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Globalisation, economic policy and rural development in Europe.

1. Introduction

Rural Europe has been experiencing far-reaching transformations in the context of contemporary economic globalization. Most rural areas have traditionally depended on agrarian activity. Nevertheless, the general decline in the importance of agriculture and the subsequent reduction in its employment absorption capacity have been bringing about significant mutations in the rural sphere. In many rural areas deep demographic changes are taking place, such as population aging and depopulation, while processes of counter-urbanization in some areas close to large city centres are also being observed. In this context, the viability of many rural zones has been dependent on economic diversification and the impulse of non-farming activities.

Economic policy has faced up the opportunities of managing the challenges that these transformations present while preventing the impoverishment of the rural environment. Therefore the role that the State should play in rural development is a question of central interest. After the crisis of the 70s, the subsequent boom in neoliberalism since the 80s and the fall of the Berlin Wall in 1989 the role of the State in the economy has been thoroughly questioned. Nevertheless, despite the tide being against it, State intervention through economic policy continues to be very important. In fact, the weight of the State in the economies of the European Union (EU) has barely diminished; changes have been produced more in the ways of intervention rather than in the intensity itself.

2. What is the specificity of the rural sphere?

There is a commonly held image of what the rural world is. Nevertheless, it is difficult to establish a precise operating definition from an economic policy and research point of view. This difficulty is rooted in the diversity of territories that could be identifying as rural. A variety of more or less spontaneous concepts and perceptions associates rural spaces with barely populated remote territories surrounded by natural countryside, agriculturally dependent, culturally traditional, etc. But, it would be necessary to specify what is understood by barely populated and even by what constitutes a territory (a municipality, a province, a region). Also, not only remote zones, but also those close to city centres may be considered rural. Furthermore, a post-industrial space (with a minimum of natural zones) belonging to a region in decline that has suffered a process of intense depopulation could also be considered rural. The most utilized definition is provided by OECD (1994). It distinguishes two hierarchical levels of geographic detail, local community level and regional level. Local communities are classified as rural or urban, according to their population density (rural if there are less than 150 inhabitants per square kilometre). Regions are then classified according to the proportion of population living in rural or urban communes as "predominately urbanised" (less than 15%), "significantly rural" (15-49%) and "predominately rural" (more than 50%) (1).

Working with this definition, it is interesting to outline some very broad characteristics of the rural world in EU to be able understand its importance and, therefore, the importance of rural development economic policy. The overall picture hides not only an enormous diversity of situations among different EU countries but also within each country. The rural sphere is important in terms of territory, population and employment. Rural areas (predominantly rural and intermediate regions) represented 90% of the territory and 54% of the population in 2005. They generate 42% of the gross value added and provide 53% of employment. Income per capita is 28% to 32% lower in rural areas. The primary sector represents 18% of employment and 5% of value added. In general, most economic activity depends more and more on the service sector. Between 2000 and 2005, the relative importance of the primary sector in the economy of the rural areas in EU-27 decreased by 6.3 percentage points in terms of employment and by 1.2 percentage points in terms of value added (European Commission, 2008a). In any case, the importance of the rural zones goes beyond territorial, demographic or economic dimensions. The rural sphere carries out some essential functions in our societies, from food and other necessary commodities production (including water) to ecology, cohesion, recreation, residential services and culture and education (Rodriguez et al, 2004).

The rural sphere is not a static reality. In Europe there are phenomena that are transforming the rural zones. Globalization also influences the rural sphere. The exposure of these rural zones to competition from emerging economies affects the viability of agriculture and certain traditional manufacturing industries. The liberalization of direct foreign investment has an impact on rural economies through the phenomena of delocalisation of intensive labour and natural resource activities and, more and more, of the sectors with greater technological content. But these effects produced by the commercial and capital liberalisation also have an impact on the dynamics of urban growth and from there spread again back to the rural sphere through the connections between the rural economy and the urban productive system.

The development of infrastructure and the changes in the global transport industry, including low-cost phenomenon, are facilitating a giddy increase in the number of national and international displacements and tourist activities. Potential tourist demand has been increasing significantly and the phenomenon of second residences is already linked not only to national citizens but also to foreigners that can now reach their second residence in a few hours at a much reduced price. These processes are producing an urbanizing pressure in the rural zones and significant landscape transformation, especially in some southern countries of Europe.

