Ministers gathered at the Government Council today adopted a draft law in support of the sustainable development of rural areas.
The purpose of the bill is to provide a legal framework for the Rural Development Programme (RDP) of the Grand Duchy, which allocates certain categories of state aid to agriculture. The RDP, co-financed by the European Agricultural Fund for Rural Development (EAFRD), will act as a means for Member States to implement, within their national territories, the rural development policy of the European Union (EU).
The project intends to replace the amended Law of 18 April 2008 regarding the renewal of support for rural development. Based on the measures outlined in the RDP, the Bill proposes various aid schemes which can be classified as the following:
- Aid in favour of individual farms, including aid to non-productve investments;
- Aid in favour of processing and marketing businesses as well as producer organisations;
- Aid in favour of farming practices which respect the environment and climate, as well as respect organic agriculture;
- Aid in favour of the promotion of continuing education, consultancy and research;
- Aid in favour of the improvement of the quality of life in rural areas and the diversification of the economy;
- Aid paid under the LEADER approach.
The classification of aid schemes comprises almost all of the subsidies provided by for the amended law of 18 April 2008, on the renewal of rural development support.
The major change proposed by community legislation and introduced by the new law is the introduction of a selection procedure for project investments. Investments in real and personal property which would likely benefit from the scheme are determined by applying a selection of criteria which then classify, according to a point system and available credit, which investment projects to introduce to the priorities of the EU in the field of rural development. In order to take into account a principle of proportionality and to limite the administrative burden, a minimum financial threshold will be set by the Grand Ducal regulation.
Aids established to help set up young farmers are also subject to a selection procedure. This new draft bill will introduce a new condition for eligibility for the second aid sum which will be decided on the implementation of a business plan. The project introduces the concept of European Innovation Partnerships (EIP) as a means of encouraging business innovation and creating a link between scientific research and the practical application of innovative approaches.
The bill concluded with the proposal of new measures, or the enhancement of existing ones, with regards to direct and indirect aid. The Council adopted two draft Grand Ducal implementation regulations to be filed in conjunction with the Bill.
