MEMO/07/608

Brussels, 20 December 2007

IPA Rural Development Programme (IPARD) for the former Yugoslav Republic of Macedonia

Country profile:

• Size : 25,713 km² land area
• Land use: 48% agricultural land, 37% covered by forests
• Agriculture 12% GDP, agricultural employment 36%
• 2 million inhabitants,
• The most important production types are – grazing livestock rearing, fruit and vegetable production and wine production
• Low productivity, agri-food sector is non compliant with Community standards, weak land parcel structure, low level of professional agricultural activity, low level of modernization of agricultural holdings, limited investment capacity, unfavourable age and education structure, low level of business activity in rural areas
• Environment: well preserved and richness of bio-diversity, soil and water sensitivity to erosion in some areas, difficult natural conditions for farming, abandonment of arable land within rural areas.
• Rural areas: poorly developed infrastructure (water and sewerage systems), most farms have only income from agricultural production, low income and lack of alternative income sources, rich natural and cultural heritage, multifunctional role of rural areas

Chosen strategy corresponding to the profile:

The IPARD programme is in line with the Multi–annual Indicative Planning Document (MIPD) and other strategic documents on the integration process for Candidate countries. The main policy objectives are:

• to contribute to the sustainable modernisation of the agricultural sector (including processing) through targeted investments while at the same time encouraging the improvement of EU acquis related food safety, veterinary, phytosanitary, environmental or other standards as specified in the Enlargement Package,
• to contribute to the sustainable development of rural areas.

Budget overall and share of EU funding

A financial aid of € 25 270 000 of which € 19 000 000 is EU financed has been allocated to the Rural Development Programme for the former Yugoslav Republic of Macedonia for the financial period 2007-2009.

* Axis II will be developed and presented to the Rural Development Committee at a later stage when the measures are to be accredited

Overall aim of IPARD programme in the former Yugoslav Republic of Macedonia

The main strategic objective is Sustainable Agricultural Development by meeting the acquis related standards with following common objectives:

• Improvement the competitiveness of agricultural holdings and the food industry bringing them into compliance with Community standards related to food safety, veterinary, phytosanitary, environmental or other standards.
• Ensuring sustainable environmental and socio-economic development of rural areas through increased economic activities and employment opportunities.

Axis 1- Improving market efficiency and implementing the Community standards

Total public aid 2007-2009: € 19,760,000 (78%)

The main priorities are to upgrade agricultural holdings and food processing plants to compliance with EU quality, health, food safety and environmental standards, to improve the quality of the agricultural production and products and enhance the innovation of new products.

Under the Axis 1 two measures will be implemented:

• Investment in agricultural holdings to restructure and to upgrade to Community standards (55% of the public aid under Axis 1) and
• Investment in processing and marketing agriculture products (45% of the public aid under Axis 1) to help restructure and upgrade the sectors covered to Community standards, to improve their overall performance and to increase their competitiveness.

Support granted towards the achievement of these objectives will mainly be concentrated on sectors where the related acquis standards to be implemented are particularly demanding like in the dairy, meat, fruits, vegetables, and wine sectors and investment in rendering sector after year 2009.

Axis 2- Preparatory actions for the implementation of agri-enviromental measures and Leader

Measures under the Axis 2 concerning preparatory actions for implementation of agri-environmental measures and the LEADER-approach will be developed for implementation during the financial period 2010-2013.

Axis 3- Development of rural economy

Total public aid 2007-2009: € 4,560,000 (18%)

Under axis 3 one measure will be implemented- Diversification and development of rural economic activities, where greatest attention is put to two sub- measures 'Supporting the establishment and development of enterprises' (53% of the public aid under Axis 3), followed by 'Support to the rural tourism activities' (47% of the public aid under Axis 3).

The measure is aimed at improving the quality of life, encouraging micro entrepreneurship and increasing economic activities and diversification in rural areas.