The development of communication infrastructures and relatively easy access to the private car enable greater mobility and the phenomenon of commuting, where residence is established in a village with daily travel to work in the city centre. This establishment in decongested areas out of built-up urban conglomerations is relevant not only to people but also to the businesses that de-locate in search of cheaper land and space (Leon, 2005). Technological advances in telecommunication and information systems also facilitate these phenomena and open up new possibilities of development in rural areas.

Recently, concern has been growing regarding the environmental consequences of the development model, especially with the effects of climatic change. The commitment to reduce gas emissions is bringing about a change in modes of production and consumption and in economic policy priorities. In this sense, agrarian and rural development policies have been increasingly incorporating environmental questions into their strategies, as in the case of the Rural Development Policy of the European Union (European Commission, 2008b), underlining the multifunctional dimension of rural spaces. Moreover, and more concretely, some processes are producing deep structural transformations in agriculture, the sector that has traditionally shaped the dynamics of rural zones. The following phenomena could be pointed out:

* The gradual process of liberalization of the agrarian commerce prompted by the World Trade Organization since the Uruguay Round of the GATT with the inclusion in the agenda of negotiations on the agrarian products.

* The reduction in the public support to the agrarian sector and the change of the intervention mechanisms produced in the Common Agriculture Policy of the EU (decoupling of farm payments).

* The acceleration of the processes of technological innovation applied to agriculture and the replacement of labour by capital, more characteristic phenomena of the large-scale faming.

* The progressive introduction of environmental requirements to agrarian practices in order to prevent negative externalities and to promote the positive ones.

* The changes in consumer preferences as to the type of products and the form of consumption with the expansion of the purchases through the large supermarket chains.

All these phenomena are producing changes in agrarian structures characterized by the concentration of large-scale farming that seeks to take advantage of the economies of scale and the mechanisms of vertical integration and by the process of dualism in the countryside and the decline of family agriculture. In parallel, this process produces a reduction in the agrarian employment (3) and the abandonment of land by many small farmers.

Synthesizing, the challenges that the globalization poses and the transformations that are happening in the economy and in agriculture have an impact on the rural sphere through the following phenomena:

* Demographic changes, migrations, depopulation

* Counter-Urbanization

* Decline of agriculture and diversification of economic activities (4)

* Transformation of the landscape

3. What does rural development mean?

Before specifying what is understood by rural development it is useful to define the content of the concept of development. Firstly, from the point of view of economic policy, development means to increase material wealth. This objective is identified by fundamental indicator of the economy, that is to say, GDP or income per capita. The advantages of economic growth are related to the increase in available goods and services for consumption and the increase in family income enabling purchases.

However, the limitations in identifying growth with development have been long indicated. The first type of problems has to do with the distribution of the growth' benefits and the social dimension of development. In spite existing a high income per capita, a part of the population could be in situation of poverty as a result of an uneven income distribution. An example of the need to expand the focus beyond growth to give solutions to this type of limitations is the Human Development Index, elaborated by United Nations Development Programme some time ago and often used in the analyses of economic development. The second type of problem refers to the environmental impact of economic growth, which has been also studied for some time now, especially since the publication in 1972 of The Limits to Growth of D. L. Meadows. The third type of problem deals with the unstable relation between growth and quality of life (5). In this sense, is quite probable that some of the collateral effects of growth, such as the phenomena of built-up urban conglomerations, increase in traffic, work stress, reduction in leisure time, etc., may deteriorate quality of life (Bono et al., 2000).

A more integrated concept of development, related to the idea of welfare is provided by Furtado (1968), for whom development is not strictly an economic phenomenon but a multidimensional process. Furtado points out the existence of three dimensions. The first one, of a more economic character, refers to the effectiveness of the productive system. The question here is to determine the model of economic growth. The second dimension incorporates a more social component and refers to the satisfaction of elementary human needs, not only material but also those connected with improvements in living standards. Finally, development has a more political dimension related to the aspirations of different groups that compete for resources to achieve their objectives. This political dimension of development is not only defined by the choice of objectives. The selection of the instruments is not neutral either. The adopted measures unevenly affect different social groups. Public intervention in economic relationships can have a redistributive impact and, therefore, another space for political discussion is opened. This multidimensional concept of development implies a wider vision of the interventions of public powers and therefore affects the type of economic policy that can be implemented in rural areas.

