Delimitation of LIFE Funds EU LIFE funds may be sought for the purpose of financing extensive land restoration projects aimed at enhancing biodiversity and preserving wild animal and plant habitats. In Sweden, applications have been submitted for LIFE Funds for the restoration of almost 2 000 hectares of grazing land. If LIFE funding is granted, support for the restoration of the same land is not payable under the Rural Development Programme.

At the time of programme planning the process of decision making in Life+ has not been set. However, with reference to the experiences from the period 2004-2006 and taking into account the important role that the County Administrative Boards play in the regional environmental work, their involvement in the process of developing Life- projects (often as project owners) ensures guarantees that overlap between Life+ and Rural Development Programme measures will be avoided. Projects that receive support from Life+ will not be eligible for financing under the Rural Development Programme and vice versa.

10.3.2 The 7th EU Framework Programme for Research and Technological Development There is a general and critical need in Sweden to strengthen the knowledge base in the rural policy domain and to promote sustainable production in land-based industries. The 7th EU Framework Programme for Research and Technological Development applies to the period 2007–2013 and is divided into four blocs: cooperation projects, ideas, human resources and research capacities. Each bloc includes a number of thematic research areas relating to rural development. The link to the Rural Develop- ment Programme is strongest in the thematic area Food, Agriculture and Biotech- nology, which deals with issues relating to the development of rural competitiveness and conditions. The communication and utilisation of research findings – part of the EU research programme with links to rural development – can facilitate implementation of the Rural Development Programme and help improve goal achievement. Although any existing synergies should be turned to account, these do not pose delimitation problems as regards use of funds from the Framework Programme for Research and Development or the Rural Development Programme.

10.3.3 The 7th EU Framework Programme for Competitiveness and Innovation The 7th EU Framework Programme for Competitiveness and Innovation (CIP) for 2007–2013 is divided into three sub-programmes: 1. The Entrepreneurship and Innovation Programme. 2. The ICT Policy Support Programme (information and communications technology). 3. The ‘Intelligent Energy – Europe’ Programme.

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Rural areas can contribute in many ways to development in the fields of entrepreneurship and innovation, ICT and the energy sector, while certain rural areas are also in need of special initiatives. Although any synergies between the Rural Development Programme and the above sub-programmes should be turned to account, these do not pose delimitation problems as regards the use of funds from these two sources.

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11 Relevant authorities and responsible bodies

11.1 Relevant authorities and responsible bodies appointed An overview of the relevant authorities and responsible bodies is presented below.

The Swedish Ministry of Agriculture as representative of the Swedish government, has the overall responsibility for programme planning. Besides planning the programme this includes responsibility for:

- Deciding on amendments to the programme after approval of the Monitoring Committee. - Decisions and amendments relating to national public funding from the Swedish government. - Deciding on the national legislative framework of the programme implementation. - Designating the managing authority, accredited paying agency and certifying body. - Designating a representative to sit as chair of the Monitoring Committee. - Deciding on the composition of the Monitoring Committee. - Deciding on the form and organisation of evaluations in accordance with the Common Monitoring and Evaluation Framework.

The responsibility of the Ministry of Agriculture initiating evaluations will not encroach on the evaluation responsibility of the Managing Authority (SJV) according to Article 75.1 (d) of Council Regulation (EC) No 1698/2005.

The managing authority As the designated managing authority for the Rural Development Programme (RDP), the Swedish Board of Agriculture has the responsibilities outlined in article 75 of Council regulation 1698/2005, including programme implementation planning, administration, implementation and follow-up. Together with the Monitoring Committee, the Swedish Board of Agriculture will be responsible for monitoring the implementation of the programme. The Swedish Board of Agriculture has the overall responsibility for collecting data and statistics necessary for monitoring the programme. The mission and role of the managing authority includes working continuously with implementation to achieve the objectives set out in the Programme. It is the responsibility of the managing authority during the implementation period to identify and with take measures and operations necessary to achieve these objectives. These may include information activities aimed at various target groups, the development of approaches designed to support the participation of different actors in the programme, and the development of expertise that can help enhance the quality of the implementation process. A further responsibility is to propose programme amendments where necessary.

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Harmonisation with the regional and local level The Rural Development Programme is to be implemented in such a way that due account can be taken of varying conditions prevailing in rural areas and regions around the country. Harmonisation with other programmes and measures aimed at promoting regional development, fisheries, etc. must be strengthened. In light of the overarching national objectives and priorities embodied in the Rural Development Programme, therefore, the need for greater regional and local influence must be a prime consideration throughout the planning, decision-making, implementation and follow-up stages. Rural Development Programme implementation must also be harmonised with regional development planning, with ongoing efforts to achieve the national, regional and local environmental quality objectives, and with other regional and local initiatives, plans and programmes. This will ensure stronger regional and local support for rural development policy and programme actions. A greater regional differentiation is also expected to increase the efficiency of the programme measures. During the programme period, the regional level will also serve as a basis for Leader administration.

Each county administrative board and the Sami parliament will be responsible for the coordination and development of an implementation strategy for the application of the Rural Development Programme in the relevant geographical and thematic areas. The operational guidelines for this will be given by the managing authority. In addition to identifying regional needs and priorities, it is particularly important in the development of the strategy to draw a dividing line between implementation of the Rural Develop- ment Programme and the Structural and Social Funds programmes for regional competitiveness and employment respectively. The point of departure here must be the area’s development needs and opportunities within the overall perspective of the programmes for sustainable regional and environmental development established for each area. To ensure that synergies are exploited when implementing programme measures, criteria will need to be developed if a careful balance between economic, social and ecological sustainability is to be maintained.

Implementation strategies are to be used as a basis for planning, selection and decisions relating to support for applicable operations in axes 1 and 3, to support for regional priorities under axis 2, and to the application of Leader. The strategies together with a number of objective criteria reflecting the objectives of each axis will serve as a basis for the decision of the managing authority on delegation of certain responsibilities to the county administrations and the Sami parliament. Strategy work must be undertaken in broad partnership with regional and local representatives and command wide support with stakeholders in the areas concerned. It is important to ensure that implementation strategies allow sufficient scope for local action groups to exercise their often evidenced capacity for initiative. The county boards shall provide for coordination with the partnerships supporting programming of the structural fund and regional growth programmes. Implementation and outcomes must be followed up annually and reported to the managing authority. The regional level through the county administrative boards will thus be an integral part of the system for monitoring and evaluation of the programme.

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Figure 13 Overview – relevant authorities and responsible bodies

Ministry of Agriculture Programme planning, Decision on programme amendments, National Laws and Regulations, Chairs the Monitoring Committee (MC), Appointment of MC delegates, Designating MA, PA, Cert. body, Evaluation framework

Board of Agriculture Certifying MA and PA Body Local action Secretariat for MC Decision making for until October groups measures on national 15th 2007 level (111, 124, 125, 311, Öhrlings 312, 313, 321, 322, 323, Price- (LAGs) 331, 341). Decision on water-house- support (114, 214 part). Cooper All payments direct to as from Decision on beneficiaries. National October 16th support implementing 2007 Information Regulations Swedish on support to National the Financial beneficiaries Management Authority

Board of Forestry 21 County Boards The Sami Decision making (on Decision making (on Parliament supports and supports and Decision making (on requisitions) for requisitions) for supports and measures 111 (part) and measures 111, 112, 121, requisitions) on all 227 123, 124, 125, 211, 212, applied measures in axes 214 (part), 216, 311, 1 and 3 connected with 312, 313, 321, 322, 323, the development of the 331, 341, 431. Formal Sami region. Measure approval of LAG 214 (part) decisions (41)

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Selection, support decisions and approval and validation of payments Processing of applications, validation and support and payment decisions will mainly be delegated to county administrative boards and, in certain cases, to the Sami parliament or the National Board of Forestry. The county administrative boards are also responsible for formal agency decisions on support and for administering and approving disbursements within the local action groups’ sphere of operations. This responsibility must be exercised in accordance with the Board of Agriculture’s Regulations concerning Administrative Procedure, which must meet the requirements set out in Annex 1 of the Accreditation Regulation72. The Board of Agriculture is responsible for making and accounting for disbursements.

Responsibility delegated to the Sami parliament covers both applicable parts of the measures in axes 1 and 3 and relevant parts of the support for regional priorities, as well as the measure on natural and cultural environments in reindeer herding areas in axis 2. Responsibility assigned to the National Board of Forestry covers the measure for non-productive investment in forestry and applicable parts of the skills acquisition measure. The authorities to whom tasks have been delegated are required to ensure that these are implemented in accordance with the implementation strategies decided on, and that cost-effective administrative coordination is undertaken whenever possible.

Regarding the measure for the preservation of endangered livestock breeds, the Board of Agriculture is responsible for registering, processing and selection of applications for support, decisions on support and payments as well as administrative validation, while the county administrative boards are responsible for carrying out field inspections. With regard to other applicable parts of the measures and operations undertaken at national level in axes 1, 2 and 3, the Board of Agriculture is responsible for validation as well as processing applications and taking aid decisions.

Regarding cross-compliances on the spot checks will be undertaken by the authority designated for the task in the relevant national legislation.

The paying authority The Swedish Board of Agriculture is the approved paying authority with regard to support from the European Agricultural Fund for Rural Development (EAFRD). The Board’s administrative organisation and system of internal controls meet the requirements set out in Annex 1 of the Accreditation Ordinance with regard to: a. internal conditions, b. checks/controls, c. information and communication, and d. monitoring.

72 Commission Regulation (EC) No 885/2006 of 21 June 2006 laying down detailed rules for the application of Council Regulation (EC) No 1290/2005 laying down detailed rules for the application of Council Regulation (EC) No 1920/2005 as regards the accreditation of paying agencies and other bodies and the clearence of the accounts of the EAGF and of the EAFRD.

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The Board disburses aid and compensation directly to recipients after checking that the payments comply with Community law. If the Board finds that a payment is in breach of Community law it will withhold payment.

The Board is empowered to issue regulations governing the administration of support and payments by competent authorities to whom such tasks have been delegated and the administration of Leader. In addition, the Board is responsible for coordinating the prescribed controls.

The Board will further encourage the harmonised application of Community law and distribute Community texts to relevant authorities. Other responsibilities include coordinating information for beneficiaries and ensuring uniform application procedures.

The Board’s special internal auditing unit is required to scrutinise the implementation of administrative procedures and decision-making within the agency itself, and at county administrative boards and other authorities to whom tasks have been delegated.

The certifying body The certifying body for the 2006–2007 financial year in respect of all aid and contributions is Öhrlings Pricewaterhouse Cooper. From the 16th of October 2007 this responsibility will be taken over by the Swedish National Financial Management Authority.

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11.2 Administration and validation systems A general ambition is to simplify implementation and follow-up of the Rural Development Programme and make it more efficient while at the same time ensuring sound financial management including guaranteeing that double-funding of beneficiaries’ costs does not occur. The administrative simplifications with regard to rules and financing, etc. implemented at Community level will be made use of. National rules and provisions must be designed to ensure a high degree of flexibility at the implementation and decision level.

Administrative procedures The processing and administration of aid and contributions is undertaken in accordance with the procedures and checklists developed jointly by the Swedish Board of Agriculture and the relevant authorities (cf section 11.1). The procedures are designed to guarantee a result-oriented, efficient, secure way of dealing with applications and to ensure that all applications are dealt with in the same way, irrespective of which authority is involved. In the official routines laid down by the paying authority, the county administrative boards and the Sami Parliament are required to secure that beneficiaries are not double-funded for the same costs. In cases where the Board is responsible for approving payments, the task is performed in accordance with established procedures and checklists.

The process The processing of an application involves the following operational stages: Handling of incoming applications – investigation – validation – decision (aid approval and payment) – and payment.

Although all forms of aid are processed in the same way, the procedures for each stage differ. Processing is simultaneously monitored for compliance with established procedures, and the monitoring is documented.

Handling of incoming applications When applications come in, they are checked to determine whether they contain the requisite information and whether the requested annexes, such as maps, business plans, etc. are attached.

Investigation The term investigation here corresponds to elements of what is referred to as administrative control in Regulation (EC) nr 1975/2006. At the investigative stage, applications for support and applications for payment are checked to determine whether they qualify for approval. The type of investigation undertaken depends on the form of support applied for. On-site checks relating to support under axes 1 and 3 and to certain measures under axes 2 and 4 are performed following a risk analysis.

In the above cases, a preliminary prioritised selection of submitted applications is made. A decision proposal is then taken. If the application has been singled out for a

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check of some kind, a decision proposal is not made until the outcome of this check has been duly registered.

Where appropriate, payment recovery matters are also investigated at this stage.

Validation Checks are undertaken in accordance with Regulation (EC) nr 1975/2006. Administrative checks such as cross-checking of area surfaces and animals are undertaken.

Field inspections under axis 2 and of certain measures under axis 4 are carried out in accordance with Regulation (EC) nr 1975/2006. In the case of measures to promote environmentally friendly agriculture, checks will as far as possible be coordinated with the field inspections undertaken in respect of various forms of direct payments.

In the case of measures in axes 1 and 3 and of certain measures in axes 2 and 4, at least 5 per cent of expenditure is to be checked on site. Selection and implementation must comply with the requirements laid down in Regulation (EC) No 1975/2006. Ex post checks on investments will be performed in accordance with Article 29.

In respect of axis 2 and support for environmentally friendly agriculture, beneficiaries are required to meet cross-compliance conditions. Checking of cross-compliances is undertaken in accordance with the same model as for direct payments as laid down in government regulation (2004:760) regarding EC direct payments to farmers etc..

Support decisions and payment decisions are determined by the outcome of these checks.

Decision Decision makers ensure that all the various stages have been completed and that sufficient checks have been carried out. The relevant applications are then selected in order of priority and the support/payment decisions are taken.

Finally, the basis for payment decisions is documented and sent to the Board of Agriculture. The documentation includes an assurance that the authority concerned has fulfilled its obligations.

Payment The responsible unit at the Board of Agriculture verifies that the documentation from the authority complies with Community rules. Payment can then be made.

Prevention, detection and reporting of irregularities The programme will be implemented in line with the provisions given in regulation (EC) 1975/06 on controls. In addition the Managing authority and paying authority will submit to all competent authorities detailed regulations (including check lists) to follow. A first basic control is performed to sort out all applications not eligible for

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support. Controls of area-based measures (mainly axis 2) will be based on the IACS provisions concerning all possible controls, e.g. controls of plots to avoid double support or controls of the fulfilment of the five year commitment. These controls are performed within the ICT system (administrative controls). In addition to this a 5 per cent on-the-spot control is performed to ensure that all other conditions for the support are fulfilled. For controls on cross-compliance at least 1 per cent of all applications are controlled on-the-spot. If repayments of unduly paid amounts are decided on after controls have been carried out, the ICT system will make the calculation (deductions) and automatically write out the claim to the beneficiary. Applications concerning non-area-based measures (mainly axis 1, 3 and 4) are also controlled on the spot (5 per cent of eligible costs) before the final payment is made but also in the framework of the ICT systems to control that a number of conditions are fulfilled. A 5 year control is also performed to ensure that an investment is still in use in line with the decision. The frequency of these controls is 1 per cent of all applications. Special routines for OLAF reports are followed.

Calculations of payments In order to substantiate and confirm the adequacy and accuracy of the calculations of payments under Articles 31, 38, 39, 40 and 43 to 47 of Regulation (EC) No 1698/2005, appropriate expertise has been provided by independent bodies. Sources used for the calculations are mainly from the variable cost calculation database at the Agricultural University or from official studies published by the Swedish Agricultural University, the Rural Economy and Agricultural Societies or other public authorities or organisations. In some cases an estimation from scientific expertises with particular knowledge in a specific field has been used as the source. More information on the calculation of payments is given in section 5.

