LEADER+ programme for Finland - Valtioneuvosto

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Ministry of Agriculture and ForestryPublication 9b/2001

LEADER+ programme for Finland

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PublisherMinistry of Agriculture and Forestry in Finland

Govern photoAntero Aaltonen

ISSN 1238-2531ISBN 952-453-059-7

Layout: PixPoint ky

Printing press: Painopörssi Oy, Finlanf 2002

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Contents1 Establishment of the areas covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2 Current state of the rural areas in Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.1 Objective 1 area in Northern Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

2.1.1 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122.1.2 Socio-economic description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

2.2 Objective 1 region in Eastern Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162.2.1 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172.2.2 Socio-economic description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

2.3 Areas outside Objective 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.3.1 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212.3.2 Socio-economic description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

2.4 Åland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252.4.1 Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252.4.2 Socio-economic description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

2.5 Equality; women, men and young people . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262.6 State of the environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.7 Results of the programming period 1995-1999 and development needs based on these . . . 30

2.7.1 LEADER II programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302.8 Strengths, opportunities, weaknesses and threats in the Finnish rural areas . . . . . . . . . . . . 35

3 Ex-ante evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

4 Objectives and strategies of the programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434.1 Development objectives and strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434.2 Quantitative and qualitative objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464.3 Economic, social and environmental impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

5 Actions, priority themes and measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505.1 Action 1) Territorial rural development strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

5.1.1 Measure A: Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535.1.2 Measure B: Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565.1.3. Measure C: Know-how . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 585.1.4 Measure D: Administration of local action groups (LAGs) . . . . . . . . . . . . . . . . . . . . 605.1.5 Measure E: Acquisition of skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

5.2 Action 2) Inter-territorial rural development projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625.3 Action 3) Networking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655.4 Technical assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665.5 Levels of assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675.6 Selection of projects to be financed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

6 Financial plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

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7 Selection of local action groups (LAGs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717.1 Eligibility and selection criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717.2 Selection procedures and timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777.3 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

8 Informing potential beneficiaries and the public at large . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798.1 Informing potential local action groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798.2 Informing the authorities, interest groups and public at large . . . . . . . . . . . . . . . . . . . . . 80

9 Administrative procedures for LEADER+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829.1 Administration of LEADER+ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

9.1.1 Central administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829.1.2 Territorial administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829.1.3 Preparation of the administrative model for the programme . . . . . . . . . . . . . . . . . 82

9.2 Granting and payment of assistance to applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829.2.1 Application procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 829.2.2 Decision-making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839.2.3 Right of appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849.2.4 Payment of assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849.2.5 Bookkeeping and monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

9.3 Financial frameworks for LEADER groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 879.4 National network unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 879.5 Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

10. Control provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9110.1 Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

10.1.1 Administrative checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9110.1.2 On-the-spot checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

10.2 Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92

11 Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

12 Consultation and participation of different partners in the Monitoring Committee . . . . . . . . . 96

13 Compatibility with other Community programmes and policies . . . . . . . . . . . . . . . . . . . . . . . 9813.1 Horizontal Rural Development Programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9913.2 Objective 1 programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9913.3 Regional Rural Development Programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9913.4 Objective 2 programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10013.5 Objective 3 programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10113.7 INTERREG III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10213.8 Urban . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

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Local action groups (LAGs) from all Finnish ru-ral areas have been on an equal footing whenapplying for funding based on LEADER+. Theselection of the LAGs is based on how their de-velopment plans meet the general eligibility cri-teria as well as the selection criteria presented inChapter 7.

1 Establishment of the areas covered by the programme

The programmes to be implemented through thestructural funds in Finland are Objective 1, 2and 3 programmes as well as Community Initia-tives LEADER+, INTERREG III, EQUAL andURBAN. In addition to these there are the Hori-zontal and Regional Rural Development Pro-grammes, which are financed from the Guaran-tee Section of the European Agricultural Guid-ance and Guarantee Fund. Åland Islands have aseparate rural development programme.

The Horizontal Rural Development Programmeis implemented in all rural areas in Finland, andall rural areas are also covered by either the Ob-jective 1 programme (Northern and Eastern Fin-land) or the Regional Rural Development Pro-gramme (Western and Southern Finland). TheObjective 2 and 3 programmes as well as the IN-TERREG III and EQUAL Community Initiativesalso include some measures directed at rural are-as.

Unlike LEADER II, which complemented Objec-tive 5 and 6 programmes in the relevant areas,LEADER+ is not tied to the area covered by anyother rural development programme. In conse-quence, local action groups implementing LEAD-ER+ Community Initiative are eligible for fund-ing in any rural area in Finland. However, it is notpossible to extend LEADER+ funding to all Finn-ish rural areas, among other things, due to insuf-ficient financing resources. Almost all rural areasare covered by the operations of LAGs, but all ofthese are not funded through LEADER.

The regional target programmes part-financedby the EU

Objective 1 area in Northern FinlandObjective 1 area in Eastern FinlandRegional Rural Development Programme areaRegional Rural Development Programme areaon the Ålands Islands

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Table 1. Finnish municipalities, population, area and population density. Source: Statistics Finland

TTTTType of areaype of areaype of areaype of areaype of area Munici-palitiesMunici-palitiesMunici-palitiesMunici-palitiesMunici-palities PopulationPopulationPopulationPopulationPopulation Area kmArea kmArea kmArea kmArea km22222 Population densityPopulation densityPopulation densityPopulation densityPopulation density31 Dec 1999 1 Jan 1999 Inhabitants/km2

Urban area 58 2 921 890 16 850 173,7

Urban-adjacent rural area 84 813 299 41 870 19,4

Rural heartland area 181 891 240 78 462 11,4

Sparsely populated rural area 129 544 471 200 965 2,7

TOTTOTTOTTOTTOTALALALALAL 452452452452452 5 170 9005 170 9005 170 9005 170 9005 170 900 338 147338 147338 147338 147338 147 15,315,315,315,315,3

2 Current state of the rural areas in finland

Finland is the northernmost and easternmostcountry in the European Union. Finland is alsothe only Member State of the EU which shares aborder with Russia. The length of this border is1,269 kilometres. The population of Finland is5.17 million, and the total area is 338,145square kilometres. Two-thirds of the area of Fin-land is forest. There are 188,000 lakes, and theshare of water area in the total land area isabout 10 per cent. The population density is15.3 inhabitants per square kilometre, while theaverage population density in the European Un-ion is 117 inhabitants per square kilometre.

In terms of the climate most of the Finnish areabelongs to the temperate zone, and the dominat-ing vegetation zone is the boreal forest zone.Compared to the rest of Europe, the Finnish cli-mate is very cold. In Northern Finland the tem-perature may be as low as –40 oC. The growingseason is also much shorter than in other partsof Europe. In Northern Finland it varies be-tween 110 and 180 days, while in Central Eu-rope it is about 220 days and in Southern Eu-rope more than 300 days. Most of Finland islowland area, the highest point, Haltitunturifjeld, is 1,328 metres high.

Finland is administratively divided into fiveprovinces: the Provinces of Lapland, Oulu, East-ern Finland, Western Finland and Southern Fin-land, as well as the autonomous Province of

Åland. There are 19 regions and 452 municipal-ities in Finland.

According to the OECD classification, Finlandis the most rural country in the EU. In the pro-gramme the different areas are presented basedon the classification where the municipalities aredivided into four types: sparsely populated ruralareas, rural heartland areas, urban-adjacent ru-ral areas and urban areas.

In 1999 the rate of unemployment in Finlandwas 10.2 per cent (Statistics Finland). The aver-age rate of unemployment in the Member Statesof the EU in 1998 was 9.9 per cent. Unemploy-ment fell towards the end of the 1990s both inFinland and in the other parts of Europe. In Fin-land the situation was the worst in 1994, whenthe rate of unemployment was 16.6 per cent.

During the whole 1990s the migration withinFinland was very strong, and this trend contin-ues. There are two aspects in the migration;within the regions the population migrates to-wards the population centres, and nation-widethe migration is directed at a few major, rapidlygrowing population centres, such as the capitalregion as well as the Oulu, Tampere and Jy-väskylä regions.

Despite the concentration of population in ur-ban areas, many people living in towns and cit-

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ies would be interested in moving to the coun-tryside. Based on the study made by the RuralEnterprise Agency, a little under 10 per cent ofpeople living in the major urban areas consid-ered it certain or very likely that they wouldmove to the countryside if certain economic andsocial obstacles were removed. For those under40 years of age the obstacles were mainly relatedto economic factors such as finding a job, whileamong those over 40 the main obstacles were so-cial, such as family ties. (Food Facts Ltd, 2000).

Structural change in agriculture and forestry

The rural areas, in particular, have been verystrongly affected by the structural change in ag-riculture and forestry in recent decades. Thenumber of jobs in primary production and for-estry has decreased dramatically. In the latterpart of the 1990s, when the number of jobsgrew in other sectors, in primary production thenumber of jobs fell by about a fifth. The share ofagricultural income in the total income of farm-ers has also decreased, and forestry income,earned income from outside the farm and otherbusiness income constitute an ever-increasingshare of farmers’ total income. The number offarms has decreased, but no major change hasoccurred in the total cultivated area.

The number of active farms fell all through the1990s. In 1990 there were 130,000 active farms,but by 1998 the number of these had fallen toabout 88,000. In 1998 half of farmers earnedmore than 75 per cent of their total income fromagriculture. (Farm Register, 2000)

The main problems in the structure of agricultureare the small farm size as well as the age structureof farmers, i.e. a large share of farmers representthe older age groups. In 1998 the average age ofactive farmers was 47 years, and in the case of allfarmers it was as high as 53.4 years. The figurepresents the number of active farmers accordingto farmers’ age in 1998. Most of the active farm-ers were 50-54 years old (Farm Register 2000).

Based on a study of the Agricultural EconomicsResearch Institute (Research reports 232/1999),on 24 per cent of active farmers the farmer wasover 55 years old in 1996. In 1995-1996 thenumber of farmers fell in all age groups. Thenumber of farmers who are over 65 years old fellby 56 per cent and the number of active farmersin the age group of 55-65 years by 21 per cent.The share of farmers who are under 35 years oldgrew slightly, but their number decreased. In1994 the number of active farmers who were un-der 35 years old was 16,500 and in 199614,400. The number of farms owned by the old-est farmers fell the most in all production lines.Most of those who gave up cereal production, asmuch as 74 per cent, were more than 55 yearsold. The share of those under 35 fell the most inegg production and rearing of beef cattle.

The age structure of farmers is different in thedifferent production lines. The share of the olderfarmers is the largest in cereal and egg produc-tion, while most of the farmers who are under45 practice piglet or special crop production(Research reports of the Agricultural EconomicsResearch Institute 232/1999).

The most important challenges in rural areas arethe development of the profitability and compet-itiveness of agriculture as well as creation of newjob opportunities to compensate for the jobs lostin agriculture. Without new employment oppor-tunities the migration to population centres isgoing to increase. The lack of jobs is reflected inall activities. Decrease in the population reducesthe purchasing power, which means that jobs inthe service sector cannot be preserved. The taxbasis of municipalities narrows and they areforced to adjust to diminishing resources.(Countryside in transition – rural policy report,Raija Volk, 1999)

When the income of the farmer alone (not in-cluding the spouse’s income) are considered, theshare of both farmers earning more than 75 percent of their income and those earning less than

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11. Number of privately owned active farms by owner’s age 1998

25 per cent from agriculture has increased slight-ly. This indicates that some farmers mainly con-centrate on agriculture, while others earn mostof their income from other activities. On largestfarms the farmers intend to expand their pro-duction further, while smaller farms intend tokeep the production at about the current level.(Countryside in transition – rural policy report,Raija Volk, 1999)

According to the Agricultural Economics Re-search Institute, 56 per cent of the Finnish farmsare pluriactive and 44 per cent are full-timefarms. Pluriactive farms are farms which earnpart of their livelihood from sources other thanagriculture and forestry, independent of whetherthis refers to wage income or income from otherentrepreneurial activity practised on the farm.(Arable area. Criteria for full-time agriculture onFinnish farms. Working Papers of the Agricul-tural Economics Research Institute 14/99).

As motives for pluriactivity economic factors areimportant, but by no means the only ones. Inmany cases people wish to utilise their educationand skills by working outside the farm. Howev-

er, full-time farmers and spouses who havelooked for new sources of income would havepreferred on-farm activities to working outsidethe farm. (Arable area. Pluriactivity of farm fam-ilies on Finnish farms. Research reports of theAgricultural Economics Research Institute 96/2000).

Services in rural areas

In addition to agriculture and forestry, duringthe 1990s the number of jobs also decreasedconsiderably in the public sector. The reductionin the number of jobs has led to depopulation,which has in turn affected the customer basis forthe private sector. This has resulted in a declinein the services and infrastructure in rural areas,which is reflected e.g. as the weakening of theschool network and maintenance of privateroads and side-roads and closing of post officesand shops. There are considerable differencesbetween the territories in the level of services.

Summer residents are highly important in termsof maintaining the services in rural areas. In1997 the number of summer residents in the

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whole country was about half a million, andduring the 1990s their number grew by about10 per cent. The number of summer cottageswas also about half a million, and their numberincreased by about 20 per cent. (Rural areas inFinland in the beginning of the EU membership– Rural indicators, 1999)

In 1996 the self-sufficiency in jobs was higher inrural areas than in the population centres, butthe degree of self-sufficiency has decreased in therural areas while some increase has occurred inthe centres. Commuting is the most common inthe service sector. 45 per cent of the employed la-bour force in rural areas worked in the popula-tion centres. In both absolute and relative termscommuting is the most common in areas close tomajor urban areas, while it is the least commonin sparsely populated rural areas, such as the ar-chipelago and Lapland. (Rural areas in Finlandin the beginning of the EU membership – Ruralindicators, 1999)

Small rural enterprises

The number of enterprises fell in the wholecountry during the depression, and it was at itslowest in 1994. Since then the number of enter-prises has grown in both urban and rural areas.In urban municipalities, however, the growthhas been more rapid than in the rural areas, andin urban municipalities the number of enterpris-es per inhabitant is also higher than in rural mu-nicipalities. In the rural areas the share of smallenterprises employing less than 20 persons isalso larger. (Rural areas in Finland in the begin-ning of the EU membership – Rural indicators,1999)

In rural areas small enterprises have a more sig-nificant role as sources of income than in urbanareas as the alternative employment opportuni-ties are scarce. Most of the large companies arelocated in towns or population centres. In therural areas the share of enterprises linked to ba-sic production and various kinds of manufactur-

ing is larger than in urban areas, while the shareof shops, restaurants, accommodation servicesand other service sector enterprises is smaller inthe countryside.

In 1997 there were 61,100 small enterprises, i.e.enterprises employing fewer than 20 persons, inrural areas (based on rural postal code areas).These employed altogether 98,000 persons,which is about 8 per cent of the total number ofpeople employed in Finnish enterprises. 7,700 ofthese small enterprises were on farms. The aver-age size of the small enterprises located in ruralareas is 1.6 persons / enterprise, while in enter-prises located in urban areas this is 1.9 persons /enterprise. In rural areas about one fourth of theenterprises are linked to primary production(16,500). Business activities linked to primaryproduction include e.g. machine contracting,tourism and recreational services as well as theproduction of timber and wood products (Struc-tural development in small rural enterprises, Re-search reports of the Agricultural Economics Re-search Institute 245/2000).

The above figures are based on the Enterpriseand Place of Business Register of the StatisticsFinland. This does not include such entrepre-neurial activity on the farm which is practisedas the same taxation unit with farming. Ac-cording to the preliminary data from the agri-cultural census of 2000, there is other entrepre-neurial activity on about 22,000 active farms,and the most important lines of business aremachine contracting (about 9,199 farms), pro-duction of tourism and recreation services(about 2,300), wood processing, energy pro-duction (2,300), food processing (about 1,100)and handicraft (about 300). When the above-mentioned 7,700 farms included in the Registeron Rural Enterprises where other business ac-tivity is not related to farming are deductedfrom the outcome of the agricultural census,there is small-scale entrepreneurial activity in-cluded in the taxation of agriculture on about15,000 farms.

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In rural areas there are about 2,200 small enter-prises offering tourism and recreation servicesincluded in the Enterprise and Place of BusinessRegister, and in 1997 these employed altogetherabout 5,100 people. 20 per cent of enterprises inthis sector are located in rural areas, but the av-erage size of these is smaller than in urban areas.The share of rural enterprises in the total turno-ver of the tourism and recreation enterprises is10 per cent and in the personnel about 11 percent. Most of the camping areas, holiday resorts,cottages, boarding houses, etc. are located in ru-ral areas, and more than half of these are includ-ed in the rural enterprises in terms of turnoverand personnel as well. A third of the hotels arein the countryside, but these account for only 7per cent of the total turnover of hotels. (Structur-al development in small rural enterprises, Re-search reports of the Agricultural Economics Re-search Institute 245/2000, Statistics Finland).

The number of nights spend in both the urbanand rural lodging-houses grew in the 1990s, butin urban municipalities the rate of growth wasdouble that in the rural ones, and the share offoreign visitors was twice that in the rural mu-nicipalities. The used capacity of the sleeping ac-commodation was also higher in urban munici-palities. (Rural areas in Finland in the beginningof the EU membership – Rural indicators, 1999)

The majority of the tourism enterprises operat-ing on farms and a large number of other smallenterprises are not included in the Enterpriseand Place of Business Register of Statistics Fin-land. The Theme Group for Rural Tourism hascompiled contact information on these enter-prises from various sources and sent out ques-tionnaires to collect basic data on the enterpris-es. The list is not complete, because for somereason all of the enterprises did not return theirresponses. Most of the enterprises are engaged intraditional business activities, such as renting ofcottages, but they also include full-time tourismenterprises without any connection to farming.The total capacity of the enterprises included in

the list was about 45,000 sleeping accommoda-tions, and 22,000 of these were used round theyear. The share of the small rural tourism enter-prises not included in the official statistics in thetotal capacity of round-the-year sleeping accom-modations was 17 per cent. (Theme Group forRural Tourism).

At present the investments in enterprises operat-ing in connection with farms are quite small,which means that very few enterprises will growto such an extent that they will need any signifi-cant number of outside labour. Encouraging thegrowth-orientation of enterprises on farmswould require considerable increase in differentskills as well as distribution of the risk. In-creased globalisation has led to increased spe-cialisation among enterprises. In rural areas witha narrow customer and enterprise basis speciali-sation in very narrow fields may not be possible.This forces the rural entrepreneurs to some de-gree of pluriactivity, which often leads to prob-lems relating to efficiency and skills. (Country-side in transition – rural policy report, RaijaVolk, 1999)

One of the main problems in rural areas is thesmall share of the growing sectors, as most ofthe rural enterprises operate in sectors where thegrowth has stopped or slowed down. At the lev-el of the total economy the growth in employ-ment depends on the increase in productivity.Sectors that are growing on the global scale willbe able to increase their production and labourforce, and areas with such enterprises will alsoattract the labour force. (Countryside in transi-tion – rural policy report, Raija Volk, 1999)

Innovation and competitiveness

Rural industries and enterprises operate on theglobal market, where new products and servicesare being introduced all the time. Thus one ofthe cornerstones of the development of the ruralareas and industries is the ability of the people toproduce and utilise innovation. This concerns

11

not only the technical product innovation butalso innovation related to the processes, organi-sation and social issues. Innovation may relateto the production methods, ways of organisingthe production, services and e.g. marketing, ornew ways of cooperation and community activi-ties. The different elements of the good environ-ment for innovation should be developed in abalanced way. This involves the identification,development and dissemination of local exper-tise, as well as cooperation networks within andbetween the sub-regional units. Contacts be-tween the different sectors are also vital. The en-vironment for innovation can be strengthenedthrough the financing of the commercialisationof innovation and supporting the creation ofnew enterprises and cooperation.

An innovation system may considered to involvea number of different regional levels, where thelocal, national and international levels interactwith each other. Owing to the regional distribu-tion of labour, rural areas occupy a special posi-tion of their own in the national innovation andproduction systems. The operations may startfrom the traditional activities of the territories,but they may also involve cooperation and dis-tribution of labour with a larger enterprise. Co-operation between a large and small companymay lead to concentration of expertise in the ru-ral areas. One example of this is the cooperationbetween Nokia group and its sub-contractors.Telecommuting, which is largely concerned withthe same issue between the employer and em-ployee, is increasing slowly but steadily.

The improvement of the rural areas in Finlandas environments for innovation and their com-petitiveness calls for intensive developmentmeasures, but the preconditions for achievinggood results exist: there are good examples ofspecialised fields of production, the innovationand communication network are quite efficientand extensive, telecommuting is on the increase,and the distribution of labour between large andsmall companies has in many cases been success-

ful. The plans of the LAGs include a largenumber of measures aimed at improving the en-vironment for innovation. Important aspects inthis are increasing the interaction between urbanand rural areas, emphasising the sectors that areparticularly strong in each territory as well asmethodologies through which innovation can becreated and supported, strengthening of thecomputer skills through training, as well as set-ting up expert work groups to assist in the reali-sation of the potential existing in the territories.These work groups will complement the work ofthe training and research institutes, authoritiesand consultants, which is not always capable ofresponding to the development potential that isstill at the innovation stage and not very well or-ganised. Apart from the highly specialised pro-duction sectors in Ostrobothnia and Satakunta,the Finnish countryside constitutes quite a ho-mogenous area as an environment for innova-tion.

In the following chapter the Finnish rural areasare presented based on the distribution into theObjective 1 areas in Northern and Eastern Fin-land, area covered by the Regional Rural Devel-opment Programme for areas outside Objective1, and Åland. LEADER+ covers all rural areas inFinland. The distribution provides an appropri-ate basis for describing the areas, but the areasof operation of the LAGs are not based on thisin any way.

2.1 Objective 1 area in Northern Finland

The Objective 1 area in Northern Finland coversthe Region of Lapland as well as areas in NorthOstrobothnia, Central Ostrobothnia and Cen-tral Finland. Objective 1 area in Northern Fin-land covers the following regions: Eastern Lap-land, Kemi-Tornio, Northern Lapland, Rovanie-mi region, Tornionlaakso, Tunturi-Lappi, Ii,Koillismaa, Nivala-Haapajärvi, Siikalatva, Saar-ijärvi, Viitasaari and Kaustinen. Altogether 56municipalities are located in the programmearea, which extends from the northernmost

12

Table 2. Municipalities, population, area and population density of Objective 1 area in NorthernFinland. Source: Statistics Finland

TTTTType of areaype of areaype of areaype of areaype of area Municipa-litiesMunicipa-litiesMunicipa-litiesMunicipa-litiesMunicipa-lities PopulationPopulationPopulationPopulationPopulation Area kmArea kmArea kmArea kmArea km22222 Population densityPopulation densityPopulation densityPopulation densityPopulation density31Dec 1999 1 Jan 1999 inhabitants/km2

Urban area 3 82 436 1 420 68,1




TOTTOTTOTTOTTOTALALALALAL 5656565656 350 076350 076350 076350 076350 076 136 574136 574136 574136 574136 574 2,62,62,62,62,6

Figur 1. Norra Finlands mål 1-område

Objektive 1 area in northern Finlandparts of the country to Central Finland. The to-tal area covered is 131 square kilometres, whichis 39 per cent of the total area of Finland. In thenorth the area borders on three other states,Sweden, Norway and Russia.

90 per cent of the statutory nature conservationareas in Finland are located in the Objective 1area in Northern Finland. In the area concernedthere are, among other things, 6,538 square kil-ometres of national parks and 1,412 square kil-ometres of nature parks, 12 large wilderness are-as based on the Wilderness Act and old-growthforest conservation areas. The total protectedland area is 34,020 square kilometres, which is26 per cent of the total area 1. In the region ofLapland alone there are 147 areas covered bythe NATURA programme, and the total area ofthese is 29,358 square kilometres.

2.1.1 Population

At the end of 1999 the population of the areaconcerned was 354,000, which is a little under 7per cent of the Finnish population. The area isvery sparsely populated; the average populationdensity is as low as 2.6 inhabitants per squarekilometre. The population density grows fromnorth to south. In the sparsely populated ruralareas, in particular, the population density is ex-tremely low, 1.4 inhabitants per square kilome-tre. The largest town in the area is Rovaniemi.The strong centres of growth, Oulu and Jy-väskylä, which are located close to the Objective1 area, influence e.g. the migration and commer-

cial and industrial life and provide educationopportunities.

Until the 1990s the development of the agestructure of the population was quite balancedand the population increased due to the naturalpopulation growth. Towards the end of the1990s, however, the migration away from thearea grew to the extent that the populationturned into a decrease and the share of the olderage groups is growing at an alarming rate. In theObjective 1 area in Northern Finland the popu-lation falls both in urban and rural areas.