Keeping in mind these reflections, at this point we can specify what is understood as rural development and which model of rural development may be more desirable or feasible in the context of current globalized societies. This question has no clear apparent solution. There are discrepancies among specialists as to the model of rural development with broad-ranging implications for economic policy (Tertulin, 2003; Ward et al., 2005). Four models of rural development can be identified (IAMO, 2007). The first one is an agrarian approach and the three others are wider approaches to rural development. The table 1 summarizes some of their characteristics.

The agrarian model assumes that the functions of rural areas are food and other commodities production, with agrarian multifunctionality playing also an important role. In this case, the economic policy focuses on improving productivity and guaranteeing agriculture multifunctionality. The main limitation of this approach comes from the progressive agrarian decline experienced in Europe and the reduction of its importance as component of the rural economy. However, the important role that agriculture can play as the motor of rural development, especially in the most backward countries is not denied (Anriquez and Staumolis, 2007).

The exogenous model underlines the subsidiary role of rural areas with respect to the dynamics of urban development and its function of providing food, labour, land, etc. The policies of development focus on improving agrarian productivity and stimulating the mobility of the labour and capital. This model of development is dependent and imposed by external needs, can lead to unbalanced growth and may generate conflict with the local agent needs. The endogenous model concentrates on diversification of rural economies that wish to expand their degree of self-sufficiency. Economic policy puts the accent on the development of local capacities according to the needs of the rural area. The main limitation of this model is its poor connection with the context of the current society. Finally, the neo-endogenous model tries to surmount the limitations of the previous approaches with an integrative perspective. The participation of local actors in the processes of development configured by external and local networks is fundamental and economic policy is to stimulate these processes.

4. Why does the State intervene?

The public powers have the opportunity to intervene in the economy with the objective of shaping the processes and the results of the market. The general arguments that justify this intervention in the economy are of two types. On one hand, it is necessary to establish an institutional framework in which the relations between the different economic agents develop. On the other hand, the market results in failures in its operation (6) and the State can correct them through specific interventions. Bearing these reasons in mind the State develops economic functions. In the first place, the State has to establish the institutional framework in which agents operate. Its content has evolved over history and is the source of ideological discrepancies. (Ionita, 2008)

Summarizing, some hold positions that defend a liberal order while others defend a State with more interventionist social purpose. From the first optic, rural development will be the result of the market forces and migratory flows will contribute to adjusting the excess and shortage of labour against the opportunities of employment in one zone or another. From the optic of a more interventionist approach, the State should guarantee the opportunities of development and the improvement in the living conditions in rural zones. In second case, there are a variety of allocation mechanisms (such as provision of public goods, regulation of markets, protection of competence, provision of infrastructures, public enterprises), redistributive tools (like progressive taxation, provision of goods and services, and welfare systems and pensions) and stabilizing and growth policies that try to resolve the market failures (7).

Finally, it is interesting to point out that the current international economic crisis is generating not only generalized impoverishment that also has an impact on rural zones. The crisis is producing a change of positions as to the relationship between market and State in favour of a greater implication and responsibility of economic policy in the development of economic relations. In any case, the final configuration of the new role that the State is going to play in the economy will be produced after overcoming the unemployment crisis that is forcing an abrupt and little thought mobilization of state intervention (Arias, 2009).

The arguments that justify the intervention of the State in the rural sphere are diverse. The first reason given is equality. Backwardness and poverty in the rural zones would alone justify the existence of rural development policies (Rickman, 2007). Nevertheless, according to the neoclassical approach and the hypothesis of perfect mobility of the labour the lack of opportunities in a territory would not justify state intervention. People without work will simply migrate to other more dynamic centres equalizing the satisfaction of the residents of each space. Besides the simultaneous problems of depopulation and built-up urban agglomerations that these massive demographic displacements generate, that reasoning is very questionable (Gallin, 2004). Mobility is not perfect, depending on different levels of skills and education, on cultural differences and different modes of life between remote areas and more dynamic urban centres or on the resistance to abandoning the social support networks that exist in villages.

In second place, the allocation of public resources to rural development finds justification in the multifunctional or diversity of services that the rural spaces offer to society. This argument is underlined by Garzon (2005) who refers to the more concrete case of public support for agriculture. Society has historically enjoyed services provided by agriculture for free as positive externalities of agrarian production. The problem lies in determining the price that the society is willing to pay to continue to benefit from these externalities. This argument can be extended to the policy of rural development, keeping in mind the multiple functions that these spaces provide.