Procedures ensuring that double funding from EU-funds does not occur In the official routines and checklists laid down by the managing authority or paying authority, competent authorities are required to secure that beneficiaries are not double-funded for the same costs. When applications for support are submitted to the competent authorities, e.g. the County administrative boards, the applications will be scrutinized prior to the selection process. Furthermore, in the application form the applicant is required to notify if other applications for support have been submitted or granted. If during the scrutiny it is deemed that the activity, in part or whole, lie in close proximity to activities covered within other Community financed programmes (e.g. EFF, EAFRD) the application is set aside. At this point, checks are also carried out to ensure that the activity has not previously received support from the Rural Development Programme. If the activity lies in close proximity to other EU-funded programmes a summary of the application is thereafter sent to the relevant competent authorities designated within the other Community co-financed programmes (e.g. Swedish Board of Fisheries). A consultation is carried out between the competent authorities for each relevant Community co-financed programme respectively. If during this consultation there is a risk for double funding, appropriate measures will be taken, including continued consultation in order to arrive at a formal decision rejecting the application from one or more of the relevant Community financed programmes in

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line with demarcation principles as outlined in chapter 10, thereby avoiding risk of double funding. For more information on demarcation and routines carried out in order to avoid the risk of costs being double-funded by different EU-funds, see section 10.

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11.3 Leader The secretariat of the LAG receives applications for support for projects within the geographic area of the LAG. Applications for support will be will administered by the LAG secretariat. When a decision on support is made, the decision proposal and documentation are sent to the county administrative board, which is to take the formal decision on support. The county administrative board then administers and decides on payments. The paying agency, the National Board of Agriculture, executes the payment to the beneficiary. In cases where Leader areas are inter-regional, the local action group and the relevant county administrative boards are to reach agreement on how cooperation between regions is to be organised so as to ensure satisfactory outcomes and cost effectiveness. The administrative organisation is to be described in the local development strategy.

In the figures below the application and payment process as regards the Leader axis are presented and described.

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Figure 14 Applications for support under the Leader axis

3. LAG: 1. 2. 4. LAG 5. The 6. Decision is 7. The Development Application Administration decision is county board sent to Project of an project form is sent and decision sent to the takes the beneficiary is accomp- idea to the Leader county board authority and LAG lished i

1. The applicant supported by the Leader secretariat develops the project idea. In that way the original idea might be changed to better contribute to fulfil the Leader strategy. 2. The application form including a plan for the project is sent to the Leader-office73. 3. The Leader secretariat analyses the application according to the procedures and the checklist laid down by the Board of Agriculture. Administrative checks according to commission regulation 1975/2006 are also carried out. LAG takes the decision on support to the project. Projects will be selected on the basis of the local strategy and the quality of the project plan. Also other priorities are taken in account (young people, women, foreign descent, etc.) 4. The LAG decision and documentation are sent to the county administrative board. 5. The county administrative board performs checks to secure that the decision is in accordance with the Community and national administrative rules. The county board will not influence the selection of the project decided by the LAG. Consultations will also be made with other relevant authorities administrating programmes co-financed by EFF and ERDF in order to avoid double funding. These checks will be in accordance with the checks made by the Swedish Board of Agriculture during Leader+. The county board will confirm the LAG decision by a necessary formal official decision. 6. The decision will be sent to the beneficiary and to the LAG. The Leader secretariat contacts the beneficiary to inform about the decision and about how to prepare the payment claims. 7. The project is accomplished. The LAG secretariat follows the project and gives necessary advice and support to promote a successful implementation.

73 In the Swedish programme the applicant normally is considered as the final beneficiary even for the Leader axis. In that way the beneficiary will get the payment as quick as possible since it will be sent directly to him or her Another administrative simplification will be that LAG does not have to make special agreements on payments with the beneficiary.

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Figure 15 Payments to Leader projects

1. LAG helps with 4. The the payment claim beneficiary and pays the local gets the public co-financing payment

2. Payment 3. County 5. The payment 9. The claim adm. board: decision is sent to beneficiary gets the decision Administratio the beneficiary and n and decision to LAG and the money

6. The county 7. The Board 8. The Board board sends the of Agriculture of Agriculture claims and a makes checks executes the report to SBA payments

1. The Leader secretariat helps the applicant to make the payment claim. The Leader secretariat also executes the local public co- financing either when they make the payment claim together with the applicant or after the checks of the county administrative board. The public co-financing has to be paid before the authority decision is taken. 2. The applicant sends the payment claim to the county board. 3. The county board analyses the application according to the procedures and the checklist laid down by the Board of Agriculture. Administrative checks according to Commission regulation 1975/2006 are also carried out. The county board takes the authority decision of payment. Contacts between the county board and the Leader secretariat will be frequent. This model with the administration of the payment claims at the county administrative board makes it possible for the LAG management to primarily work with initiating and developing projects that ensure effective achievement of the objectives specified in the local strategies. 4. The beneficiary receives public national co-financing by LAG and the LAG informs the county administrative board.

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5. The decision of payment is sent to the beneficiary and to the LAG. 6. The county administrative board sends the claims (normally a batch of claims) and a report to Swedish Board of Agriculture according to Commission regulation 885/2006. 7. The Board of Agriculture makes checks to ensure that the county board has followed all procedures that are laid down and makes also checks of a sample of decisions to ensure they are in accordance with the Community rules. 8. The Board of Agriculture executes the payment to the beneficiary. 9. The beneficiary receives the money from The Board of Agriculture. Payments are made directly to the account of the beneficiary at the same day as declared in the decision. He or she has also received the decision of payment from the county board. The beneficiary may turn to the Leader secretariat to get information about the contents in the decision. The Leader secretariat may also contact the beneficiary.

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12 Monitoring and evaluation systems and the composition of the Monitoring Committee

12.1 Description of follow-up and evaluation systems A stronger focus on management by objectives and results is aimed at, in accordance with Community principles. A well organised system for continuous follow-up and regular evaluations are crucial to the efficiency and effectiveness of the Rural Development Programme.

An account is given below of how Sweden proposes to organise the production of the source data needed to ensure that the Programme is satisfactorily followed up and evaluated. The work is to be based on Community requirements set out in Articles 13, 16 (a)(b) and 79–87 of Council Regulation (EC) No 1698/2005. In addition, there are national, regional and local follow-up and evaluation requirements relating to the monitoring and reporting of the Programme.

Continuous follow-up Under Article 86 of the Regulation, Member States are required to set up procedures for continuous follow-up of their rural development programmes. This affords a basis for assessing progress in relation to objectives, determining the effectiveness of the measures and, where necessary, drawing up proposals for substantive programme changes.

In Sweden’s case, follow-ups will be based on indicators specified in the Common Monitoring and Evaluation Framework (CMEF) and on national supplementary indicators. In addition to this continuous follow-up process Sweden will undertake a number of in-depth follow-ups and analyses during the programme period.

Overall responsibility for following up the Rural Development Programme and its measures will rest with the managing authority and other authorities responsible for implementation (see section 11.1).

Annual progress reports Article 82.1 of the Regulation specifies the delivery date and content of each annual progress report. The follow-up system for the Rural Development Programme is designed in such a way that the annual progress reports for any 12-month period starting in 2007 may be compiled in the following year, for delivery to the Commission no later than 30 June 2008.

Regarding the content of the annual progress reports, the managing authority will be responsible for ensuring that all information specified in Annex VII of the Commission’s implementing regulation is included. The source data for most of the follow-up indicators of relevance to the Rural Development Programme, namely under codes 111–142, 211– 227, 311–341, 411–431 and the twelve result indicators specified in the CMEF, will be collected in the appropriate order so they can be reported to the monitoring committee in

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the spring after the year in question. These indicators will mainly be assembled in conjunction with applications for support and requisitions.

In addition to the indicators specified in the CMEF, Sweden has developed a number of national indicators. Other data specified in Annex VII which are not already available from the managing authority will be gathered primarily from the payment authority and the competent authorities. Early in the proceedings, the managing authority will inform these authorities and bodies of the requirements governing delivery of the abovementioned data. These data, too, will be reported to the monitoring committee, which must approve the annual progress report.

Evaluation of the Rural Development Programme A system for continuous follow-up of the Rural Development Programme is to be developed to ensure coherent evaluation throughout the programme period. Continuous follow-up is also intended to furnish a basis for mid-term and ex post evaluations. Under Article 84, these evaluations are to be undertaken by independent evaluators. At relevant points along the way, evaluators will be given the opportunity to set out their observations and results in the annual progress reports. The managing authority is responsible for ensuring that all indicators of relevance to the evaluation are included. These comprise the follow-up indicators described below, other indicators specified in the CMEF and national indicators. The indicators will be followed up via a system developed by the managing authority and incorporating the main features described below.

General grounds The Swedish follow-up and evaluation system is based on indicators established by the EU and comprises several main components. The smallest building block in the system is made up of existing statistics or statistics specially produced for follow-up and evaluation purposes. Using these basic sources, the statistics are then collated or processed at various levels so that the material meets indicator requirements. In certain cases, full-scale models are built up as a complement to the basic sources and for analysis purposes.

Detailed documentation will be produced indicating the basic sources used in connection with each indicator, and what processing, etc. has been undertaken. A brief outline is given below.

Basic sources The basic sources are classified under the following main headings:

- Official Swedish statistics on agriculture (category a). - Other official Swedish statistics (category b). - Official statistics from EU bodies (category c). - Statistics from Swedish Board of Agriculture databases (category d). - Statistics from accountancy data surveys other than JEU/FADN (category e). - Statistics from special surveys based on the Board of Agriculture’s register (category f). - Other special surveys (cat g).

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The planned documentation must clearly show which basic source has been used for each indicator.

Processing and models The degree of processing of basic source data will vary according to how closely the material corresponds to the indicator requirements. The documentation will indicate the type of processing involved and any additional assumptions, etc. made. This information will be divided into the following categories: simple statistical processing, supplementary metadata, supplementary assumptions/technical coefficients, IT systems developed for extracting data from existing registers, and model construction.

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12.2 Projected composition of the Monitoring Committee Within three months of Rural Development Programme approval, the Government will appoint a monitoring committee. The committee chair will represent the Government, in the form of the Ministry of Agriculture. The committee will include representatives of the relevant regional and local authorities, other public authorities, business and labour market organisations and other appropriate organisations representing civil society, NGOs, including environmental organisations, and bodies working to promote integration and gender equality.

Several national organisations and public authorities forming the National Rural Network will be represented in the committee. When the national network and the LAGs have been established and organised, there will be possibilities for the nomination of one person representing the national network and one person representing the LAGs. If necessary, the committee will also be given the mandate to establish other links to the National Network and the LAGs.

Representatives of the Commission may on their own initiative take part in the work of the committee on a consultative basis.

The Monitoring Committee will be required to develop working procedures that accord with Sweden’s institutional, judicial and financial frameworks and which are to be adopted after consultation with the managing authority.

The committee is to be assisted in its work by a permanent secretariat based with the managing authority. The secretariat will be responsible for preparing agendas and documentation ahead of committee meetings. It will also be responsible for producing material relating to the monitoring and evaluation of Rural Development Programme implementation, in consultation with the managing authority.

In virtue of its capacity as secretariat of the Monitoring Committee and managing authority, the Swedish Board of Agriculture will be responsible for ensuring constructive cooperation between public authorities and implementing organisations.

12.3 Tasks of the Monitoring Committee The Monitoring Committee is responsible for ensuring that the Rural Development Programme is implemented efficiently and effectively. To this end, the committee is to: - Be consulted, within four months of the decision approving the Rural Development Programme, on the selection criteria for funded operations. These criteria shall be revised in accordance with programme planning needs. - Periodically review progress made towards achieving the specific targets of the Programme, on the basis of the documents submitted by the managing authority. - Scrutinise implementation results, particularly achievement of the targets set for each axis and ongoing follow-ups.

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- Consider and approve annual progress reports and the final annual report before it is sent to the Commission. - Propose to the managing authority any adjustments or reviews of the Programme as may be necessary to achieve the objectives of the EAFRD or to improve the implementation and/or financial management of the Rural Development Programme. - Consider and approve any proposal to amend the content of the Commission decision on support from the EAFRD.

The managing authority and the Monitoring Committee are required to monitor the quality of implementation. In addition, they are required to monitor the Rural Development Programme on the basis of financial indicators, designated indicators and nationally established indicators.

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13 Information and publicity

13.1 Information to beneficiaries

Objectives The overall aim of information provision is to contribute to rural development. Specifi- cally, the aim should be to give the target groups and other stakeholders defined in the Rural Development Programme a thorough grasp of the Programme and inspire the target groups to move from thought to deed. The information should also seek to raise public awareness of the Rural Development Programme and of the Community’s role as a financial contributor. The information initiatives must help ensure a high level of goal fulfilment. A more detailed Communication Plan is presented in section 17.8 Annex 8.

Target groups The numerous target groups differ considerably from one another, which means that the qualifications differ and as well as the information needs. Potential beneficiaries are the primary target group. The largest target group comprises farmers including reindeer husbandry enterprises, forest holders, other rural enterprises and LAGs. A group that is difficult to define, and thus difficult to reach with information, is that comprising enterprises and individuals planning or potentially interested in starting new businesses and activities in rural areas.

In addition to the primary target group, there are other stakeholders, including county administrative boards, consultants, organisations and government agencies. Though not beneficiaries they also need access to information, not only because they are important channels for the dissemination of information to potential beneficiaries but also because such information is of value to their own activities (e.g. banks).

Prior to the establishment of new Leader areas, information needs to be disseminated to a number of target groups in addition to the county administrative boards. These include current Leader groups, local action groups, rural development councils, municipalities, the Swedish Association of Local Authorities and Regions, regional autonomous bodies and municipal cooperation bodies, the Federation of Swedish Farmers’ regional associations, the Federation of Private Enterprises, and small enterprise associations at county level, where such exist. The general public, also an important target group, is reached primarily through the media.

Particularly important groups to be reached with information about the Rural Development Programme are women, young people and Swedes of foreign extraction. Consideration must be given to these groups when planning and implementing information initiatives.

Strategy To ensure that it helps achieve the overall objective and the aims of information dissemination, information must be: - Suitably adapted to the target group.

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- Continuous and timely. - Distributed via channels appropriate to each target group. - Disseminated in collaboration with other agencies and organisations, including county administrative boards, the Sami Parliament, the National Board of Forestry, municipalities, professional associations and the national network for rural development. - Evaluated on a regular basis so that lessons can be learned from initiatives undertaken and, where necessary, changes can be made in strategies and activities during the programme period.

The following types of channels may be used to varying extents, depending on needs and circumstances: - Personal information, e.g. meetings, seminars, trade fairs and training courses. - Electronic communication, e.g. information via the websites of the Ministry of Agriculture and the Swedish Board of Agriculture, electronic news bulletins, e-mail to organisations and professional bodies, and project databases for the dissemination of information on approved projects. - Direct information, e.g. mailing of brochures. - Mass communication including press releases, releasing news to the media, press briefings and advertising.

To ensure that information reaches groups and individuals not engaged in agricultural activities and who have not previously been in a position to apply for aid, the Board of Agriculture will work closely with other agencies and organisations, including the Swedish Agency for Economic and Regional Growth (Nutek), the National Rural Development Agency, county administrative boards, municipalities, NGOs, professional associations and the national rural development network.

Indicative budget For the period 2007–2013, the budget for information initiatives relating to the Rural Development Programme in Sweden is estimated at approx. SEK 105 million (M€ 11,7). This sum does not include costs for the national rural network.

Organisation and responsibilities The Board of Agriculture is the managing authority and has overall responsibility for the implementation of the Rural Development Programme. Information initiatives must comply with the guidelines laid down in Council Regulation (EC) No 1698/2005 and in Commission Regulation (EC) No 1974/2006. Overall responsibility for information to the general public rests with the Swedish Government Offices. The county administrative boards are responsible for providing information about regional priorities. Other agencies and organisations also contribute to the dissemination of information to potential beneficiaries.

Evaluation criteria The information initiatives must be evaluated regularly in relation to the set objectives. The purpose of these evaluations is to assess the impact of implemented measures and to

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pave the way for improvements and new information efforts. Both quantitative and qualitative methods may be used.

Examples of evaluation criteria: - The target group’s familiarity with the Rural Development Programme. - The target group’s use of different types of information. - The target group’s assessment of how important information initiatives have been to them. - How the target groups rated the information provided.