13

Table 3. Migration and population forecast in Objective 1 area in Northern Finland. Source: Statis-tics Finland

Figure 2a. GDP per capita in the province of Lapland. Source: Statistics FinlandKälla:Statistikcentralen

GDP / capita per sub-regional units of the province og Lapland

TTTTType of areaype of areaype of areaype of areaype of area Change inChange inChange inChange inChange in Net migrationNet migrationNet migrationNet migrationNet migration PopulationPopulationPopulationPopulationPopulation Change in popu-Change in popu-Change in popu-Change in popu-Change in popu-populationpopulationpopulationpopulationpopulation 1996-19991996-19991996-19991996-19991996-1999 forecast forecast forecast forecast forecast lation forecastlation forecastlation forecastlation forecastlation forecast1996-19991996-19991996-19991996-19991996-1999 20302030203020302030 1999–20301999–20301999–20301999–20301999–2030

Urban area -975 -1 833 81 959 -477

Urban-adjacent rural area -372 -967 37 075 28 13

Rural heartland area -1 671 -2 734 57 752 -4 979

Sparsely populated rural area -8 928 -10 874 155 051 -15 596

TOTTOTTOTTOTTOTALALALALAL -11 946-11 946-11 946-11 946-11 946 -16 408-16 408-16 408-16 408-16 408 331 837331 837331 837331 837331 837 -18 239-18 239-18 239-18 239-18 239

One special feature in the population of Laplandis the aboriginal population, the Lapps. The to-tal number of Lapps in Finland is about 7,000.About 4,000 Lapps live in the Lapp area (’homedistrict’), which covers the northernmost partsof Lapland – the municipalities of Enontekiö,Utsjoki and Inari and northern parts of the mu-nicipality of Sodankylä. Provisions concerningthe right of the Lapps to develop their own cul-ture are laid down in the Finnish Constitution.Three Lapp languages are being used in Finland:

northern Lapp, Inari Lapp and Skolt Lapp, andeach linguistic area is characterised by specialcultural features of its own.

2.1.2 Socio-economic description

In all sub-regional units except that of Kemi-Tornio located in the Objective 1 area in North-ern Finland the GDP is much lower than in thewhole country on average. In 1997 the GDP/capita in the sub-regional unit of Ii was only

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14

Figure 2b. GDP/capita in Objective 1 area in Northern Finland, except in the province of Lapland.Source: Statistics Finland

GDP / capita per sub-regional unit in 1990–1997

48.9 per cent of the average GDP in the wholecountry.

The education level of the people living in theObjective 1 area in Northern Finland rose in thepast decade, but it is still among the lowest inFinland. Almost half of the population over 15years of age have no degree after the basic educa-tion. The education level is the lowest amongthose who are over 50 years old. Like in otherparts of the country, in Northern Finland the ed-ucation level of women is a little higher thanthat of men; in particular, women have universi-ty degrees more than men. There is one institu-tion of higher education in Objective 1 area ofNorthern Finland, the University of Rovaniemi,and the Universities of Oulu and Jyväskylä arenot very far away. There are numerous educa-tional establishments of the secondary level inthe area, and the number of institutes or unitspractising different kinds of research, educationand training activities is 22.

In the Objective 1 area in Northern Finland theunemployment reached its peak in the mid-1990s, when the rate of unemployment wasmore than 25 per cent in several sub-regionalunits. Towards the end of the decade the situa-tion improved especially in the southern partsof the area, but the rate of unemployment isstill very high, 20.4 per cent (Ministry of La-bour). The regional differences in the rate ofunemployment are considerable. The share ofyoung people in the unemployed has fallenmainly due to the special labour policy meas-ures, but the long-term unemployment is stillgrowing.

In the Objective 1 area in Northern Finlandabout 61 per cent of the jobs in the area are inthe service sector. The share of public services isvery high, as more than half of the service sec-tor jobs are in the public sector. The share ofprocessing in the number of jobs is 23 per centand that of agriculture and forestry 12 per cent.The main weaknesses in the industrial structure

15

Table 4. Unemployment in Objective 1 area in Northern Finland. Source: Ministry of Labour (the unemployment figures of the Ministry of Labour are higher thanthose of Statistics Finland due to differences in the statistical basis. The unemployment figures of theMinistry of Labour follow the practices of the International Labour Organization ILO and the EUstatistics agency EUROSTAT. The statistics of the Ministry of Labour are based on legislation andadministrative orders.)

are the dependence on the public sector and therelative large share of jobs in primary produc-tion in rural heartland areas, because in the fu-ture there will be no increase in the number ofjobs in these sectors. There is considerable re-gional variation in the structure of industries.Agriculture is particularly significant in thesouthern parts of the area, while jobs in theservice sector dominate in the north, and jobsin the processing are concentrated to the urbanareas. Several of the most famous tourist attrac-tions in Finland are located in Northern Fin-land, and thus tourism industry is very impor-tant.

There area large-scale industrial plants in thearea in the fields of wood processing, steal in-dustry and mining. Kemi-Tornio region on thenorth coast of the Baltic Sea is the most impor-tant concentration of large-scale industry inNorthern Finland. The value added of the indus-trial plants located in this region is 13 per cent ofthe GDP of the area concerned.

The SMEs located in Objective 1 area of North-ern Finland practise the manufacturing of woodand metal products as well as food processing.All lines of business in the high-tech sector arealso practised in the area. Tourism occupies acentral position among the service sector enter-prises. The enterprises are quite small, most ofthem have fewer than 5 employees. Thus the in-

TTTTType of areaype of areaype of areaype of areaype of area UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% ChangeChangeChangeChangeChange19961996199619961996 19991999199919991999 i1996-1999 %i1996-1999 %i1996-1999 %i1996-1999 %i1996-1999 %

Urban area 9 574 24,7 8 320 21,6 -3,1

Urban-adjacent rural area 3 708 23,7 3 187 20,2 -3,5

Rural heartland area 4 875 18,1 3 875 14,7 -3,4

Sparsely populated rural area 20 643 26,2 16 470 21,9 -4,3

TOTTOTTOTTOTTOTALALALALAL 38 80038 80038 80038 80038 800 24,224,224,224,224,2 31 85231 85231 85231 85231 852 20,420,420,420,420,4 -3,8-3,8-3,8-3,8-3,8

dustrial plants are in most cases oriented to-wards the local market, and very few companiesare directly involved in export activities. Howev-er, there is a large number of medium-sized en-terprises with quite good growth prospects in thearea.

Tourism is already highly important in terms ofthe employment in Northern Finland, and it isone of the growing sectors in the area. At presenttourism is mainly concentrated to Lapland andKoillismaa, but it is becoming increasingly im-portant in the other sub-regional units of thearea as well. The number of overnight stays reg-istered annually in the area is about 1,700,000,which is 12 per cent of the overnight stays in thehotels, cottages, camping grounds, etc. in thewhole country.

The development of the entrepreneurial activitysince 1994 has been quite successful. By the endof 1996 the net increase in the number of busi-ness establishments was 1,000 and the numberof people employed grew by 1,450.

As a result of the structural change in agricultureprimary production employs a smaller and small-er number of people. In urban-adjacent rural are-as the emerging new industries replace the jobslost in agriculture, but in sparsely populated ruralareas it is far more difficult to find new sources ofincome. Farmers in Northern Finland have much

16

19981998199819981998 Urban areaUrban areaUrban areaUrban areaUrban area Urban-adjacentUrban-adjacentUrban-adjacentUrban-adjacentUrban-adjacent Rural hearlandRural hearlandRural hearlandRural hearlandRural hearland Sparsely popula-Sparsely popula-Sparsely popula-Sparsely popula-Sparsely popula- TOTTOTTOTTOTTOTALALALALAL

rural arearural arearural arearural arearural area area area area area area ted rural areated rural areated rural areated rural areated rural area

Primary production % 2,4 9,1 21,7 14,8 12,012,012,012,012,0

*incl. forest % 1,4 1,8 1,6 3,1 2,32,32,32,32,3

Processing % 27,8 20,2 24,8 19,5 23,023,023,023,023,0

Private services % 30,9 28,1 19,7 26,8 26,826,826,826,826,8

Public services % 35,9 37,1 29,1 33,6 33,733,733,733,733,7

Unknown % 3,0 5,4 4,7 5,3 4,54,54,54,54,5

TOTTOTTOTTOTTOTALALALALAL 100,0100,0100,0100,0100,0 99,999,999,999,999,9 100,0100,0100,0100,0100,0 100,0100,0100,0100,0100,0 100,0100,0100,0100,0100,0

Table 6. Farms and arable areas in Objective 1 area in Northern Finland.Source: Ministry of Agriculture and Forestry / IACS register, Farms 1995, 1998

Table 5. Structure of industries in Objective 1 area in Northern Finland. Source: Statistics Finland

less wage or other entrepreneurial income fromoutside the farm, and forestry income is alsomuch smaller than in other parts of Finland. InNorthern Finland the farm size is slightly belowthe average in the whole country. More than halfof active farms practise cattle husbandry as theirmain production line, and in Lapland agricultureis almost solely based on livestock production.

In Lapland and parts of the region of North Os-trobothnia reindeer husbandry is practised inthe so-called reindeer herding area. This is par-ticularly important in the sub-regional units ofTunturi-Lappi and Northern Lapland. Reindeerhusbandry is the main source of livelihood forabout 2,000 families. Reindeer husbandry islargely based on the utilisation of natural pas-tures. The production of reindeer meat in thearea totals about 2.5 million kg.

The number of farms fell considerably in the lat-ter part of the 1990s, while the size of farms(measured by the arable area) has grown.

2.2 Objective 1 area in Eastern Finland

Objective 1 area in Eastern Finland covers theregions of Etelä-Savo, Kainuu, North Kareliaand Pohjois-Savo, and the number of munici-palities located in this area is 78. The largestpopulation centres are the towns of Kuopio,Joensuu, Mikkeli and Kajaani. The area is85,200 square kilometres, which is about aquarter of the total area of Finland. The area ischaracterised by the large number of lakes andother watercourses. The share of waters is morethan 17.5 per cent of the total area. EasternFinland shares almost 600 kilometres of borderwith Russia.

TTTTType of areaype of areaype of areaype of areaype of area Farms 1995-Farms 1995-Farms 1995-Farms 1995-Farms 1995- Arable areaArable areaArable areaArable areaArable area Farms 1998Farms 1998Farms 1998Farms 1998Farms 1998 Arable areaArable areaArable areaArable areaArable area ChangeChangeChangeChangeChange Change inChange inChange inChange inChange in ha/farm ha/farm ha/farm ha/farm ha/farm ha/farm 1998ha/farm 1998ha/farm 1998ha/farm 1998ha/farm 1998 in number in number in number in number in number arable areaarable areaarable areaarable areaarable area

19951995199519951995 of farmsof farmsof farmsof farmsof farms ha/farmha/farmha/farmha/farmha/farm1995-19981995-19981995-19981995-19981995-1998 1995-19981995-19981995-19981995-19981995-1998

Urban area 247 21,2 241 26,9 -6 2,7

Urban-adjacent 454 17,1 436 18,4 -18 1,3 rural area

Rural heartland area 3 393 22,4 3 052 26,1 -341 3,7

Sparsely populated 5 008 18,0 4 633 20,1 -375 2,1rural area

TOTTOTTOTTOTTOTALALALALAL 9 1029 1029 1029 1029 102 19,819,819,819,819,8 8 3628 3628 3628 3628 362 22,422,422,422,422,4 -740-740-740-740-740 2,62,62,62,62,6

17

Table 7. Municipalities, population, area and population density in Objective 1 area in Eastern Fin-land.Source: Statistics Finland

TTTTType of areaype of areaype of areaype of areaype of area MunicipalitiesMunicipalitiesMunicipalitiesMunicipalitiesMunicipalities PopulationPopulationPopulationPopulationPopulation Area kmArea kmArea kmArea kmArea km22222 Population densityPopulation densityPopulation densityPopulation densityPopulation density

31 Dec 1999 1 Jan 1999 inhabitants/km2

Urban area 7 271 979 4 301 63,2




TOTTOTTOTTOTTOTALALALALAL 7878787878 686 046686 046686 046686 046686 046 85 17285 17285 17285 17285 172 8,18,18,18,18,1

Objektive 1 area in Easter Finland

Figure 3. Objective 1 area in Eastern Finland.

KajaaniKajaaniKajaaniKajaaniKajaani

JoensuuJoensuuJoensuuJoensuuJoensuuKuopioKuopioKuopioKuopioKuopio

MikkeliMikkeliMikkeliMikkeliMikkeli

In the Objective 1 area of Eastern Finland thereare 101,200 holiday homes, and the number ofholiday homes has exceeded the number of per-manent residences in the sparsely populatedarea. There is 5,400 square kilometres of areaincluded in the NATURA 2000 programme,which is 7.6 per cent of the total area. 1,900square kilometres of this, i.e. 2.6 per cent of thetotal area of Objective 1 area in Eastern Finland,is nature conservation area. The primary objec-tive of the nature conservation programmes is topreserve the special characteristics and biodiver-sity of the forests, peatland and lakes in EasternFinland.

2.2.1 Population

The population of the Objective 1 area in East-ern Finland is 691,000, which is 13.4 per cent ofthe total Finnish population. Part of the popula-tion is concentrated around the regional centres,but a significant share of the population is alsoscattered to the sparsely populated areas. Thearea is characterised by low population density,only 8.1 inhabitants per square kilometre.

Almost the whole area, both urban and ruralmunicipalities, suffers from population loss,which has accelerated in recent years. The agestructure is also distorted, with a growing shareof the older population groups. The likelihoodto migrate is the highest among educated youngpeople and women. According to the population

forecast, in urban areas the population lossshould actually turn into population gain.


In all regions of Objective 1 area in Eastern Fin-land the GDP/capita is below the average in thewhole country. In Pohjois-Savo the per capitaGDP is somewhat higher than in the other re-gions. Relative to the average in the whole coun-try the GDP/capita in Eastern Finland continuedto weaken until 1997.

18

Figure 4. GDP/capita in Objective 1 area in Eastern Finland. Source: Statistics Finland

GDP / capita per sub-regional unit in 1990–1997

Table 8. Migration in Objective 1 area in Eastern Finland and population forecast.Source: Statistics Finland

TTTTType of areaype of areaype of areaype of areaype of area PopulationPopulationPopulationPopulationPopulation Net migrationNet migrationNet migrationNet migrationNet migration PopulationPopulationPopulationPopulationPopulation PopulationPopulationPopulationPopulationPopulationchangechangechangechangechange 1996-19991996-19991996-19991996-19991996-1999 forecast 2030 forecast 2030 forecast 2030 forecast 2030 forecast 2030 changechangechangechangechange

1996-1999 1996-1999 1996-1999 1996-1999 1996-1999 forecast forecast forecast forecast forecast1999-20301999-20301999-20301999-20301999-2030

Urban area 60 -2 514 281 769 9 790

Urban-adjacent rural area -698 -1 750 99 930 2 515



TOTTOTTOTTOTTOTALALALALAL -15 276-15 276-15 276-15 276-15 276 -17 352-17 352-17 352-17 352-17 352 656 049656 049656 049656 049656 049 -29 997-29 997-29 997-29 997-29 997

In all regions in Eastern Finland the educationlevel is below the average in the whole country,and the education level has risen more slowlythan in the other parts of Finland. 53.5 per centof men and 56.9 per cent of women have takendegrees after the basic education. The share ofpeople with an academic degree, 15.9 per cent ofmen and 20.5 per cent of women, is also belowthe average in the whole country, which is 22.5per cent (Statistics Finland). There are two es-tablishments of higher education in the area, the

University of Kuopio and the University of Joen-suu, and three branches of other universities.There is a number of vocational schools andfour polytechnics in the area, as well as 14 re-search institutes or units operating in variousfields.

In Eastern Finland the number of jobs collapsedin the 1990s, and between 1990 and 1996 thenumber of jobs fell by about a fifth. In spite ofthe decrease in the population and labour force,

19

Table 9. Unemployment in Objective 1 area in Eastern Finland.Source: Ministry of Labour (the unemployment figures of the Ministry of Labour are higher thanthose of Statistics Finland due to differences in the statistical basis. The unemployment figures of theMinistry of Labour follow the practices of the International Labour Organization ILO and the EUstatistics agency EUROSTAT. The statistics of the Ministry of Labour are based on legislation andadministrative orders.)

this led to mass unemployment, and the situa-tion has started to improve only in the very re-cent years. Some decrease has occurred in therate of unemployment, albeit more slowly thanin the other parts of the country. The decrease inunemployment is mainly due to the migrationand loss of labour force to other areas as well aslabour policy measures rather than the creationof new jobs. The improved employment in thegrowing sectors has not been enough to compen-sate for the loss of jobs in other sectors. Amongthe young people the situation has improved.Long-term unemployment has decreased, but theshare of this in the total unemployment hasgrown.

The majority of enterprises in Eastern Finlandoperate in the service sector, and in 1998 theshare of these in all business establishments was62 per cent. Among the company services themost important sector in Eastern Finland istransport services, and the share of this is muchhigher than in the other parts of Finland. Theshare of manufacturing companies was 12 percent, which is a little smaller than in the otherparts of the country. However, the share of man-ufacturing companies in the employment was al-most 34 per cent, which is considerably higherthan the share of these in the whole country. Themost important lines of business are the manu-facturing of wood and metal products and ma-

chinery and implements as well as food process-ing, which accounted for more than half of allmanufacturing companies in the area. Com-pared to the other parts of the country, thenumber of companies engaged in the manufac-turing of paper, wood and stone products aswell as food processing is higher, but there arefewer companies operating in the growing sec-tors such as electronics and information tech-nology. Tourist industry is also highly importantin Eastern Finland, and the share of these enter-prises is larger than in other parts of the coun-try. Tourism is particularly significant in Etelä-Savo and Kainuu, where the share of tourist en-terprises is higher than in the other parts ofEastern Finland.

In Eastern Finland the establishment of newcompanies is much less frequent than in the oth-er parts of the country, and the rate of establish-ment (i.e. new companies relative to the existingones) was 8.8 per cent, while in the whole coun-try this was 10 per cent.

Agriculture in Eastern Finland is dominated bygrass production for feed and cattle husbandry,especially milk production. Almost a third ofthe milk produced in Finland comes from Ob-jective 1 area in Eastern Finland. The number ofjob in forestry has decreased considerably, butforests still constitute a highly significant natu-

TTTTType of areaype of areaype of areaype of areaype of area UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% Change inChange inChange inChange inChange in

19961996199619961996 19991999199919991999 1996-1999 1996-1999 1996-1999 1996-1999 1996-1999 %%%%%

Urban area 28 663 22,9 23 747 18,9 -4,1





20

19981998199819981998 Urban areaUrban areaUrban areaUrban areaUrban area Urban-adjacentUrban-adjacentUrban-adjacentUrban-adjacentUrban-adjacent Rural heartlandRural heartlandRural heartlandRural heartlandRural heartland Sparsely popu-Sparsely popu-Sparsely popu-Sparsely popu-Sparsely popu- TOTTOTTOTTOTTOTALALALALAL

rural area rural area rural area rural area rural area area area area area area lated rural arealated rural arealated rural arealated rural arealated rural area


*incl. forest % 1,1 1,6 2,1 3,5 2,02,02,02,02,0

Processing % 23,8 24,7 25,1 23,1 23,823,823,823,823,8


Public services % 37,8 36,2 28,4 29,9 34,234,234,234,234,2

Unknown % 3,1 3,9 4,5 4,5 3,83,83,83,83,8


TTTTType of areaype of areaype of areaype of areaype of area Farms 1995Farms 1995Farms 1995Farms 1995Farms 1995 Arable areaArable areaArable areaArable areaArable area Farms 1998Farms 1998Farms 1998Farms 1998Farms 1998 Arable areaArable areaArable areaArable areaArable area Change inChange inChange inChange inChange in Change inChange inChange inChange inChange inha/farm 1995ha/farm 1995ha/farm 1995ha/farm 1995ha/farm 1995 ha/farm 1998 ha/farm 1998 ha/farm 1998 ha/farm 1998 ha/farm 1998 number ofnumber ofnumber ofnumber ofnumber of arable areaarable areaarable areaarable areaarable area

farmsfarmsfarmsfarmsfarms ha/farmha/farmha/farmha/farmha/farm11111995-1998995-1998995-1998995-1998995-1998 1995-19981995-19981995-19981995-19981995-1998

Urban area 713 17,7 630 20,0 -83 2,3

Urban-adjacent rural area 2 543 18,2 2 235 20,8 -308 2,6

Rural heartland area 4 203 20,4 3 720 23,6 -483 3,2

Sparsely populated rural area 10 253 17,3 8 826 20,2 -1 427 2,8

TOTTOTTOTTOTTOTALALALALAL 17 71217 71217 71217 71217 712 111118,28,28,28,28,2 15 41115 41115 41115 41115 411 21,021,021,021,021,0 -2 301-2 301-2 301-2 301-2 301 2,862,862,862,862,86

Table 10. Structure of industries in Objective 1 area of Eastern Finland. Source: Statistics Finland

Table 11. Farms and arable areas in Objective 1 area in Eastern Finland. Source: Ministry of Agricul-ture and Forestry / IACS-register, Farms 1995, 1998.

ral resource and source of employment in East-ern Finland, where the whole forestry sector em-ploys about 18,000 persons. About a sixth ofthe total production of the forestry sector comesfrom the Objective 1 area in Eastern Finland.Forestry has also indirect employment effects ase.g. wood energy accounts for 33 per cent of theenergy production in Eastern Finland (18 percent in the whole country).

The number of farms has fallen rapidly, whilethe average arable area of farms has grown.Compared to the other parts of Finland, thefarms in the eastern part of the country aresmall, and farmers’ forestry income is higher.

2.3 Regional Rural Development Programme for areasoutside Objective 1 area

The Regional Rural Development Programmecovers the regions of Uusimaa, Itä-Uusimaa,

Varsinais-Suomi, Satakunta, Kanta-Häme, Päi-jät-Häme, Pirkanmaa, Kymenlaakso, SouthKarelia, South Ostrobothnia and Ostrobothniaas well as parts of the regions of Central Fin-land, Central Ostrobothnia and North Ostro-bothnia. The area covered is 114,850 square kil-ometres, which is 34 per cent of the total area ofFinland. There are 302 municipalities in thearea.

There is a special Regional Rural DevelopmentProgramme for areas outside Objective 1, whichcovers the whole area except for the planned ar-eas of the 12 largest towns or cities.

There are two Objective 2 programmes concern-ing the area covered by the Regional Rural De-velopment Programme, Objective 2 areas ofSouthern and Western Finland. In the map theseareas are indicated by dark grey. The area cov-ered by Objective 2 is about 20 per cent of the

21

Table 12. Municipalities, population, area and population density of the area outside Objective 1.Source: Statistics Finland

TTTTType of areaype of areaype of areaype of areaype of area MunicipalitiesMunicipalitiesMunicipalitiesMunicipalitiesMunicipalities PopulationPopulationPopulationPopulationPopulation Area kmArea kmArea kmArea kmArea km22222 Population densityPopulation densityPopulation densityPopulation densityPopulation density31Dec 1999 1 Jan 1999 inhabitants/km2

Urban area 47 2 556 979 11 117 230,0




TOTTOTTOTTOTTOTALALALALAL 302302302302302 4 109 0724 109 0724 109 0724 109 0724 109 072 114 850114 850114 850114 850114 850 35,835,835,835,835,8

Areas outside Obhjektive 1

Regional Programmeand Objektive 2 area

RegionalProgramme area

TTTTTurkuurkuurkuurkuurku

TTTTTampereampereampereampereampere

HelsinkiHelsinkiHelsinkiHelsinkiHelsinki

OuluOuluOuluOuluOulu

JyväskyläJyväskyläJyväskyläJyväskyläJyväskylä

Figure 5. Area outside Objective 1.

area of Finland, and the population is 30.1 percent of the total Finnish population.

There are 700 NATURA areas in the area of theRegional Programme, and the total area of theseis 1,000 square kilometres, i.e. about 1 per centof the area. (The figures include the whole terri-tories of the regions of Central Finland, SouthOstrobothnia and Central Ostrobothnia, even ifparts of these are covered by the Objective 1programme for Northern Finland.)

2.3.1 Population

There are altogether 4,109,072 people living inthe area outside the Objective 1 area, which isabout 80 per cent of the population of Finland.

Areas where the population grows the moststrongly are concentrated to the sub-regionalunits of the largest towns. About a third of thepopulation in the area lives in the sub-regionalunits of Helsinki, Tampere and Oulu. On theother hand, the population is also concentratedto the main population centres in Southern Fin-land. There are six sparsely populated sub-re-gional units in the area, where the populationdensity is less than 10 inhabitants per square kil-ometre.

The rural population is decreasing quite rapidly,and according to the population forecast thistrend can be expected to continue. Instead, inthe urban areas and urban-adjacent rural areas

the net migration is positive. Based on the fore-cast, the strong migration especially to the townsis expected to continue, but people will also bemoving to the rural areas adjacent to towns. Allof the most important centres of growth in Fin-land are located in the area outside Objective 1,i.e. the capital region as well as the regions ofTampere, Oulu and Jyväskylä. In the area as awhole the net migration is positive, but there arealso sub-regional units which suffer from popu-lation loss.