In third place, economic policy has the opportunity to try to manage the challenges that represent the changes that are happening in contemporary Europe. These opportunities refer to the possibility of influencing the impact that globalization and transformations in agriculture are producing in the rural spaces, that is, the decline in agriculture and the increase in diversification, demographic and urban changes and the transformation of the environment and landscape.

5. Which objectives and what forms must the State intervention adopt? The objective of rural development policy could be defined as the overall improvement in the welfare of rural residents and in the contribution that the rural resource base makes more generally to the population as a whole (Hodge, 1986). This definition puts the accent on the needs of the rural population and on the multifunctionality of the rural environment. One must point out that although this definition is very integrative, it is also little precise. Therefore it would be necessary to carry out a more pragmatic and operating definition of concrete objectives in terms of economic policy. The specific delimitation of the objectives is changeable. This will depend on the particular conditions of the framework of policy application and of the dominant doctrine on the desirable rural development model.

Furthermore, to understand and influence the process of rural change it is necessary to expand our horizons. As Persson and Westholm (1994) indicate, economic variables are not sufficient to explain rural change. Values, ideology and cultural aspects play an important part. Surely, it is necessary to expand our perspective to understand several questions. The first one considers the objectives of the people that live in the rural world. Of course, these people pursue monetary objectives, such as increasing income, stabilizing cash-flow or accumulating capital. But they can also have other nonmonetary objectives, such as improving welfare related to non-material commodities but with health or access to determined services. A way of life connected with the rural world or the consolidation and extension of social networks could also become very important objectives within the rural sphere. Even guaranteeing their own food security or carrying out a sustainable use of the resources likewise could be other objectives to pursue.

In second place, types of behaviour or modes of economic integration are other aspects that also need a broader perspective. According to Polanyi (1944), people establish economic relations not only through the exchange of merchandises, but other forms of integration exist like redistribution and reciprocity (8). Exchange generates incomes and thereby the possibility of purchasing goods and services for household needs. Individuals may sell their labour on the market, and receive a wage, or develop an economic activity as self-employed and sell goods and services.

Reciprocity is the transfer of goods carried out through free gifts, with the expectation that other goods will be received, usually in a different form and at a different time although not necessarily from the same person. In this case, neither individual profit nor remunerated labour is the reason for this behaviour. Reciprocity plays an important role in the family and social networks and contributes to assuring production and family subsistence. This kind of relation involves mutual trust between the members of a network. Redistribution involves collecting and distributing from a centre, according to custom, law or a central decision ad hoc. Meert et al. (2005) offers a good overview of the three modes of integration, with some examples applicable to farm-household diversification (Table 2).

In third place, the coming together of the plurality of objectives and the modes of integration can result in a diversity of survival forms that makes us again broaden the focus of the rural development analysis. Table 3 summarizes the possible market and non-market forms of survival.

Before developing a program of action it is necessary to differentiate the rural zones and to identify the specific characteristics of each space. Later on it must be distinguished what zones need development policies and where the most vulnerable population is located. On this point it is interesting to remember that economic policy interventions are not free. They have a cost for the public budget and this is not unlimited. Neither are they neutral; they differently affect diverse social groups and can generate undesirable negative collateral effects described earlier. The State has to prioritize its interventions. Developing one policy implies rejecting another possibility. Because of this, it is useful to identify in what situations it is opportune to mobilize a development program and what mode of intervention is more recommendable.

Table 4 summarizes the possible options of economic policies. The table does not intend to devise a typology of rural zones, but a differentiation of modes of intervention of the rural development economic policy (9). For example, there could be developed rural zones, with full employment, environment well conserved and satisfied population where it may not be necessary to mobilize a program of rural development. Also there could be more backward remote areas populated with people that are satisfied with the way of life and existing opportunities. Satisfaction in this case could be related to the existence of non-market survival forms as described in the table 3. Or zones where the unsatisfied population wishes to migrate because they do not have social ties strong enough or they desire to live in large cities. In these cases, the opportunity to carry out growth programs is also questionable. However, this does not signify that the State does not have any function to carry out in these areas. Its role could be generally to guarantee the continuity of the existing forms of survival. For example, through regulating economic activities, avoiding excessive urbanization and the deterioration of the natural environment or guaranteeing the maintenance of subsistence agriculture and social support networks, as well as other forms of non-market survival.