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13.2 Information on the Community contribution All information material relating to the Rural Development Programme, both in printed form and on websites, will clearly state that the measures are co-financed by the EU. The rules set out in Annex VI of the Commission regulation (EC) No 1974/2006 will be complied with.

13.3 Information to the general public The overall strategic objectives of the Rural Development Programme affect a broad section of the general public and far more citizens than those found in the target groups for the various Rural Development Programme measures. An important task for the Government, therefore, and for the agencies and partnerships responsible for and taking part in the implementation of the Programme, is to inform the general public in the clearest possible terms of the purpose of the Programme and the results achieved. The national rural development network also has a role to play as a disseminator of information to the general public.

It should be emphasised that the Swedish Rural Development Programme forms part of a coherent European strategy for sustainable rural development. Several of the strategic objectives and the measures associated with them are in response to problems and opportunities common to the EU Member States or are transboundary in character. Environ- mental projects are one example of measures that address transboundary problems. International cooperation under the Leader initiative is an example of measures aimed at broadening cooperation within the Union, creating fresh opportunities for new economic activities and expanding social, economic and cultural networks.

A variety of methods will be used to provide information to the general public. In addition to traditional forms such as printed matter, websites, radio and TV, etc. the outcome of Rural Development Programme operations should be made apparent in the field to visitors and those living in rural areas. By using channels such as notice boards, information and discussion meetings, hiking trails, nature paths, demonstration farms, activities targeting various groups and cultural events related to rural life, the new approach and the results of Rural Development Programme operations can be given prominence, instilled in the public consciousness and placed in context.

Starting 2008 the Swedish Board of Agriculture will on their web site publish the list of beneficiaries receiving support from the rural development programme, the names of the operations and the amounts of public contribution allocated to the operation.

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14 Designated parties and results of consultations

14.1 Designated parties Work on the forthcoming Rural Development Programme (RDP) has been accompanied by numerous consultations between the Government and relevant bodies. These have taken the form of reference group meetings, conferences, referral of reports and proposals for consideration and comment, and bilateral discussions. An account of the consultation bodies with which the Ministry of Agriculture has been in contact during work on the Rural Development Programme is given below.

Eurofutures Preparation for the forthcoming Rural Development Programme began in September 2004, when the consultancy firm Eurofutures was commissioned to perform a prospective analysis of rural development in Sweden with particular focus on land-based industries. The purpose of the study was to provide an independent basis for decision-making prior to the work of drawing up a national strategy for rural development for the period 2007– 2013. A reference group comprising 25 representatives of public authorities, the non- profit sector and the business community was appointed by Eurofutures. Its function was to contribute its experience to and comment on the project. The results of the study were set out in a report published in 2005.

Concurrently with the Eurofutures project, a working party was set up in the Govern- ment Offices under the aegis of the Ministry of Agriculture and comprising representatives of the Ministries of Finance, Sustainable Development, Industry Employment and Communications, and Education; the National Rural Development Agency, the Swedish Board of Agriculture and the National Board of Forestry. The working party was tasked with producing background material on ecological, economic and social conditions in the countryside and monitoring the ongoing Eurofutures project. It completed its work in January 2005.

In March 2005, the Ministry of Agriculture held a conference to discuss future challenges facing the Swedish countryside. The Eurofutures report was used to prompt and encourage discussion and debate on rural development in Sweden. Invitations were sent to 140 delegates from stakeholder organisations, public authorities, political parties and the Government Offices. Just over 100 people attended.

Rural Development Committee In December 2004, the newly appointed Rural Development Committee was tasked with submitting proposals for a long-term strategy for the Government’s national rural development policy. The strategy is to be based on the long-term goal of ecological, economic and social development of the Swedish countryside and embraces issues relating to the role of land-based industries and the prospects for development. The committee is also instructed to consider the division of roles and responsibilities at local, regional, national level, as well as from an international perspective, in connection with issues related to the strategy. Under the terms of its assignment, the committee, which

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comprises a chairperson and eight members, is also required to propose a strategic framework for the Rural Development Programme for the period 2007–2013. The committee produced an interim report containing proposals for such a framework in May 2005. When referred for consideration in May and June of the same year, the report elicited 102 separate opinions.

Assignment for the Swedish Board of Agriculture In August 2004, the Board of Agriculture was tasked with compiling technical data to be used as a basis for drafting the Rural Development Programme. The work was divided into several sub-projects and carried out with the assistance and participation of a number of country administrative boards and central government authorities. Authorities and other bodies involved in Rural Development Programme -related issues served as a reference group for the project. A report was drawn up following consultation with the Swedish Institute for Food and Agricultural Economics, the Sami parliament, the National Heritage Board, the Swedish Environmental Protection Agency, the National Rural Development Agency, the Institute of Growth Policy Studies, the National Forestry Board and the Swedish Agency for Economic and Regional Growth (Nutek). The county administrative boards were also given the opportunity to take part in the assignment. A final report was presented in April and June 2005.

The reference group In May 2005, the Ministry of Agriculture appointed a reference group to monitor the work of drafting a new Rural Development Programme. The group’s 30 members represent relevant public authorities, the non-profit sector and the business community. Five meetings have been held in 2005–2006. The group has had continuous access to proposals relating to the form and content of the new Rural Development Programme, both as regards its aims and proposed measures. These have been discussed and commented on at reference group meetings on the basis of the group members’ knowledge and experience. The meetings have been highly fruitful; participants have not only unstintingly shared their views on proposals put forward with the ministry, but also actively and continuously provided the latter with decision-support data and material throughout the project.

Bilateral meetings During 2005–2006, the Ministry of Agriculture has held regular bilateral meetings with a number of representatives of public authorities, the non-profit sector and the business community. The meetings, which complemented the reference group meetings, have provided a forum for more detailed discussion of the proposed form and content of the Rural Development Programme, and given the organisations in question the opportunity to share their views and experience. The following organisations have participated in bilateral meetings with the Ministry of Agriculture: - Centrum för biologisk mångfald - Centrum för uthålligt lantbruk - Ekologiska lantbrukarna - Folkrörelsen Hela Sverige skall leva - Företagarna - Gävleborgs fäbodförening

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- Hushållningssällskapens förbund - Kooperativa Institutet, KOOPI - Lantmännen - Lantmäteriverket - LO - LRF - LRF Gotland - Länsstyrelsen i Skåne län - Sametinget - Sveriges Betodlares Centralförening - Svensk Mjölk - Svenska Naturskyddsföreningen - Sveriges Nötköttsproducenter - Svenska nätverket för Leader - Sveriges Kommuner och Landsting - Södra Skogsägarna - WWF

Regional meetings Between December 2005 and January 2006, meetings organised by the respective county administrative boards were held in four counties. The following counties were visited by Ministry of Agriculture officials: Norrbotten, Kalmar, Västra Götaland and Värmland. The purpose of the meetings was to present the Ministry’s preliminary strategy and Rural Development Programme related proposals for the period 2007–2013, to give regional actors the opportunity to present their views on the proposals directly, and to highlight specific regional or county issues that need to be taken into account when drafting the forthcoming programme.

The meetings, each of which was attended by between 25–40 representatives of regional stakeholder groups, municipalities and county councils, and government agencies, yielded valuable inputs. Views on the proposals and the thinking behind them were put forward. These included specific, practical suggestions and viewpoints from actors in the agricultural and rural development spheres. Other issues discussed were the appropriateness of the strategies and measures presented whether these were capable of implementation and whether they targeted the right problem/area.

Development of methods for strengthening regional and local leverage on the implementation process Concurrently with development work on the Rural Development Programme, the preparation of appropriate implementation methods and strategies at county level has got under way. The Ministry of Agriculture and several county administrative boards have produced examples of suitable rural development strategies at county level as part of wider ongoing work on regional rural development programmes and in preparation for the expedient implementation of the new Rural Development Programme on the basis of current prospects and priorities for rural development in each county or region. Methods and implementation issues have been discussed at a number of seminars and talks attended by central and regional authorities concerned. Discussions have proceeded on

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the basis of experience and observations gathered in counties engaged in developing methods for the implementation of the new programme.

In the spring of 2006, all Sweden’s county administrative boards, regional cooperation bodies, regional autonomous bodies and relevant central government agencies and organisations were invited to a conference jointly organised by the Ministry of Agriculture and the Swedish Board of Agriculture. The participants discussed implementation and cooperation issues relating to the implementation of the Programme at county level. The purpose of the conference was to establish the method for coordinating planning and implementation. The conference was attended by almost 100 people and amply fulfilled its purpose.

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14.2 Outcome of consultations Most of the referral bodies have endorsed the Rural Development Committee interim report on the overall strategic aims of the forthcoming Rural Development Programme. The interim report and the opinions delivered by the referral bodies were the subject of a communication submitted to the Riksdag in February 2006. The communication was dealt with by the parliamentary Committee on Environment and Agriculture and the matter was concluded without further additions.

The continuous tripartite consultations and the reference group meetings have provided valuable material for use as a basis for drafting the Rural Development Programme. The bilateral meetings with concerned stakeholder groups from the business community, the non-profit sector and public authorities afforded an opportunity for more detailed discussion on strategic aims and priorities, necessary measures and their design and development. The reference group meetings proved a particularly important forum. They provided stakeholder groups with a chance to express their views and generated much fruitful discussion of choices and priorities in the Rural Development Programme, not only between the Ministry of Agriculture and stakeholder groups but also among the groups themselves. The regional meetings hosted by the four county administrative boards referred to above provided specific examples of regional variation in terms of the needs and challenges confronting Sweden’s rural areas.

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15 Gender equality and discrimination

15.1 Gender equality Greater gender equality is a central development issue in the rural and agricultural context and a horizontal priority in Sweden’s rural development strategy and the Rural Development Programme. The gender equality objective also accords with the guidelines set out in the Council Regulation (EG) No 1698/2005 on the avoidance of discrimination on the grounds of gender and the promotion of gender equality. The objectives apply to all stages of the process, from design, drafting and implementation to monitoring and evaluation.

The need for opportunities to take account of gender equality concerns has been considered. In the case of axis 1, the assumption is that gender equality in traditional primary production enterprises is poorly developed in comparison with the food processing sector, and enterprises specialising in ecological and quality products. Axis 3 provides several opportunities to promote gender equality and increase the number of women entrepreneurs. Today, many of the new enterprises, diversification initiatives and new activities in rural areas are started by women with life and working experience. Women therefore form an important target group for measures in axis 3. Axis 4 and local development work are based on broad participation by different groups in society. The measures in axis 2 are based on land and land use.

The national goal of gender equality, along with the overarching axis objectives and measures, will constitute the guiding principles for the regions’ strategies and the implementation of the measures set out in the Rural Development Programme. This perspective must likewise be adopted when devising local development strategies. The aim must be to promote greater gender equality in a regional/local context. A number of general information projects on gender equality concerns should also be considered during implementation.

Feedback and statistical data from follow-ups of measures and operations should as far as possible be gender-disaggregated. The resulting information will serve as a basis for assessing goal fulfilment.

Finally, the composition of the national rural development network and the Monitoring Committee must serve to promote gender equality, while implementation of the Rural Development Programme must be informed throughout by a gender equality perspective.

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15.2 Integration Swedes of foreign extraction are severely under-represented in the agricultural and forestry sector and in local rural development projects. Integration of people with foreign backgrounds must accordingly be stepped up. The integration objective also accords with the guidelines set out in the Council Regulation (EG) No 1698/2005 on the avoidance of discrimination on the grounds of race, ethnic origin, religious conviction or other belief.

Like gender equality, integration is a horizontal priority in Sweden’s rural development strategy and the Rural Development Programme, and must therefore be taken into account in all aspects of the Programme. The Swedish programme incorporates a number of instruments for promoting greater integration in rural enterprise and development. Increased dissemination during the programme period of knowledge and information, and intensified dialogue and network activities pertaining to the green sector, the countryside with its varied environments and opportunities, are thus feasible aims. Information initiatives/knowledge dissemination undertaken as part of skills acquisition projects and programmes can be brought into play.

Another way of promoting integration is to link immigrant organisations into existing rural networks, thereby creating natural communication channels and interfaces that would contribute to knowledge dissemination and closer integration between actors in rural areas and Swedes of foreign extraction.

In the case of groups or other local development groups, support for the inclusion of people with foreign backgrounds should be provided. Raising awareness of integration policy goals should also be a programme management priority. This can then serve as a basis for a range of employment/enterprise-related activities and network participation. Here, operations undertaken under the Rural Development Programme can complement or interact with other activities at national, regional or local level. Regarding the establishment of enterprises, the obstacles to development are largely the same as for other enterprise groups. Attitudes to immigrants and language difficulties can lead to communication and contact problems for people with foreign backgrounds.

Like the gender equality objective, the integration objective must be one of the perspectives of Rural Development Programme implementation and be taken into account in regional and local strategies for implementing Rural Development Programme measures.

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15.3 Special considerations applying to the Sami population The Sami population is included in the target groups defined for all four axes. The special conditions associated with reindeer herding as part of the food production industry, and the Sami’s status as an indigenous people and a national minority, must be taken into account when implementing the Rural Development Programme. The Sami parliament will therefore be accorded a special responsibility for – and thus the opportunity to exert an influence on – the implementation process.

To ensure that due consideration is given to Sami issues, including reindeer husbandry, the Sami parliament will be responsible for drawing up a strategy for the implementation of measures in the Rural Development Programme. The overall objective of the strategy will be to strengthen sustainable Sami industries and, in the process, foster Sami culture. Efforts will be made to promote conditions favourable to a vigorous reindeer herding sector and the development of Sami villages. The development of Sami society on the basis of the region’s resources and industries will require a broader economic base. The creation of viable job opportunities for Sami, particularly women, young people and people who are underemployed or risk becoming unemployed, is an important task in this connection. Another important basic consideration is the need to contribute to established knowledge through skills acquisition programmes that create suitable conditions for the sustainable development of a vigorous Sami society. The strategy will be drawn up and implemented with the support of a broad-based partnership incorporating other parties in addition to those representing the Sami and the reindeer herding industry. The possibility of adopting the Leader method should also be considered.

Strategy development work must be predicated on an economic framework for implementation that will facilitate continued action on a scale corresponding to operations under the current rural development programme and parts of the Structural Funds programme, and whose aims and objectives are consistent with those of the Rural Development Programme.

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16 Technical support

16.1 Technical support

Eligible costs for technical support In total approximately 630 million SEK (approximately 70 million euro) will be allocated for technical support under the programming period. The funds will in part be used to ensure that relevant public authorities have sufficient capacities to deliver a smooth and correct implementation of the programme. During the programming period the managing authority will be responsible for ensuring that the funds used for technical assistance are in accordance with relevant EU-regulations as well as eligibility criteria as outlined below.

Expenditure which is eligible for financing with technical assistance must be relating to the preparation, management, appraisal and selection process, monitoring, evaluation, information activities and control of assistance within the programme. Such expenditure may include:

- Expenditure relating to the acquisition of special skills necessary for an effective appraisal and selection process. - Expenditure relating to the setting up of systems necessary for monitoring, evaluation, management and control/verification. - Expenditure relating to studies, analysis and the quantification of indicators. - Expenditure after the 31st of December 2006 relating to the ex-post evaluation of the Swedish environment and rural development programme for the period 2000-2006 and measures financed by the guidance section of the EAGGF for the period 2000-2006. - Expenditure relating to the operations of the monitoring committee including the running of the committee secretariat and costs associated with committee meetings. - Expenditure relating to audits and on-the-spot checks of operations. - Expenditure relating to information activities including e.g. seminars and dissemination of information, carried out with the aim of ensuring effective delivery of the programme measures. - Expenditure relating to establishment and operation of the national rural network including the implementation of the action plan as well as the structure needed to run the network.

Further requirements on eligible costs:

- Expenditure on salaries including social security contributions is eligible for staff carrying out specific and clearly demarcated tasks within the abovementioned areas and for a limited period of time which cannot exceed the final date for the eligibility of expenditure in the programme. Staff may include civil servants or

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other public officials as well as other staff employed to carry out the tasks referred to in the abovementioned criteria for a limited period of time and under the time of eligibility (see final point). - Public tendering will be used for outsourced activities which fall within thresholds as set out in applicable EU and national regulations. - Only costs incurred under the programming period will be eligible for technical assistance.