22

TTTTType of areaype of areaype of areaype of areaype of area Change inChange inChange inChange inChange in Net migrationNet migrationNet migrationNet migrationNet migration PopulationPopulationPopulationPopulationPopulation PopulationPopulationPopulationPopulationPopulationpopulationpopulationpopulationpopulationpopulation 1996-19991996-19991996-19991996-19991996-1999 forecast 2030forecast 2030forecast 2030forecast 2030forecast 2030 change forecastchange forecastchange forecastchange forecastchange forecast1996–19991996–19991996–19991996–19991996–1999 1999-20301999-20301999-20301999-20301999-2030

Urban area 69 371 57 443 2 726 399 169 420

Urban-adjacent rural area 14 267 5 405 701 099 24 318



TOTTOTTOTTOTTOTALALALALAL 66 50766 50766 50766 50766 507 45 71445 71445 71445 71445 714 4 235 5524 235 5524 235 5524 235 5524 235 552 126 480126 480126 480126 480126 480

Table 13. Migration and population forecast in the area outside Objective 1.Source: Statistics Finland

Figure 6. GDP/capita in the area outside Objective 1. Source: Statistics Finland.

GDP / capita in the different regions in 1990–1997


In all regions located outside Objective 1 theGDP/capita is higher than in the regions locatedin Northern and Eastern Finland. However, onlyin the province of Uusimaa the GDP/capitaclearly exceeds the national average every year,and in 1997 it was 137.8.

The majority of the establishments of highereducation, for example, the Universities of Hel-sinki, Tampere, Turku, Jyväskylä and Oulu are

located in the area not covered by Objective 1,and the education level of the population isalso above the national average. 58.6 per centof the people of working age (15-75 years ofage) in the area have taken a degree after thebasic education. The national average is 57.7per cent. 23.8 per cent of the population in theworking age have an academic degree, while inthe whole country the share of these is 22.5 percent. However, there is considerable regionalvariation in the education level. (Statistics Fin-land)

23

Table 14. Unemployment in the area outside Objective 1. Source: Ministry of Labour (the unemployment figures of the Ministry of Labour are higher thanthose of Statistics Finland due to differences in the statistical basis. The unemployment figures of theMinistry of Labour follow the practices of the International Labour Organization ILO and the EUstatistics agency EUROSTAT. The statistics of the Ministry of Labour are based on legislation andadministrative orders.)

TTTTType of areaype of areaype of areaype of areaype of area UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% UnemployedUnemployedUnemployedUnemployedUnemployed %%%%% Change inChange inChange inChange inChange in19961996199619961996 19991999199919991999 unemploymentunemploymentunemploymentunemploymentunemployment

1996–1999 %1996–1999 %1996–1999 %1996–1999 %1996–1999 %

Urban area 221 571 18,3 170 663 13,6 -4,7





In municipalities located in sparsely populatedrural areas and rural heartland areas unemploy-ment decreased in 1996-1999 somewhat moreslowly than in the whole area on average, andthe share of the unemployed in the labour forceis still clearly above the average of the area. Theshare of long-term unemployment has decreasedin urban areas, but in the rural areas this has in-creased.

In the area concerned the processing sector, pri-vate services and public services each employabout a third of the population. The share ofjobs in the processing and private services ismuch higher than in the other parts of thecountry.

Important sectors in terms of employment,apart from agriculture, include food industryand forestry, but their significance decreasedduring the past decade. The number of jobs infood industry fell due to the opening of the bor-ders and increased competition. In 1998 thenumber of people employed in the food indus-try was about 40,000. The number of peopleemployed in forestry decreased rapidly in theearly part of the 1990s, and at present forestryemploys about 13,000 people in the area con-cerned.

The number of mechanic wood processingplants in the area is about 4,000, and these areestimated to employ 20,000 people. In thewhole country companies manufacturing metalindustry products employ almost 30,000 peo-ple. Most of the total of about 50,000 jobs inthe manufacturing of machinery and implementsin Finland are located in Uusimaa, Varsinais-Suomi, Pirkanmaa and Häme.

The total number of people employed in elec-tronics industry is around 50,000, and almost20,000 of these are in Uusimaa. Electronics in-dustry is an important employer in Varsinais-Suomi, North Ostrobothnia, Ostrobothnia andCentral Finland as well. Most of the companiesin this sector are quite small, and more thanhalf of them employ fewer than 5 persons. Inrecent years new companies have entered thefield quite rapidly, and the number of compa-nies has grown by more than a quarter since1992 and the number of people employed hasincreased manifold, by about 5,000, in the pastfive years.

Tourism is less significant as an industry andsource of additional income than in Laplandand the Finnish Lake District. According to therural business register of the Agricultural Eco-

24

Table 15. Structure of industries in the area outside Objective 1.Source: Statistics Finland

Table 16. Farms and arable areas in area outside Objective 1. Source: Ministry of Agriculture andForestry / IACS register, Farms 1995, 1998

19981998199819981998 Urban areaUrban areaUrban areaUrban areaUrban area Urban-adjacentUrban-adjacentUrban-adjacentUrban-adjacentUrban-adjacent Rural heartlandRural heartlandRural heartlandRural heartlandRural heartland Sparsely populatedSparsely populatedSparsely populatedSparsely populatedSparsely populated TOTTOTTOTTOTTOTALALALALALrural arearural arearural arearural arearural area area area area area area rural area rural area rural area rural area rural area


*incl. forest % 0,2 0,5 1,0 2,7 0,40,40,40,40,4

Processing % 25,8 36,6 31,6 26,7 28,028,028,028,028,0


Public services % 30,7 27,6 25,9 27,8 29,529,529,529,529,5

Unknown % 2,2 3,3 3,6 3,9 2,62,62,62,62,6


TTTTType of areaype of areaype of areaype of areaype of area FarmsFarmsFarmsFarmsFarms Arable areaArable areaArable areaArable areaArable area FarmsFarmsFarmsFarmsFarms Arable areaArable areaArable areaArable areaArable area Change inChange inChange inChange inChange in Change inChange inChange inChange inChange in19951995199519951995 ha/farmha/farmha/farmha/farmha/farm 19981998199819981998 ha/farmha/farmha/farmha/farmha/farm number ofnumber ofnumber ofnumber ofnumber of arable areaarable areaarable areaarable areaarable area

1995 1995 1995 1995 1995 19981998199819981998 farmsfarmsfarmsfarmsfarms ha/farmha/farmha/farmha/farmha/farm1995-19981995-19981995-19981995-19981995-1998 1995-19981995-19981995-19981995-19981995-1998

Urban area 4 784 26,7 4 274 30,0 -510 3,3

Urban-adjacent rural area 14 303 26,0 12 845 29,4 -1 458 3,4

Rural heartland area 41 980 24,0 37 574 27,5 -4 406 3,4

Sparsely populated rural area 6 819 17,8 5 971 20,5 -848 2,7

TOTTOTTOTTOTTOTALALALALAL 67 88667 88667 88667 88667 886 24,024,024,024,024,0 60 66460 66460 66460 66460 664 27,427,427,427,427,4 -7 222-7 222-7 222-7 222-7 222 3,43,43,43,43,4

nomics Research Institute, the number of enter-prises offering tourism and recreational servicesin the area concerned is less than 1,800, which isabout 56 per cent of all rural enterprises operat-ing in this sector in Finland.

63 per cent of all Finnish farms and 72 per centof active farms are located in the area not cov-ered by Objective 1. The share of active farms inall farms is higher than in the whole country onaverage. 76 per cent of the arable land area inFinland, 1.7 million ha, is in this area. The larg-est farms are located in the southern and south-western parts of the area, i.e. in Varsinais-Suo-mi, Uusimaa and Häme, while farms whose sizeis below the average are in Central Finland,South Karelia and Pirkanmaa.

Measured by the arable area the average farmsize is larger than in the other parts of Finland,and in Southern Finland, in particular, farmershave more wage and other entrepreneurial in-come than in Northern and Eastern Finland.

Agricultural production in the area is very diver-sified, but the different production lines are forthe most part concentrated to certain parts of thearea. 24 per cent of the farms practise dairy hus-bandry, 6 per cent raise beef cattle and 8 per centpractise pig husbandry as their main productionline. Most of the pigmeat production in Finlandis located in this area, especially in its westernparts. Almost all egg production in Finland oc-curs in this area, and egg production is the mainproduction line in 2 per cent of the farms.

25

Figure 7. Regional Rural Programme and Ob-jective 2 area on the Åland Islands.

MariehamnMariehamnMariehamnMariehamnMariehamn

The Åland IslandsCereal production is highly important, and 40per cent of the farms report this as their mainproduction line. In Uusimaa cereal production isthe main production line on almost 60 per centof the farms. The share of crop production in theproduction structure is growing, while the roleof livestock producing farms is diminishing.This means that an increasing number of farmsdo not offer gainful employment all year round,and especially on cereal farms working outsidethe farm is quite common. In rural heartland ar-eas and sparsely populated rural areas, wherefinding work outside the farm is more difficult,farmers search for employment opportunities bydeveloping small-scale entrepreneurial activityin connection with farming. Pluriactivity is be-coming more and more important for the ruralpopulation.

2.4 Åland

The Åland Islands are located in the archipelagobetween Finland and Sweden. Åland is a demili-tarised, self-governing region, which belongs toFinland. Based on the Act on the Provincial Au-tonomy of the Åland Islands, which has the sta-tus of a constitutional act, the people of Ålandhave the right to enact provisions on their inter-nal matters and make the decisions concerningthe budget for the province. Decisions on thelegislation for the Åland Islands are made at theProvincial Government of Åland, and the pro-vincial administration deals with a number of is-sues pertaining to the State administration inFinland. Demilitarisation means that no militarytroop may be located in the area and the areamay not be fortified.

The Province of Åland is the smallest and west-ernmost of the Finnish provinces. The total areais 1,551.93 square metres, which is only 0.46per cent of the area of Finland. There are 16 mu-nicipalities, and in these there are no actiongroups that would have wished to be involved inLEADER+.

There is a separate rural programme for Prov-ince of Åland, which covers the whole area.Åland also has an Objective 2 area of its own,including all municipalities, except for the townof Mariehamn.

2.4.1 Population

There are 25,626 inhabitants on the Åland Is-lands, which is 0.5 per cent of the population ofFinland. Of the 6,500 islands and rocky islets ofthe Åland Islands 65 are inhabited. The popula-tion density is 16.5 inhabitants per square kilo-metre. 90 per cent of the population lives on themain islands. The capital of the province isMariehamn, which is also the largest municipali-ty in terms of the population.

The population is growing in Mariehamn andits surroundings, while the small archipelagomunicipalities are losing their population. Thenet migration to the area was 149 persons,which is 0.6 per cent of the total population ofthe province.

26


In 1997 the GDP per capita in the Province ofÅland was 119.4 per cent of that in Finland, andit is also higher than the EU average. The rate ofunemployment is low, especially in the summer.It varies between 0.0 per cent in Sottungan and5.3 per cent in Kumlingen, which is the lowestrate of unemployment in the EU. When unem-ployment increases, more people leave the areato search for employment and education oppor-tunities, mostly in Sweden. There are no estab-lishments of higher education on the Åland Is-lands.

The main industries in the Province of Åland areshipping, agriculture and fishing. Tourism ishighly significant, but it is only seasonal. As a re-sult of the increase in the tourism and servicesectors the importance of the traditional mainindustries had decreased to some extent, butthey are still quite significant in terms of the em-ployment of the archipelago region.

2.5 Equality; women, men and young people

In Finland the education level of women is aboutthe same as that of men, especially in the case ofyoung women. 57.7 per cent of the population(over 15), 58.5 per cent of men and 57.0 percent of women, have a degree from a vocationalschool or polytechnic or an academic degree. Ofthose who have a post-basic education degree58.5 per cent are men and 57 per cent are wom-en. 22.5 per cent of these have an academic de-gree. In the case of academic degrees the share ofwomen is slightly higher than that of men, i.e.21.2 per cent of men with post-basic educationdegree have an academic degree while in the caseof women this is 23.7 per cent. Young people arein general more highly educated than the oldergenerations. (Statistics Finland)

The share of people with academic degrees hasgrown in both rural areas and population cen-tres, but the share of those with an academic de-

gree in the population over 15 in rural areas isstill only about half of that in urban areas, andthe share of people with secondary-level degreesis also higher in population centres. (StatisticsFinland, surveys 1999/2, Rural areas in Finlandin the beginning of EU membership – Rural indi-cators, pp. 158-159)

Of the working-age population the number ofmen employed is 100,000 larger than that ofwomen. The share of the employed labour forceis about 40 per cent of the population of Fin-land. 42 per cent of men and 37 per cent ofwomen are employed. In the case of young peo-ple the share of the employed is smaller as mostof them are still students. In the past three dec-ades the rate of unemployment has in generalbeen lower among women than men, but in thepast five years the unemployment rate of womenexceeded that of men. In 1999 the rate of unem-ployment was 10.7 per cent among women and9.8 per cent among men. The wage level ofwomen is much lower than that of men, and theaverage earnings of the regular working hours ofwomen are 80 per cent of men’s earnings. (Sta-tistics Finland)

In sparsely populated rural areas the rate of un-employment is much higher than in the otherparts of the country, while in rural heartland ar-eas the rate of unemployment is below the aver-age. In some sparsely populated rural areas thehigh rate of unemployment has become a perma-nent problem. Instead, long-term unemploymentis less common than in rural heartland areas orurban areas, mainly due to the active employ-ment policy measures. Unemployment in sparse-ly populated rural areas might be characterisedas periodical unemployment. Long-term unem-ployment affects mainly those more advanced inyears.

Among the young there is less unemployment insparsely populated rural areas than in urban are-as, while among the young unemployment ispartly hidden unemployment reflected in the sta-

27

TTTTType of areaype of areaype of areaype of areaype of area Share ofShare ofShare ofShare ofShare of Share ofShare ofShare ofShare ofShare of NetNetNetNetNet NetNetNetNetNet ShareShareShareShareShare NetNetNetNetNet women women women women women young peopleyoung peopleyoung peopleyoung peopleyoung people migrationmigrationmigrationmigrationmigration migrationmigrationmigrationmigrationmigration of womenof womenof womenof womenof women migrationmigrationmigrationmigrationmigration(31 Dec(31 Dec(31 Dec(31 Dec(31 Dec (age 15-30) (age 15-30) (age 15-30) (age 15-30) (age 15-30) 19991999199919991999 women women women women women in net in net in net in net in net young young young young young 1998) % 1998) % 1998) % 1998) % 1998) % (31 Dec (31 Dec (31 Dec (31 Dec (31 Dec 1999 1999 1999 1999 1999 migrationmigrationmigrationmigrationmigration (age 15-30) (age 15-30) (age 15-30) (age 15-30) (age 15-30)

1998) %1998) %1998) %1998) %1998) % 19991999199919991999

Urban area 52,3 20,6 9 147 5 312 58,1 15 833

Urban-adjacent rural area 49,9 16,6 1 968 841 42,7 -3 6 44

Core rural area 50,1 16,4 -4 522 -2 651 58,6 -6 161

Sparsely populated rural area 49,2 15,0 -6 593 -3 502 53,1 -6 028

Whole countryWhole countryWhole countryWhole countryWhole country 51,251,251,251,251,2 18,718,718,718,718,7

Table 17. Share of women and young people in the population and their net migration.Source: Statistics Finland.

tistics. In rural areas women often withdrawfrom working life or work part-time. Some ruralpeople are not entitled to unemployment bene-fits due to income from farms, and these are notincluded in the unemployment statistics. Ruralunemployment also falls due to the migration tourban areas. (Publications of the Ministry of Ag-riculture and Forestry 9/1999, Countryside intransition – rural policy report, Raija Volk, pp.32-34)

Women have taken an active part in the local ac-tion groups in the LEADER II and POMO pro-grammes, and the share of women in the boardsof the action groups and among the employeesas well as in the projects has been at least equalto men.

Depopulation is a serious problem and threat inthe rural areas. This concerns, in particular, theyoung people, who migrate to the populationcentres to find education and employment. In1999 the net migration of the young from ruralto urban areas was 15,833. The migration ofwomen away from the rural areas is also a seri-ous problem. More women than men moveaway from the rural heartland areas and core ru-ral areas, and the age and sex structure becomesmore and more distorted.

The age structure is already quite distorted in therural areas. Even if the migration came to anend, the small number of people in the youngest

age groups and working age women in propor-tion to men lowers the birth rate . In the futurethe rural population is going to decline rapidly,if the current migration trends continue. Peoplemoving away from the rural areas are in generalmore highly educated than those who are stay-ing, and thus knowledge and skills are concen-trated to certain areas in Finland, which willalso be reflected in the structure of industries.

2.6 State of the environment

Finland is located in the northern coniferous for-est zone, which is characterised by the largeshare of peatland and watercourse area, strongvariation in the climatic conditions between theseasons, short growing period, barren soil andextremely vulnerable ecological balance.

The pure, healthy and high-quality environmentin Finland as well as the service network andcultural environment in rural areas provide ex-cellent opportunities for rural development. Thepurity and high quality of the environment arecompetition factors which have not yet been uti-lised to the maximum in Finland. The safety ofthe Finnish natural products and goods manu-factured from these is a significant strength. Theuse of pesticides is at a very low level, pollutiontransmitted in the air is small, and the heavymetal content in plants is also very low. The ma-jority of forests are not treated with fertilisers orother chemical substances. The most significant

28

Figures 8-11. Age pyramid (31 December 1998) in urban areas, urban-adjacent rural areas, ruralheartland areas and sparsely populated rural areas. Source: Statistics Finland

Urban area Urban adjacent rural area

Rural hearland area Sparsely populated rural area

29

strengths in terms of the so-called ecotourism arethe purity of the nature, large number of forestsand lakes, snow, light, extensive wilderness are-as, accessibility and good services. Landscapes,pure environments and natural resources consti-tute the production factors for entrepreneurshiprelating to the nature, and it is very important topreserve these and improve their quality. For themost part the state of the Finnish forest environ-ment is good.

The Finnish forests are under quite intensive uti-lisation in forestry. Wood processing industryhas for a long time been one of the cornerstonesof the Finnish economy and especially in Easternand Northern Finland, where most of the Finn-ish forest resources are located, it is a central fac-tor for the regional economies. Conservation ar-eas are quite unevenly distributed so that themajority of the protected forests are located inNorthern Finland. The significance of the con-servation areas for tourism has grown.

One special feature in the land ownership in Fin-land is the large share of the private land own-ers, i.e. about two thirds of the forest area isowned by private persons. An increasing shareof forests are owned by urban dwellers. Thereare altogether 920,000 forest owners in Finland,and the number of forest holdings of over 1 hec-tare is 440,000. Farmers own about 31 per centof all privately owned forest land.

The scattered forest ownership is problematicfor example when forests are used for the pro-duction of tourism and recreational services. Ef-forts have been made to solve the problems bycombining the planning concerning the entre-preneurial activities of villages to the forestryplans made jointly by the land owners. All landowners will be available for the drawing up ofthe forestry plans, and at the same time issuesconcerning e.g. the recreational needs of the lo-cal residents, the needs of tourism enterprises,landscape and other protection, hiking routes,etc. can be discussed.

The quality of the inland waters in Finland isalso good. These are usually quite shallow, withpoor buffering capacity, which makes them sus-ceptible for eutrophication and acidification.Finland has abundant groundwater resourcesand in most cases the quality is also good, butthe problem is that they are quite unevenly dis-tributed to different regions so that the resourcesare scarce in the most densely populated areaswhere the consumption is the highest. Sea areassuffer from eutrophication. Emissions from theneighbouring countries also influence the load-ing of the Gulf of Finland in an essential way.

The air quality is in general quite good in Fin-land. The most serious problems are caused bythe emissions from traffic in the population cen-tres and from large industrial plants as well aslong-distance pollution from both the south andeast.

In recent decades biodiversity has declined due tosettlement and industrial activities. This affects, inparticular, the species depending on old-growthforests, groves, high-nutrient peatland, small wa-ters and habitats based on traditional cultivationand pasturing practices. About half of the endan-gered species live in forest or peatland.

The objective of the NATURA 2000 programmeis to make sure that an adequate amount of alloriginal and valuable ecotypes and ecologicalentities are preserved so that the species living inthese will survive for the future generations. TheNATURA 2000 proposal for Finland contains1,458 areas based on the nature and bird direc-tive of the European Union, and the total area ofthese is about 4.8 million ha. Three-quarters ofthe area is land and a quarter is water. The pro-posal of Finland covers about 12 per cent of thetotal area. 97 per cent of the areas have alreadybeen included in conservation programmes orreserved for these.

Cultural landscape is closely linked to the rela-tionship between people and the land, forms of

30

land use as well as production technology relat-ing to the use of natural resources, which arechanging all the time, resulting in changes in thelandscape. Cultural landscape is an essentialpart of the identity of the inhabitants and citi-zens, and it influences the attractiveness of theplaces of residence and tourism a great deal.

The increased concentration of people to popu-lation centres, rural depopulation as well as thegrowth in the unit size of agriculture have led tomajor changes in the rural landscape, especiallyduring the past decade. The open areas are be-coming overgrown, pastures are disappearingwhere there is no longer any grazing livestock,the range of crops becomes less varied, and inmany areas empty houses and production build-ings show that the people are leaving. On theother hand, the number of holiday homes is in-creasing in the rural areas, and in many casesthese are becoming second homes that are usedround the year.

2.7 Results of the pre2.7 Results of the pre2.7 Results of the pre2.7 Results of the pre2.7 Results of the previous prvious prvious prvious prvious progrogrogrogrogramming periodamming periodamming periodamming periodamming periodand deand deand deand deand devvvvvelopment needs based on theseelopment needs based on theseelopment needs based on theseelopment needs based on theseelopment needs based on these

2.7.1 LEADER II programme

In the programming period 1995-1999 twoLEADER II programmes were implemented inFinland by altogether 22 LEADER groups. 12 ofthese operated in Objective 5b area and 10 inObjective 6 area. The EU contribution to theFinnish LEADER II programmes totalled EUR16.48 million (FIM 97.96 million) in Objective1 area and EUR 12.21 million (FIM 72.62) inObjective 6 area, and the amounts of nationalpublic funding were the same. The private fund-ing for the programmes totalled EUR 21.09(FIM 125.36 million) in the LEADER areas inthe Objective 5b area and EUR 11.55 million(FIM 68.66 million) in LEADER areas in Objec-tive 6 areas. In 1997-1999 altogether 2,817projects received funding through the LEADERII programmes, of which 1,716 were in Objec-tive 5b area and 1,101 in Objective 6 area.

LEADER II succeeded well in establishing its po-sition among the EU funded and national ruraldevelopment programmes, and the objectivesconcerning the increased co-operation betweenthe different parties and activity of the local resi-dents were reached even better than expected.Due to the emphasis on local initiative the LEAD-ER methodology is particularly well suited for ac-tivating the rural population. It has been easy forthe local residents to come to the LEADER offic-es, and thus new people have become involved inrural development, bringing along new ideas. Thefaith of the rural residents in the possibility to in-fluence their own lives and the decision-makinghas increased due to the new channel provided bythe LEADER programme.

LEADER II programme also contributed to thecreation of new, especially part-time jobs in ru-ral areas, as well as the establishment of new en-terprises. By the end of 1999 LEADER II pro-gramme (Objective 5b and 6 areas) had contrib-uted to the creation of 973 full-time and 1,570part-time jobs, and altogether 24,233 peoplehad participated in the information and trainingsessions. The LAGs have also directed a consid-erable number of project proposals to the otherrural development programmes.

Based on the mid term evaluation, however, theLAGs were not completely satisfied with thenumber of new jobs and enterprises, and LEAD-ER II groups considered this to be an even moreimportant objective in the future. Now the localresidents have been involved and activated, andthe next stage will be to channel the enthusiasmmore strongly into action. The objective con-cerning the creation of new jobs and enterprisesis well in harmony with the general objectives ofLEADER+, i.e. improving the economic viabilityin rural areas.

The LEADER methodology is new to the newLAGs, and in the case of these involving and ani-mating the local residents constitutes an impor-tant phase in launching the programme. In

31

LEADER II the best results were achieved partic-ularly in animating the rural residents.

Because activity based on the local action groupswas considered an important aspect of rural de-velopment, it was supplemented through nation-al financing to altogether 26 POMO groups(Rural Programme for Local Initiative), whichoperated in 1997-1999.

Other rural development programmes

POMO programme

The rural programme for local initiative was fi-nanced nationally, and thus it was not tied to theareas covered by the EU programmes. POMOgroups operated in the Objective 6, 5b and 2 ar-eas as well as outside these. The number ofgroups was 26, and their territories coveredabout a third of the area of Finland.