There are other situations that require the execution of more active rural development programs. For example, there are rural zones with a high level of income per capita, but with a part of the population in a situation of poverty. In this case, the economic policy should emphasize redistributive aspects and less so the question of growth.

Another possibility is the existence of developed zones without poverty in which a worrying ecological deterioration is being produced. In this case the intervention should prioritize the aspects of environmental sustainability. The convenience of a growth program would be subordinated to a resource reassignment process toward sustainable activities. A different situation could also be represented by a developed zone without problems of social exclusion neither environmental problems in which different collective declare desire to incorporate new priorities into the development model. In this case, the type of economic policy intervention would be centred on the identification of the new priorities and the reassignment of resources toward other activities in an economic diversification process. Finally, there are the backward rural zones with population dissatisfied with its socioeconomic situation in which a development program that includes the impulse of the income growth based on the diversification of economic activities is necessary.

In this last case, it is necessary to identify which specific activities have the potential for growth. According to the report Study on Employment in Rural Areas commissioned by European Commission (European Commission, 2006), in the current context of the decline in agrarian employment there are new opportunities of development of economic activities that permit diversification and the generation of new employment in the rural zones. The possibilities of future development, besides traditional agriculture, industry and services, are centred in the following activities:

1. Agro-tourism

2. Renewable energies

3. Culture, connected with tourism, local products and protection of the landscape

4. Nature

5. Ecological and quality products

6. New technologies, connected with the development of other activities

7. Health and social services

Finally, it is fundamental to keep in mind the possibilities of taking advantage of these opportunities by individuals. It could be the case that a new activity is not carried out because of lack of qualified human capital, for example. According to Ellis (2000), the possibilities of improvement in the economic situation of families and therefore the carrying out of the opportunities offered in its context depend on the access and availability of five types of resources: human capital (education, skills, ability to work, etc.), natural capital (natural resources endowments such as land, air quality, biodiversity, etc.), physical capital (basic infrastructure and production means such as transport infrastructure, buildings, water supply system, energy infrastructure, etc), social capital (relationships and social network, authority relations, relations of trust and established norms) and financial capital (availability of credit, savings and new flows of money like incomes, remittances or transfer from the state).

6. Conclusions

Rural areas in Europe are going through wide-ranging and deep transformations such as agrarian decline, depopulation, increasing economic backwardness, urban pressure, economic diversification and environmental degeneration. Taking into account the plurality of rural spaces, an overview of rural development centred on the specific needs of each zone requires the drawing-up of specific economic policy programs.

In some cases these programs do not need the incorporation of specific growth stimulus policies. In this respect, it is necessary to consider the costs of trying indiscriminately to reproduce growth programs as well as the impact on landscape, and environmental and redistributive factors. Moreover, the inhabitants of the rural zones may pursue nonmonetary objectives, to develop forms of economic integration different to that of exchange and to maintain forms of survival outside the market. All these considerations suggest considering other public intervention forms besides the policies of growth. According to the multidimensional approach of development and the typology of modes on intervention established in table 4, when it is not necessary to promote a program of growth there is also space for the establishment of redistributive policies of poverty reduction and for the environmental policies of nature conservation.

Nevertheless, in other situations the revitalization of specific sectors is indispensable in rural development. Keeping in mind the forecasts on the new employment opportunities, economic policy has an extensive space of intervention in rural areas. As well as the framework of macroeconomic growth policies that influence global income increase, the State can mobilize resources to stimulate the growth of some potentially dynamic sectors (agro-tourism, renewable energies, culture, nature, ecological and quality products, new technologies and health and social services). Moreover, infrastructures can be improved (in a broad sense, that is to say including social infrastructures such as education or health) and the State can also facilitate the access of people to the resources that permit them to take advantage of new opportunities, such as, for example, through training activities or enabling the access to the financial resources.


* Anriquez, G. & Staumolis, K., 2007. Rural development and poverty reduction: is agriculture still the key? Journal of Agricultural and Development Economics, 4 (1), pp. 5-46.

* Arias, X., 2009. La crisis de 2008 y la naturaleza de la politica economica. IAES Working Paper, 04/2009.

* Bono, E., Nacher, J.M. & Tomas Carpi, J.A., 2000. Politica de calidad de vida. In: L. Gamir, ed. 2000. Politica economica de Espana. Madrid: Alianza, pp.253-267.