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16.2 The national network for rural development The purpose of the national network for rural development is to bring together parties involved in or affected by the Rural Development Programme, through information activities, exchanges of experience and methods development, with a view to improving its implementation and strengthening its potential for rural development. The network should also serve as a national and transnational forum for wide-ranging exchange of information, experience and methods, and help to broaden dialogue on implementation at and between local, regional, national and international levels.

It is also important as a means of promoting exchanges of experience between those involved in rural development policy, regional development policy and environmental policy. It is therefore essential that public authorities with links to these policy areas be given a role in the network.

16.2.1 Organisations and public authorities forming part of the rural development network All parties and actors involved in implementation of the Rural Development Programme must be included in the network and its activities. The network must therefore comprise a broad cross-section of organisations and authorities involved in all four axes. These may represent beneficiaries, the rural population and its industries, or be stakeholders with an interest in the development of Sweden’s rural areas. The network should also include representatives of Sweden’s municipalities, regional autonomous bodies and municipal cooperation bodies. Representatives of immigrant organisations should also be affiliated to the network. Finally, the network should include a broad selection of representatives from institutions of higher education actively involved in research in relevant areas.

16.2.2 Procedures and timetables for building the network A pilot study on the creation of a national rural development network was conducted in the spring of 2006. A large number of prospective network members have been contacted and invited to give their views on appropriate network functions and activities and to outline the nature and scope of their organisations’ future participation.

The target is to build a national network for rural development in the autumn of 2006. As the managing authority for the entire Rural Development Programme, the Swedish Board of Agriculture is also responsible for the activities of the network. However, responsibility for the implementation of network tasks should rest largely with the member organisations.

An initial task will be to draw up a network action plan. The plan must contain a description and analysis of successful, transferable methods and information on the latter, an account of the network’s structure, organisation and operation, including its

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arrangements for exchanges of knowledge and experience, a plan for the preparation of training programmes for local development groups and future LAGs, and details of support schemes for national and interregional projects and initiatives. An important task in this connection is to identify in greater detail the parties to be included in the network.

Useful lessons and observations from the existing Swedish Leader+ network and relevant authorities should be turned to account when planning the network. Other existing networks could also serve as examples.

The network will have an important part to play at the start of the new programme period inter alia by contributing to the dissemination of information about the Rural Development Programme, and in connection with the introduction of the Leader method in new areas. It should therefore commence operations before the end of 2006.

16.2.3 Activities Among other tasks, the network will be expected to:

- Gather, analyse and disseminate information about and raise awareness of rural development and the possibilities offered by the Rural Development Programme. - Gather, analyse and disseminate information about conditions in the countryside in areas affected by all the axes. - Promote knowledge dissemination through exchanges of R&D-based experience between stakeholders, authorities and expert networks. - Promote method development and evaluation of methods, projects and other initiatives. - Organise training courses aimed at actors in the network. - Act as a contact point for exchanges with the European network and encourage transnational exchanges. - Support implementation of the Rural Development Programme - Act as a contact point for LAGs.

A detailed description of the content of the network’s activities and initiatives and its relevance to the Rural Development Programme will be included in the action plan.

16.2.4 Budget Technical support funds will be used to cover the network and implementation of the actions. The indicative budget for the national rural network is estimated being approx 70 million SEK (approx M€ 7,8) under the programming period. Of the total budget approx 15 million SEK (approx M€1,7) will be reserved for the structure needed to run the network (Article 68(2)(a) of Regulation (EC) No 1698/2005) while 55 million SEK (approx M€ 6,1) will be reserved for the action plan (Article 68(2) (b) of Regulation (EC) No 1698/2005).

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17 Annexes

17.1 Annex 1

Account of ongoing contracts and remaining payments after 15 October 2006, per measure

Support for investment in agricultural holdings Total investment support already decided for the 2000–2006 period is in principle assessed as comprising the entire budgeted framework for decisions on support. Only a small remainder – about SEK 4.5 million (€ 0,5million) is expected to be paid between 15 October 2006 and 31 December 2006.

All modulation money for 2005 is expected to have been paid by 15 October 2006, while modulation money for 2006 – SEK 70 million (€ 7,8 million)approx. – is expected to be paid in 2007.

The total amount of support of SEK 74.5 million (€ 8,3 million) (about 1.8 million (€ 0,2 million) pertaining to priority area II) is thus expected to be charged to the new budget period, 2007–2013. With EU funding of 50 per cent, this means that SEK 37.25 million (€ 4,1 million) will be charged to the EAFRD.

The guidance section within the EAGGF will continue to make payments from Objective 1 programmes until 2008. This totals SEK 62.4 million (€ 6,9 million) approx. in investment aid which is to be paid in 2007 and 2008 for the Objective 1 programme Northern Norrland and a total of SEK 85.2 million (€ 9,5 million) approx. for the Objective 1 programme Southern Forest Region. These funds, then, will be charged to the guidance section of the EAFRD.

Setting-up of young farmers Setting-up aid decided for the 2000–2006 period is in principle assessed as comprising the entire budgeted framework for decisions on support. Only a small remainder – SEK 1.5 million (€ 0,2 million) approx. – is expected to be paid between 15 October 2006 and 31 December 2006. With EU funding of 60 per cent, this means that SEK 0.75 million (€ 83 000) will be charged to the EAFRD.

The guidance section within the EAGGF will continue to make payments from Objective 1 programmes until 2008. This totals SEK 12.1 million (€ 1,3 million) approx. in setting-up aid which is to be paid in 2007 and 2008 for the Objective 1 programme Northern Norrland and a total of SEK 6.2 million (€ 0,7 million) approx. for the Objective 1 programme Southern Forest Region. These funds, then, will be charged to the guidancesection of the EAGGF.

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Training Priority Area I (KULM)

KULM activity will continue throughout 2006, with emphasis on the autumn. County Administrative Boards, other organisations and the Swedish Forest Agency cannot request KULM funds until the activity has been completed, since the regulations say that no funds may be requested until the activity has been performed. This means that remaining payments of SEK 104 million (€ 11,6 million) approx. will be made after 16 October. Of this sum, SEK 50 million (€ 5,6 million) is expected to be able to be paid prior to 31 December 2006, and the remainder as early as possible in 2007. Central and regional KULM activity is also included in the autumn payouts. With EU funding of 50 per cent, this means that SEK 52 million (€ 5,8 million) approx. will be charged to the EAFRD.

Training in Priority Area II (K2) The County Administrative Boards draw up their county training plans for a calendar year at a time. The Board of Agriculture has approved the 2006 county programmes and has decided that most trainings funds are to have been requisitioned before 15 October 2006, and that a small part of the budget can be requisitioned after 15 October 2006. Payments that will take place after 15 October are estimated to total SEK 2.5 million (€ 0,3 million) approx.

All modulation money for 2005 is expected to have been paid by 15 October 2006, while modulation money for 2006 – SEK 8 million (€ 0,9 million) approx. – is expected to be paid in 2007.

With EU funding of 50 per cent, this means that SEK 5.25 million (€ 0,6 million) approx. will be charged to the EAFRD.

Compensatory allowances in LFAs The total amount of support decided but not paid out as per 15 October 2006 is expected to total SEK 639 million (€ 71 million) approx. With EU funding of 46 per cent, this means that SEK 294 million (€ 32,7 million) approx. will be charged to the EAFRD.

Agri-environment payments Multiyear commitments for agri-environment support for the 2000–2006 period total 160 000 agreements, of which 75 000 have a term that stretches into the 2007–2013 programme period. The cost associated with these 75 000 commitments is distributed according to Table 8. With EU funding of 46 per cent, this means that SEK 516.3 million (€ 57,4 million) approx. will be charged to the EAFRD. Where the farmer’s payment exceeds the company limit, Sweden will defray 100 per cent of the costs of the part that constitutes supplementary payment in agri-environment support for the conservation of grazing land and mown meadows. The commitments are ongoing and fall due at the pace stated in the decisions, unless the recipient chooses to move onto a new commitment (within a type of payment with

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corresponding content) within the framework of the 2007–2013 Rural Development Programme. Table 17:1 Payments for ongoing agri-environment contracts from the previous programme period Year Total EAFRD SEK million, SEK million € million € million 2007 599.2 275.6 2008 241.4 111.0 2009 147.1 67.7 2010 40.3 18.5 2011 8.2 3.8 2012--74 86.2 39.7 Total 1 122.4 516.3 (€ 124,7) (€ 57,4)

Investment aid for improved processing and marketing of agricultural products For investment aid within the framework of the 2000–2006 Environmental and Rural Development Programme, the guarantee section in the EAGGF, all funds for the 2000–2006 budget period are expected to have been paid by 15 October 2006.

All modulation money for 2005 is expected to have been paid by 15 October 2006, while modulation money for 2006 amounting to SEK 12 million (€ 1,3 million) approx. is expected to be paid in 2007. With EU funding of 50 per cent, this means that SEK 6 million (€ 0,7 million) approx. will be charged to the EAFRD.

The guidance section within the EAGGF will continue to make payments from Objective 1 programmes until 2008. This totals about SEK 21.3 million (€ 2,4 million) approx. in investment aid for processing and marketing which is to be paid in 2007 and 2008 for the Objective 1 programme Northern Norrland and a total of SEK 36.3 million (€ 4,0 million) approx. for the Objective 1 programme Southern Forest Region. These funds, then, will be charged to the EAFRD’s development section.

Forestry aid All payments for forestry aid during the 2000–2006 programme period will have been made by 15 October 2006.

74 The amounts from 2002 onwards are an estimate of the total amount that will be paid out in agri- environment support for the management of wetlands and small waterways, which is a measure spanning a period of 20 years.

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Promoting the adaptation and development of rural areas

Priority Area I 6a. Restoration of grazing land and mown meadows. 6b. Creation of wetlands and ponds. 6c. Other environmental or livestock measures.

The total number of decisions on project supports 6a and 6b during the 2000–2006 programme period is 1,493. The total sum decided for 6a and 6b amounts to SEK 190.9 million (€ 21,2 million) approx. Only a small remainder – about SEK 20 million (€ 2,9 million) – is expected to be unpaid after 15 October 2006. With EU funding of 40 per cent, this means that SEK 8 million (€ 0,9 million) approx. will be charged to the EAFRD.

The total decided sum of SEK 15 million (€ 1,7 million) for project support 6c in the 2000–2006 programme period is expected to be paid by 15 October 2006 at the latest.

The decisions on aid whose project period extends into the 2007–2013 programme period will continue to apply according to decision on support and the conditions for it specified therein. Decided aid will then fall due at the rate at which the projects are completed.

Priority Area II 1. Diversification of activities within and in connection with agriculture. 2. Marketing of quality agricultural products. 3. Promotion of tourism and small businesses. 4. Development and improvement of infrastructure. 5. Development of villages and protection and conservation of rural heritage.

The total decided sum of SEK 408 million (€ 45,3 million) for project support 6c in Priority Area II (not including modulation money) for the 2000-2006 programme period is expected to be paid by 15 October 2006 at the latest. All modulation money for 2005 – SEK 10 million (€ 1,1 million) – is expected to have been paid by 15 October 2006, while modulation money for 2006 of SEK 10 million (€ 1,1 million) is expected to be paid in 2007. With EU funding of 40 per cent, this means that SEK 4 million (€ 0,4 million) will be charged to the EAFRD.

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17.2 Annex 2 Annex to section 9 State aid– list A Code of Measure Compliance with the Duration the state aid rules measure 214 Agri-environment payments Special notification 2007-2013

State aid– list B Code of Measure Compliance with the Duration the state aid rules measure 123 Adding value to agricultural Support under this 2007-2013 and forestry products operation is in compliance with the de minimis rules 124 Cooperation for Support under this 2007-2013 development of new operation is in compliance products, processes and with the de minimis rules technologies in agriculture and food sector and in the forestry sector 311 Diversification into non- Support under this 2007-2013 agricultural activities operation is in compliance with the de minimis rules 312 Support to business creation Support under this 2007-2013 and development operation is in compliance with the de minimis rules 313 Encouragement of tourism Support under this 2007-2013 activities operation is in compliance with the de minimis rules 321-323 Basic services for the Support under this 2007-2013 economy and rural operation is in compliance population, village renewal with the de minimis rules and development and conservation and upgrading of the rural heritage 411-413 Implementing local Support under this 2007-2013 development strategies operation is in compliance with the de minimis rules

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Comments

214. Additional national funding is given as “top-up support” for operations that each of them is eligible for support according to the program. In several cases the level of support goes beyond the lower limit for support according to the de minimis for the agricultural sector.

123. Additional national financing supporting some operations within the measure is expected to stay within the limit of de minimis. If after all that level in a few cases will be excided during the period of implementation each such case will be notified to the Commission and no decision about aid will be taken before a Commission decision.

124. See 123.

311. Additional national financing supporting some operations within the measure is expected to stay within the limit of de minimis. If after all that level in a few cases will be excided during the period of implementation each such case will be notified to the Commission and no decision about aid will be taken before a Commission decision.

312. See 311.

313. See 311.

321-323. See 311.

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17.3 Annex 3 Regional management initiatives Annex to section 5.4.3.6

As described in section 5.4.3.6, the competent authorities (the County Administrative Boards and the Sami Parliament) have to lay down regional implementation strategies, including specifications of what measures will be applicable in the region. It is not possible from financial reasons to choose all regional measures in a county. Most measures will only apply in some parts of the country, because of natural geographic restrictions (e.g. 17.3.7 Special management of mountain grazing land) or because of the regional variation in biodiversity and landscape structure (e.g. 17.3.2 Bio fallow is mainly applicable in highly productive regions). The table below shows where in the country the different actions may be implemented.

Action Region 17.3.1 Preservation of thretened weeds in Mainly directed to highly productive arable land regions in the south and middle of Sweden 17.3.2 Bio fallow Mainly directed to highly productive regions in the south and middle of Sweden 17.3.3 Unharversted grain yield Possible in the whole country 17.3.4 Management of landscape elements of Possible in the whole country particular value 17.3.5 Traditional hay-making Possible in the whole country 17.3.6 Burning of semi-natural grazing lands Mainly regions where there are heathers and mown meadows (ljunghedar) e.g. some counties in southwest of Sweden 17.3.7 Special management of mountain Only the regions (middle and north of grazing land Sweden) where mountain pastures exist (in five of the 21 counties) 17.3.8 Management of semi-natural grazing Especially the archipelago and some forest land and mown meadows at places difficult regions to access 17.3.9 Management of mosaic land and other Mosaic land is mainly in the archipelago land with poor sward 17.3.10 Restoring of mown meadows and Possible in the whole country semi-natural grazing lands 17.3.11 Maintenance and clearance of paths The Sami region in the north of Sweden to and from Sami settlements

The method of calculations is following the basic principles described in section 5.2.4. Many of the measures in the menu of regional management initiatives are very specific in their land management conditions and are far away from the “normal” agricultural practices. Cost for these types of land management is in some cases not estimated and included in the database that are used for most of the other agri-environmental

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measures (the Agriwise database). In these cases, cost estimates are collected from field studies.

17.3.1 Preservation of threatened weeds in arable land

Underlying considerations This measure is aimed to increase elements of land that are managed in a way and with intensity that are adjusted to preserve and enhance the biodiversity. By this, the measure contributes to turn the negative trend concerning species connected to the agricultural landscape and thus contribute to the fulfilment of the national environmental quality objective ”A varied Agricultural Landscape”. This trend has been particularly evident in flat, low-lying areas. It has led to the loss of the variety, in terms of time and space that wild plants and animals need to maintain viable populations.