The programming period was 1997-1999. Thecontribution of the Ministry of Agriculture andForestry was FIM 28 million in each of the threeyears, which was 50 per cent of the financialframework of the POMO group. The other halfconsisted of private financing and/or municipalfunding or possible other State funding. The shareof the private and/or municipal funds had to be atleast 25 per cent. The total financing for the pro-gramme amounted to about FIM 190 million.

POMO involves no funding directed at small en-terprises, and the total number of projects imple-mented in the programming period was morethan 1,800.

The POMO groups have contributed to the crea-tion of new full-time, part-time and periodicaljobs or renewal of old jobs, and they have alsopromoted co-operation and networking betweenthe different actors and parties. The projects con-cerned e.g. the construction of new co-operationnetworks, development plans for villages and var-ious kinds of service units. Hundreds of courses

around the different themes were organised, andthe multiplier impacts of the programme wereconsiderable. POMO programme complementedand boosted the implementation of the other pro-grammes by feeding project applications and ide-as corresponding to about FIM 80 million to oth-er financing sources.

The POMO groups drew up three-year develop-ment plans for the development of their own ter-ritories, and the Ministry of Agriculture andForestry allocated funds for the groups annuallyon the basis of the economic and activity plans.Before drawing up the plans the POMO groupshad called in project applications from the areasconcerned and selected the measures consideredthe most appropriate for the implementation ofthe development plan to be included in the eco-nomic and activity plan.

The assistance from the Ministry of Agricultureand Forestry was paid on the basis of theprogress of the development plan in eachPOMO group. The maximum of 25 per cent ofthe annual appropriation to the LAG could begranted as an advance, which had to be appliedfor. A more detailed activity and economic planindicating the use of funds for different measureshad to be submitted before applying for the ad-vance or the first instalment. A summary of theactivities and measures of each LAG was at-tached to the application for payment submittedto the Ministry of Agriculture and Forestry, andthe Ministry verified that the measures compliedwith the relevant legislation. When the follow-ing instalments were applied for an account hadto be provided of the use of the previous instal-ment, together with an estimate of the expensesdue to the programme implementation in thefollowing period. The last instalment for 1999was payable when the final report and accountof the use of funds by the LAG had been ap-proved. The POMO groups were responsible forthe payments to the programme implementers ithad selected in accordance with the directions is-sued for the payment procedure.

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The particular strength of the POMO pro-gramme was its autonomy, as all the decisionson the financing and payments to measures weremade by the LAG itself, and only the POMOgroup was in direct contact with those imple-menting the measures. The LAG provided assist-ance in the practical implementation as well ascompiled the information needed for the pay-ments, monitoring and reporting to the Ministryof Agriculture and Forestry.

The POMO programme involved a number ofnew actors in the rural development work, andit constituted a particularly significant resourcein areas not covered by the EU programmes inthe previous programming period. The bottom-up approach and local orientation succeededvery well in POMO, and it was easy for theleader of the measures with little experience inproject work to contact the local POMO officesfor advice. The programme increased theknowledge and skills relating to LAG activitiesand other rural development in a significantway.

The advance payment procedure of the nationalprogramme proved efficient in terms of the li-quidity of the LAGs, and no problems came upin this respect.

The most serious problem in the POMO pro-gramme was the tight schedule and the possibili-ty to apply for assistance through the pro-gramme only once a year. Due to this some ofthe measures selected to be financing were in-complete. At the payment stage the Ministry ofAgriculture and Forestry was responsible forverifying that hundreds of measures compliedwith the relevant legislation based on writtendocuments only. In some areas the work of thePOMO groups was not linked to the other de-velopment work, mainly due to administrativemodel. Some POMO groups had to compile theannual financing from a number of sources(Ministry of Agriculture and Forestry, Employ-ment and Economic Development Centre, mu-

nicipalities, Regional Councils, State ProvincialOffices), which means that a number of differentparties were also involved in the application forpayments and reporting.

Objective 5b

The objective of priority 2, diversification of pri-mary production, of the Objective 5b pro-gramme was rural development through the de-velopment of primary production and entrepre-neurial activity in rural areas. Based on the midterm evaluation, assistance was allocated prima-rily to measures concerning the number offarms, which was a general objective of thewhole programme, assigned to priority 2(48,000 active farms). According to the objec-tive, 4,000 farms should change their produc-tion line. The measures included in priority 2also influenced the objectives concerning newjobs, reducing unemployment and reducing re-gional disparities in the development.

By the end of 1999 6,323 projects had been ap-proved, and 37 per cent of these concerned thefinancing of enterprise projects.

The result objective for priority 2 established inthe programme document was 7,000 new orpreserved jobs. According to information col-lected from the projects, by 31 December 1999the measures of priority 2 had contributed to thecreation of 3,485 new jobs. For the part of thepreserved jobs the monitoring data clearly over-estimate the significance of the Objective 5b pro-gramme, considering the decrease in the numberof jobs during the period in question.

Another important result objective in priority 2was launching new entrepreneurial activity on3,000 farms. By 31 December 1999 1,147 enter-prises had been set up on farms and the numberof other new enterprises was 772, and thus theprogramme had contributed to the establish-ment of 1,919 enterprises.

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One of the objectives in priority 2 was to in-crease the number of product development unitsby 60 units. This objective was exceeded, as thenumber of new product development units en-tered to the project register is 145.

The priority is also expected to contribute to theimplementation of 220 information technology,research and development projects. The numberof projects directly linked to the utilisation of in-formation technology is 78, and most of themconcerned increasing the computer skills in ruralareas. Increasing the use of information technol-ogy was an important aspect in several otherprojects as well.

The development in the number of jobs concern-ing the lines of businesses relevant to the strategyof the Objective 5b programme varied. Accord-ing to the final report of the mid-term evalua-tion, Objective 5b programme had contributedinto creation of 11,975 new jobs and preserva-tion of 38,166 jobs by the end of 1998. Largepercentage of the jobs created was due to theservice sector where the impact of Objective 5bis mainly indirect.

By 6 September 1999 assistance through the Ob-jective 5a programme had been granted to about700 agricultural investments, 1,700 farms forstarting-up, and 900 farms for bookkeeping.The subsidies totalled FIM 298 million and FIM314 million were granted as interest-rate subsidyloans. The investments based on EU fundingconcerned mainly the building of dairy produc-tion buildings. During the same period of timethe investment aid granted from the nationalfunds totalled almost FIM 1 billion, and morethan FIM 3 billion was granted as interest-ratesubsidy loans.

Objective 6 programme

The general objective of the Objective 6 pro-gramme is to address the problems of sparselypopulated rural areas where the development ac-

cording to the indicators for the national econo-my is the weakest. Objectives of the programmewere implemented through all the structuralfunds, and a specific rural package directed atthe rural development measures was included inthe programme. Projects part-financed by theEAGGF concerned mainly the diversification ofrural industries, especially projects promotingforestry and the use of wood as well as ruraltourism. Development measures were also di-rected at local rural development and environ-mental measures.

The programme was implemented at the region-al level, with extensive participation of the localactors and authorities in the planning and imple-mentation of the strategies. Rural developmentmeasures implemented in a certain area havebeen integrated to each other, with special em-phasis on extensive development projects con-cerning the focal areas.

The development and enterprise investmentprojects financed through the EAGGF have cre-ated 2,350 new permanent jobs and contributedto the preservation of 8,350 jobs. The measureshave led to the establishment of 550 enterprises,and on more than 400 farms the programme hascontributed to the launching of subsidiary in-dustries. About 3,500 farms are involved in co-operation rings, which can be considered a sig-nificant result.

In the area covered by the plan, support throughObjective 5b for farms was granted to altogether600 agricultural investments as well as 426projects concerning bookkeeping subsidies.Most of the financing aid from the EU was usedfor cattle production buildings, while all otheragricultural investments have been funded na-tionally. Investment aid has contributed to therapid structural development of agriculture inthe areas concerned so that e.g. in Objective 6area the production quantities have stayed at thesame level or even increased slightly even if thenumber of farms has decreased. Start-up aid for

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young farmers was granted to 760 farms in theprogramme area, and these totalled FIM 90.1million. Aid for the development of the process-ing and marketing in the food industry wasgranted to 31 projects, whose cost estimates to-talled FIM 102 million.

By the end of 1999 2,119 projects had been ap-proved, and more than 1,500 of these were en-terprise projects.

Among the most important areas of focus in allregions were forestry and promoting the use ofwood for energy and mechanical use of wood.The number of development projects in this sec-tor was about 100, and there were more than500 projects related to these enterprise projects.The input to projects aimed at developing entre-preneurship and the skills of entrepreneurs, wasalso considerable, leading to more than 300 en-terprise projects. Training, especially concerningthe rural population, was a very attractive meas-ure in all development projects. The develop-ment of rural tourism was one of the special are-as of focus, which has benefited considerablyfrom regional development work. The totalnumber of projects implemented in this sectorwas 80, and the number of related enterpriseprojects was more than 200.

The number of projects concerning the develop-ment of new production lines or changing theproduction line was about 100, and 70 enter-prise projects related to these were implemented.106 projects were directed at the development,processing and marketing of agricultural andnatural products, and the number of related en-terprise projects was 85. 64 projects concernedthe development of villages and local communi-ties, and 40 enterprise projects were implement-ed in this field.

Rural Policy Committee

There was an obvious need for a national levelbody for co-ordinating of the co-operation be-

tween different ministries and other main organ-isations involved in rural policy. The Rural Poli-cy Committee set up for this purpose assists theGovernment in preparing a general programmefor rural development or is involved in the im-plementation of other general programmes. Oneimportant task of the Rural Policy Committee isto promote the different sectors that are impor-tant in terms of rural policy, and it is responsiblefor duties that the parties involved in rural de-velopment regard as common, best dealt withthrough a single body. These include the regis-ters and statistics on different fields, certain is-sues relating to information, training and inter-national co-operation, as well as extensive net-working projects financed by the Rural PolicyCommittee. Thus the committee serves the terri-torial development, the numerous projects im-plemented in the different sectors as well as theentrepreneurs and specialists involved in these.In many sectors the development stage still callsfor crossing both territorial borders and bound-aries between the different fields, and co-opera-tion and distribution of labour between the na-tional and territorial activities are needed in this.

The Rural Policy Committee operates throughtheme groups and national networking projects,which in turn perform the above-mentionedtasks in co-operation with various parties. In or-der to develop the system, territorial activitiescorresponding to the theme groups and parts ofnetworking projects are needed. The territorialactivities and actions need not correspond in fullto the bodies operating at the national level, butefficient co-operation and distribution of labouris essential. The Rural Policy Committee sup-ports closer networking through publications,seminars and other information services as wellas by designing research and developmentprojects. The Rural Policy Committee may ap-point persons or temporary work groups to per-form the above-mentioned tasks.

The number of theme groups is 10-15, and thelong-term development work at the territorial

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and national level covers the following themes,among others: small and medium sized foodcompanies (Ruoka-Suomi / Food Finland), ruraltourism, women in rural development, local ini-tiative (LEADER and POMO theme groups)long-distance employment, development of vil-lages (village network project), natural products,

wood products (Wood Finland action pro-gramme), remote rural areas and reinforcing theexpertise in rural areas (e.g. village school repre-sentative, rural PD training, training of ruraland village developers). The themes change ac-cording to the needs, and the composition of thegroups is also revised from time to time.

2.8 Strengths, opportunities, weaknesses and threats in rural areas

Quadripartite SWOT analysis of the Finnish rural areas

STRENGTHSSTRENGTHSSTRENGTHSSTRENGTHSSTRENGTHS

- new kind of co-operation culture created in the previousprogramming period

- high education level and large number of educationestablishments

- traditional skills in crafts- small, local, high-quality products- nature and natural resources- spaciousness and quietness of the Finnish nature- NATURA 2000- abundant use of information and communication

technology and wireless communications- citizens’ action, joint action, village action

WEAKNESSESWEAKNESSESWEAKNESSESWEAKNESSESWEAKNESSES

- lack of co-operation, especially in the economy- reduction in the resources and rural service network- low entrepreneurship- employment in general and decrease in the need for labour

in the municipal and agricultural sector- low value added of natural products- small lots, not accepted by the main retail chains- low tolerance of the northern nature- sparse population and long distances, difficulties in all in-

dustrial activity and in maintaining services and other inf-rastructure

- decrease in the population, especially in the number ofmore highly educated, women and the young, distortedage and sex structure

THREATHREATHREATHREATHREATSTSTSTSTS

- unproductive use of resources, loss of developmentpotential

- inability to invest in developing sectors- contamination of the environment- difficulties in maintaining industrial activity, services and

other infrastructure

OPPORTUNITIESOPPORTUNITIESOPPORTUNITIESOPPORTUNITIESOPPORTUNITIES

- utilisation and increase of co-operation- supporting micro enterprises- customized training- utilisation of crafts skills in industrial activity- product development relating to raw materials,

processing- market niche for small local high-quality products

because large food companies are concentrated tocertain areas

- networking and joint marketing of small-scale producers- small-scale enterprise projects, processing of local or-

ganic products, ecotourism- utilisation of NATURA- productive utilisation of information technology e.g. in

entrepreneurial activity and long-distance employment,increased employment opportunities, reduces the prob-lems due to long distances

- proper channelling of citizens’ action- utilisation of cultural heritage and special local features

in e.g. tourism, which also reinforces the local identity ofthe people

- interaction between rural and urban areas- international contacts

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In order to make sure that new ideas will befound and experimented, local residents and or-ganisations have to be involved in the LAGsfrom as many different fields as possible, and itis also important to find new people who havenot participated in rural development work ear-lier. The development of the areas should be di-rected at the real needs, utilising the existing re-sources as efficiently as possible. One obviousthreat is that the resources are used in an unpro-ductive way and the potential development op-portunities are lost. In rural areas the develop-ment is often directed to the same fields as earli-er, without adequate input to the emerging anddeveloping sectors.

In some parts of the Finnish rural area there hastraditionally been very little co-operation. Dur-ing the previous programming period, however,co-operation was started between parties wherethis did not use to exist, such as associations andenterprises. The new kind of co-operation cul-ture is an important resource, which should beutilised e.g. in the diversification of the rural in-dustries. The significance of co-operation is in-creasing, because the reduction of the rural serv-ice network and other resources directed at ruralareas makes it more and more difficult to man-age on one’s own. One of the objectives ofLEADER+ is to continue and increase the co-op-eration between the LAGs and regional and lo-cal authorities as well as to find new forms andfields of co-operation.

The LAGs consider the promotion of entrepre-neurship in each area the most important issuein the development work. Micro enterprises areimportant for the employment in the country-side, and supporting these will be continued andintensified in LEADER+. Micro enterprises maybe sources of voluntary or part-time employ-ment for farmers who need and additional in-come source or quit agricultural production.Micro enterprises often start by employing 1-2persons; often only the person starting the enter-prise, but successful companies may grow later

on so that they need more labour than the farmfamily alone. New ideas are often quite small,but in best cases they may create employmentopportunities for a large number of people. Sev-eral small companies may also employ morepeople than few large ones. The establishment ofsmall enterprises has significant indirect effectson the viability of the countryside as families goon living there.

The number of entrepreneurs has traditionallybeen small in Finland, compared to many othercountries. The industrial structure of many ruralareas is also too one-sided. In the 1990s the em-ployment in both agriculture and the municipalsector decreased considerably and the share ofthe unemployed in the working-age populationis still quite high, which means that new compa-nies are needed in the rural areas to diversify theindustrial structure and provide new employ-ment opportunities.

Starting a company requires capital, as well asability to take risk. One way to promote and de-velop the establishment of new companies couldbe through training customised to the needs ofthe rural residents. The development of new ide-as often calls for appropriate training as well,which is usually not available in the regulartraining programmes of educational establish-ments. However, the high education level andlarge number of schools and colleges providesan excellent framework for the organisation oftraining directed at the special needs of rural res-idents together with specialists in different fields.For example, the skills in crafts could be utilisedindustrially much more than is being done atpresents. More efficient utilisation of informa-tion technology requires inputs both in the basicskills and special skills needed in running an en-terprise.

In addition to the one-sided industrial structureand decrease in the number of farmers, the lowdecree of processing of natural resources is a se-rious handicap. The price paid for the raw mate-

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rial is much lower than the price of the proc-essed goods, and thus small-scale product devel-opment and processing of the raw materialswould diversify the structure of industries andincrease the income from the local raw materi-als. The strong concentration of large food com-panies has created a market niche for local high-quality products, which is reflected e.g. in thecontinuous increase in the demand for organicproducts. The most serious problem has been toget the products of small-scale producers to themarket, because many large retail chains takegoods for sale in relatively large lots only, whichsmall-scale producers are not capable of supply-ing. The situation could be improved throughnetworking and joint marketing.

The nature and natural resources are the mainstrength of the Finnish countryside. Owing to thesparse population and long distances the Finnishnature has stayed purer and more intact than inmost other parts of Europe. On the other hand,the tolerance of the northern nature is lower thanin the south, and thus the risk of pollution andcontamination is also greater and significant in-puts in the protection of nature are needed. TheLAGs emphasise the sustainable utilisation of thenature and natural resources through e.g. small-scale environmental projects, processing of localnatural products and ecotourism. Small-scaletourism also takes better advantage of the spa-ciousness and quietness typical of the Finnish na-ture, which cannot be found anywhere in Centraland Southern Europe. It is also possible to utilisethe NATURA 2000 areas in tourism.

Sparse population and long distances are alsoone of the most serious problems in the rural ar-eas in Finland. They constitute a major obstacleto all industrial activity and make it difficult tomaintain the services and other infrastructure,because the number of potential residents issmall. The long distances also make it practicallyimpossible for people living in the rural heart-land areas and remote rural areas to work inpopulation centres.

Compared to the other countries, informationand communication technology as well as wire-less means of communication are used a lot inFinland. Information technology as such doesnot promote industrial activities, but it must beused in an efficient way, and this calls for ex-tensive development measures. There is alreadya lot of information technology available inthe Finnish countryside, and more efficient uti-lisation of this e.g. in rural enterprises or long-distance employment for companies located inpopulation centres create new employment op-portunities. New information technology alle-viates the problems caused by the long distanc-es, especially in the rural heartland areas andremote rural areas.

Citizens’ action is an important resource in therural areas, and through proper channelling thismay yield excellent results. There is a largenumber of associations in rural areas, such asthe Women’s Advisory Organisation for Devel-opment of Rural Areas, farmers’ societies, andvillage associations. There is a long tradition ofco-operation in villages, and this has beenstrengthened through the village activities. Thework of the LAGs during the previous program-ming period also made a significant contributionto activating the residents. Residents’ and citi-zens’ actions improve the attractiveness of therural areas as places of residence and improvethe quality of life and the living environments.However, actions animating the residents andimproving their environments need to be com-plemented by economic actions, as it would beimpossible to maintain the rural populationwithout making it possible for them to earn theirliving. Cultural heritage and special local fea-tures can be utilised in tourism and by organis-ing various kinds of events in rural areas. Thisalso activates the people and strengthens theirresidential identity.

In recent years the rural population has decreasedconsiderably in Finland, and the migration ofyoung people and women has been a particularly

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serious problem. People migrating from the ruralareas are also usually more highly educated. Themigration is reflected as a distorted age and sexstructure, e.g. the disproportionately high shareof pensioners in the rural population. LEADER+lays special emphasis on equality, especially in-creasing the interest of the young in developingtheir home district. Keeping the rural areas popu-lated depends largely on how the young peoplecould be made to stay in their native place orcome back after their studies.

Equality between the sexes by no means refers toincreasing measures directed at women, even ifthe emphasis on women and young people runsthrough the whole LEADER+ programme. InFinland women work outside the home just asmuch as men. More than half of the jobs createdthrough LEADER II were directed at women.However, the number of unemployed men isvery high in rural areas and many of them lackany vocational education and are thus threat-ened by social exclusion, especially due to theradical changes in or even disappearance ofmany traditional tasks or jobs.

Interaction between the rural and urban areasaims at improving the equality between differ-

ent areas. The local markets in rural areas arevery small and thus the marketing of localproducts in the near-by centres should be in-creased. Small rural companies could also makeproduction contracts or engage in other typesof co-operation with companies in the popula-tion centres.

During the implementation of LEADER II mostof the LAGs started the planning of internation-al projects together with partners from otherMember States. Due to the short programmingperiod in Finland, only a few groups reached theproject stage in this, but international partnersbrought along new information and ideas,which the Finnish LAGs were able to take ad-vantage of in their own work. In LEADER+ theinternational contacts are further strengthenedand the ideas and insights relating primarily torural industries will be utilised. International co-operation brings value added to the local devel-opment work when this is concerned with issuesthat are relevant for the areas in question. Localindustries may benefit from international co-op-eration through e.g. networking with companiesand communities operating in the same field inother countries.

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3 Ex ante evaluation

The ex ante evaluation of the LEADER+ pro-gramme for Finland has been conducted in ac-cordance with the requirements laid down in Ar-ticles 19 and 41 of the General Regulation,Commission Notice Laying down the Guidelinesfor the Community Initiative for Rural Develop-ment (LEADER+) (2000/C 139/05, points 26and 34) as well as Commission Notice concer-ning the ex ante evaluation of the CommunityInitiative prior to the submission of the pro-gramme to the Commission.

The parties conducting the evaluation have to bespecialists in the relevant fields as well as impar-tial. Prior knowledge on the principles of LEA-DER and other structural fund programmes wasessential. The schedule for drawing up LEA-DER+ was extremely tight, and thus the Mi-nistry of Agriculture and Forestry sent a requestconcerning the ex ante evaluation of the LEA-DER+ programme for Finland and the develop-ment plans of the local action groups directly totwo experienced candidates, who were not in-volved in planning the programme nor will theybe involved in its implementation, administrati-on or financing.

In Finland the Finnish Area Research FAR,which is a research institute specialising in stu-dies concerning the regional development inFinland and Europe, was chosen to perform theex ante evaluation of LEADER+. The selectionwas based on the long experience of the evalu-ator in various kinds of evaluation tasks rela-ting to the structural funds, as well as the ex-tensive knowledge concerning the LEADERmethodology. A contract made between the Mi-nistry of Agriculture and Forestry and FARmade in September 2000 laid down the require-ments for the ex ante evaluation as well as theperiod of time during which the evaluation wasto be completed.

In the ex ante evaluation, special attentionshould be directed at the following issues: pilotnature of the projects, the regional dimension ofthe measures, with special emphasis on the localaction groups, the role of networking and co-operation in the strategies, integrated approachbased on sustainable development as well as therealisation of the bottom-up approach in themeasures.

Ex ante evaluation also had to cover the SWOTanalysis describing the current state of the ruralareas, appropriateness of the programme objec-tives and the desired effects as well as issues rela-ting to equality and the environment, as well asconsistency of the programme with other regio-nal support measures. The evaluation was alsoconcerned with the implementation proceduresfor administration, monitoring and evaluation.

The main conclusion of the ex ante evaluationwas that the programme covers the objectives setfor LEADER+, and the complementarity in rela-tion to the mainstream programmes envisaged inthe LEADER+ programme has been adequatelytaken into account. The national programmedocument was based on the development plansdrawn up by the LAGs, which shows that the lo-cal perspective required by the Commission hasbeen taken into consideration when setting theobjectives. The priorities and their objectivesand themes are presented in accordance with theguidelines in the programme document. The ge-neral objectives of the priorities are consistentwith the objectives of the LEADER+ program-me. The quantitative and qualitative objectivesof the priorities are appropriate and consistentwith the programme objectives. The dual dimen-sion of LEADER+ has in general received ade-quate emphasis in the objectives, and the ex-pected impacts are in line with the initial situati-on and objectives.

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The description of the state of the environmentin the programme was considered appropriate,taking into account the national coverage of theprogramme concerning the area concerned andbiodiversity. The description of the state of theenvironment covers both the natural and cultu-ral environments, with special emphasis on thepure and healthy environment as competitionfactors that have not yet been adequately takenadvantage of. These opportunities have alsobeen included in the SWOT analysis, whichforms the basis for the selection of strategies inthe programme.

In the LEADER+ programme for Finland equali-ty is mainly seen as equality between the sexes,but equality between the different age groups isby no means neglected. Equality is consideredfrom the perspectives of education, employment,wage level, social participation, participation inthe LAGs and migration. The emphasis on equa-lity runs through the whole programme docu-ment, and in the description of the current stateof rural areas the adequate attention is directedat the realisation of equality and the problems inthis so that the minimum requirements of theCommission are actually exceeded.