* Ellis, F., 2000. Rural livelihoods and diversity in developing countries. Oxford: Oxford Development Press.

* European Commission, 2006. Study on employment in rural areas. Bruxels: Directorate General for Agriculture.

* European Commission, 2008a. Rural development in the European Union. Statistical and economic information. Report 2008. Bruxels: Directorate General for Agriculture and Rural Development.

* European Commission, 2008b. The EU rural development policy 2007-2013. Facing the Challenges. Luxembourg: Office for official publications of the European Communities.

* Furtado, C., 1968. Teoria y politica del desarrollo. Mexico: Siglo XXI.

* Gallin, J.H., 2004. Net migration and state labor market dynamics. Journal of Labor Economics, 22 (1), pp. 1-21.

* Garzon, I., 2005. Multifunctionality of agriculture in the European Union: Is there substance behind the discourse's smoke? Center on Institutions and Governance Presentation Paper no. 20. Institute of Governmental Studies. Berkeley, CA: University of California.

* Hodge, I., 1986. The scope and context of rural development. European Review of Agricultural Economics, 13 (3), pp. 271-282.

* IAMO, 2007. Conceptual framework for analysing structural change in agriculture and rural livelihoods. Discussion Paper no. 113. Leibniz Institute of Agricultural Development in Central and Eastern Europe. Halle (Saale), Germany.

* Ionita, Sorin, 2008. The Long Way to Europe. Romanian Journal of Political Science, 2/2008, pp. 84-85

* Leon, Y., 2005. Rural development in Europe: a research frontier for agricultural economists. European Review of Agricultural Economics, 32 (3), pp. 301-317.

* Meert, H. et al., 2005. Farm household survival strategies and diversification on marginal farms. Journal of Rural Studies, 21 (1), pp. 8197.

* OECD, 1994. Creating Rural Indicators for Shaping Territorial Policy. Paris: Organisation for Economic Cooperation and Development.

* OECD, 2005. Regions at the glance. Paris: Organisation for Economic Cooperation and Development.

* Persson, L.O. & Westholm, E., 1994. Towards the new mosaic of rural regions. European Review of Agricultural Economics, 21 (3-4), pp. 409-427

* Polanyi, K., 1944. The Great Transformation. New York: Rinehart.

* Polanyi, K., 1957. The Economy as Instituted Process. In: K. Polanyi, C.M. Arensberg & H.W. Pearson, ed. 1957. Trade and Market in the Early Empires. Glencoe, Ill.: The Free Press, pp. 242-270.

* Rodriguez, M., Galdeano, E. & Cespedes, J., 2004. Rural multifunctionality in Europe: the concept and policies. 90th EAAE Seminar Multifunctional Agriculture, Policies and Markets: Understanding the Critical Linkages, Rennes, 28-29 October 2004.

* Terluin, I.J., 2003. Differences in economic development in rural regions of advanced countries: an overview and critical analysis of theories. Journal of Rural Studies, 19 (3), pp. 327-344.

* Ward, N., et al., 2005. Universities, the knowledge economy and the 'neo-endogenous rural development'. Discussion Paper no. 1. Centre for Rural Economy. Newcastle: Newcastle University.

(1) Later, OECD (2005) introduced a modification to improve the definition. Thus, if there is an urban centre (population density above 150 inhabitants per sq. km. and total population above 200.000 inhabitants in EU) representing no less than 25% of the regional population in a "predominantly rural" region, it is reclassified as "intermediate". And if there is an urban centre (more than 500.000 inhabitants in EU) representing no less than 25% of the regional population in an "intermediate" region, it is re-classified as "predominantly urban".

(2) It has to be mentioned that Bulgaria, Poland and Romania played an important role in the change of employment in primary sector, falling by 16%, 10.6%, and 8.4% respectively. In EU15, by contrast, this figure decreased by 1.6%.

(3) The importance of primary sector in EU-27 is declining. Between 2000 and 2005, the number of jobs decreased by 2.7 millions of persons or -3.7% per year (European Commission, 2008a).

(4) More than one third of EU-27 family farmers are pluriactive and 12% of EU-27 holdings develop diversification activities (European Commission, 2008a).

(5) It is an ambiguous concept but it could associate with health, security, comfort, liberty, pleasure, feeling of personal satisfaction and feeling of non-discrimination.

