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Brussels, 2 February 2004

Agreement on rural development programmes for Hungary for 2004-2006

In a letter to the Hungarian Agriculture Minister, EU Agriculture Commissioner Franz Fischler confirmed today agreement on the country's Operational Programme for Agriculture and Rural Development. It will be formally approved upon accession on 1 May 2004. The programme, covering the whole territory of Hungary, includes a broad range of ambitious rural development measures which give a special emphasis to the improvement of competitiveness, sustainable development, the stabilisation of existing work places and widening the economic fabric of Hungarian rural areas. The financial allocation is significant, given that the European Union's contribution, € 317.2 million during the period 2004-2006, will be complemented by national public funding of € 105.6 million. This political agreement concludes the Commission negotiations to launch the Structural Funds Programming for Hungary for the period 2004-2006.

Announcing this agreement Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries, congratulated the Hungarian government for "the significant progress made by Hungary in its preparation for the future structural funds programmes". He also expressed his wish for "continued and enhanced progress in the next few months to allow for a rapid implementation of the programme. This will allow achievement of the ambitious objectives set: the realisation of a more competitive and sustainable agricultural sector, including agriculture, fisheries and food processing industry, and of an integrated development of rural areas aiming at the improvement of the income level and the creation of additional job opportunities of the rural population".

The implementation of the programme will be supervised by a Monitoring Committee operational from the end of 2003, representing all partners involved. This committee is responsible for the efficient application and fine tuning of the measures in favour of agriculture and rural development as a tailor-made instrument which promotes all opportunities existing in rural areas.

The priorities in the programme are defined by the Hungarian authorities. According to the principle of subsidiarity, the Hungarian authorities decide about the projects benefiting from EU support under the condition that these decisions are based on objective criteria and that all procedures are transparent and well policed. Commissioner Fischler invites the competent Hungarian authorities to speed up all administrative procedures necessary to take full benefit from this generous financial allocation in favour of rural areas to improve the economic cohesion inside the European Union.

The Agriculture and Rural Development Operational Programme is based on the following priorities.

Establishment of competitive raw material production in agriculture, with an EU contribution of € 180.9 million. The priority aims at increasing the competitiveness of agricultural production, including fisheries, through investments to reduce production costs, increase the added value and the quality of goods and preserve and improve the environment, hygiene and sanitary conditions and animal welfare standards. The priority will also support the setting-up of young farmers and the acquisition of adequate skills through targeted training for persons involved in agricultural activities and in the conservation of landscape, to adapt to the requirements of expanded markets, to consumer demand and to a more environmentally sound management.

Modernisation of food processing, with an EU contribution of € 44.4 million. The priority supports the competitiveness of the food processing industry, by the modernisation of technologies and of the related logistical, storage, warehouse capacities and IT background. Investments will also focus on consumer health protection and food safety and quality, as well as on the environment and on a better adaptation to the sales channels.

Development of rural areas, with an EU contribution of € 84 million. The activities supported aim at improving the potential of rural areas and increasing employment by diversifying the agricultural activities and expanding the rural business activities, such as developing rural tourism and handicrafts and the marketing of quality products. The priority also contributes towards making rural areas more attractive by improving infrastructure, quality of life, preserving the natural and cultural heritage (village renewal) and strengthening rural communities through the implementation of the Leader+ approach.

Technical Assistance, with an EU contribution of € 7.9 million, will assist in the implementation of the programme.

The total public expenditure to implement the programme is set at € 422.8 million for the period 2004-2006. This includes a financial contribution of € 317.2 million from the European Union: € 312.8 million from the European Agricultural Guidance and Guarantee Fund, Guidance Section and € 4.4 million from the Financial Instruments for Fisheries Guidance.

The Department of Structural Funds of the Hungarian Ministry of Agriculture and Rural Development will be the Managing Authority for the programme.

The Treaty of Accession provides that Hungary may benefit from the eligibility of expenditure under Structural Funds as of 1 January 2004, subject to full compliance with EU policies and legislation, including environmental protection, public procurement, competition and State aids, financial management and control. However, to ensure sound financial management, contracts under the new programme may be signed only when contracts under the pre-accession instrument, SAPARD, have stopped.

More information about rural development is available on the Internet:

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