With respect to the administration of the pro-gramme the ex ante evaluation points out thatthe shift of the decision-making power to theLAGs will not be realised. Compared to theLEADER II programme the administration hasbeen revised e.g. by concentrating the decisionson financing to the Rural Departments of theEmployment and Economic Development Cent-res, instead of involving both the Rural and En-terprise Departments. The facts that the officialdecisions on financing are not made in the LAGswill not risk the autonomy of the groups, becau-se the authority may deviate from the proposalof the LAGs only for particularly weighty rea-son, and the LAGs may not be disregarded in thedecisions concerning the projects. The distributi-on of labour calls for close and constructive co-operation between the LAGs and territorial aut-

horities, which was for the most part realised al-ready during the LEADER II period. The metho-dology has been developed in the directionpointed out by the evaluator so that it is theLAG which maintains the contacts to the projectimplementers, and the LAGs also prepare thepayments. The establishment of the indicatorsfor monitoring and monitoring in general is con-sidered to receive adequate emphasis, utilisingthe experiences from the previous programmingperiod, and special attention has been directede.g. at the compilation of the initial data.

The most important proposals concerning thecomplementation and revision of the program-me put forward in the ex ante evaluation con-cerned more extensive analysis of the actions ofthe previous programming period, clarificationof the objectives and strategies, more extensivedescription of the other national support measu-res as well as revision of the classification of in-dicators.

An analysis of the nationally funded POMOprogramme for 1997-1999 complementing theLEADER II programme has been added to theprogramme. The impacts of POMO were alsodescribed in the draft sent for ex ante evaluation,and now a more extensive account of the quanti-tative and qualitative results as well as the admi-nistrative procedure from the perspective of thePOMO groups and administration have been in-cluded in the programme document.

The general objectives and strategies to achievethese are consistent with each other, but the waythey are presented in the programme documentshould be clarified. Special attention has beendirected at this point in drawing up the final ver-sion of the document. However, the LEADER+programme for Finland is based on the develop-ment plans of all the 57 LAGs that applied forfunding, and thus no major revisions could bemade in the objectives and strategies withoutjeopardising the required emphasis on the localperspective.

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In the LEADER+ programme for Finland theeconomic viability receives considerable empha-sis, and thus promoting entrepreneurship occu-pies a central position in the programme. In theex ante evaluation this is considered ap-propriate, and LEADER+ programme shouldspecifically be directed at the rural micro enter-prises. In the draft submitted for evaluation ent-repreneurship refers primarily to small andmicro enterprises, as LEADER+ is not intendedto constitute a means of financing large-scaleentrepreneurial projects. According to the Fin-nish legislation, funding through LEADER+ isavailable for enterprises employing no morethan five persons.

In the draft submitted for evaluation it was pro-posed that the share of enterprise projectsshould be 35 per cent of all projects, but in theevaluation it was suggested that the share of en-terprise projects should be larger. However,based on the statements from the interest groupsand re-analysis of the objectives the share of en-terprise projects was lowered to 30 per cent, andit is specified in the document that this target le-vel refers specifically to direct enterprise supportprojects. In addition to this entrepreneurial acti-vity will be promoted through the developmentprojects for enterprises as well as general deve-lopment projects. Thus entrepreneurial activitywill receive more extensive support thanthrough the direct enterprise support alone.

According to the ex ante evaluation, the LEA-DER+ programme for Finland should contain amore extensive description of the national me-asures relating to rural and regional develop-ment, employment and the environment. Duringthe preparation process all of these have beenused as background data, and LEADER+ pro-gramme has been drawn up taking into accountthe outlines and measures presented in the diffe-rent programmes to avoid any overlapping bet-ween the programmes or conflicts in relation tothe national employment and environmental ob-jectives. After the ex ante evaluation a descripti-

on of the national measures and programmeswas added to the programme document. Itshould also be noted that the development plansof the LAGs contain detailed accounts of theimplementation of the other programmes in theareas concerned, and thus the complementarity,synergy and overlapping with other measuresimplemented in the areas are well accounted for.

Other comments and additions proposed in theex ante evaluation have been included in the re-levant sections of the programme document.Consequently, the results of the ex ante evaluati-on have been taken into account as laid down inArticles 19 and 41 of the General Regulationand requirements of the Commission NoticeLaying down the Guidelines for the CommunityInitiative for Rural Development (LEADER+)(2000/C 139/05).

The ex ante evaluation took the full-time workinput of one person for altogether 17 days. Theevaluation was based on anticipatory approach,mainly using the matrix method. The draft ofthe LEADER+ programme document for Fin-land subjected to the evaluation was dated 11September 2000. The report of the ex ante eva-luation is given in Annex 2.

After submitting the report, the Finnish Area Re-search, which conducted the ex ante evaluation,was requested to complement the evaluation forthe part of the analysis of the Finnish rural areas.

In addition to the ex ante evaluation of the draftfor the LEADER+ programme for Finland, anexternal ex ante evaluation will be made concer-ning all the development plans of local actiongroups submitted to the Ministry of Agricultureand Forestry (altogether 57) prior to the selecti-on of the local action groups. The LAGs shouldbe selected as soon as possible after the approvalof the LEADER+ programme for Finland, andthus the Ministry of Agriculture and Forestryhas already designated the University of HelsinkiMikkeli Institute for Rural Research and Trai-

42

ning to conduct the external ex ante evaluationof the development plans of the LAGs. The Unitpossesses a great deal of expertise in the LEA-DER II programme as well as rural developmenton the national, territorial and local level. Thepurpose of the ex ante evaluation of the develop-ment plans is to secure the objectivity and trans-parency of the plans made by the LAGs. Exter-nal evaluation also provides valuable data to the

parties making the final selection on the LAGs toimplement LEADER +, the feasibility of the pro-posed development plans as well as whethertheir budgets are realistic.

All the costs due to the ex-ante evaluation ofboth the LEADER+ programme for Finland andthe development plans of the LAGs are paidfrom the national funds.

43

4 Objectives and strategies of the programme

4.1 Development objectives and strategy

The objective of the LEADER+ programme is toexperiment with new ideas for rural develop-ment. This may concern the development of newproducts, services and production methods ornew kind of co-operation in development me-asures. Work based on valuable new ideas maybe continued based on other financing. TheLAGs are responsible for the implementation ofthe programme, and thus the implementationstrategies vary in different territories.

In their development plans each LAG definestheir own measures and special goals based onthe particular characteristics of the area. Thisprogramme document is based on the develop-ment plans drawn up by the LAGs. The generalframework for LEADER+ should be as extensiveas possible. The projects are in general imple-mented for a period of eight years, and thus theprogramme is not restricted to concern one sec-tor or certain sectors only.

LEADER+ programme aims at increasing anddiversifying the preconditions for industrial acti-vity and attractiveness of rural areas mainlythrough small-scale measures suited for the spe-cial characteristics of each area. The ideas of therural residents, training and more extensive co-operation are expected to contribute to the crea-tion of new jobs and enterprises as well as to ot-her new kinds of activities.

Activities such as those based on the LEADERprogrammes are particularly well suited for pro-moting co-operation in rural areas. The Finnishcountryside is characterised by scarce and scatte-red resources. The LAGs bring together the diffe-rent parties, rural residents, local companies andassociations as well as local authorities, to co-operate for mutual benefit. LEADER+ increases

and reinforces the co-operation by financing jointprojects between the different parties, in particu-lar, when the co-operation is directed at promo-ting industrial activities e.g. by means of jointmarketing efforts of small-scale producers. In ad-dition to co-operation within the areas, effortsare being made to increase co-operation betweenthe areas as well as international co-operation.

In order to improve and diversify the precondi-tions for industrial activity, special efforts aremade to promote the establishment of small en-terprises as well as to develop their activities andco-operation. For the most part support throughLEADER+ is directed at micro enterprises. Skillsneeded for diversifying the rural industries willbe acquired through training suited to the spe-cial needs of each area. Skills in handiwork andlocal raw materials, together with the nature andnatural resources constitute the most importantresources of the Finnish countryside, and effortswill be made to develop and utilise these as a ba-sis for diversified industrial activities.

The education level of the rural population isstill below the national average, partly due tothe age structure. The rapid structural change inthe rural areas and adjustment to this calls forurgent measures to raise the level of knowledgeand skills. For example, it is important to makesure that the new entrepreneurs starting busines-ses to diversify the industrial structure possessadequate knowledge and skills. There is notenough training based on the specific needs ofrural entrepreneurs related to e.g. marketingavailable. The management of the activities andquality of the pluriactive enterprises could beconsiderably improved through training.

In addition to economic viability, the quality oflife in rural areas receives considerable emphasisin the programme. This can be developed based

44

on the traditionally active citizens’ and village ac-tivities as well as professional associations. Thenature and natural resources constitute one of themost important strengths in rural areas. Small-scale activity, such as LEADER, is very well suitedfor promoting sustainable development in boththe ecological and the social and cultural sense.

Finland is a pioneer in the information andcommunication technology, and this also appliesto the rural areas. Efficient utilisation of infor-mation and communication technology providesexcellent opportunities for remote and sparselypopulated rural areas with long distances to thenearest population centres. LEADER+ promotesthe skills and possibilities of the rural popula-tions in using information systems, utilisation ofinformation as well as producing data concer-ning the different areas. Know-how in computertechnology lays the foundations for the creationof new fobs and enterprises.

LEADER+ promotes the equality between boththe sexes by encouraging e.g. the entrepreneurialactivity of women and different areas by suppor-ting the interaction between the urban and ruralareas to the benefit of both parties. The youngpeople are encouraged to stay in their homedistrict or to return there after studies by sup-porting the employment of the young.

The principles of sustainable development aretaken into account in all actions. In generalsmall-scale activities such as LEADER have nomajor environmental impacts in the ecologicalsense. Projects improving the environment areencouraged. In the social and cultural sense, ho-wever, activities like LEADER influence the li-ving environment a great deal, and this is wherethe principles of sustainable development can befurthered through the programmes. Throughthis the quality of life in the rural areas can beconsiderably improved.

Small-scale development work such as LEADERsupports the principles of ecological, economic,

social and cultural sustainability. LEADER pro-gramme encourages projects enhancing biodi-versity, such as management of traditionallandscapes, regional and local recycling projectsas well as bioenergy projects utilising the localraw material. The projects can be expected tohave long-term socio-economic impacts, andthey may not lead to indebtedness or depletionof resources. Economic sustainability is alsosupported by increasing the human capitalthrough both training and development. In thesocial and cultural sense activities like LEADERmake a significant contribution to the people li-ving in the rural areas by giving them the oppor-tunity for developing the areas on their own ini-tiative as well as by preserving the local cultureand increasing social interaction and local res-ponsibility for the welfare of the territories.

Increased value added through LEADER+

LEADER+ complements and deepens the otherrural development programmes through the lo-cally oriented mode of action and highly diversi-fied group of actors. This is closely linked to thesmall-scale nature of the projects, because LEA-DER projects are mainly implemented by the ru-ral residents and local communities, not by largeorganisations. The maximum level of supportfor the projects to be financed is FIM 500,000(EUR 84,094). Already in the previous program-ming period the financing was divided so thatlarge-scale projects were financed through themainstream programmes and smaller projectsthrough the LEADER programme. The specialcharacteristics of LEADER methodology, suchas bottom-up approach, are particularly wellsuited to the financing of small-scale projects,but these have by no means been excluded fromthe other programmes, either.

The implementation of the EQUAL programmeis based on the so-called development partner-ships. These differ clearly from the LAGs imple-menting the LEADER programme. In the deve-lopment partnerships the role of authorities is

45

more significant, while the LAGs are establishedby the local residents, and the local authoritiesconstitute a minority in the composition of theLAGs. For the most part the target groups forthe EQUAL and LEADER Community Initiati-ves are also different. In EQUAL the mainemphasis is on abolishing all kinds of discrimi-nation in the working life, and the rural resi-dents facing difficulties in finding employmentare only one small group among others. A moredetailed account of the connections betweenLEADER+ and the other rural development pro-grammes is given in Chapter 13.

The applicants for funding through LEADER+are mainly actors at the local level, not establis-hed rural development organisations, while thecomposition of applicants in the opposite in themainstream programmes. Local actors oftenlack previous experience on project work, espe-cially the administration of large-scale projects,and thus the activity should be started from rela-tively small projects. LEADER methodologyemphasises the animation and participation atthe grass-root level. Development plans aredrawn up by local residents and communities,not by large organisations and professionals indevelopment work. This will, in turn, direct thefunding at certain kind of projects.

One important requirement for projects fundedunder the LEADER+ programme is that theyshould be of pilot nature. There is no such requi-rement in the other programmes. Projects underLEADER+ contain activities that are new in one

way or the other in the area concerned, and thusthe LAGs produce value added to rural develop-ment in their own territories.

In terms of its contents LEADER+ is more fle-xible than LEADER II, because the LAGs nolonger implement the same sub-measures. Thuseach LAG is able to concentrate on the specialcharacteristics, development of strengths andcombating the weaknesses of the territory con-cerned. Thus LEADER+ is capable of respon-ding more efficiently to the needs of the local ru-ral residents, which is one of the main differen-ces between projects funded through LEADER+and the other programmes.

Each LAG has selected one or two themes,which form the basis for the development plan.This reinforces the strategic aspect of the deve-lopment plans and makes it possible to designthe actions according to the local elements thatare considered the most important.

The population density is very low in all Finnishrural areas. Development work based on LAGsis particularly well suited for such conditions,because the activity involves bringing togetherscattered resources and different parties to consi-der and solve the special problems in each terri-tory. Through this the local expertise in differentfields can be utilised to the maximum. Conse-quently, the fact that LEADER+ programme canbe implemented in all rural areas in Finland is asignificant improvement.

46

INDICAINDICAINDICAINDICAINDICATORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORING

New jobs (created) converted into full-time jobs,their number, of which jobs for women / the young(under 30 years of age)Contact information of new jobs

Renewed (preserved) jobs converted into full-time jobs,their number, of which jobs for women / the young(under 30 years of age)Contact information of renewed jobs

Jobs during the project / programme converted into AWUand the number of these, of which women / the young(under 30 years of age)

New enterprises to be set up, of which run by women /the young (under 30 years of age)Contact information of new enterprises

Line of business of enterprises

Number of enterprise projects

Number of days of training, of which women / the young(under 30 years of age)Number of persons participating in training,of which women /the young (under 30 years of age)Number of training courses / sessionsType of training: quality training, marketing skills, environ-mental skills, new production methods, entrepreneurship,information technology, project work, development work,equality or other

Number of persons participating in information andanimation sessions, of which women / the young(under 30 years of age)Number of information and animation sessions

Number and contact information of associations

Number of projects with positive environmental impacts

QUANTITQUANTITQUANTITQUANTITQUANTITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES INDI-INDI-INDI-INDI-INDI- Num-Num-Num-Num-Num-CACACACACATORTORTORTORTOR berberberberber

New jobs converted into full- Resulttime jobs 2 400

Of which women 1 200Of which the young (under 30 years) 360

Renewed (preserved) jobs converted Resultinto full-time jobs 600

Of which women 300Of which the young (under 30 years) 20

Jobs during the project / Resultprogramme (AWU) 1 000

Of which women 500Of which the young (under 30 years) 150

New enterprises to be set up Result 500Of which run by women 200Of which run by the young 50(under 30)

Share of enterprise projects Inputin all projects 35%(direct aid for enterprises)

Training, number of days Output(7 hours) 20 000

Of which the young 10 000 (under 30 years) 2 000

Number of persons participating Outputin information and animation sessions 50 000

Of which women 25 000Of which the young 10 000

Organised coalitions of companies Result 50and other organisations(associations, companies,co-operatives, etc.)

Share of projects with positiveenvironmental impacts of allprojects 20 per cent

4.2 Quantitativ4.2 Quantitativ4.2 Quantitativ4.2 Quantitativ4.2 Quantitative and qualitative and qualitative and qualitative and qualitative and qualitative objective objective objective objective objectives of the pres of the pres of the pres of the pres of the progrogrogrogrogrammeammeammeammeamme

Objectives of LEADER+ and indicators for monitoring:

47

Monitoring data compiled for evaluation,Monitoring data compiled for evaluation,Monitoring data compiled for evaluation,Monitoring data compiled for evaluation,Monitoring data compiled for evaluation,a separate form for qualitative objectives and theira separate form for qualitative objectives and theira separate form for qualitative objectives and theira separate form for qualitative objectives and theira separate form for qualitative objectives and theirrealisation. LAGs may also set objectives of theirrealisation. LAGs may also set objectives of theirrealisation. LAGs may also set objectives of theirrealisation. LAGs may also set objectives of theirrealisation. LAGs may also set objectives of theirown and indicators to monitor these.own and indicators to monitor these.own and indicators to monitor these.own and indicators to monitor these.own and indicators to monitor these.

Projects with environmental impacts fill in the monitoringform for environmental impacts.The form, a verbal description of the positive and negativeenvironmental impacts of the project, e.g. changes inamounts of emissions and waste, effects on landscapeand biodiversity, summary of these impacts

The form, a verbal description of the impacts of the projectto improve the residents’ quality of life, summary of thesemeasures

Organised co-operation rings, number of parties involvedin joint projects, number of participants in training andanimation sessions, accompanied by a verbal description

Monitoring indicators follow the shares of men, womenand the young in the results, accompanied by a verbaldescription

Number of members in LEADER+ groups, membershipstructure, number of participants in group meetings,turnover of the board, project applicants from variousparties, information, accompanied by a verbal description

Number and type of innovations. A verbal description inparticular of the transferability of the models createdby the project

Summary of implemented measures, a verbal descriptionof how well the objective reached

Summary of the implemented measures, a verbaldescription of how well the objective reached

Number of participants in meetings, summary of theimplemented measures, a verbal description of how wellthe objective reached

QUALITQUALITQUALITQUALITQUALITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES INDI-INDI-INDI-INDI-INDI-CACACACACATORTORTORTORTOR

Improvement of the environment Impact

Improvement of the quality of life Impact

Increasing co-operation Impact

Increasing equality Impact

Equal opportunity for all local residents Impactto participate in the development of the area

Pilot nature (and innovation) Result

Curbing migration / encouraging migration Impacttowards rural areas

Increasing interaction between rural and Impacturban areas

Animating the residents and increased Impactparticipation

Ohjelman kokonaistavoitteet ja seurattavat asiat on eritelty toimenpidekokonaisuuksissa A - D.

48

4.3 Economic, social and envir4.3 Economic, social and envir4.3 Economic, social and envir4.3 Economic, social and envir4.3 Economic, social and environmental impactsonmental impactsonmental impactsonmental impactsonmental impacts

Economic impacts

The objective of LEADER+ is to develop the in-dustrial activities in rural areas. New enterprisesand job opportunities make it possible for therural residents to go on living in their homedistrict, which slows down rural depopulation.Active industrial life secures the preservation ofan adequate population basis to maintain anadequate level of services in rural areas, and thusthe negative spiral can be stopped. The multip-lier effects of industrial activity are reflected as agrowing demand in both the public sector andthe private service sector. Increased tax incomebalances the municipal economies and secures areasonable supply of services. LEADER+ is partof the extensive programme package of the EU,which in turn constitutes only part of the factorsinfluencing the structure and economy of ruralareas, and thus it is very difficult to present anydetailed account of the quantitative impacts.

Social and cultural impacts

In terms of its operational strategy LEADER+ isa development programme based of communi-ties, which strengthens the processes of the ac-tors relating to influence, learning and develop-ment. The work of the LAGs has involved newpeople in the development of rural areas as wellas activated the local organisations, such as vil-lage committees. The activities create social net-works, which provide various kinds of econo-mic opportunities and improve the social envi-ronment in a number of ways. This is reflectedas increased attractiveness of rural areas, and itrevives and reinforces the faith in the future.This leads to growth in the viability of the wholearea and more efficient utilisation of the deve-lopment potential.

The LAGs have largely been based on the workof active women. The emphasis in industries inLEADER+ encourages women to take advantage

of the opportunities for entrepreneurship andself-employment. This addresses one of the basicproblems in rural areas, i.e. the migration of wo-men to population centres to find employment.As a result of the decrease in the number of jobsin agriculture and the cuts in the public sectorthe opportunities of women to find employmentin rural areas became very scarce, and new kindsof industrial activities are needed to improve thesituation.

LEADER+ also makes it possible to integrate themen who, due to the fall in the number of farms,are threatened by social exclusion to the socialnetworks and create new jobs for them.

One problem in the rural areas in Finland is theageing population, which increases the need tocreate new ways of action. Through LEADER+it will be possible to support e.g. new small-scaleservice enterprises complementing the municipalservices for the old people, or to develop supportperson networks for old people living alone. Theageing population should also be involved in theactivities under LEADER to prevent the exclusi-on of the old people from the society and pro-mote the transfer of their experiences and know-how as well as cultural heritage to the youngergenerations.

LEADER+ programme contributes in a signifi-cant way to the cultural objectives related to theprinciple of sustainable development, because itpromotes the preservation of the national andculinary traditions, traditional landscapes aswell as buildings and environments with cultu-ral and historical value. The measures related toculture also increase the interaction between therural and urban areas.

Environmental impacts

The LEADER II programme contained a numberof projects aimed directly at improving the envi-ronment, such as landscape management, resto-ration of traditional landscapes and old buil-

49

dings, revival of old building techniques, resto-ration of meadows and peatland areas, as wellas waste and recycling projects. Similar actionswill be continued in LEADER+.

The objective of LEADER+ is to preserve theviability of rural areas, improve the quality ofthe living environment and diversify the econo-mic activities in order to reduce depopulationand maintain the diversity of landscapes. Me-asures concerning the restoration of traditionalbuildings and finding new uses for them have apositive impact on both the traditional landsca-pes and the preservation of diversity. All marginareas and variations in land use improve the li-ving conditions of different kinds of living orga-

nisms. The rural environments can be signifi-cantly improved through active projects aimedat improving the state of the environment.

The LAGs developed various kinds of ‘ecotou-rism’ during the previous programming period,and LEADER+ will continue the utilisation ofnature. The possibility for economic utilisationtakes the attitudes to nature conservation into amore positive direction, and NATURE 2000 are-as can also be used in tourism.

In the ex-ante evaluation of programme comple-ment more environmental aspects according toArticle 41.2 (b) of the general regulation (1260/1999) will be elaborated.

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5 Actions, priority themes and measures

The structure of the LEADER+ prThe structure of the LEADER+ prThe structure of the LEADER+ prThe structure of the LEADER+ prThe structure of the LEADER+ progrogrogrogrogramme:amme:amme:amme:amme:

• Selected theme

• Action 1 and 2

• Sub-measure

• Alatoimenpide (from the development plan of the group)

• Single project

The themes, actions and measures to be selectedare defined in this programme document. Sub-measures are defined in the development plan ofeach LAG, and thus all of the LAGs do notimplement the same sub-measures. Each LAG se-lects the projects to be implemented in each areaso that they implement at the same time one ofthe sub-measures established by the LAG, onemeasure of this programme document, action 1or 2 as well as the theme selected in the develop-ment plan.

Priority themes in the programme

The LAGs have linked the section concerningthe strategies and measures of the developmentplan to one or two selected themes, and all pro-jects financed by the LAGs must contribute tothe theme(s).

1. Use of new know-how and technologies tomake the products and services of rural areasmore competitive

2. Improving the quality of life in rural areas3. Adding value to local products; facilitating

access to markets for small production unitsvia collective actions

4. Making the best use of natural and culturalresources, including enhancing the value ofsites of Community interest selected under

NATURA 20005. Slowing down migration from rural areas to

population centres, encouraging migrationtowards the rural areas

6. Increased interaction between rural and ur-ban areas

If the section concerning the strategies and me-asures relates to two themes, the developmentplan still has to remain consistent. The develop-ment plan is not only a collection of projects orjuxtaposition of sectoral measures, but theleading idea has to be clear at every point. Thetheme selected by the LAG has to be quite exten-sive as well suited for the development needs ofeach area so that there will be appropriate pro-ject proposals relating to this for the whole peri-od 2000-2006.

Themes 1-4 have been given in the guidelines forLEADER+ (Official Journal 2000/C 139), andthey relate to promoting issues that are impor-tant for rural development in all parts of Euro-pe. Utilisation of new know-how and technolo-gy is important to improve the competitivenessof the products and services of rural areas. As acountry with a highly advanced level of techno-logy Finland possesses excellent opportunitiesfor this. Special attention should be directed atimproving the quality of life of the rural popula-

51

tion to make the countryside an even more at-tractive place of residence. Finland is a sparselypopulated country, which means that improvingand securing the services, traffic and communi-cations in the rural areas is of primary importan-ce. Raising the degree of processing of the localproducts is one of the central themes in rural de-velopment. This involves encouraging micro ent-repreneurs to joint action in both product deve-lopment and marketing. In rural development itis increasingly important that the areas rely ontheir own special strengths. Rural areas differfrom the other areas primarily in terms of thenature and culture, and these are more and moreimportant as sources of employment and liveli-hood.

Themes 5 and 6 were proposed by the LAGs,and they are considered important for the deve-lopment of all rural areas in Finland. Migrationfrom rural areas to towns and cities continuedthroughout the 1990s, and this has led to areduction in the services available in rural areasas well as depopulation. On the other hand, qui-te a few people living in towns and cities wouldbe interested in moving to the countryside. Cur-bing the migration away from the rural areasand increasing the attractiveness of the rural are-as as places of residence are vital in terms ofmaintaining the rural population. Increasing theinteraction between the rural and urban areasintensifies the co-operation between these andthus improves the operating possibilities of therural industries. Themes 5 and 6 are also exten-sive enough so that it will be possible to find ap-propriate projects concerning these for the who-le programming period.