(6) There are three market failures. Failures in distribution refer to the extension of the inequality and poverty among the population. The destabilization of the cycle or failures of stabilization refers to the apparition of macroeconomic imbalances and unexpected shocks. The failures of allocation present diverse forms. In the first place, economic activities can generate both positive and negative externalities. Another failure refers to the restrictive practices of the competence such as monopolies, oligopolies or other practices of imperfect competence. The third failure case is the presence of public goods.

(7) In fact, the same intervention can impact on different market failures. For example, the policy of rural development could be included inside the framework of the provision of public goods, provision of infrastructures or as part of the sector policies (group of allocation policies), inside the redistributive policies through the provision of goods and services in the rural areas or the social security systems and even like part of a program of growth through the increase of public expense for these policies.

(8) In The Great Transformation Polanyi defines another integration mechanism, householding. Later, in The Economy as Instituted Process (Polanyi, 1957), this form is considered as kind of the reciprocity.

(9) There could be possibly more combinations than the seven diagnoses collected in the table and hybrid situations that mix characteristics of different types of zones. Also it could be possible to incorporate other diagnosis variables. Nevertheless, it would not affect the typology of modes of intervention.

* Mr. Raul de Arriba Bueno holds a teaching position at the Department of Applied Economics from the University of Valencia in Spain.
Table 1. Approaches to rural development


Premise        Viable rural areas
               dependent on
               fanning activity

Key            Agrarian
determinants   productivity

Dynamic        Agricultural R&D

                            Wider rural development

               Erogenous         Endogenous          endogenous
               development       development         development

Premise        A competitive farming sector is not a
               prerequisite for viable rural areas

Key            Specialization,   Employing           Interaction
determinants   concentration     local recourses     between local
               and economies     locales (natural,   and global
               of scale          human and           forces.
                                 cultural) and

Dynamic        Connexion with    Local initiative    Globalisation
force          urban growth                          and knowledge
               poles (external                       economy

Adaptation from IAMO (2007)

Table 2. Examples of survival strategies and
the different modes of integration

Modes of         Within            Outside
Integration      agriculture       agriculture

Market           Innovative        On-farm       Holiday Farms
                 marketing         Off-farm      Non-agricultural
                 of produce                      employment

Redistribution   Investment        On-farm       Support measures
                 support                         linked to
                 by the state                    nature conservation
                                   Off-farm      Support from public
                                                 social services,
                                                 charity aid
Reciprocity      Cooperation       On-farm       Non-remuncated
                 with other                      support by relatives
                 during harvest,                 to arrange rooms for
                 without                         holiday activities
                 remunicration                   on the farm

                                   Off-farm      Non-remuncrated
                                                 support from
                                                 relatives to
                                                 repair the
                                                 household's dwelling

Source: Meert et al. (2005)

Table 3. Forms of survival

Market                       Non- Market

Commercial agriculture       Subsistence agriculture-self

Non farm incomes using       Non-farm self-consumption
agrarian resources (for      activities (hunting, fishing
example, tourism)            and others)

Other employment and         Social security benefits and
activities independent of    public subsidies
farm resources

Other incomes (interests,    Remittances
dividends, rents)

Illegal activities           Illegal activities

Own elaboration

Table 4. Options for economic policy

                                 Type of intervention

Kind of rural area       Growth program   Other interventions

1. Developed area +      No need          To guarantee the
absence of poverty +                      sustainability of
healthy environment +                     the model of
satisfied population                      development and the
                                          forms of survival

2. Backward area +       No need          To guarantee the
healthy environment +                     sustainability of
satisfied population                      the model of
                                          development and the
                                          forms of survival

3. Backward area +       No need          To guarantee the
healthy environment +                     sustainability of
population wish                           the model of
emigrate                                  development and the
                                          forms of survival

4. Developed area +      No need-little   Income and wealth
healthy environment +    need             re-distribution and
social exclusion                          reduction of poverty

5. Developed area +      Little need-     Sustainable
absence of poverty +     Need             development

6. Developed area +      Little need-     Re-allocation of
absence of poverty *     Need             resources and
healthy environment +                     diversification
unsatisfied population

7. Backward area +       Need             Re-allocation of
unsatisfied population                    resources and

Own elaboration
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Author:Bueno, Raul de Arriba
Publication:Romanian Journal of Political Science
Article Type:Report
Geographic Code:4E
Date:Mar 22, 2009
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