Description Farmers are compensated for establishment and management of arable land that re- seeded with threatened weeds. The arable land shall be managed extensively, without use of chemical plant protection products and fertilizer, with a minimum of mechanical weed control. Exceptions may be made from the prohibition of the fertilizer use in cases where fertilizer is assume to enhance some specific varieties of weeds. The competent authority decides on the exceptions and the amount of fertilizer which could be applied. To qualify for payment, the farmer has to plough, sow and harvest the arable land yearly. The disadvantaged and threatened weeds shall, when needed, yearly be harvested and re-seeded with the main crop. Payment is not granted for land managed organically according to 5.4.3.10.

Payment SEK 4 000 (€ 444,4) per hectare and year.

Method of calculation and underlying assumptions The baseline is a farmer using the arable land for grain cultivation. This measure is compensating farmers for an activity that is not regulated by the cross-compliance requirements or national legislation. The main cost connected with this measure is the income forgone for such cultivation compared to grain cultivation. It is estimated that the loss of harvest amounts to 75 per cent. In addition to this, an extra cost is incurred due to the manual undertakings in order to receive seeds to be used for admixture in the seed for the next year. This includes extra labour costs at sowing, threshning and storing. On the revenue side of calculation is the reduced costs for plant production and fertilizers, which is prohibited on the arable land cultivated with threatened weeds. No payment for transaction cost is included.

17.3.2 Bio fallow

Underlying considerations This measure shall contribute to the national environmental quality objective ”A varied Agricultural Landscape” and to promote the biodiversity in regions with an intense agricultural production. The objective is to enhance a rich flowering with pollen and

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nectar of benefit to insects such as butterflies and bees. Additionally, the objective is to create suitable environments for nesting. This measure benefits bird species such as Crex crex, Emberiza hortulana and Anthus campestris, which are species mentioned in Council Directive 79/409/EEC of 2 April 1979 on the conservation of wild birds.

Description The entire field or a part of a field is left with stubble after harvest for four years. No re-seeding of ley grass, legume for ley, grain or rape is allowed. However, it may be allowed to do re-seeding during the first year of seed mixture that promotes bird or insect life. Land management such as harrowing makes parts of the bio fallow free of vegetation and thus reduces the rate of succession. Also, cutting reduces the rate of succession or regulates the composition of the vegetation. Perennial shoots of woody plants; bushes and trees may not exist on the bio fallow, according to the cross- compliance requirements. After the four year, a spring-seeded grain shall follow the fallow on the fifth year. The positive effect of the bio fallow is usually declining from the second or third year.

The spring-cultivation of the fifth year will be positive for farmland birds like Vanellus vanellus (lapwing), Numenius arquata (sv. Storspov) and Aluada arvensis (sv. Sånglärka). The ploughing of the fallow on the fourth year may occur earliest in the month of July. In order to increase the attractiveness of the measure, chemical ploughing is allowed on the fourth year, to improve the condition for cultivation of the arable land. The competent authority shall declare the area and the management conditions in a management plan. The management conditions may be when harrowing and cutting should take place and what type of crop that may be re-seeded the first and fifth year. Payment is only granted for land set-asides and may not be combined with the payment for catch crops according to 5.4.3.8.

Payment SEK 500 (€ 55,6) per hectare and year.

Method of calculation and underlying assumptions In addition to the cross-compliance requirements that states that the set-aside land must be kept free from perennial shoots of coppices, buches and trees, the farmers have to manage the set-aside by scouring and harrowing. The cost connected with establishing a bio fallow on set-aside land consists of labour cost for scouring and harrowing at least three times during the five year period. No payment for transaction cost is included.

17.3.3 Unharvested grain yield

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape” and “A Rich Biodiversity of Plant and Animal Life”. If a field is left unharvested, it has a very positive effect on overwintering

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migratory birds such as Carduelis cannabina, Carduelis flavirostris, Carduelis chloris and Emberiza citronella.

Description Payment is granted for not harvest the grain yield. The cultivation shall be with sight of normal yield and normal seed rate. The area within the commitment is not connected to a specific parcel and the amount of land under contract may vary during the contract period. The farmer has to have at least 1 hectare of unharvested grain yield during the five-year period. The competent authority may limit the number of hectares. This sub-measure may not be combined with set-asides and may not be combined with the payment for catch crops according to 5.4.3.8.

Payment SEK 3 900 (€ 433,3) per hectare and year.

The cost for an unharvested grain yield consists of forgone yield income and increased costs for the following crops. On the revenue side of the calculation is the reduced costs for harvest, fertilizers and plant production, etc. The costs varies and depends on where in the country and on what type of arable land the measure is taking place. This measure should mainly be relevant in the plains and it is assumed that the alternative crop is spring barley. The average value that is used for the amount of forgone yield harvest is weighted according to the grain acreage in the plain areas and multiplied with an average price of spring barley. The cultivation should be done with the intention of receiving a good yield which implies that a normal amount of seed is assumed.

The increased cost for the following crop is assumed to be two extra runs on the field to cultivate the plant material. The cost is assumed to be SEK 700 (€ 77,8) per hour and the time required is one hectare per hour.

No payment for transaction costs is included.

17.3.4 Management of landscape element of particular value

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape”. The purpose is to maintain a cultural- historical management, to visualise the landscape elements and to enhance the biodiversity connected to these habitats.

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Description The management of landscape elements with particular value is an extra and complementary measure that only those farmers who have a commitment for Valuable and cultural environment in the agricultural landscape (section 5.4.3.5) can apply for. When the measure described in section 5.4.3.5 compensates the farmer for maintaining landscape elements in order to avoid degeneration and overgrowth of the elements, this complementary measure compensates the farmer for a specific and targeted management of certain elements such as ancient remains and wooded elements that are especially vulnerable or difficult to manage. To further visualise the landscape elements and to enhance the biodiversity, a complementary management of the sward and herbage may be required. Payment is granted to cut and remove the sward and herbage on and around valuable landscape elements that are particularly management demanding. The moisture of sward and herbage damaging the values of the wood element, and the vegetation connected to the ancient remains requires specific management in order to preserve its values.

It is the competent authority that declares what elements that is in need of a special management, what methods and what equipments to use beyond what is required in the measure in section 5.4.3.5.

Payment Line-shaped rural features SEK 10-120 (€ 1,1-13,3) per 10 metres Concentrated rural features SEK 120-360 (€ 13,3-40) each ¤ Top-up notification

Method of calculation and underlying assumptions Since this sub-measure is only directed to farmers with a commitment according to the measure described in section 5.4.3.5, the baseline is a farmer fulfilling the requirements of the basic management of the landscape elements.

Farmers are in this measure described here compensated for specific management of the field vegetation on or around certain landscape elements. The costs are mainly labour costs. Field studies has shown that the time consumption for each elements that qualifies for this sub-measure is assumed to be twice as large as for the basic management required to fulfil measure 5.4.3.5. The management and costs of concentrated elements corresponds to the management of mown meadows with particular values (section 5.4.3.4). No transaction cost is included in the calculation.

17.3.5 Traditionally hay-making on mown meadows

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape” and “A Rich Biodiversity of Plant and Animal Life”. Payment is granted for traditionally hay-making on mown meadows. The traditionally hay-making is a prerequisite for spreading of seeds of the more rare

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meadow plants. The hay-making with traditionally frames for drying hay has also a cultural-historical value.

Description The traditionally management of mown meadows includes, in addition to the mowing, also labour demanding hay-making with putting on frame for drying or frequently turning the hay on the ground. To be eligible of payment, the frames for drying have to be traditional. The competent authority may declare what methods and what equipments to use. This measure may be combined with pollarding for leaf fodder, post-mowing grazing and scything according to 5.4.3.4. Payment is only eligible for farmers with an agreement on mown meadows with particular values described in section 5.4.3.4. The values of these meadows are very often high with a specific meadow flora. These meadows are not allowed to be fertilized. In the measure for managing mown meadows of particular value the farmer is compensated for mowing the meadow and to take the grass away. This measure described here is a complement to compensate for the traditional drying of the hay.

Payment SEK 1 700 (€ 188,9) per hectare and year. Top-up notification

Method of calculation and underlying assumptions The baseline is a farmer fulfilling the requirements for mown meadows with particular values described in section 5.4.3.4. Traditional hay-making goes above and beyond the cross-compliance requirements or national legislation. The incurred cost for the farmer to fulfil the requirements of this measure is mainly labour cost for constructing the frame for drying hay, putting hay on the frame for drying it self and for deconstructing the frame. It is assumed that the labour demand amount to 10 hour per hectare and the costs for required materials (hayrack stakes etc.) is assumed to be SEK 100 (€ 11,1) per hectare.

No transaction cost is included in the calculation.

17.3.6 Burning of semi-natural grazing lands and mown meadows

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape” where burning is a method that represents a valuable complement to grazing, or mowing and harvesting.

Description Burning of semi-natural grazing land and mown meadows with biological and cultural values that, in addition to grazing and mowing, requires burning, for example heathers. Which part of the land, when and how the burning should take place are regulated by the competent authority. Burning of heathers should mainly take place in areas where burning traditionally has taken place. Locally tradition is important when deciding on

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what method to use when burning. The area should be burned ones during a five-year period. This form of payment may only be combined with payment eligible for the management of grazing land and mown meadows with particular values described in section 5.4.3.4.

Payment SEK 800 (€ 88,9) per hectare and year. Top-up notification

Method of calculation and underlying assumptions The baseline is a farmer fulfilling the requirements for semi-natural grazing lands as described in section 5.4.3.4. Burning is an activity that goes above and beyond the cross-compliance requirements and national legislation. Burning of semi-natural grazing lands or meadowlands is a labour intensive activity and the payment is solely calculated to cover the labour cost. The estimated labour demand is based on field results with two different types of land and with different size. There are not enough observations to say that the marginal cost of burning decreases when the area of burning is larger. The time demanded per hectare is calculated as the average of the two field studies and amounts to 25 hour over the five year period.

No transaction cost is included in the calculation. Special management of mountain grazing land

Underlying considerations This sub-measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape”. The sub-measure is a complement to other measures in order to increase the number of seasonal cottages in use and the purpose is to enhance the biological and cultural values at seasonal cottages.

Description Payment may be granted for seasonal mountain and woodland pastures that, besides being grazed, also characterized by traditional practices at seasonal cottages and contain certain assets of biological or cultural and historical importance that require special management in addition to grazing. Examples include selective cutting and actions relating to the physical appearance of the vegetation. A prerequisite for payment is that the farmer is allowed to make manual management activities of the land. The area under contract and the management conditions is decided by the competent authority. The maximum amount of hectares under contract is 10 hectares. This type of payment supplements, and may only be combined with, the payment for mountain grazing under the measure described in section 5.4.3.4.

In order to secure that the maximum payment level is not exceeding the levels stated in annex of the Council regulation (EC) No 1698/2005, a restriction of the amount of hecatres is inserted. If the farmer has a commitment with less than 10 hecatres of mountain pastures according to the sub-measures described in section 5.4.3.4, it is only

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possible to get a commitment for special management in this sub-measure described here for at maximum two hectares.

Payment SEK 1 200 (€ 133,3) per hectare and year.

Method of calculation and underlying assumptions The baseline is a farmer fulfilling the requirements for mountain pastures as described in section 5.4.3.4. The actions described in this measure goes above and beyond the cross-compliance requirements and national legislation. The cost for special management of mountain pasture covers only the cost elements in addition to what is compensated for in the basic measure for mountain pastures (section 5.4.3.4). The calculation is based on an average cost for selective cutting and removal of overgrowing. The mountain pastures are common land and are normally not fenced. To have the proper management and to receive a suitable grazing density in order to maintain the grazing dependent biodiversity, farmers are compensated for temporary fencing.

17.3.7 Management of semi-natural grazing land and mown meadows at places difficult to access

Underlying considerations This sub-measure shall contribute to maintain and increase the amount of acreage under management in the archipelago and on other valuable but inaccessible grasslands. By this, the measure is contributing to the national environmental quality objective ”A varied Agricultural Landscape”.

Description Payment is granted to partly cover the cost for transportation of cattle and guarding the animals on islands without connection to mainland or other grasslands that are inaccessible. Payment can also be granted for management of valuable but inaccessible meadows in areas with no ways or transport routes. The competent authority shall declare the acreage that is eligible for payment. This form of payment may only be combined with payment for the management of grazing land described in section 5.4.3.4.

Payment SEK 1 000 (€ 111,1) per hectare and year. Top-up notification

Method of calculation and underlying assumptions The baseline is a farmer fulfilling the requirements for semi-natural grazing lands as described in section 5.4.3.4. According to the cross-compliance, the grazing land has to be effected by grazing.

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This sub-measure is compensating the farmer for extra labour cost to fulfil the commitment according to section 5.4.3.4 depending on the long distance from the home farm or grasslands difficult to access.

The management of semi-natural grazing lands on islands without connection to mainland or in areas with no ways or transport routes involves extra cost for transporting the animals and extra time consuming guarding. The extra time for guarding is estimated to five extra hours compared to management on the mainland.

In the case of mown meadowlands, the farmer is compensated for the extra cost of managing the land in areas without ways or transport routes compared to the management of the same type of land closer to the home farm. The size of mown meadows is often small, very seldom more than 2 hectares. In the calculation, an average size of 0,5 hectares is used.

The calculations for both semi-natural grazing land on islands and mown meadows in remote area are based on field studies. No payment for transaction costs is included.

17.3.8 Management of mosaic land and other land with poor sward

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape”. Eligible land is mosaic pastures, i.e. grassland along the coastline where the sward is scattered and with large areas of natural impediments. Also, grasslands with little sward but many trees and bushes are eligible for payment. These grasslands have large natural and cultural values and are important for the landscape picture, recreation and tourism activities. These areas have too much impediment to qualify for the single farm payment and for the ordinary compenstion payable for the management of grazing land described in section 5.4.3.4.

Description The mosaic grasslands and other grasslands where the sward is poor constitutes a special class of grasslands where the management conditions within the cross- compliance requirements is not applicable. However the activity conditions within the cross-compliance requirements are applicable, since the grasslands is included in the holding. The area within the special class and the requirements are decided by the competent authority. The requirements for grasslands with poor sward should, as far as possible, coincide with the requirements for management of grazing land and forestry grasslands described in section 5.4.3.4.

Payment SEK 2 000 (€ 222,2) per hectare and year.

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areas. The cost for fulfilling the requirements of this measure consists of labour cost for extra supervision of the grazing animals. This is labour demanding due to the terrain. Other costs are cost for clearing of vegetation and maintenance of fences. Since these types of semi-natural grazing lands are not regulated by the cross-compliance requirements and thus not qualify for the single farm payments, the full cost of maintaining the fences or clearance of vegetation are included in the calculations. It is also included that the growths of the animals are lower of these semi-natural grazing lands compared to grazing on arable fields. No transaction cost is included in the calculation.

17.3.9 Restoring of mown meadows and semi-natural grazing lands

Underlying considerations This measure shall contribute to, in the first place, the national environmental quality objective ”A varied Agricultural Landscape”. Payment is granted for restoring to retrieve biodiversity and cultural values in traditional but abandoned grasslands and meadows. The objective with this measure is to increase the acreage of grasslands and meadows of the most threatened types with 5 000 and 13 000 hectares, respectively until the year 2010. The measure will be the main instrument to fulfil this objective.

Description Payment is granted for a certain percentage of the costs of restoration of mown meadows, semi-antural grazing land, and woodland, limestone and mountain pasture that have become overgrown as cultivation has wholly or partially ceased. Payment is granted on condition that the land in question is not maintained or has become overgrown and was previously cultivated. The area must contain remnants of types of vegetation, plant or animal species favoured by traditional land use, or important cultural and historical assets. Moreover, the land must have been exposed to minimal fertilisation or other yield-enhancing management measures.

The competent authority shall draw up a restauration plan where the area that is included in the commitment is defined. Restoration must take place during the programme period. Once restoration has been completed, the land must mainly be managed for at least five years, according to the requirements of the payment aimed at preserving semi-natural grazing land and mown meadowland (see section 5.4.3.4). Whether or not it qualifies for this form of payment, from the date of the final inspection. The competent authority is also defining the area that may be eligible, after restoration, for payment aimed at preserving semi-natural grazing land and mown meadowland (see section 5.4.3.4).