Actions

LEADER+ is structured around three actions:

Action 1: Territorial rural development projectsAction 2: Inter-territorial and transnational co-

operationAction 3: National network unit

The main emphasis in LEADER+ is in action 1,and 86 per cent of the public financing is alloca-ted for this. The administration costs of theLAGs are also paid from action 1, even if someof the tasks concern action 2. The share of acti-on 2 in the funding is estimated at 10 per cent.Activities relating to action 3 will be financedthrough the national funds in 2000 and 2001.By means of national funding, in February 2000a common network unit was set up for all LAGsfunded nationally. If the work of the commonnetwork unit for all LAGs will not continuethrough the whole programming period 2000-2006, a LEADER+ network unit will be establis-hed no sooner than the beginning of 2002. 1 percent of the public funding has been reserved forthis , and 3 per cent of the public funding is re-served for the technical assistance operations.

5.1 Action 1) T5.1 Action 1) T5.1 Action 1) T5.1 Action 1) T5.1 Action 1) Territorial rurerritorial rurerritorial rurerritorial rurerritorial rural deal deal deal deal devvvvvelopment prelopment prelopment prelopment prelopment projectsojectsojectsojectsojects

The objective of action 1 is, in particular, to inc-rease activities with direct or indirect emplo-yment effects in rural areas. Through the actionfunding is made available for rural developmentprojects implemented in the territory of a certainLAG and based on the ideas and needs of localresidents and economic operators. The costs dueto the management of the LAGs and running theoffice are also financed from action 1. NewLAGs may add the costs of acquiring the know-ledge and skills needed in the LEADER metho-dology to be paid through action 1. Most of thefunds for action 1 are, however, used for finan-cing the development and investment projects inthe territory of the LAG.

Measures

The programme contains five measures

A. InvestmentsB. DevelopmentC. Know-howD. Administration of LAGsE. Acquisition of skills

52

In addition to the theme selected by the LAGs, aswell as action 1 or 2 all projects funded throughthe programme have to implement one of themeasures A, B or C. The measures do not over-lap with the themes, but projects implementingmeasures A, B or C may be included in all of thealternative themes.

Each LAG may have sub-measures of its ownwithin the measures. This secures the preservati-on of the special characteristics of the develop-ment plans and makes sure that they are suitedto address the particular focal areas and deve-lopment needs as well as the special problems ofeach area. Figure 12 illustrates the relationshipof single projects to the selected theme(s), ac-tions 1 and 2 as well as to measures A, B and C.

The contribution of the European Union toLEADER+ is financed in full from the GuidanceSection of the European Agricultural Guidanceand Guarantee Fund (EAGGF-Guidance Secti-on). In the Community Initiatives the scope ofthe structural funds has been extended to that ofthe other funds, and thus projects that in factpertain to the scope of the European RegionalDevelopment Fund (ERDF) or European Struc-tural Fund (ESF) can be financed through theLEADER+ programme.

General objectives of the measures

The general objective of measures A, B and C isto improve the possibilities for employment andeconomic activity in rural areas.

Pilot nature and innovation will receive specialemphasis in the implementation of the program-me. Promoting these reinforces the attractivenessof the rural areas and, in particular, the competi-tiveness of rural industries.

Based on the penetration principle, the objectivesof both measures include co-operation, networ-king, sustainable development as well as enhan-cing the equal opportunities of different populati-

on groups, in particular, women and the young,to participate and engage in industrial activities.

The beneficiaries of the projects to be financedmay be the residents of the territory of the LAG(single persons or several persons jointly), localassociations, companies and foundations, aswell as the LAG itself.

The realisation of the objectives of the measuresis monitored by means of common basic indica-tors. In addition to these, there are specific indi-cators for each measure, and each LAG may alsointroduce indicators of its own, which they con-sider suited for the development plan and its fo-cal areas. The share of women and young peopleas participants and beneficiaries as well as envi-ronmental impacts are monitored for the part ofall measures.

Issues to be monitored measures A, B and C:

• number of projects to be financed• number of new companies created, their con-

tact information and line of business� run by women / men / the young (under 30years of age)

• number of new jobs created / converted intofull-time jobs� women / men / the young (under 30 yearsof age)

• number of renewed (preserved) jobs / con-verted into full-time jobs� women / men / the young (under 30 yearsof age)

• number of jobs during the project / program-me / converted into annual work units� women / men / the young (under 30 yearsof age)

• number of days of training or training cour-ses / sessions, number of participants in trai-ning as well as type of training� women / men / the young (under 30 yearsof age)

• number and amounts of investments• number of the accounts of feasibility

53

• number of animation meetings and number ofparticipants� women / men / the young (under 30 yearsof age)

• number of new innovations (services, produc-tion methods and other products)

• number of enterprises and associations parti-cipating in the projects

• environmental impacts of the projects and, inparticular, projects targeted at improving theenvironment

• impact of the projects on equality

5.1.1 Measure A: Investments

Through measure A financing is made availablefor the establishment of new enterprises, expan-ding or renewal of, for example, the productioncapacity of the existing small-scale or micro en-terprises, as well as other investments. Financingis not directed at basic agriculture.

The objective of the measure is to diversify theeconomic activities in the territories of the LEA-DER groups, create new jobs, improve the ope-rating conditions of the existing enterprises andencourage the rural residents, especially womenand the young, to entrepreneurship.

In their development plans the LAGs consideredthe promotion of enterprises and entrepreneur-ship one of the most important areas of focus.The establishment of new small and micro enter-prises as well as expansion and renewal of theproduction capacity in the existing enterprisesare highly important in terms of creating neweconomic opportunities and improving the ope-rating conditions for enterprises in rural areas.A more detailed description of the measure is gi-ven in the supplement to the LEADER+ pro-gramme.

Beneficiaries:

The rural residents (individual persons or seve-ral persons jointly) as well as local communities

Forms of assistance:

− Subsidy

Examples of activities eligible for support

• small-scale investments• start-up aid for enterprises• building• acquisition of machinery and implements

54

Actions:➊ Territorial rural development projects➋ Inter-territorial and transnational co-operation

Co-operation

Networking

Sustainable development

Women and the young partici-

pating and engaging in industrial

activities


A. Investments

B. Development

C. Know-how

Rural areas

Priority themes:1. Use of new know-how and technologies to make the products and services of rural areas more competitive2. Improving the quality of life in rural areas3. Adding value to local products; facilitating access to markets for small production units via collective actions4. Making the best use of natural and cultural resources, including enhancing the value of sites of Community interest selected under NATURA 20005. Slowing down migration from rural areas to population centres, encouraging migration towards the rural areas6. Increased interaction between rural and

urban areas

results

results

results

results

results results

results

results

results

resu

lts

results

results

projects

resultsresu

ltsre

sults

pro

ject

s

55

QUANTITQUANTITQUANTITQUANTITQUANTITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES numbernumbernumbernumbernumber

New jobs (created) convertedinto full-time jobs 2 000

Of which women 1 000 Of which the young (under 30) 300

Renewed (preserved) jobs convertedinto full-time jobs 200

Of which women 100Of which the young (under 30) 10

New enterprises to be set up 500Of which run by women 200Of which run by the young (under 30) 50

MONITORING ALSO COVERSMONITORING ALSO COVERSMONITORING ALSO COVERSMONITORING ALSO COVERSMONITORING ALSO COVERS

Objectives of measure A and issues to be monitored:

Number of projects financed

Number and amounts of investments

Change in the turnover of an enterprise in FIM and percentage share

Number of projects targeted at women and the young

Projects targeted specifically at improving the environment

Number of projects taking advantage of the NATURA areas

QUALITQUALITQUALITQUALITQUALITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES

Environmental impacts of projects

Impacts of projects on equality

Diversification of industrial structure

Promoting entrepreneurial activity, in particular,establishment and development of small enterprises

Encouraging rural residents, in particular, the young andwomen to entrepreneurship

Creation of new industrial and employment opportunities

Innovation


New jobs (created) converted into full-time jobs as wellas their number, of which women / the young(under 30 years of age)Contact information of the new jobs

Renewed (preserved) jobs converted into full-time jobs aswell as their number, of which women / the young(under 30 years of age)Contact information of the renewed jobs

New enterprises to be set up, of which run by women /the young (under 30 years of age) Contact informationof new enterprises

Line of business of new enterprises

Monitoring data compiled for evaluationMonitoring data compiled for evaluationMonitoring data compiled for evaluationMonitoring data compiled for evaluationMonitoring data compiled for evaluation

Environmental impact form, see Chapter 4.4

Monitoring indicators show the shares of men, women andthe young in the results, accompanied by a verbal description

Classification of the lines of business of new enterprises

Number of enterprise projects, number of new enterprises

Share of women and the young in the number of newenterprises

Number of new enterprises and new as well as renewedjobs

Form, number of innovations (services, production methods,other products)

The LAGs may also apply other indicators derived from their own development plan. A more detai-led account of the indicators for monitoring is given in the supplement to the LEADER+ programme.

56

5.1.2 Measure B: Development

Through the measure financing is made availab-le for projects enhancing the attractiveness of ru-ral areas as places of residence, environmentalprojects and projects relating to the promotionand utilisation of local culture.

The purpose of the measure is to improve the at-tractiveness of rural areas as places of residenceand living taking into account of principles ofsustainable development. This also comprisesincreasing environmental awareness and promo-ting measures that improve the environment.

By improving the quality and attractiveness ofthe environment, rural areas can be made moreattractive places for living and practising of in-dustries. This also contributes to the realisationof the principles of sustainable development interms of both the environment and social andcultural factors. Improving the quality and at-tractiveness of the environment supports thepromotion of industries and the effects of pro-jects to increase environmental activity in ruralareas by taking into account the human and en-vironmental aspect in the development work.Environmental projects as such may also promo-te industrial activities.

The development and diversification of otherkinds of industries that increase the number ofjobs is also highly important in terms of maintai-ning the rural population. For example, long-distance employment in companies located inpopulation centres or other employment basedon the utilisation of information technologyprovide new opportunities for earning a living inrural areas.

Products development and processing increasethe price of the rural raw materials and provideemployment for the residents.

New ways of co-operating between parties whohave not done this before may offer new kinds of

solutions to the problems of certain areas, and co-operation also leads to synergy benefits. Rural en-terprises are usually quite small, and thus co-ope-ration in e.g. marketing is essential.Projects related to rural tourism in LEADER+ arerelatively small in scale, mainly concerning ‘eco-tourism’ or networking of small tourism enterpri-ses. Especially before financing the new tourismprojects the LAGs have to make sure that the fi-nancing of the project is of pilote nature. Activi-ties overlapping with the other programmes arenot eligible for financing through LEADER+.

A more detailed description of the measure is gi-ven in the supplement to the LEADER+ pro-gramme.

Beneficiaries:

Rural residents (individual persons or severalpersons jointly) as well as local communities andfoundations.


− Subsidy

Examples of activities eligible for support:

• increasing environmental awareness and pro-jects improving the environment

• recycling projects• multi-service points (non-public services)• projects improving the residential environ-

ment and attractiveness of rural areas• projects utilising local culture, organisation

of various kinds of events, programme servi-ces

• products of local culture• product development, e.g. development of

new, high-quality agricultural, forestry, fishe-ries and natural products

• joint marketing of local products and services• new service enterprises• small-scale tourism projects, e.g. ‘ecotourism’• feasibility studies

57

Objectives of measure B and issues to be monitored:

Number of village plans made in the project

Days of training (7 hours), of which women / the young (under 30 years of age)Number of participants in training, of which women / the young (under 30 years of age)Number of training courses or sessionsType of training: quality training, marketing skills, environmental skills, new production methods, entrepreneurship, informationtechnology, project work, development work, equality or other

Number of new enterprises to be set up, of which run by women / the young (under 30 years of age)Contact information of new enterprises

Line of business of new enterprises



Number of enterprises and associations participating in the project

Number of projects taking advantage of the NATURA areas



Impacts of projects on equality

Improving the attractiveness of the environment

Realisation of the principles of sustainable development rela-ting to both the environment and social and cultural factors

Increasing environmental awareness, promoting measuresto improve the environment.

Enhancing local culture

Innovation


New jobs (created) converted into full-time jobs aswell as their number, of which women / the young(under 30 years of age)Contact information of the new jobs


Jobs during the project / programme converted intoannual work units as well as their number, of which women /the young (under 30 years of age)

Number of participants in information and animationmeetings, of which women / the young(under 30 years of age)Number of information and animation meetings

Number and contact information of associations


Environmental impact form; see Chapter 4.4

Monitoring indicators show the shares of men, women andthe young in the results, accompanied by a verbal description

Environmental impact form, verbal description




Form, number of new innovations (services, production met-hods, other products). Verbal description


New jobs (created) convertedinto full-time jobs 400


Renewed (preserved) jobs converted into full-time jobs 300


Jobs during the project / programme(AWU) 660

joista naiset 330joista nuoret (alle 30 v) 99

Number of participants in information andanimation meetings 30 000

Of which women 15 000Of which the young (under 30) 6 000

Organised coalitions of enterprises and otherorganisations (associations, companies,co-operatives, etc.) 50

MONITORING ALSO COVERS:MONITORING ALSO COVERS:MONITORING ALSO COVERS:MONITORING ALSO COVERS:MONITORING ALSO COVERS:

The LAGs may also have indicators of their own derived from their development plan. A more detai-led account of the indicators for monitoring is given in the supplement to the LEADER+ programme.

58

5.1.3 Measure C: Know-how

Through measure B financing is made availablefor training, in most cases in a relatively smallscale, which is otherwise not available butcontributes to solving the special problems inthe territories of the LAGs. In particular, finan-cing is made available for training which inc-reases the practical professional skills as well asmarketing skills of the trainees. However, basicor vocational training or training where thetrainee is subject to unemployment support me-asures cannot be financed through the pro-gramme.

The purpose of the measure is to improve theknow-how of the rural residents in areas withdirect or indirect impacts on the diversificationof the industries in the area and or creation ofnew enterprises / jobs. One important objectiveis to improve the utilisation of the humanresources existing in the areas.

Raising the level of knowledge and skills is im-portant to preserve the viability of the rural are-as. In most of these the education level is lowerthan in the whole country on average. In recentyears the number of farms has decreased rapidly,but the studies show that farmers who have gi-ven up agricultural production would like to goon living in the countryside. There are alsofarms where the agricultural income is no longeradequate to support the whole family. However,in order to start practising other industries, forexample, entrepreneurship, farmers and their fa-mily members need training.

People who are already running small compa-nies in rural regions often need further trainingrelating to the improvement of the skills, effi-ciency or quality of the activity, such as more ef-ficient marketing of the products. Training parti-cularly directed at improving the entrepreneurialskills of women and the young encourages themto stay in the countryside.

In recent years attention has also been directedat the disappearance of the traditional handic-raft skills, and through training related to theseskills it might be possible for many young peop-le in rural areas to find employment in theirhome district. Training should yield practical re-sults, and training in new skills that can be uti-lised in industrial activities motivates the trai-nees better than more theoretical training.

Training in the rural development work is nee-ded in order to improve the ability of the localresidents to implement the various kinds of de-velopment measures and co-operation skills.Training in the development work also influen-ces the structure and direction of rural develop-ment in the future.


Beneficiaries:

Rural residents as well as local communities andfoundations.


− Subsidy


• accounts of feasibility• further training e.g. to increase the practical

skills needed by the local residents• training in entrepreneurial skills suited to the

local conditions• raising the level of skills in existing compa-

nies• training related to marketing• training in project work• training in development work for members

and officials• training in development work for members

and employees of LEADER groups

59

Objectives of measure C and issues to be monitored:


Renewed (preserved) jobs convertedinto full-time jobs 100


Jobs during the project / programme(AWU) 100


Days of training (7 hours) 20 000Of which women 10 000Of which the young (under 30) 2 000

Number of participants in training 8 000Of which women 4 000Of which the young (under 30) 800





Days of training (7 hours, of which women / the young(under 30 years of age)Number of participants in training, of which women /the young (under 30 years of age)Number of training courses or sessionsType of training: quality training, marketing skills, environ-mental skills, new production methods, entrepreneurship,information technology, project work, development work,equality or other

Arviointia varten kerättävät seurantatiedotArviointia varten kerättävät seurantatiedotArviointia varten kerättävät seurantatiedotArviointia varten kerättävät seurantatiedotArviointia varten kerättävät seurantatiedot

Environmental impact form, see Chapter 4.4

Monitoring indicators show the shares of men, women and theyoung in the results, accompanied by a verbal description

Types of training; e.g. entrepreneurship, increasing practicalprofessional skills, new production methods, number ofparticipants and distribution into men / women / the young.Verbal description.

Types of training; number of participants in developmenttraining and distribution into men / women / the young.Verbal description.

Participants fill in an evaluation form drawn up by the imple-menter of the project for each training course / session,summary of these in the final report

Number of new innovations (services, production methods,other products. Verbal description


Number of companies and associations participating in the projects


Projects targeted specifically at improving the environment



Impact of projects on equality

Further training needed in practising new industries ordevelopment or diversification of industrial activity for ruralresidents

Improving the ability and skills of local residents in ruraldevelopment work

Quality of training

Innovation

The LAGs may also have indicators of their own derived from their development plan. A more detailedaccount of the indicators for monitoring is given in the supplement to the LEADER+ programme..

60

5.1.4 Measure D: Administration of local actiongroups (LAGs)

The funds for administration are mainly usedfor tasks relating to the implementation andpromotion of the development plan of theLAGs. This comprises, among other things, en-gaging of officials and their travel expenses, offi-ce expenses as well as information concerningthe LEADER+ programme and the developmentplan in the areas concerned. The administrativeexpenses should be kept at a reasonable level. Inmost cases the municipalities located in the areasconcerned finance at least 20 per cent of the ad-ministrative costs. All administration costs maybe paid from the public funds.

Based on the previous programming period it isestimated that the reasonable level of administra-tive costs is no more than 15 per cent of the pub-lic funding for action 1, if the average funding ofthe groups is at about the same level as in LEA-DER II. This should secure adequate operatingconditions for the LAGs. The tasks pertaining tothe LAGs require employing at least two full-timeofficials, and these will be responsible for a largernumber of duties than in LEADER II.

In LEADER+ the projects applicants submit theapplications for support and payment to theLAGs. The LAG processes both the project app-lication and the application concerning thepayment and makes sure that the applicant hassubmitted all the accompanying documents re-quired before the application is forwarded to theRural Department of the Employment and Eco-nomic Development Centre. Thus the duties andresponsibility of the LAGs are considerably inc-reased from the previous programming period,and the groups also need a larger number ofqualified staff.

Finland is a sparsely populated country, andthus the rural structures and organisations ope-rate on a very small scale. There is quite a largenumber of associations in the rural municipali-

ties and villages, but the number of active mem-bers is very small, and in most cases this is on thedecrease. The administration of the LAGs can-not be incorporated to the existing organisa-tions, partly due to the fact that the LAGs haveto be independent of any other organisations toguarantee their open and equitable activity.

Summary of measures to be financedfrom administrative funds:

• recruitment and engaging of officials for LAGsbased on temporary employment contracts

• travels of the LAGs and necessary travel ex-penses of the board members

• office expenses and data processing• furniture and implement costs of the LAGs’

offices; rents• information concerning LEADER+ and the

development plan of the group to the local re-sidents� e.g. notices, newspaper article, brochures,local news and information bulletins

• participation in the national and Europeannetwork unit� e.g. compilation and transfer of data to thenetwork unit

• preparation of international projects� e.g. finding co-operation partners

• organisation of training and information ses-sions for local residents and LAG members

• use of outside experts and services� e.g. bookkeeping and accounting services,engaging temporary animators


Beneficiaries:

Local action groups (LAGs).


– Subsidy

61

Objectives of measure D and issues to be monitored:



Number of participants in information and animationmeetings, of which women / the young (under 30 years of age)Number of information and animation meetings


Board members and parties represented by them

Number of members in LEADER+ group and partiesrepresented, number of participants in group meetings,turnover of the board

Time of processing the applications, average in days

QUANTITQUANTITQUANTITQUANTITQUANTITAAAAATIVE OBJECTIVES numberTIVE OBJECTIVES numberTIVE OBJECTIVES numberTIVE OBJECTIVES numberTIVE OBJECTIVES number

Jobs during the project / programme(AWU) 240 Of which women 120 Of which the young (under 30) 36

Number of participants in information andanimation meetings 20 000 Of which women 10 000 Of which the young (under 30) 4 000


Days of training (7 hours), of which women / the young (under 30 years of age)Number of participants in training, of which women / the young (under 30 years of age)Number of training courses or sessions


Number of projects processed

Number of accounts on feasibility and their subject

Number and circulation of papers, brochures, etc. published by the group

Number of articles in newspapers etc. on the activity of the group


Realisation of the principle of tripartition

Openness and participation of local residents

Efficiency of the activity

The LAGs may also have indicators of their ownderived from their development plan. A moredetailed account of the indicators for monito-ring is given in the supplement to the LEADER+programme.

5.1.5 Measure E: Acquisition of skills

New LAGs may include the costs due to the ac-quisition of the necessary skills to their financialplan. Measures relating to this may be imple-mented in areas where rural development basedon LAGs is a completely new methodology, andthus calls for the acquisition of the skills for this.A group may be considered a new one if at least60 per cent of the population of the area con-

cerned live in municipalities which have notbeen included in the LEADER II or POMO pro-grammes. If part of the territory of the LAG haspreviously been included in LEADER II orPOMO, funds for the acquisition of skills can-not be used in the municipalities concerned. Ac-tivities related to the acquisition of skills may befunded only before the implementation of thedevelopment plan of the LAG is started.

The purpose of the measure is to familiarise theLAGs and the residents and associations of thearea with the LEADER methodology. The acqui-sition of skills may concern information onLEADER+ and the activities based on the LAGsas well as increasing and expanding the local

62

Objectives of the acquisition of skills and issues to be monitored:

QUANTITQUANTITQUANTITQUANTITQUANTITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES

To be established in detail later on after the LEADER+ groupshave been selected and the number of new LAGs is known


The purpose of the measure is to familiarise the new LAGsand residents and associations of the areas concerned withthe LEADER methodology


Number of participants in animation and information mee-tings, of which women / the young (under 30 years of age)Number of animation meetings

Days of training (7 hours), of which women / the young(under 30 years of age)Number of participants in training, of which women / theyoung (under 30 years of age)Number of training courses or sessions

Number and circulation of papers, brochures, etc. publishedby the group

Number of articles in newspapers etc. on the activity of thegroup


Indicators for monitoring

The LAGs may also have indicators of their own derived from their development plan. A more detai-led account of the indicators for monitoring is given in the supplement to the LEADER+programme.Toimintalohkon 2 tavoitteet ja seurattavat asiat:

partnerships. This is vital to reach an adequatecritical mass as well as for making the program-me and methodology known in the areas con-cerned.

In many cases the new LAGs may not possessthe necessary structures for the implementationof the programme and projects. At this stage thegroup may set up an office, with appropriateequipment. Acquisition of skills also involves in-formation on the LEADER methodology andopportunities offered by the programme in thearea concerned, as well as training of the groupmembers and officials.

Summary of measures relating to acquisition of skillsthat are eligible for financing:

• setting up an office for the LAG, with ap-propriate equipment

• training of officials and board members ofthe LAG in LEADER work

• information on the LEADER methodologyand opportunities offered by the LEADERprogramme in the area concerned

• necessary travel expenses, e.g. getting acquai-nted with the activities of the LEADER IIgroup

Beneficiaries:

Local action groups (LAGs).


– Subsidy

5.25.25.25.25.2 Action 2) InterAction 2) InterAction 2) InterAction 2) InterAction 2) Inter-territorial rur-territorial rur-territorial rur-territorial rur-territorial rural deal deal deal deal devvvvvelopmentelopmentelopmentelopmentelopmentprprprprprojectsojectsojectsojectsojects

Action 2 covers the same themes and measuresas action 1. The quantitative objectives pre-sented in action 1 include the objectives of acti-on 2.

63

The purpose of action 2 is to encourage and sup-port co-operation between different rural areas:

a) between the Finnish LAGs (inter-territorialco-operation)

b) between LAGs or similar groupings operatingin the EU Member States or other countries(transnational co-operation)

It is estimated that 40 per cent of the funds foraction 2 will be used for inter-territorial jointprojects and 60 per cent for transnational co-operation.

Selection of projects:

In inter-territorial co-operation the selection cri-teria for the projects are about the same as inprojects funded through action 1. The objectiveis to find new ideas and solutions relating to theproblems that may arise in the development ofthe territory of a certain LAG, create new kindof co-operation between different rural areas, aswell as increase the possibilities for industrial ac-tivity and employment in rural areas.

It is of primary importance that the joint projectsproduce value added to the areas involved. Espe-cially the results of transnational joint projectshave to be such that they could not have beenachieved through a local projects implemented bymeans of the domestic resources only. The pro-jects also have to be linked to the theme selectedin the development plan of the LAG and consis-tent with the measures financed from action 1and sub-measures presented in the developmentplan of the LAG. The themes and measures havebeen presented in the beginning of Chapter 5.

Co-operation partners:

In the case of national inter-territorial joint pro-jects the partners of the LEADER+ group maybe the other Finnish LEADER+ groups or localaction groups financed through other program-mes. However, only the expenses of the LEA-

DER+ groups may be paid through the LEA-DER+ programme, while the other co-operationpartners have to find their own share of finan-cing from other sources.

In transnational joint projects the potential part-ners are LEADER+ groups or other LAGs in theother EU countries or organisations similar toLAGs located in other countries, for example, inthe Central and East European countries thathave applied for the EU membership or Norway.Only the expenses of the LEADER+ groups canbe financed through the LEADER+ programme.Before financing a co-operation project, a desc-ription of the composition of the partners will berequired to ensure that all the partners are eitherlocal action groups or have a similar kind ofcomposition. Additionally, a commitment of co-financing as well as determination of responsibi-lities are required from each partner.

Financing of the projects:

Funds allocated to national inter-territorial jointprojects are distributed to the LAGs in connecti-on with the annual distribution of the financingframework for action 1. During the implementa-tion of LEADER II the LAGs already had a num-ber of joint projects with other groups operatingin the same area, and the development plans ofmost of the LAGs applying for funding throughLEADER+ included concrete plans concerningco-operation with other LAGs in Finland.

Transnational projects of the LAGs may be eli-gible for financing after the implementation ofthe development plan and the territorial projectsare well under way. The funds for transnationaljoint projects are allocated later on, dependingon what kind of transnational joint projects theLAGs may have in hand with eligible co-operati-on partners (LAGs or similar groupings).

A feasibility study should be made prior to gran-ting the financing for an transnational joint pro-ject, including the planning of the project toget-

64

QUANTITQUANTITQUANTITQUANTITQUANTITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES

The quantitative objectives of action 2 are included in thecommon quantitative and qualitative objectives of measures1 and 2, i.e. projects of action 2 implement the same objecti-ves as those included in action 1.


Number of national joint projects

Number of international joint projects


Increase in national contacts in SMEs and other industrialactivity, contributing to the promotion of industries

Increase in international contacts in SMEs and otherindustrial activity, contributing to the promotion ofindustries

Acquisition of new skills and knowledge through joint action

Finding new market areas for local products through jointaction


Number and type of joint projects, verbal description

her with the co-operation partners, commitmentof the parties to the projects and a feasibility stu-dy. No more than 20 per cent of the public fun-ding for a transnational project may be used fora feasibility study.

Otherwise the preparation of the projects, e.g.acquisition of partners, is financed from the ad-ministrative funds. One of the duties of the na-tional network unit is to assist the LAGs in thesearch for co-operation partners. Before laun-ching a transnational project, the commitmentof all parties to the project and its financingneeds to be confirmed.

The forms and percentage shares of assistancefor projects funded under action 2 are the sameas in the projects under action 1.

Beneficiaries:

Rural residents (individual persons or severalpersons jointly) as well as local associations, en-terprises and foundations.

Forms of assistance

– Subsidy

Qualitative objectives

The objective is to increase international con-tacts in the SMEs and other industries of the ter-ritories concerned and, through this, to promotethe economic viability, as well as to acquire newkinds of knowledge and skills and find new mar-kets for the local products.

Objectives of action 2 and issues to be monitored:

The LAGs may also have indicators of their own derived from their development plan. A more detai-led account of the indicators for monitoring is given in the supplement to the LEADER+ programme.

65


• joint marketing of local products or services• exchange in the acquisition and utilisation of

new know-how and/or skills• feasibility studies

Issues to be monitored:

National and international joint projects imple-ment the same objectives as projects in action 1.The issues to be monitored are the same as in ac-tion 1, together with the following:• number of national joint projects• number of transnational joint projects

5.3 Action 3) Netw5.3 Action 3) Netw5.3 Action 3) Netw5.3 Action 3) Netw5.3 Action 3) Networkingorkingorkingorkingorking

The duties of the national network unitcomprise the information and contacts betweenall parties involved in the implementation ofthe LEADER+ programme or otherwise intere-sted in the rural development work. The net-work unit informs the parties involved and thepublic on the LEADER+ programme and theopportunities offered and the progress throughits web pages and the paper published by theunit. The network units also organises trainingon topics and themes relating to LEADER+considered necessary by the LAGs, as well ascurrent topics relating to the implementation ofLEADER+.

The national network unit maintains contactwith the European LEADER observatory. It in-forms the Finnish LEADER+ groups on the acti-vity of the LEADER observatory and forwardsrequests for contact relating to transnational co-operation between the LAGs in Finland and theother EU countries. Upon request the nationalnetwork unit also compiles information on theFinnish LEADER+ groups and their projectsand delivers this to the LEADER observatory.However, the Ministry of Agriculture and Fo-restry is mainly responsible for supplying datarecorded into the project register of the Ministry

(e.g. data on financing and indicators) as well asother data related to the administration of theprogramme.

The LAGs are actively involved in the nationalnetwork unit. The LAGs may be in direct con-tact with the LEADER observatory or requestthe assistance of the national network unit intheir search for international partners. Networ-king of the LAGs on their own initiative is alsoencouraged.

The tasks included in action 3 are financed na-tionally in 2000-2001 as a national rural deve-lopment project. The national network unit, theoffice of the Finnish Village Action Movement,was set up in February 2000. The network unitserves all LAGs, independent of the financingsource. The need for a common network unitwas obvious already before LEADER+, becausethe network units of the LEADER II and POMOprogrammes had been closed, while new LAGswere getting started, in addition to the old LEA-DER and POMO groups.

Efforts will be made to maintain the nationallyfinanced national network unit intended for allLAGs during the whole programming period2000-2006, but if this objective is not reached, aseparate network unit will be set up for the LEA-DER+ groups. Regardless of the source of finan-cing, there will be an open invitation to tendertowards the end of 2001, and the national net-work unit selected based on the tendering pro-cedure will start its operations in the beginningof 2002.

If a network unit of their own is set up for theLEADER+ groups, the funds allocated for thistotal FIM 6 million, of which both the EU andFinland contribute FIM 3 million. Regardless ofthe financing source, the national network unitsecures the services for LEADER+ groups pre-sented in this programme document and realisesthe objectives set for it.

66

Of which womenOf which the young (under 30)

NANANANANATIONAL QUALITTIONAL QUALITTIONAL QUALITTIONAL QUALITTIONAL QUALITAAAAATIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVESTIVE OBJECTIVES

Services offered by the network unit meet the needs of theLAGs and other interest groups. When necessary the net-work unit assists the LAGs in their search for national andinternational partners

Visits to the LEADER+ web pages of the network unit in Finland

Number of participants in animation meetings

NANANANANATIONAL QUANTITTIONAL QUANTITTIONAL QUANTITTIONAL QUANTITTIONAL QUANTITAAAAATIVE OBJECTIVES NumberTIVE OBJECTIVES NumberTIVE OBJECTIVES NumberTIVE OBJECTIVES NumberTIVE OBJECTIVES Number

Jobs during the project / programme(AWU) 10 Of which women 5 Of which the young (under 30) 1,5

Days of training (7 hours) 450 Of which women 225 Of which the young (under 30) 45

Publication of papers dealing with LEADER+ 20

Brochures on LEADER+(in Finnish, Swedish and English) 2 (6)


NANANANANATIONAL INDICATIONAL INDICATIONAL INDICATIONAL INDICATIONAL INDICATORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORINGTORS FOR MONITORING


Days of training (7 hours), of which women / the young(under 30 years of age)Number of participants in training, of which women / theyoung (under 30 years of age)Number of training courses or sessions

Number of papersNumber of pages concerning LEADER+Circulation of the paper

Number of brochures on LEADER+(in Finnish, Swedish and English)

Monitoring data compiled for national evaluationMonitoring data compiled for national evaluationMonitoring data compiled for national evaluationMonitoring data compiled for national evaluationMonitoring data compiled for national evaluation

Those participating in training fill in an evaluation form onthe realisation of training and quality of the contentsEach year the LAGs fill in a questionnaire on how well thedifferent operations of the network unit meet the needs ofthe groupsNumber of inter-territorial and international joint projectswhere the network unit contributed to finding the partners

National objectives and issues to be monitored:

5.4 T5.4 T5.4 T5.4 T5.4 Tececececechnical assistancehnical assistancehnical assistancehnical assistancehnical assistance

The share of funds allocated for technical assis-tance operations is 3 per cent of the public fundsfor the LEADER+ programme. Technical assis-tance covers the financing of the administration,monitoring and evaluation of the programme atthe level of central and territorial administration.According to the financial plan, altogether FIM9.88 million of both national and EU funding, i.e.the total of FIM 19.76 million, is available fortechnical assistance operations for 2000-2006.

Most of the technical assistance is used for themid term and ex post evaluation of the LEA-DER+ programme as well as the organisationand other costs of training concerning e.g. theapproved costs and bookkeeping directed at theLAGs and project implementers in the territories

of the different Employment and Economic De-velopment Centres.

The implementation of the programme may alsobe supported through the establishment of acommon bookkeeping and monitoring systemfor all the LAGs and projects involved. Finan-cing may also be needed for purchasing servicesrelating to the development and maintenance ofthe monitoring systems, as well as informationin connection with opening the tendering pro-cedure for mid term and ex post evaluation.Technical assistance for the organisation of trai-ning in the territories is allocated to the RuralDepartments of the Employment and EconomicDevelopment Centres, which make the decisionson the use of the funds. Other decisions concer-ning the use of technical assistance are made atthe Ministry of Agriculture and Forestry.

67

Technical assistance will not be used for admi-nistrative costs in the LEADER+ programme. Ifneeded, part of the funds reserved for technicalassistance might be transfered later to action 1.

5.5 Le5.5 Le5.5 Le5.5 Le5.5 Levvvvvels of assistanceels of assistanceels of assistanceels of assistanceels of assistance

The maximum levels of support are establishedalong the same lines as in Objective 1 programmeand the Regional Rural Development Program-me, and in the case of the aid for enterprises thelevels are also influenced by the relevant Statesupport areas. The percentage shares of assistanceare the same in actions 1 and 2. On average, 50per cent of the assistance comes from the Europe-an Agricultural Guidance and Guarantee Fundand 50 per cent is national financing, includingthe contribution of municipalities.

Assistance with minor importance (de minimis) andthe state support systems to be applied

Regarding products falling under Annex I of theTreaty, the management authority (ministry ofagriculture and forestry) will take care that ruleslaid down in Community guidelines for state aidin the agriculture sector (2000/C 28/2) are res-pected. Regarding other support, the manage-ment authority will take care that the rules laiddown in Commission Regulation (EC) No 68/2001 of 12 January 2001 on the application ofArticles 87 and 88 of the EC Treaty to trainingaid, in Commission Regulation (EC) No 69/2001 of 12 January 2001 on the application ofArticles 87 and 88 of the EC Treaty to de mini-mis aid and in Commission Regulation (EC) No70/2001 of 12 January 2001 on the applicationof Articles 87 and 88 of the EC Treaty to Stateaid to small and medium-sized enterprises arerespected.

The level of investment aid for enterprises con-nected to farms is the same in the whole Objecti-ve 1 area. Outside the Objective 1 area the sup-port is differentiated so that the level of supportis higher in municipalities located in the sparselypopulated rural areas and rural heartland areasand lower in the urban-adjacent rural areas andurban areas.

The investment aid for other enterprises is diffe-rentiated in the Objective 1 area based on thesupport areas, and thus the support is the lowestin the Objective 1 area of Eastern Finland (natio-nal support area 1) and the second highest in theObjective 1 area of Northern Finland (nationalsupport area 2). In national support areas 2 and3 outside the Objective 1 area the level of sup-port is higher in the municipalities located insparsely populated rural areas and rural heart-land areas and lower in urban areas and urban-adjacent rural areas. The level of support is thelowest in municipalities outside the nationalsupport areas.

Maximum levels of assistance for projects:

Technical assistance and

administrative funds

for LEADER groups no more than 100%

Training projects no more than 90%

Development projects no more than 90%

Investments included in development

projects no more than 75%

Investments in enterprises connected

to farms no more than 50%

Other investments in enterprises

− Objective 1 area no more than 40%

− Outside Objective 1 area no more than 30%

Development aid for enterprises

(de minimis) to examine the preconditions

for operation no more than 90%

Development aid for enterprises

(de minimis) no more than 75%

Start-up aid for engaging outside

employees in connection with / starting /

expanding entrepreneurial activity no more than 45%

Feasibility studies of the projects

*by public corporation no more than 100%

*other no more than 80%

The percentages given above are the maximumlevels of assistance, and they should not be usedas the general level of assistance for the projects.

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Other State support systems may be added tothis by changing the programme document by aCommission decision. All support relating to ag-riculture or any new or revised State supportsystems concerning enterprises shall be notifiedto the Commission in accordance with Articles87 and 88 of the Treaty Establishing the Europe-an Community.

5.6 Selection of pr5.6 Selection of pr5.6 Selection of pr5.6 Selection of pr5.6 Selection of projects to be financedojects to be financedojects to be financedojects to be financedojects to be financed

The general principle for selecting the projects isthat only territorially based, bottom-up projectsare eligible for financing through LEADER+.The projects must be of pilot nature, which me-ans that they must contain experimental actions,which is in some respect new in the territory ofthe LAG concerned. The projects to be financedeither experiment with new kinds of actions ornew methods, or the parties implementing theprojects are such that co-operation betweenthem is something new.

The projects have to complement other rural de-velopment programmes. Projects fundedthrough other programmes are not eligible forLEADER+ funding, and financing to continuesuch projects may not be granted through LEA-DER+, either.

The projects to be financed must produce valueadded to the rural areas, e.g. by increasing thewelfare of the residents. The projects must betransferable, i.e. the ideas and methodologiesmust be such that they can be utilised in otherrural areas as well. Transferability can be pro-moted through efficient information on the pro-jects and their implementation.

The projects must be in accordance with theprinciple of economic sustainability. The LAGshave to make sure that the projects to be finan-ced are economically feasible. The viability ofthe project means that the activity should conti-nue after the project without assistance. TheLAGs should keep this objective in mind in theselection of all the projects to be financed. Theemployment effect is a very important criterion.The purpose of LEADER+ is to improve the pre-conditions for industries in rural areas, and thuspriority should be given to measures with positi-ve, long-term impacts on employment.

Sustainable development is one of the areas offocus in the LEADER+ programme, and thuspriority should be given to projects with positiveenvironmental impacts. Actions with obviousnegative impacts on the environment will not beeligible for financing.

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6 Financial plan

The public funding of the LEADER+ program-me for the programming period 2000-2006 to-tals FIM 658.79 million (EUR 110.80 million).50 per cent of the funding comes from the Gui-dance Section of the European Agricultural Gui-dance and Guarantee Fund (EAGGF-Guidance),and thus the EU contribution totals FIM 329.39million and the national funding is also FIM329.39 million. It is estimated that the munici-palities located in the territories of the LEADERgroups will contribute about 20 per cent of thetotal public funding. The contribution of mu-nicipalities must be made available to the LAGsso that the decision on the use of the funds ismade by the LAG, and their autonomy is notjeopardised.

The share of private financing in the total fundsfor the whole programming period is estimatedat 35 per cent. Consequently, the total fundingfor the LEADER+ programme amounts to FIM

1,013.52 million, and the share of private finan-cing is FIM 354.73 million. Part of the privatecontribution may be in the form of voluntarywork or other payment in kind in compliancewith the Commission directions. Voluntarywork as part of the private funding may be usedonly in development projects where the appli-cant is a non-profit corporation. In most casesvoluntary work is used in village projects.

In the LEADER+ programme for Finland thereare no separate financial quotas for Objective 1areas, Objective 2 areas and areas outside these.About a third of the LAGs that have applied forfinancing through LEADER+ are located in eachof these areas.

The following tables present the financial planfor the LEADER+ programme for Finland accor-ding to the actions and years in both Finnishmarkka and euro.

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LEADER+ -programme 2001-2006Financial table meuroa 5,94573

TTTTTotalotalotalotalotal Public financingPublic financingPublic financingPublic financingPublic financing Private financingPrivate financingPrivate financingPrivate financingPrivate financing

TTTTTotal pubfinancingotal pubfinancingotal pubfinancingotal pubfinancingotal pubfinancing EU contributionEU contributionEU contributionEU contributionEU contribution NationalNationalNationalNationalNationalfinancingfinancingfinancingfinancingfinancing financingfinancingfinancingfinancingfinancing

20012001200120012001Action 1Action 1Action 1Action 1Action 1 23,420 15,090 7,545 7,545 8,330Action 2Action 2Action 2Action 2Action 2 2,223 1,400 0,700 0,700 0,823Action 3Action 3Action 3Action 3Action 3 0,000 0,000 0,000 0,000 0,000TTTTTechnical assistanceechnical assistanceechnical assistanceechnical assistanceechnical assistance 0,510 0,510 0,255 0,255 0,000TTTTTotalotalotalotalotal 26,153 17,000 8,500 8,500 9,153

20022002200220022002

Action 1Action 1Action 1Action 1Action 1 21,393 13,718 6,859 6,859 7,675Action 2Action 2Action 2Action 2Action 2 2,541 1,600 0,800 0,800 0,941Action 3Action 3Action 3Action 3Action 3 0,202 0,202 0,101 0,101 0,000TTTTTechnical assistanceechnical assistanceechnical assistanceechnical assistanceechnical assistance 0,480 0,480 0,240 0,240 0,000TTTTTotalotalotalotalotal 24,616 16,000 8,000 8,000 8,616

20032003200320032003


20042004200420042004


20052005200520052005


20062006200620062006


TTTTTotalotalotalotalotal


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7 Selection of the local action groups (LAGs)

7.1 Eligibility and selection criteria7.1 Eligibility and selection criteria7.1 Eligibility and selection criteria7.1 Eligibility and selection criteria7.1 Eligibility and selection criteria

The LAGs to be selected to the LEADER+ pro-gramme have to fulfil the following general eligi-bility criteria for the programme and methodo-logy:• Rural area• Appropriate size of the area• Local action group• Partnership• Principle of tripartition• Strategic cohesion of the development plan• Consistency of the development strategy with

one or two themes

In addition to the general eligibility criteria, theevaluation of the development plans of theLAGs is based on criteria relating to their feasi-bility and the reliability of the estimated budget,as well as the compliance with the followingprinciples:• Pilot nature• Transferability• Complementarity• Sustainable development• Equality• Economic and other feasibility• Economic viability• Networking

The selection of the LAGs is based on the reali-sation of the above-mentioned criteria in thedevelopment plan. Should two or more groupsbe quite even and a selection between theseneeds to be made, additional factors to be ta-ken into account include the GDP of the areaand overlap with the areas covered by other EUprogrammes, i.e. if the GDP is low and the areaextends beyond the areas included in admi-nistrative or EU programmes, the chances ofthe group to be selected to LEADER+ are bet-ter.

The following chapters present a more detailedaccount of the contents of the eligibility and se-lection criteria.

Rural area

LEADER+ programme is intended for rural de-velopment and improvement of the precondi-tions for industrial activities in rural areas, andthus the benefits of the programme should bedirected specifically at rural, not urban areas.In determining the population of the territoryof a certain LAG, municipalities with less than15,000 inhabitants are in most cases conside-red rural areas. Based on the discretion of theLAG concerned, in the case of municipalitieswith 15,000-20,000 inhabitants the municipalcentre may be left out when establishing the po-pulation of the territory to be covered, and inmunicipalities with more than 20,000 inhabi-tants the planned areas of the centres are al-ways excluded from the population, and pro-jects funded under the programme may not beimplemented in such areas. However, if a mu-nicipality wishes to participate in the paymentof the municipal share by an amount based onthe whole population, this is also possible. Thepopulation of the territory covered by a LAG isused as a criterion for determining the financialframework.

The projects implemented through LEADER+must benefit the rural areas. Joint projects con-cerning the interaction between the urban andrural areas benefit both of these, but the urbanareas have to participate in the interaction pro-ject through financing from other sources.

During the application process all rural areas areto be considered equal. Upon the selection noquotas are allocated for any of the areas andthey are not weighted in any way – e.g. based on

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whether the area is included in Objective 1 ornot. The areas may not belong to the territory ofmore than one LAG.

Appropriate size of the area

The territories covered by the LAGs should notbe too large to risk the realisation of the local as-pect, i.e. taking the needs and ideas of the localresidents into account. However, the territorymay not be so small that this might restrict thenumber or quality of the projects or that a consi-derable share of the funds of the group would bespent on administration.

The population of the territories may vary bet-ween 10,000 and 100,000 inhabitants, depen-ding on the population density and local condi-tions, such as the preconditions for the differentoperations of the LAGs. The territories of theLAGs need not follow the national regional orother divisions. What is of primary importanceis that the area constitutes a homogenous unit interms of the objectives and development needs,and the various parties involved agree on the ter-ritory to be covered to ensure the preconditionsfor the co-operation needed in the developmentwork.

Local action group

LEADER+ is implemented through local actiongroups (LAGs). The LAGs shall come togetheras organisations governed by private law, suchas associations or co-operatives, so that themembership is representative in terms of the areaconcerned, with a broad basis consisting of thedifferent local actors (individual residents, asso-ciations, companies and organisations as well aslocal authorities). Co-operation between the dif-ferent parties involved shall be insured. TheLAGs are responsible for the preparation andimplementation of the development plan in thearea concerned, and thus the LAGs have to beable and willing to commit themselves to the de-velopment work.

The LAGs assist the applicants and implemen-ters of the projects in the preparation and imple-mentation of the projects and in the contactswith the authorities, and they have to possess oracquire the necessary qualifications for thesetasks. The distribution of responsibilities withinthe LAGs has to be open and unambiguous. Theefficiency of the procedures relating to the decisi-on-making and activities has to be secured bythe rules and internal procedural instructions ofthe associations / co-operatives.

Partnership

Partnership refers to extensive co-operation onan equal standing in the composition and activi-ty of the LAGs. The activity is open to all localpersons and organisations who are interested inrural development, and the objective is to invol-ve as many different fields and organisations aspossible. There should also be extensive co-ope-ration with parties outside the LAGs (e.g. terri-torial authorities, rural section of the regionalco-operation group, Carrefour centres, other de-velopers).

Principle of tripartition

The principle of tripartition concerns the com-position of the boards of LAGs. As far as pos-sible the boards should consist of an equal num-ber of representatives of individual rural resi-dents, local associations and companies as wellas the local administration. This guarantees theopenness and equitability in the decision-ma-king required in the LEADER+ programme aswell as the involvement of new people in the lo-cal development work. Tripartition secures thepossibilities of the LAGs for long-term operati-on. In order for the LAGs to succeed in the Fin-nish conditions with low population density,they need extensive support from the differentactors operating in the territories, associations,public-sector organisations as well as individualresidents.

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The work of the LAGs may not be based onsmall number of insiders, but on co-operationon as broad a scale as possible. The LAG and itsboard must enjoy the confidence of the local re-sidence. This is necessary to ensure successful,long-term development work.

The representatives of the local administrationin the board are the members of the municipalcouncils and the municipal executive board, mu-nicipal manager and municipal secretary, tradeombudsman, rural secretary, municipal engineeras well as heads of educational establishmentsthat are potential applicants for support throughLEADER+. Chairpersons of committees or mu-nicipal boards whose tasks include rural deve-lopment issues are also considered municipalrepresentatives.

The organisations and companies are repre-sented by persons with decision-making power,such as the chairpersons and board members ofregistered or unregistered village associations orcommittees or the leading employees of these.This also includes the representatives of the ru-ral tourism entrepreneurs and 4H associations.LEADER+ aims at involving the local actors,and thus the organisations to be representedshould also operate at the local level.

Because broadly-based board and the involve-ment of the local and new actors are required bythe principles of the programme, about a thirdof the board members should be individual ruralresidents who do not represent the local admi-nistration or associations or groups of enterpri-ses with interests relating to issues pertaining tothe LAGs due to their work or other position.Thus the board members in the quota for indivi-dual residents may not be persons involved inthe decision-making bodies of municipal or ot-her local organisations or associations who maybe in the position of potential beneficiariesthrough LEADER or operate in fields close tothose of the LAGs.

In the boards of the LEADER+ groups there areno special quotas for women and young people.Experiences from the LEADER II programmehave shown that women have been actively in-volved in the LAGs, and thus adequate represen-tation of women will be realised without anyspecial measures. The share of women in the bo-ards will be monitored throughout the program-ming period.