Payment SEK 3 600 (€ 400) per hectare and year.

Method of calculation and underlying assumptions The costs are based on restoration of one hectare of grasslands. The main part of the costs for land clearing occurs during the first years of the five-year period and the main

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costs for fencing in the middle of the contract period. The cost for grazing occurs mainly in the end of the five-year period. It is assumed that the land is grazed during the last two years of the period. The full cost of grazing and meadow management is included in the calculations since these land types are not regulated by the cross- compliance requirements and thus are not eligible for single farm payments. No transaction cost is included in the calculation.

17.3.10 Maintenance and clearance of paths to and from Sami settlements

Underlying considerations The objctive is to preserve areas with representative and high biological and cultural values in the reindeer herding area. The motive is to maintain paths and hiking trails that lead to Sami settlements and that are an important part of the Sami cultural environment. When clearing the path in combination to management for other Sami cultural landscape features, such as traditional fences or reindeer corrals, the Sami cultural environment is described in a overall picture and the measure is thus contributing to the management of cultural and natural valuable elements from a landscape perspective.

Description Land managers are compensated for maintenance and clearance of path to and from Sami settlements. The maintenance of paths is an extra measure that only those who has a commitment for Valuable and cultural environment in the reindeer herding area (section 5.4.3.5) can apply for. In these cases the paths to and from the settlements are as important to the cultural environment as the reindeer corrals. In old days the herding and other transports took place on specific routes. With the modernization of the reindeer management the paths are no longer in use and are growing over.

Payment SEK 1 800 (€ 200) per kilometre and year.

Method of calculation and underlying assumptions The land that qualifies for this payment is not regulated by the cross-compliance requirements. There is no national legislation regulating the management of these areas. The cost of clearance of path consists of labour cost for clearing and removal of vegetation. It is assumed to require 8 hours of work per kilometre of path. The cost of renting machineries is included in the calculations.

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17.4 Annex 4 Ex ante-evaluation Swedish version in a separate annex

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17.5 Annex 5 Possible combinations between different operations within the agri-environment payment measure The following operations within the measure agri-environment payments are possible to combine with fallow land: Possible to combine Payment for regional priorities: - bio fallow yes1) Valuable natural and cultural yes2) environments in the agricultural landscape Reduced nitrogen leaching spring cultivation: yes3) ¤ cultivation of catch crop: no

1) To be eligible for payment the farmer has to take the field out of production. The extent of the commitment bio fallow goes beyond the obligations concerning cross- compliance in Council regulation (EC) No 1782/2003.

2) Preservation of rural features does not involve agricultural production since the management only involves the rural element itself and not the surrounding field.

3) Spring cultivation does not include any agricultural production. To be eligible for payment for spring cultivation the farmer must not work the soil until the spring. This means that the commitment goes further than the obligations concerning cross- compliance under Council Regulation (EC) No 1782/2003.

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Possible combinations between different operations within the agri-environment payment measure

Extensive ley Valuable natural and Valuable natural and Biodiversity and cultural Traditional managementfor a cultural cultural Reduced Riparian strips Environment heritage in semi-natural cultivation of Organic forms of better environment environments in the environments in nitrogen alongside protection grazing lands, mown brown beans in production and an open agricultural reindeer herding leaching waterways measures meadows land and wetlands Öland landscape landscape areas spring Extensive ley management for a better environment and an open - * ¤ * * cultivation¤ * * ¤ landscape others*

Biodiversity and cultural heritage in semi-natural grazing lands, * - * * * * * * * mown meadows land and wetlands

Valuable natural and cultural environments in the agricultural ¤ * - * ¤ ¤ ¤ ¤ ¤ landscape

Valuable natural and cultural environments in reindeer herding * * * ------areas Traditional cultivation of brown * * beans in Öland ¤ - - * * * * spring cultivation ¤ Reduced nitrogen leaching * others * ¤ - * - * ¤ ¤ Riparian strips alongside * * waterways ¤ - * * - * * Environment protection measures * * ¤ - * ¤ * - * Organic forms of production ¤ * ¤ - * ¤ * * -

* The operations could be combined on the same holding but not on the same land ¤ The operations could be combined on the same land - The operations are not possible to combined

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17.6 Annex 6 Cross-compliance obligations, national legislation obligations and management criteria for environmentally friendly farming Management criteria Cross compliance and current Management criteria in agri- environmental national legal obligations (cc sub-measure involving extra expenditure and nl obligations) Biodiversity and cultural heritage in semi-natural Applicable to all grasslands: All encroaching vegetation has to be removed. grazing lands, mown meadows and wetlands (5.4.3.4) strong encroaching vegetation that will harm biodiversity or cultural heritage values must be removed. Some (normal) encroaching vegetation is allowed.

If the land is designated as a protected biotope zone, it is prohibited to destroy the grassland, incl. wetlands, by e.g. spreading of chemical fertilisers or weed killers. Preservation of semi-natural grazing lands The land must be used for - The land has to be grazed every year in such a grazing every year way that there is no accumulation of harmful litter. - Yield enhancing measures are forbidden. Preservation of mown meadows Mown meadowland must be cut - Mown meadowland has to be cut and and harvested every year. harvested in late summer. - Only cutting tools are allowed. - There must be no accumulation of harmful litter.

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- Yield enhancing measures are forbidden. - Mown meadowland should be tidied up in spring. Preservation of the wetland There is no cc or nl obligations The wetland must be preserved for at least 20 concerning the cutting of years. aquatic plants.

The landowner is prohibited from removing or destroying wetlands and ponds on agricultural land There is no cc or nl obligations Dam embankments, wells/springs and the like concerning the maintainance of necessary for the preservation of wetlands are embankments, wells/springs to be properly maintained. etc. The spreading of fertilisers or Prohibition of the spreading of fertilisers, biocides in the wetlands is not biocides and lime. allowed. Aquaculture, such as fish or Aquaculture, such as fish or crayfish farming in crayfish farming in the wetland, the wetland, may be prohibited. requires permission from the authorities.

Valuable natural and cultural environments in the agricultural landscape and reindeer herding areas (5.4.3.5) - Agricultural landscape The arable land must be kept - Trees and shrubs of undergrowth type on or free from perennial shoots of around the landscape elements are to be coppices, buches and trees. removed or grazed, - Special management conditions for trees in

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There are no cc or nl obligations the arable land, such as pollarding, concerning the management of - Stockpiles, refuse and the like are to be landscape element situated in removed arable land.

It is not allowed to; - remove valuable landscape features or destroy them through spreading og mineral fertilizers, large quantities of manure or chemical weed killers, - undertake actions that may harm the biological or cultural values of the elements. - Reindeer herding areas There is no cc or nl obligations - Trees and shrubs of undergrowth type on or concerning preservation of around the landscape elements are to be landscape elements in the removed, reindeer herding areas. - No harmful accumulations of litter/organic debris are allowed on the land. It is not allowed to destroy the - Fencing is to be maintained in order to construction of some valuable preserve the biological and cultural values traces of traditional reindeer connected to its original function. husbandry.

Payment for regional priorities (5.4.3.6) - Preservation of threatened weeds The arable land must be kept - Weeds must be grown together with cereals free from perennial shoots of or cultivated flax coppices, buches and trees. - Annual ploughing, sowing and harvest must take place

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Existing drainage must be - No usage of chemical plant protection maintained. products and A crop must grow in the field at fertilizer the very latest at the 15th of l July - Management according to a special management plan -Bio fallow The arable land must be kept - The fallow must not be broken until July 1st in free from perennial shoots of the fourth year of the five year period coppices, buches and trees. - Cutting or harrowing of the fallow is allowed during the five year period Existing drainage must be - New crop must be sown in the spring in the maintained. fifth year of the five year period - A management plan is needed where times for A crop must grow in the field at cutting and harrowing is specified. The plan can the very latest at the 15th of also contain the type of crop to be grown in July year one and five - Unharvested grain yield The arable land must be kept The cultivation of cereal should be done with free from perennial shoots of the aim of normal yield and normal seed rate. coppices, buches and trees. It is not allowed to harvest. A crop must grow in the field at the very latest at the 15th of July - Special management of landscape elements See above for Valuable natural Specific management of field vegetation on or and cultural environments in the around certain landscape elements. agricultural landscape and reindeer herding areas - Traditional hay-making See above for Biodiversity and Traditional hay-making with putting on frame cultural heritage in semi-natural for drying or frequently turning the hay on the grazing lands, mown meadows ground.

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and wetlands - Burning See above for Biodiversity and - Burning of grasslands once during a five-year cultural heritage in semi-natural period. grazing lands, mown meadows - Which part of the land, when and how the and wetlands burning should take place are regulated by the competent authority - Special management of mountain pasture See above for Biodiversity and - The area under contract and the management cultural heritage in semi-natural conditions is decided by the competent grazing lands, mown meadows authority and wetlands - Examples include selective cutting, temporarily fencing and actions relating to the physical appearance of the vegetation - Management of semi-natural grazing lands difficult See above for Biodiversity and In case of semi-natural grazing lands: to access cultural heritage in semi-natural - The land has to be grazed every year in such a grazing lands, mown meadows way that there is no accumulation of harmful and wetlands litter. - Yield enhancing measures are forbidden. In case of mown meadows: - Mown meadowland has to be cut and harvested in late summer. - Only cutting tools are allowed. - There must be no accumulation of harmful litter. - Yield enhancing measures are forbidden. - Mown meadowland should be tidied up in spring. - Management of mosaic grasslands There are no cc or nl obligations - The land has to be grazed every year in such a concerning the management of way that there is no accumulation of harmful land that qualifies for this litter. payment, unless it is designated - Yield enhancing measures are forbidden.

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as a protected biotope zone (see above Biodiversity and cultural heritage in semi-natural grazing lands, mown meadows and wetlands) - Restoration of mown meadows and semi- natural There are no cc or nl obligations - Land clearance grazing land concerning the management of - Fencing land that qualifies for this - payment. - Maintenance of path to and from Sami settlements There are no cc or nl obligations - Clearance of path concerning the management of - Removal of overgrown vegetation land or elements that qualifies for this payment.

Traditional cultivated plants and livestock breeds (5.4.3.7) Traditional cultivation of brown beans - Cultivated varieties There are no cc or nl obligations Only Swedish varieties at the Swedish list sort- concerning type of variety. list may be cultivated - Restrictions on supplied quantities of fertilizer There are restrictions on how Maximum 30 kilogram nitrogen per hectare much manure and fertiliser may may be used. This 30 kilogram must be applied be applied per hectare land. when the beans are sown. From 1 January 2006, the supply of phosphorus from manure and organic fertilisers may not exceed 22 kilogram per hectare available land (with certain exceptions), counted as a five-year average. (22 kilogram phosphorus per hectare

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corresponds to less than 170 kilogram nitrogen per hectare that is the upper limit for manure application according to the nitrates directive.) Within areas identified as vulnerable (e.g. at Öland), the supply of nitrogen via manure and fertilisers may not exceed the quantities considered necessary for the crop in the site in question. Mineral fertiliser nitrogen may not be spread during the period 1 November – 15 February. - Plant protection For further details on plant Plant protection products against fungus and protection, see below for the insects may not be used at all. sub-measure Environment protection measures Brown beans must be cultivated in as broad rows so that mechanical weeding is possible. - Late ploughing There are no cc or nl obligations The land may not be ploughed up before 15 concerning late ploughing. November. Exception is if an autumn sown crop is established. Endangered livestock breeds There are no cc or nl obligation The endangered livestock breed shall be kept concerning preservation of throughout the commitment period. Livestock endangered livestock breeds breeds eligible for payment is mentioned in the RDP.

For breeding associations: Creation and maintenance of pedigree registers

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and herd books,, health-promoting measures, breeding advice, support for transport of genetically important animals etc.

Reduced nutrient leaching from arable land (5.4.3.8) Cultivation of catch crops A crop must grow in the field A catch crop shall be established in the main at the very latest at the 15th of crop or following the harvesting of the main July. crop throughout the commitment period over an specific area. Combination with fallow is not Rules about crop cover during possible. autumn or winter is included in the national legislation. However it is not stated that the crop cover must be a catch crop, for example are winter cereals, stubble, fallow and ley accepted as crop cover. Spring Cultivation The fallow has to be left The field has to be left unmanaged until the end unmanaged until mid-October of the year, thus establishment of winter- if not followed by an autumn cereals is not possible. seed. Spring cultivation may be combined with fallow land. Riparian Strips There are no cc or nl obligations Riparian strips along waterway, lakes or sea concerning establishing riparian shall be established on arable land. strips The measure may not be combined with fallow.

Environment protection measures (5.4.3.9) Mandatory condition which is not compensated: The most important cc and nl Costs which are not acreage-dependent are The farmer shall have a current crop management obligations are mentioned for spread over 5 years and 50 hectares. Costs plan. The management plan involves details about all which are acreage dependent are calculated on a

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the different blocks of arable land on the holding. the different sub-measures. per hectare per annum basis. Support is not For each block, information about preceding crop, payable for more than 300 hectares per farmer the crop of the year and variety of this crop, the calculated needs of nitrogen, phosphorus and potassium shall be noted. The needs of nitrogen shall be calculated from the estimation of the yield, the effect of the preceding crop and the long-term effect of manure used on the block. The amount of nitrogen, phosphorus and potassium calculated, estimated or noted from the package for the mineral fertilizers, manure and other organic fertilizers, which will be used on the block. This shall be noted for each block. Time of spreading and type of fertilizer, the amount of manure and other organic fertilizers shall be given and noted as nitrogen, phosphorus and potassium in the fertilizers for each spreading occasion. Finally the harvest on each block shall be documented. - Farm gate balance For all agricultural enterprises The recipient has to establish a farm gate with more than ten livestock nutrient balance for the whole holding. A farm units, there are requirements gate balance is a balance on farm level involving regarding manure storage products transported in to the farm containing capacity. nutrients for instance animal feed, fertilizer etc and products transported out from the farm In the south of Sweden, and in such as sold harvest products, animal for parts of the plains in central slaughter etc. Sweden, special requirements - Analyse of the nutrient content in liquid manure regarding the filling and The recipient shall analyse the content of covering of urine and slurry nutrients in liquid manure used at the farm. It stores apply to agricultural applies to both manure produced on the farm

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enterprises that keep livestock. and to manure received from outside the farm - Soil mapping including soil analysis There are restrictions on how Soil mapping including soil analysis shall be much manure and fertiliser may conducted according to detailed conditions laid be applied per hectare land. down in the national ordinance and regulation. Within areas identified as These rules involves details how to make the vulnerable, the supply of specific soil sampling, the analysis of pH, nitrogen via manure and phosphorus, potassium, the clay content, the fertilisers may not exceed the organic matter content etc. The soil mapping quantities considered necessary including the soil analysis shall cover the arable for the crop in the site in land used by the holding question. - Use of bio-beds or other approved loading Anyone who uses plant A bio bed or impermeable platform shall be position/method for farm sprayers protection products must used when filling and empting the sprayer and ensure that these can be applied have to be constructed. The farmer could also without risking contamination choose to fill and empty the sprayer on the of the water intakes, wells, lakes field or another suitable place with a bioactive watercourses, surrounding areas ground. If the farmer chooses such a place he and property own by someone have to have a mobile equipment for filling the else. This includes filling and sprayer and portable and lockable storage place cleaning of equipment and for plant protection products. disposal of remaining plant - Use of tested farm sprayer The spraying equipment has to be tested. protection product - Documentation of weed control requirements on (concentrated or ready-made The documtation of the need of plant each occasion and determination opportunities to for spraying liquid) as well as used protection usage shall be done considering needs- based controls packing or containers. thresholds and dosage keys for different weeds and pests. Protection zones must be - Check areas for following up of weed control defined and observed whenever Check areas must be established where plant practices plant protection products are protection products is not used.

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- Spray-free edge zones applied or otherwise handled. The recipient must have zones along border of Safety distances are to be fields with grain cultivation there plant defined in accordance with protection products is not used. prevailing conditions with regard to the need to protect water catchments, lakes, watercourses, the surrounding landscape and property. Operators of towed or motor- driven sprayers must be equipped with suitable instruments/devices for determining appropriate, wind- adjusted safety distances, temperatures, wind direction and wind speed. Spraying equipment must be appropriate, properly maintained and calibrated. Anyone who applies Class 1 or Class 2 plant production products is required under Section 11 of the Plant Protection Product Ordinance to keep a record of each such application. There are some extra demands on the records when using plant protection products particularly dangerous

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to bees. A ban on the application of plant protection products without a permit applies inter alia to water protection areas. Chemical products hazardous to health must be stored out of reach of small children and separately from products intended for eating or drinking. Chemical products requiring permits for use must be stored out of reach of unauthorised persons.

Organic forms of production (5.4.3.10) Fertilisers applications Rules concerning the amount of Use only farmyard manure, fertilisers and phosphorus that may be applied auxiliary soil material listed in Council by farmyard manure and how Regulation (EC) No. 2092/1991, Annex II, the manure shall be spread. part A. Plant protection Lists of allowed plant The applicant shall only use preparations listed protection preparations in in Council Regulation (EC) No. 2092/1991 organic farming and in legal Annex II part B. regulations differ. Regulations for organic farming significantly limit an application of plant protection preparations. Rotation of crops There are no cc or nl obligations The fertility and the biological activity of the concerning growing and soil must be maintained by cultivation of

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rotation of agricultural crops legumes, green manures or deep-rooting plants in an appropriate multi-annual rotation programme. Organic seed There are no cc or nl obligations If there is organic seed for sale of a specie or concerning type of seeds to use sort that organic seeds must be used.

Organic feed Livestock shall get enough Livestock shall be fed with organic feedstuffs. feeding and feeding stuff of A small amount (5 per cent until 31 dec 2007 good quality that suits to the for herbivores and 15-5 per cent until 2011 for needs of the animal. other species can be non organic, but must contain only feedstuff listed in council Regulation (EC) No. 2092/1991 Annex II part C and D Use of roughage Livestock shall get enough At least 60 per cent of the dry matter in daily feeding and feeding stuff of rations is to consist of roughage. This gives the good quality that suits to the organic fed animals a somewhat slower growth needs of the animal. with more total feedstuffs, costs of work, stable area. The roughage is also requiring more work due to a larger quantity of feedstuff and manure. Area in the stable and outdoor exercise area For all types of husbandry there For many categories of animals a larger indoor are requirements on minimum area is needed in organic husbandry. For indoor area. If there is bedding, organic animals there is need for an outdoor it must be kept dry and clean. exercise area or pasturage in connection to the building. At least half (one third, for poultry) of the area indoor may be solid. That means some more consuming of litter and work handling manure than at slatted floors. Preventing health problems There are no cc or nl obligations Parasite problems must preferably be prevented

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concerning preventing parasite with change of pasture-area. That increases the problems cost of work

Extensive ley management for a better environment and an open landscape (5.4.3.11) A. Open and varied agriculture landscape The arable land must be kept The arable land has to be cultivated actively free from perennial shoots of with ley. The crop shall be grazed or harvested coppices, buches and trees. every year. The harvested crop must be There is no demand on collected and removed. harvesting or removing harvested crop. For the supplementary payment there is a requirement that the farmer should have a certain number of livestock. A and B The arable land must be covered The forage must remain unploughed at least Length of cultivation by vegetation in the autumn or three winter seasons in succession. winter A and B Chemical plant protection The farmer is not allowed to use any chemical Plant protection products e.g. herbicides is plant protection products during the period the allowed on grassland at arable forage has to be unploughed. However land. herbicides may be used in direct connection with the termination of the ley just before the For further details, see below land is ploughed. for the sub-measure Environment protection measures.

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17.7 Annex 7 Maps

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17.8 Annex 8 Communication plan for the Swedish Rural Development Programme 2007–2013

Strategic planning Introduction On 1st January 2007 a new rural development programme will enter into force to succeed the former environmental and rural development programme for the period 2000 -- 2006. The programme will contain measures in three different areas: (Axis I) Improved competitiveness in agriculture and forestry, (Axis II) Improvement in the environment and landscape, and also (Axis III) Promotion of life quality in rural areas and diversification of the rural economy. In addition to these three areas, (Axis IV) Leader method (method for local development and coordination) will be an integral part of the program.

The introduction of the programme creates a major need for communication with and information to potential aid applicants and other interested parties. The EU's role as a joint financier should be clearly evident.

This document is a plan on how work on information concerning the rural development programme 2007–2013 should be implemented. The Swedish Board of Agriculture is the supervisory authority with principal responsibility for the implementation of the programme and thus also has overall responsibility for information about the program. Many other authorities and players are involved. This document mainly provides a description of the Communication Plan drawn up by the Swedish Board of Agriculture. The others players develop their own plans which are currently being drawn up.

Active work on the communication plan will be carried out throughout the programme and where necessary strategies and activities will be changed. Detailed plans for activities will be made annually.

The aim of the document The aim of this document is to describe how information measures concerning the rural development programme should be implemented, and is most detailed for the period July 2006-December 2007. The document can be regarded as a method for structuring the target groups and choice of channel for information and it also sets out the communication goals.

Three phases Work on the information campaigns is divided into three phases, which partially overlap in terms of time.

Phase 1 – This is the introductory phase for providing information about the new program. Recipients should be made aware of the existence of the programme and what it involves. It mainly covers the period from July 2006 until December 2007. Some measures, in particular for new target groups, will also be implemented at a later stage.

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Phase 2 – During this phase information is regularly issued about the opportunities provided by the programme and its rules to those who are familiar with the program, especially aid applicants. This process takes place regularly throughout the programme period, i.e. from January 2007 up to and including December 2013. The need for this type of information is greater at the beginning than at the end of the programme period.

Phase 3 – The third phase involves providing information about the outcomes of the program. This work will start at the earliest in 2008 and be completed after 2013. The target group for this information is broad. This type of information will also increase successively during the programme period.

Overall goals The goal is to provide good information so that recipients will understand the opportunities they have and how they should proceed in order to take advantage of the opportunities in the rural development programme.

Those who receive information should be familiar with the new rural development programme and its implications for them. They should acquire knowledge about the programme and be able to choose the type of support of interest to them. They should also be able to use their knowledge in order to realize ideas, apply for support and follow the rules. The information should be designed such that recipients understand they are contributing to the attainment of the Rural Development Programme goals. Recipients should also understand that they can influence their own financial position by participating in the program. The information measures thus also become a means of achieving the goals of rural development policy.

The overall goals of the communication are to provide information about the goals of the programme and the measures it contains. This should be accomplished by authorities, rural businesses and project owners, and using cost effective methods. Information from the authorities should be comprehensible and clear. Standard terminology should be used. The information in terms of design and the time at which it is communicated should be coordinated with other support information at the Swedish Board of Agriculture. The application procedure should be simple for those applying for support. The information should enable the target groups to make and submit correct applications in time. The general public should be given information about the purpose of the programme and its resultant outcomes.

Target groups This section provides a review of the target group recipients of information measures. The approach taken has not been to identify all the different interested parties, but instead focuses on groups thereof.

Axis I, II and III The primary target group for the information measures within Axis I, II and III are potential aid recipients. In addition to this group, other interested parties such as consultants, county administrative boards, municipalities and county councils, as well as

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other organisations and authorities are target groups for information. Aid recipients are a heterogeneous target group, which means that the information measures must be adapted accordingly. In order to make clear how the target groups differ between different parts of the program, an overview is provided below of the target groups for each specific Axis.

The group "Other players" is provided with information even though they are not aid recipients. This is mainly because they are important players in the dissemination of information to aid recipients, but also because they may be important as a result of their own activities (for instance, banks).

The target groups differ in a number of ways. Some target groups expect information, farmers applying for different forms of agricultural support expect to receive information annually. Other target groups, for example, forest holders, do not expect information in the same way since they have not to any great extent received support within the framework of the programme 2000-2006. This is evident in the section on channels.

The largest target groups amongst aid recipients in Table 1 are farmers and other rural businesses (micro companies) and members of farm households. The most important groups amongst the category of "Other players" in Table 1 are the county administrative boards.

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Table 17:2 Target groups for Axes I, II and III. Axis I Axis II Axis III Aid recipients Agricultural holdings/ Rural Users of agricultural land75 Members of farm enterprises/ Food processing Private forestry owners households enterprises/ Food Seasonal cottage managers76 Existing and possible enterprises/Horticultural Owners of animals threatened business owners in rural enterprises with extinction (and possibly area (micro companies) Private forestry owners other animal owners) Entrepreneurs Reindeer owners/Samis Managers of wetlands Representative Quality assessment bodies Reindeer owners/Samis organisations and co- (e.g. Krav (Organic Associations/ gene banks ordinating bodies standards) and Svenskt Sigill Local action (Swedish Seal of Quality) groups/exchange Third parties (for example, in development groups the education system) Other players County Administrative Boards Consultants Others authorities and agencies Municipalities/County Councils Representative organisations/trade organisations / non-commercial associations Banks

Leader (Axis IV) A major change compared with the earlier programme is that Leader will be a part of the program. The idea is that the Leader programme approach should exist in all Axes. Simply described, Leader can be said to represent more a method than a type of support where local and regional initiatives are important. Support will be distributed via "local action groups " (LAGs). The work of forming and approving LAG groups will take place during 2007-2008. LAGs have the responsibility for providing information to potential aid recipients. Since the support measures in Leader in the different Axes should be virtually the same, recipients of aid will come from the same groups as for the other axes.

75 This refers to all individual or legal persons using agricultural land. 76 All land which is connected to a seasonal cottage is not regarded as agricultural land. The group should thus be distinguished in order to make the document more precise. In many respects, however, the group comes in under the category of "Users of agricultural land".

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The target groups for information on forming LAGs are: - Municipalities - County Administrative Boards - County Councils - Organisations at the central level - Sveriges kommuner och Landsting (The Swedish Association of Local Authorities and Regions) - Village movement councils (regional level) - Trade union organisations - Environmental organisations - Immigrant organisations - Organisations promoting gender equality - Authorities and agencies - Local action groups - Regional self-determination and co-ordinating bodies

General standpoints Women, young people and Swedes of foreign descent are referred to in the programme as important groups to reach. These groups, however, are not distinct target groups, but are included in the target groups described above. However, as regards Leader, immigrant organisations and those promoting gender equality have been identified as target groups for information on forming LAGs. Reindeer owners/Samis have been identified as target groups in Axes I and II. In the case of Axis III, the Samis are considered to be part of the other target groups and have thus not been identified as a specific group.

Article 76.2 of the Council Regulation (EG) nr 1698/2005 states that the Managing Authority for the programme shall be responsible for its publicity by informing potential beneficiaries, professional organisations, the economic and social partners, bodies involved in promoting equality between men and women and the non-governmental organisations concerned, including environmental organisations, of the possibilities offered by the programme and the rules for gaining access to programme funding. The Managing Authority shall also inform the beneficiaries of the Community contribution and it shall inform the general public about the role played by the Community in the programmes and the results thereof. The Ministry of Agriculture has overall responsibility for providing information to the general public.

The target groups can be divided in different ways than is done in this document. It would be possible instead of taking the axes as the starting points, to take groups such as farmers, companies in the food sector, reindeer owners etc. Such a division in the long- run would lead to adapting the information provided to each target group so they would receive tailored information about support in Axis III which would look different compared to the information provided to a food company or reindeer owner. Adapting information to the needs of different target groups would take more resources than if the information were made more general. Since resources are limited, the view is that the existing division of target groups made in this document is the best alternative.

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Communication goals What knowledge should the target groups have, what should they think or do? The goals for all target groups are that they should: - Read the information, - Understand the information and - Be familiar with the information.

Additional goals: - Aid recipients should apply for support. - Other players should disseminate information and get potential aid recipients to apply for aid. - The target groups for information on forming LAGs should apply to form LAGs.

An additional goal is that aid recipients, and also newly formed LAGs, should understand as a result of the information measures that they are contributing to the attainment of the goals of the rural development program.

Communications strategy How should communication be managed in order to achieve success? Success in attaining the goals requires the following: - The target groups are regularly supplied with information. - Choice of channel varies depending on the target group information measure. Direct communication, personal communication, electronic information and communication through the mass media will be used. - Existing channels should as far as possible be used, for instance the Swedish Board of Agriculture's web site. - Other players should be used as disseminators of information. In order to succeed in this, there must be cooperation with these players. Even if some responsibility for providing information is placed on other authorities and organisations, the Swedish Board of Agriculture is responsible for the basic, core information.

The information will not be specifically adapted to target groups except in terms of selection of channel. Target group adaptation in this context means i.a. that different versions of the same information material will not be produced for different target groups. Adaptation that could be made would be the provision of certain information in languages other than Swedish.

Channels The texts below are written in such a way so that they can be applied to the three main target groups "Aid recipients"," Other players" and "Leader". In those cases where adaptation is required for a target group, this is specifically mentioned; otherwise the choice of channel applies to the whole target group.

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Aid recipients (Axis I, II and III) What is important for the target group of aid recipients is that they should read, understand and be familiar with the information, and also that they apply for aid, i.e. the communication goals for the target group.

Electronic information For the target groups of potential aid recipients, electronic information is the main form by which external information is provided. It is experienced Internet users who will primarily prefer this medium. This is a channel which the target groups can use on their own to search for the information they consider they need. The Swedish Board of Agriculture's web site will be used and the Board will continue to send out electronic newsletters. At the Swedish Board of Agriculture's web site, there is also the "Support guide" which provides assistance in organising information for persons who are interested in obtaining information on different forms of support. The "Support guide" is primarily appropriate for information on agricultural support (support which is applied for in SAM and other agri-environment aid) even though other forms of support may be included.

Sametinget (The Sami Parliament in Sweden) and the Swedish Forest Agency will be important players in administering the programme. Some Internet-based information can thus be provided by linking to these web sites, and also other web sites run by authorities and agencies.

Electronic information may also provided via e-mail to certain target groups. This relates primarily to the group of "Other players".

Communication through the mass media Communication through the mass media will take place via public notices and articles in the trade press for different target groups and also through press releases. Measures via these channels will be incorporated in both a media plan and a plan for public notices. For the reader to recognize the information provided by the Swedish Board of Agriculture, all public notices should have a uniform format. Public notices are also a good means of accessing target groups who have not applied for support under earlier rural development programs.

Personal information This is the channel that will be least used since personal information will in general only be used by the Swedish Board of Agriculture, and only on the initiative of aid recipients when participating in fairs or when communicating with the Swedish Board of Agriculture. It is mainly "Other players" who will use personal information in their contacts with aid recipients when disseminating information from the Swedish Board of Agriculture.

Direct communication Direct communication is mainly used for direct mailing of brochures and application forms. The Swedish Board of Agriculture's policy on keeping printed material to a minimum will be followed, and this means that in each case consideration will be given to

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whether the information measures can be accomplished in better ways than by printed material. Brochures should as far as possible be designed to be used for a number of years and supplemented by additional material where necessary.

All farmers are contacted through the SAM mailing as presented at the end of this section. The target group of farmers in this context is accustomed to direct communication and expects to receive information sent to their homes.

Address registers can also be used for a number of other groups if this is considered appropriate. This applies, for example, to food companies, rural businesses, reindeer owners and horticultural companies.

However, for certain groups at best only partial address registers exist. This applies principally to potential aid recipients. This means that direct communication is not a possible channel for this group.

SAM mailing – Each year all farmers in Sweden (those who have applied for some acreage based support or registered such an interest) receive an information package on farming support. The mailing is sent out to about 85 000 persons and companies, each mailing includes printed, company specific application forms for payment (SAM form) and maps for the specific company. The SAM form is used for both acreage based support, where both the application for single farm payment, as well as application for environment payment and regional support, are included. In addition, forms for environmental commitments and a number of information brochures on different types of support are also included. The information content of the mailing varies from one year to another and is related to the magnitude of the changes in the regulatory framework, and also on how information material has been received by the target group in previous years. Consultants and the county administrative boards receive information and training on the content of the information in good time before farmers receive it.

Others players (in Axes I, II and III) What is important for the target group of "Other players" is that they should receive and understand the information, and also that they assist potential aid applicants to apply for support.

Some education and training will be provided for the group of "Other players", mainly to those in county administrative boards, but also to consultants and industrial organisations. It is important that the group receives information at an early stage so that the information can then be forwarded to other target groups. This means that printed material and some specific material should be sent to some "Other players" before "Aid recipients". One way of reaching this group could be to use e-mail or local area networks. The Swedish Board of Agriculture and the county administrative boards have an intranet where the Swedish Board of Agriculture provides specially adapted information for the county administrative boards.

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Leader (Axis IV) It is important that the target group receiving information on forming LAGs understands it and that they apply to start LAGs.

The Swedish Board of Agriculture is not responsible for informing potential aid recipients about Leader. Its primary responsibility is providing information to potential LAG members so that LAG groups can be formed. Since aid recipients are mainly the same as for other Axes, they will receive information about the program, and specifically information about Axis III.

Information to potential LAG members will primarily be provided electronically. This means that the web sites of the Swedish Board of Agriculture, and other authorities and organisations are the source of the information. Information is also disseminated by means of e-mail.

Direct communication will not be used by the Swedish Board of Agriculture unless the target group is not reached by other means. When LAGs have been formed, they have a responsibility to provide aid recipients with information.

Personal communication can take place by means of information meetings and similar activities. However, the county administrative boards have the major responsibility for this. It may also be relevant to use communication through the mass media via public notices in newspapers and other activities.

Graphic profile etc The guidelines set out in the Commission Regulation (EG) No. 1974/2006 are to be followed. This stipulates how the EU flag, its motto etc should be used to make clear the role of the EU as a joint financier.

The information material which the Swedish Board of Agriculture produces should have the same graphic profile as other support information (for example, single farm payment). The sender should be clearly indicated. The graphic profile for the national network should be produced.

The message Formulation of the message should be simple and clear and create an interest among the target groups in acquiring further information. The message should also be formulated in such a way that the aims of the different measures are clear so that the target groups are fully informed about the goals of rural development and environmental policy. The message should have an impact.

Follow-up, evaluation and development Follow-up of information measures concerning Axis II (SAM mailing) will take place in conjunction with the regular evaluation carried out of the SAM mailing. Since a number of routines already exist for this, no new methods will be developed for its evaluation.

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For Axes I, III and Leader, the Swedish Board of Agriculture does not carry out any systematic evaluations today. Follow-up is based on taking the communication goals as a starting point, and the method chosen will depend on the measure to be evaluated. The Swedish Board of Agriculture will receive assistance from external consultants in making its evaluation.

Activities and products Co-ordination with authorities and agencies The Swedish Board of Agriculture produces the national information material. The Swedish Board of Agriculture co-ordinates this work with the Swedish Forest Agency, the Sami Parliament and the county administrative boards, as well as other authorities such as NUTEK (Swedish National Board for Industrial and Technical Development) and Glesbygdsverket (Swedish National Rural Development Agency). Links exist between the web sites of these authorities.

Each county administrative board and the Sami Parliament will draw up an information strategy for the regional application of the national program. These strategies show how those in the different areas will also work with the provision of information.

Implementation of the regional plans takes place in a broad partnership. The use of partnership networks and information channels will create effective dissemination of information. The Leader method will be introduced and is an important component of regional information work. The municipalities also play an important role in the local sphere.

Phase 1– The Swedish Board of Agriculture's information measures During the introductory phase, the main emphasis is put on accessing as many target groups as possible in order to provide information on the existence of the new program. Recipients should be made aware of the different opportunities provided in the programme. Phase 1 starts in July 2006 and continues throughout the whole of 2007. Some measures, in particular those for completely new target groups, will be carried out later. A national network for rural development starts and the work of forming the Leader areas is started under Phase 1.

July – December 2006 The Swedish Board of Agriculture examines the options and how a national network for rural development should be organised. This is done in order to improve the implementation of the program, and strengthen the program's measures for rural development.

The Swedish Board of Agriculture in cooperation with the county administrative boards, the Swedish Network for Leader and the Glesbygdsverket (Swedish National Rural Development Agency) start an information campaign about the new Leader. This is to provide players who are active in rural development with knowledge about the rural development programme in general, and about the new Leader programme in particular. The meetings can be regarded as mobilisation meetings for starting the process of launching the new Leader in Sweden. The target groups for information are the

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municipalities, regions, rural development councils, local action groups, rural businesses, youth groups, immigrant groups et al. The major part of the information measures will be implemented during the autumn, and some 15 events with 50 participants have been planned.

The Swedish Board of Agriculture arranges training and education for the officials of the county administrative boards. The demarcation line between what constitutes training in administrative routines and what is information for a player in extensive contact with farmers and other target groups is difficult to determine. The two go together. In total during the autumn about 10 education and training days are planned for about 50-100 participants for each event.

Web updating of structure and content is an on-going process. Press releases are issued - when the programme is sent to the Commission. E-mail is sent to a large number of organisations and authorities e.g. about preparations for the New Leader and about the new support for breeding associations for the preservation of endangered livestock breeds. Information is also disseminated in the electronic newsletter which comes out alternate weeks.

The introductory brochure on the new programme will be sent out to all 85 000 farmers in October. A shorter version of the introductory brochure for the target groups "Other company owners" has been produced in a PDF document and is published on the web site and e-mailed to a large number of organisations and to the media.

The Swedish Board of Agriculture participates in the agricultural trade fair "Elmia" in Jönköping and arranges a number of activities in the new programme. Elmia which is Sweden's largest agricultural fair has about 30 000 visitors.

Public notices should be directed to target groups other than farmers with the message "Opportunities in rural areas". Joint public notices are issued together with the Swedish Forest Agency in the trade press with the message ”New initiatives in forestry”.

During 2007 The introductory information campaign on the new Leader started in 2006 will be completed.

The national network for rural development starts its activities. There is a special action plan for the network setting out how the network should work on i.a. information measures.

The material concerning enterprise and project support is finalised. The forms for applying for enterprise support and project support, instructions for these as well as the brochure "Enterprise support and project support" will be produced. Information about the availability of the material is provided on the web, in newsletters and direct to the media.

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SAM mailing distributed. Information about the availability of the material is provided on the web, in newsletters and direct to the media.

Also consultants and the county administrative boards receive targeted information which consists of information about the enterprise support as well as the supports included in the SAM mailing, mainly via e-mail and the web.

A 2 day rural development conference will be held under the theme ”Landsbygd i centrum” (Focus on Rural development) as a starting point for the new Rural Development Programme with around 900 seminar participants, mainly from county administrative boards, as well as from a number of other organisations representing e.g. business, research, education and the rural population.

In total during the spring, around 10 education and training events are planned for about 50 participants for each event for officials of the county administrative boards.

A number of distance education programs will be provided during spring 2007 to the county administrative boards. The first concerns competence development. Other distance education will be provided as and when needed. Normally training in the use of IT takes place via telephone some weeks after completion of a training event. The number of distance education sessions is estimated at between 4-6 over the spring.

Co-ordination with organisations Sweden in general and not least the rural development areas have a substantial advantage, which the rural development programme should exploit: it is well-organized. There is a highly developed web infrastructure of organisations for all possible interest groups. The organisations have different orientations, but all are of interest for the dissemination and development of the rural development program.

The solid infrastructure for rural development in Sweden is important not only as a channel, but also as part of the message. In order to encourage target groups to start businesses in rural areas and perhaps relocate to such areas, they must feel that they will not be left alone once they have made their decision. The crucial factor will thus be to show them that assistance is available by linking the Rural Development Programme with the infrastructure of all associations and organisations active in rural areas.

This can take place in a number of different forms. The different organisations can disseminate information about the Rural Development Programme and thus enhance its legitimacy. The organisations can also provide scope for participating at conferences, seminars, fairs etc and provide the Swedish Board of Agriculture et al with opportunities for presenting the rural development program. It is also possible to link to different web sites and jointly develop other means of interacting.

The plan is to reach the main target groups by working through channels (organisations) with which they are already familiar, for two reasons: not only is this more cost effective, but also these organisations probably have higher credibility amongst the target group, than e.g. the Swedish Board of Agriculture.

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In summary, the message should be formulated together with other players, and partially put into a context so that recipients understand their involvement in rural development in Sweden. In addition to the basic brochure presenting the whole program, the message should in general be tailored to each target group together with the relevant organisations.

The Swedish Board of Agriculture should disseminate information via portals on the Internet, such as www.landsbygdssverige.org, to promote rural development.

Specific target groups identified During this period work will be started on reaching specific target groups. Co-operation and contacts with organisations will be initiated. This starts in January. Below follows a brief presentation of the organisations which may in the first instance be relevant. It may be appropriate to have more organisations. In some cases, organisations run activities that are in line with the ambitions of the programme, one example is LRF's project "Integrera grönt (Green Integration " which aims at developing business exchange between immigrant companies and green industry.

Possible organisations for communicating with the young, women and those born outside Sweden may be Ung företagsamhet (Young entrepreneurship), Upper secondary schools running Nature Resource Programs, the Association for Nature Resource Use Programmes, ALMI Företagspartner, LRF (Federation of Swedish Farmers) "The Rural Economy and Agricultural Societies", SLU (Swedish University of Agricultural Sciences) and Folkrörelserådet Hela Sverige ska leva (Popular Movements Council for Rural Development). There are a number of representative interest groups that can be of interest e.g. FLF Landsbygdshandelns (The Village Shop), Kvinnliga företagarnätverk (Company networks for women) and the target group of companies in horse breeding can be reached via Svenska Ridsportförbundet (Swedish Equestrian Federation), Svenska Travförbundet (Swedish Trotting Association) and Svensk Galopp (Swedish Jockey Club).

Phase 2– Information measures of the Swedish Board of Agriculture During phase 2 work will continue on providing information about new opportunities in the program. The focal point during this phase, however, will be to inform those who are familiar with the programme, mainly aid applicants, about the rules and any possible changes thereto. This takes place regularly throughout the programme period, i.e. from January 2007 up to and including December 2013, and also later if there are a number of multi-annual measures that are incomplete. The need for this type of information is greater at the beginning than at the end of the program.

The ongoing work of providing information on the rural development programme shall follow the guidelines applicable to the introduction under Phase 1.

Activities and information material should be regularly analysed and evaluated. Depending on how this is publicised and understood, conclusions can be drawn as to what measures should be given priority and reinforced in the future.

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The national network and Leader have active operations.

Phase 3– Information measures of the Swedish Board of Agriculture The third phase involves providing information about the results of the program. This work will start at the earliest in 2008 and be completed after 2013. The target group for receiving this information is broad. One important target group is the general public. This type of information will increase during the programme period, particularly because evaluation and analysis of the programme measures will have been obtained.

During this phase the main channel is electronic information via the web. Other important channels are communication through the mass media (articles in the media) and seminars.

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17.9 Annex 9 – Financial plan (annex to section 6 and 7)

Annex 9.a Regioner 2007 2008 2009 2010 2011 2012 2013 Summa Icke-konvergensregioner 292 133 703 277 225 207 256 996 031 260 397 463 252 975 513 246 760 755 239 159 282 1 825 647 954 Summa 292 133 703 277 225 207 256 996 031 260 397 463 252 975 513 246 760 755 239 159 282 1 825 647 954

Annex 9.b EJFLU:s Summa offentliga Title bidragsnivå (i EJFLU:s bidrag utgifter (1) procent) 1 Att förbättra konkurrenskraften inom jord- och skogsbruket 555 194 644 50,00% 277 597 322 2 Att förbättra miljön och landsbygden 2 702 126 646 46,66% 1 260 812 293 3 Livskvalitet och diversifierad ekonomi på landsbygden 325 976 902 45,00% 146 689 606 4 Leader 263 871 833 40,00% 105 548 733 5 Tekniskt stöd 70 000 000 50,00% 35 000 000 Summa 3 917 170 025 46,6063% 1 825 647 954

Annex 9.c

Summa offentliga Sammanlagda Axel/åtgärd EJFLU:s bidrag Privata utgifter utgifter kostnader

111 Yrkesutbildning och information 77 777 778 155 555 556 8 187 135 163 742 691 112 Startstöd för unga jordbrukare 15 555 556 31 111 112 228 148 148 259 259 260 113 Förtidspension 00 114 Anlitande av rådgivningstjänster 0000 115 Inrättande av företagslednings-, avbytar- och rådgivningstjänster 00 121 Modernisering av jordbruksföretag 133 708 432 267 416 864 623 972 685 891 389 549 122 Högre ekonomiskt värde i skog 00 123 Högre värde i jord- och skogsbruksprodukter 27 222 222 54 444 444 127 037 037 181 481 481 124 Samarbete om utveckling av nya produkter 11 666 667 23 333 334 15 555 556 38 888 890 125 Infrastruktur som är av betydelse för utveckling och anpassning […] 11 666 667 23 333 334 15 555 556 38 888 890 126 Återställa jordbrukets produktionspotential 00 131 Normer som ska uppfyllas enligt gemenskapslagstiftningen 00 132 Jordbrukares deltagande i kvalitetssystem för livsmedel 00 133 Information och marknadsföring 00 141 Delvis självförsörjande jordbruksföretag 00 142 Producentgrupper 00 211 Stöd för naturbetingade svårigheter, för jordbrukare i bergsområden 00

212 Stöd för jordbrukare i områden som inte är bergsområden men där det finns andra svårigheter 262 041 938 561 598 667 561 598 667 213 Natura 2000-stöd och stöd som är kopplat till direktiv 2000/60/EG 00 214 Stöd för miljövänligt jordbruk 982 801 040 2 106 303 129 31 111 111 2 137 414 240 215 Stöd för djurens välbefinnande 00 216 Icke-produktiva investeringar 00 221 Första beskogning av jordbruksmark 00 222 Första införande av agri-silvo-pastorala brukningssystem […] 00 223 Första beskogning av annan mark än jordbruksmark 00 224 Natura 2000-stöd 00 225 Stöd för miljövänligt skogsbruk 00 226 Restaurering av skogstillståndet och införande av förebyggande åtgärder 00 227 Icke-produktiva investeringar 15 969 315 34 224 850 51 333 333 85 558 183 311 Diversifiering till annan verksamhet än jordbruk 24 500 000 54 444 444 69 292 929 123 737 373 312 Etablering och utveckling av företag 35 000 000 77 777 778 98 989 899 176 767 677 313 Främjande av turismverksamhet 35 000 000 77 777 778 98 989 899 176 767 677 321 Grundläggande tjänster för ekonomin och befolkningen på landsbygden 9 450 000 21 000 000 18 622 642 39 622 642 322 Förnyelse och utveckling av byarna 12 250 000 27 222 222 4 803 922 32 026 144 323 Bevarande och uppgradering av natur- och kulturarvet på landsbygden 5 950 000 13 222 222 16 828 283 30 050 505 331 Utbildning och information 23 789 606 52 865 791 9 329 257 62 195 048 341 Kompetensutvecklings- och informationsinsatser för förberedelse och genomförande 750 000 1 666 667 294 118 1 960 785 411 Genomföra lokala utvecklingsstrategier. Konkurrenskraft 4 542 087 11 355 218 4 865 547 16 220 765 412 Genomföra lokala utvecklingsstrategier. Markförvaltning och miljö 21 183 919 52 959 798 22 692 510 75 652 308 413 Genomföra lokala utvecklingsstrategier. Livskvalitet 56 044 950 140 112 375 60 036 134 200 148 509 421 Genomföra samarbetsprojekt 4 444 444 11 111 110 4 760 951 15 872 061 431 Driva den lokala aktionsgruppen, satsa på kompetensutveckling […] 19 333 333 48 333 333 48 333 333 511 Tekniskt stöd 35 000 000 70 000 000 70 000 000 Summa 1 825 647 954 3 917 170 025 1 510 406 652 5 427 576 677

344 The European Agricultural Fund for Rural Development: Europe investing in rural areas

Rural Development Programme for Sweden – the period 2007-2013 For more information, visit www.sweden.gov.se/agriculture