Instead, young people have not been taking avery active part in the LAGs, and it has been dif-ficult to increase their interest in LEADER acti-vity. Migration of the young away from the ruralareas is a serious problem, and thus many LAGsconsider the young people as a particularly im-portant target group. There is no reason to set aquota for the young in the boards of the LAGs,but their participation will also be monitored.Strategic cohesion of the development plan

The development plan covers the analysis of thestrengths and problems of the territory con-cerned, establishment of the development objec-tives and proposals for measures to reach theobjectives. The development plan is drawn up inco-operation between the different actors, fieldsand projects, and it must be integrated, based onthe special characteristics of the territories andenhancing these. Cohesion means that the pro-posed strengths, problems, objectives and me-asures are linked to each other, which reinforcesthe programme nature of the plan. There mustbe a common theme running through the plan.Consistency with a theme

Each section concerning the strategies or measu-res of the development plan has to be consistentwith one or two of the following alternative the-mes of the EU or Finland, which are of equal im-portance:1. Utilisation of new know-how and technology

to improve the competitiveness of the pro-ducts and services of the area

2. Improving the quality of life of the rural resi-dents

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3. Increased value added of the local products;in particular, by promoting the marketing ofthe products of small-scale producersthrough joint actions

4. Utilisation of natural and cultural resources,e.g. opportunities provided by the NATURA2000 areas

5. Slowing down migration away from the ruralareas, encouraging migration towards the ru-ral areas

6. Increasing the interaction between the ruraland urban areas.

The theme is the leading idea of the developmentplan, and the objectives, strategy and plannedmeasures must be consistent with the theme. Theselected theme must be feasible in view of thewhole programming period, i.e. until the end of2006.

In most cases the strategies and measures propo-sed in the development plans of the LAGs arestructured around one of the above themes. Ef-forts to incorporate two themes may not reducethe cohesion of the development plan. What is es-sential is the programme nature of the develop-ment plan, i.e. it may not be just a collection ofprojects or measures of different fields or sectors.

Pilot nature

The purpose of the development plans and pro-jects of the LAGs is to develop and experimentwith new kinds of actions or methodologies,such as new kind of co-operation. The action assuch need not be completely new, but it may benew in the territory concerned. However, the pi-lot nature does not refer to the developmentwork based on LAGs alone, but the develop-ment plans and the projects have to representnew kinds of actions in some other respect, too.Transferability

Through LEADER+ funding is made availablefor projects that may also be utilised in the deve-lopment of other rural areas. Transferability can

be promoted through openness and informationin respect of the approved projects, and theLAGs are obliged to share the results of their ac-tivity so that the methods or measures developedby one LAG can be applied in other rural areasas well. This makes the work of the LAGs morewidely known and increases their credibility.The national network unit is also responsible forpromoting transferability.

Complementarity

Complementarity is an essential aspect of theLEADER+ programme. LEADER II comple-mented the Objective 5b and 6 programmes.The LEADER+ programme complements all ot-her rural development programmes imple-mented in the territories concerned, independentof whether they are financed nationally or eli-gible for part-financing from the EU. Projects fi-nanced through LEADER+ differ from the pro-jects implemented through other programmes inthe areas concerned. Efficient co-operation withthe other parties engaged in rural development isvital in order to deepen the complementarity andabolish the possible overlaps.

LEADER+ complements the other EU program-mes, for example, by financing locally-basedand for the most part quite small projects,through which new actors can be involved in thedevelopment work. LEADER+ brings togetherthe different kinds of local resources to co-ope-rate with the view to develop new ideas and met-hodologies.

Sustainable development

The activities of the LAGs have to comply withthe principles of sustainable development inboth the environmental and the economic, socialand cultural sense. For instance, the develop-ment plan may not contain any actions with ob-vious negative environmental impacts, while me-asures aimed at improving the environment willbe prioritised.

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Sustainable development requires the ability ofthe society, communities and people to take theresponsibility and care about both the natureand people. The tenets of sustainable develop-ment are the preservation of the natural values,productive capacity of nature, biodiversity andliving ecosystems, adjustment of the economicand material activity of the people to the tole-rance of the nature as well as preservation of thepreconditions for welfare to be transferred fromone generation to another.

Ecological sustainability: Development workmust be adjusted to the sustainable use and ma-nagement of natural resources, i.e. unrenewablenatural resources are used sparingly and, whene-ver possible, replaced by renewable naturalresources, which have to be utilised within the li-mits allowed by the productive capacity. Theneeds of the future generations must be takeninto account when using the natural resources.The actions may not jeopardise the biodiversityof ecosystems, species of plants and animals orthe genetic resources contained in these. Measu-red aimed at improving the environment as wellas the utilisation of the existing buildings andinfrastructure should be favoured.

Economic sustainability: The economic activitycreated through the development plan is balancedin terms of both the contents and the quality, andin the long term it may not be based on the deple-tion or the resources or indebtedness. Investmentsin the utilisation of the local renewable resourcesor human capital are the most clearly in accor-dance with the principle of sustainable develop-ment, which can also be promoted through thediversification of the production and servicestructure in the rural areas, development of thelocal services and raising the value added.

Social and cultural sustainability: The develop-ment plans promote the social and cultural sus-tainability if they aim at equality between thedifferent regions, population groups and sexes,reducing unemployment and preventing social

exclusion. Interaction between the rural and ur-ban areas should be encouraged primarily tocurb the migration and prevent the negative con-sequences of this.

The LAGs have to make sure that the projectsare implemented in accordance with the princip-les of sustainable development.

Equality

Through their development plans the LAGs haveto promote equality between the different actorsin terms of both the economic and social opera-tions. The measures also implement the require-ment concerning equal opportunities for men andwomen in the working life. Women and youngpeople play a significant role in maintaining theviability of the rural areas, and thus the develop-ment plans place considerable emphasis on me-asures promoting the employment and other op-portunities for women and the young.

Economic and other feasibility

The development plans of the LAGs must be rea-listic both in terms of the resources available andthe conditions prevailing in the territories con-cerned. The private funds available for theimplementation of the development plan mustbe adequate. Only part of the private fundingcan be replaced by voluntary work or otherpayments in kind. Without any actual financialinputs the projects will run into liquidity prob-lems, which would jeopardise their realisation –and through this the implementation of thewhole development plan. A monetary input in-dicates that the parties involved are committedto the project.

Feasibility also depends on the abilities, skillsand motivation of the LAG concerning theimplementation of the development plan. One ofthe main objectives of LEADER+ is to improvethe preconditions for industrial activity in ruralareas, and the employment effect in the short

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and long term is a central issue in the evaluationof the development plan.

Economic viability

Support through LEADER+ is intended, in par-ticular, for measures promoting the industries.This comprises the improvement of the emplo-yment opportunities and diversification of in-dustries in the territories of the LAGs. The possi-bility to earn one’s living is an essential conditi-on for keeping the rural areas inhabited.

Networking

Networking refers to co-operation between themeasures, companies, etc. in the same or diffe-rent fields to reach a common goal. The mostimportant aspects of networking are informati-on, communication and the openness related tothese. Networking increases the amount of in-formation and experience and facilitates thework of the LAGs.

Networking is highly important in the imple-mentation of LEADER+, and thus unofficial net-working of the LAGs and co-operation with ot-her LAGs and parties involved in rural develop-ment is desirable. The national and internationalnetwork organisation units also assist in networ-king.

All LAGs should take active part in networkingand the activity of the network units at least at thenational level e.g. through information concer-ning the experiences from the development oftheir own territories. The expenses are paid fromthe administrative funds allocated to the LAGs.

Weighting of the eligibility and selection criteriafor the LAGs

The selection of the LAGs to implement theLEADER+ programme is based on how welltheir development plans fulfil the above-mentio-ned eligibility and selection criteria. The criteria

referred to in the following chapters will receivespecial emphasis. All the LAGs applying for fun-ding under LEADER+ have an equal opportuni-ty to be selected. There are no special quotas forthe LEADER II groups, POMO groups or newLAGs. The purpose of the information and trai-ning measures undertaken since September 1998was to make sure that all the LAGs start from anequal footing in the application process.

The most essential criterion for the developmentplans to be selected is that the applicant really isa local action group and the board of the LAG isset up on the basis of the principle of tripartiti-on, with as broad a basis as possible. The wholeLEADER+ programme is based on developmentwork starting from LAGs, and the programmehas to be implemented by these alone. The prin-ciple of tripartition is a requirement in order tomake sure that LAG activities are, in accordancewith the principles of LEADER, open to all tho-se who are interested and the LAGs are broadlybased, involving new actors. There are a lot oflocal associations in Finland but none of them isable to realise the objectives of LEADER alone.Therefore, it is important to gather the existingbodies together.

The principle of tripartition is evaluated by re-viewing the composition of the boards of allLAGs and the parties represented by the boardmembers. One third of the board membersshould represent the municipalities located inthe territory concerned, one third the local asso-ciations and one third individual local residentsnot involved in the decision-making bodies ofthe local associations or municipalities. The factthat the applicant can be considered a genuineLAG operating in accordance with the LEADERprinciples is assessed e.g. by checking the num-ber of members and the number and backg-round data of people participating in the generalassembly of the association.

Further important criteria are the feasibility ofthe development plan as well as economic viabi-

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lity and pilot nature. The implementation of thedevelopment plan should benefit the territoriesin the long run, not only during the time whenthey are funded under LEADER+.

The activity envisaged in the development planmust be such that it can be implemented, takinginto account the local conditions and the legisla-tion in force. The objectives, planned measuresand funding applied for must be realistic in rela-tion to each other, i.e. no too high objectivesshould be set without considering whether andhow these can be realised. The developmentplan should contain activities which contributeto the creation of new permanent jobs and newenterprises, and the activities and measures envi-saged should be something new in the territoryconcerned. In this, e.g. the statements of regionalauthorities on the development plans of theLAGs are utilised, as regional authorities knowwell the local conditions.

One important aspect of the LEADER Commu-nity Initiative is the promotion of co-operationbetween different parties, and the selection crite-ria related to this are the realisation of the requi-rements for partnership and networking in thedevelopment plan.

The development plan should contain concreteplans for co-operation, and thus it is an advan-tage if the LAG already has started or madeplans for co-operation with other LAGs, regio-nal authorities or other parties involved in therural development or it has concrete plans con-cerning possible fields and co-operation part-ners.

7.2 Selection pr7.2 Selection pr7.2 Selection pr7.2 Selection pr7.2 Selection procedures and timingocedures and timingocedures and timingocedures and timingocedures and timing

After the guidelines for LEADER+ CommunityInitiative had been published in the OfficialJournal of the European Communities 18 May2000 (2000/C 139), the Ministry of Agricultureand Forestry called for proposals for the deve-lopment plans to be selected.

The development needs and focal areas of theLAGs constitute an important aspect of the LEA-DER+ programme for Finland. The programmesection (Chapters 4 and 5) of this programme do-cument have been drawn up taking into accountthe measures and focal areas proposed in the de-velopment plans submitted by the groups.

The LEADER+ development plans will be se-lected after the Commission has approved theLEADER+ programme for Finland. The decisi-on is made by the Ministry of Agriculture andForestry, based on the proposal of the workgroup for the LAGs appointed by the Ministry.The work group consists of representatives fromthe different administrative sectors (Ministry ofAgriculture and Forestry, Ministry of the Interi-or, Ministry of Labour, Ministry of Trade andIndustry, Ministry of Education, Ministry of theEnvironment), and territorial administration(Rural, Employment and Enterprise Depart-ments of the Employment and Economic Deve-lopment Centres, the Federation of Regions) aswell as the Finnish Federation of Municipalitiesand certain other organisations (Central Organi-sation of Agricultural and Forestry Producers,Federation of Finnish Enterprises, Finnish Villa-ge Action Movement). The secretariat of thework group is composed of the officials of theMinistry of Agriculture and Forestry dealingwith issues related to the action groups. Thusthe principle of partnership is also being realisedat the level of central administration.

Each member of the work group for LAGs is dis-qualified when the development plan of the ter-ritory where the member in question lives is dea-lt with. Representatives of the territorial admi-nistration may not participate in the processingof the development plans concerning their ownterritories.

Before the selection is made all developmentplans are subjected to an external, impartial eva-luation, and each plan is also sent to the relevantterritorial administration for statement.

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Number of LEADER+ groups to be selected

It is proposed that the number of LEADER+groups to be selected would be 25.

The LEADE+ programme for Finland is basedon the development plans of the LAGs, and alto-gether 57 LAGs have applied for the financing.More than 50 of these are eligible for the fun-ding according to the criteria presented in thisprogramme document, and about 40 LAGs areabout equal in terms of the quality of the deve-lopment plan.

Due to the extension of the area eligible for sup-port through LEADER+ to cover all rural areasin Finland, the number of LAGs included shouldbe increased. In the Finnish conditions the num-ber of people involved cannot be very high, be-cause the countryside is very sparsely populated.To secure the unity of the area covered and thelocal approach, the distances within the areascovered by the LAGs should not be too long.

The population of the areas covered by the diffe-rent LAGs varies between 15,200 and 80,000people. The LAGs to be selected must possessadequate economic preconditions for activity aswell as the necessary resources for financing thedifferent types of projects in their territories,which will secure the broad basis for the activityand the involvement of an adequate criticalmass. If 25 LAGs are selected, the average levelof financing for the programming period 2000-2006 will be EUR 4.06 million, of which the EU(EAGGF) contributes EUR 2.03 million. Theaverage population of the areas covered by theLAGs that have applied for funding is about41,600 inhabitants.

The financing framework for each LAG will bespecified after the selection has been made.

There is no need to determine any minimum le-vel of funding for each LAG, because the situa-tion varies between the different LAGs and itmay also change during the programming peri-od. Obviously, adequate preconditions for ope-ration will be guaranteed for each LAG. The fi-nancing framework will also depend on the po-pulation of the area covered, funding appliedfor in the development plan and the feasibilityof this in relation to the envisaged developmentmeasures as well as the quality of the develop-ment plan.

7.3 Agreement7.3 Agreement7.3 Agreement7.3 Agreement7.3 Agreement

After the development plans of the LEADER+groups have been selected, an agreement ismade between the Ministry of Agriculture andForestry and each LAG. The final developmentplan approved by the Ministry entitles the LAGto funding from the EU and the State, and theexact amounts to be paid will be specified an-nually. The quality of the development planand the preconditions for operation of thegroup are taken into account when granting thefunding.

The agreement determines the obligations con-cerning the decision-making, actions and imple-mentation of the development plan. When dee-med necessary, the agreement may be comple-mented by more detailed instructions.

During the programming period the LAG mayrevise the development plan if this can be consi-dered justified. For example, if there are notenough proposals concerning projects directedat a certain area of focus in the developmentplan, the weighting of the measures can be re-vised accordingly. The proposals for changesmust be submitted to the Ministry of Agricultureand Forestry for approval.

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8 Informing the potential beneficiaries and the public at large

8.1 Informing the potential local action gr8.1 Informing the potential local action gr8.1 Informing the potential local action gr8.1 Informing the potential local action gr8.1 Informing the potential local action groupsoupsoupsoupsoups

When it became almost certain that throughLEADER+ Community Initiative funding wouldbe available for the LAGs in all the rural areas ofthe European Union, the Rural Policy Commit-tee started to plan the information proceduresconcerning the LEADER methodology to all po-tential beneficiaries. Information was consideredvery important, because the experiences fromthe LEADER II programme and the similar, na-tionally financed POMO programme hadshown that rural development based on local ac-tion groups is very well suited for the Finnishcountryside, and the application of this kind ofmethodology should be continued and expan-ded. In September 1998 the Rural Policy Com-mittee set up a support group for expanding thework based on LAGs by informing the rural are-as of this bottom-up development work.

In the programming period 1995-1999 therewere 22 LAGs implementing the LEADER IIprogramme in Finland, and the application ofthe LEADER methodology was expanded by es-tablishing 26 POMO groups (rural programmefor local initiative), which were funded national-ly. The territories of these 48 groups coveredabout two-thirds of the rural areas in Finland.Thus the main task of the support group was toinform the remaining third of the rural areaswhere development based on LAGs had not yetbeen applied. There were also needs for changein some of the existing groups, for example,some of them wished to expand their territories,because in the current area covered the populati-on had proven too small for the activities envisa-ged in the plan.

The support group consisted mainly of membersof the LEADER II and POMO theme groups,but five executive directors of the existing LAGs

were also included, because they were the bestexperts on the practical application of LEADERmethodology. The members of the supportgroups participated in tens of meetings wherethe rural residents got together to set up actiongroups or draft proposals for developmentplans. Information and advice was also given byphone. The support group drew up a six-pagedocument on the establishment and work ofLAGs, and this was sent to all old and newLAGs as well as to the municipalities.

Owing to the efficient information the LAGswere well prepared for the drafting process ofthe development plans. The support groupcompleted its work in January 1999, and by thattime the total number of LAGs in Finland was57 and these covered almost all rural areas. Na-turally most of these had been working for sometime, funded through the LEADER II or POMOprogrammes. Later on the number of LAGs roseto 60. It will not be possible to fund all of thesethrough LEADER+ and thus it has been necessa-ry to look for other sources of financing, such asObjective 1 programme and the Regional RuralDevelopment Programme.

The second stage in the information and trainingstarted in April 1999, when the Ministry of Ag-riculture and Forestry (Rural Policy Committee)asked all the LAGs to send the drafts for theirdevelopment plans to the Ministry by 31 May1999. The main purpose of this was to encoura-ge the LAGs to co-operation in mapping out themost important development opportunities andneeds of their territories, as well as to preventoverlaps, because only one LAG for each territo-ry is allowed. It is hoped that the new peopleand associations who become interested in LEA-DER methodology would joint the existingLAGs instead of setting up new competinggroups.

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During autumn 1999 and spring 2000 the Mi-nistry of Agriculture and Forestry, together withthe Rural Policy Committee organised three trai-ning sessions concerning the LEADER+ program-me and the LAG work in general intended for thenew LAGs. The training aimed at improving theskills of the new LAGs in drafting the develop-ment plans so that the new groups would be clo-ser to the old ones in terms of the relevant know-ledge and skills already during the applicationprocess. The existing LEADER II and POMOgroups received information on LEADER+ inconnection with their own training sessions.

When the Commission Guidelines for the LEA-DER+ programme had been published, the Mi-nistry of Agriculture and Forestry sent the appli-cation instructions consisting of 12 pages to allthe LAGs known to exist at that time (altogether60). The instructions were also sent to the Emp-loyment and Economic Development Centresand the Federation of Regions, as well as uponrequest to all parties interested in LEADER. Atthe end of May 2000 the Ministry of Agricultureand Forestry organised a training session for allLAGs that had applied funding through LEA-DER+. The training concerned the applicationinstructions, and questions put forward by thegroups were also dealt with.

Information during the programme implementation

At the early stage of the implementation of theLEADER+ programme the Ministry of Agricul-ture and Forestry will publish a LEADER+ Gui-debook intended both for the LAGS and theproject implementers, and the Ministry will alsoissue instructions on the implementation of theLEADER+ programme for the LAGs. The LAGswill be updated on the current issues relating tothe programme implementation by post and e-mail throughout the programming period, andadvice is also given by phone.

The Ministry of Agriculture and Forestry willprovide information and training to the LAGs

on issues related to the implementation of theLEADER+ programme in training sessions orga-nised by the national network unit all throughthe programming period. If considered necessa-ry, the Ministry will also organise training ses-sions of its own for the LAGs.

8.2.8.2.8.2.8.2.8.2. Information to authorities, interest grInformation to authorities, interest grInformation to authorities, interest grInformation to authorities, interest grInformation to authorities, interest groupsoupsoupsoupsoupsand public at largeand public at largeand public at largeand public at largeand public at large

Before the LEADER+ programme was sub-mitted to the Commission for approval, a draftof the programme document was sent to the ter-ritorial authorities and certain other partnersfor comment (e.g. Central Organisation of Ag-ricultural and Forestry Producers, organisa-tions for nature conservation, women’s organi-sations, service sector employers). Territorialauthorities had also been informed on the LEA-DER+ programme in connection with othertraining sessions.

In April 2000 the Ministry of Agriculture andForestry published an information booklet onthe sources of financing for rural areas duringthe programming period 2000-2006. The infor-mation was intended for all rural residents, andit was circulated in connection with the newspa-per ‘Maaseudun tulevaisuus’ (‘Future of RuralAreas’), which also contained further informati-on on LEADER+.

After the approval of the LEADER+ programmefor Finland and the selection of the groups, theMinistry of Agriculture and Forestry will pub-lish a brochure directed at the rural populationconcerning the financing possibilities offered byLEADER+ as well as the measures and fields ofactivity involved. Information on LEADER+ isalso available on the Internet pages of the Mi-nistry of Agriculture and Forestry. The projectdescriptions attached to the applications will beavailable on the Internet as well. Thus all thosewho are interested in LEADER+ will be able tosee what kind of projects have received financingthrough LEADER+.

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The LEADER+ groups are responsible for moredetailed information on the programme in theirown territories. Many of the LAGs have web pa-ges of their own, including the contact informa-tion and e-mail addresses. At the national levelthe national network unit also provides infor-mation on the LEADER+ programme on their

web pages as well as through their own paper.The information on the programme and projectsis based on the guidelines laid down in Commis-sion Regulation (EC) No 1159/2000 on infor-mation and publicity measures to be carried outby the Member States concerning assistancefrom the Structural Funds.

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9 Administrative procedures for LEADER+

9.1 Administration of LEADER+

9.1.1 Central administration

The administrative and paying authority of theLEADER+ programme is the Ministry of Agri-culture and Forestry. The contact address of ad-ministrative and paying authority:

Ministry of agriculture and forestry, P.O. Box30, 00023 GOVERNMENT

The Ministry of Agriculture and Forestry deter-mines the annual financial framework for eachLAG, including the share of administrativefunds available for the groups.

At the level of central administration the prin-ciple of partnership is realised through the workgroup for LAGs set up by the Ministry of Agri-culture and Forestry (the composition of this isgiven in Chapter 7.2). Equal representation ofthe different territories is guaranteed throughthe participation of representatives of the terri-torial administration and local action groups se-lected from different parts of the country for oneyear at a time.

The tasks of the work group for LAGs are the following:

• preparation of the national selection criteriafor LEADER+ groups and information con-cerning these

• preparation of the LEADER+ programme• preparation of the selection of the LEADER+

groups and the proposal concerning this tothe Ministry of Agriculture and Forestry

• preparation of issues to be decided in the Mo-nitoring Committee for LEADER+

The work group also assists all LAGs (bothLEADER+ groups and LAGs financed through

other programmes) in their work through trai-ning and information, as well as deals withproblems that have arisen in the work of theLAGs and helps to find solutions to these.

9.1.2 Territorial administration

In the LEADER+ programme the final beneficia-ry is the local action group. The beneficiary ofthe project funding may be a single natural per-son or several natural persons jointly, associati-on governed by public or private law, as well asfoundation.

The decisions on financial assistance to projectsthrough LEADER+ are made at the Rural De-partments of the Employment and Economic De-velopment Centres based on applications for fi-nancing submitted by the LAGs. Each year theMinistry of Agriculture and Forestry authorisesthe Employment and Economic DevelopmentCentres to grant a certain amount of assistance,which corresponds to the total amount on finan-cing granted to the LEADER+ groups operatingin the territory of the Employment and EconomicDevelopment Centre in question. The decisionson the projects of the LAGs to be financed maynot exceed the limits of the financial framework.

9.29.29.29.29.2 GrGrGrGrGranting and paanting and paanting and paanting and paanting and payment of assistanceyment of assistanceyment of assistanceyment of assistanceyment of assistanceto applicantsto applicantsto applicantsto applicantsto applicants

9.2.1 Application procedure

Application forms relating to the projects, toget-her with instructions and appendices, are avai-lable both at the LAGs and the Employment andEconomic Development Centres. The formshave been drawn up in co-operation with theMinistry of Agriculture and Forestry, and theyare ratified by the Ministry. The form are avai-lable both in the electronic form and on paper.

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Assistance related to the LEADER+ programmecan be applied for all year round, but if consi-dered appropriate the local LEADER+ groupsmay also invite the projects to compete witheach other by taking in the application in at le-ast four periods per year. The LAGs have theobligation to provide information on the op-portunities offered by LEADER in their ownterritory.

The application concerning an individual pro-ject is submitted to the LAG in whose territorythe development project is to be implemented orwhere the company is located. Assistance mustbe applied for before launching the project.

The LAG notes the date of receiving the applica-tion on the form. Upon receipt of the applicationthe LAG checks that the application contains allthe required information and appendices and, ifnecessary, requests the applicant to complementthe application as well as provides assistance tothe applicants. The board members, deputymembers, members of the work groups andemployees of the LAGs are bound to an obligati-on to maintain secrecy concerning the informati-on obtained in connection with processing theapplications.

The applications are processed by the boards ofthe LAGs, which also decide whether to proposethe project to be financed. When the applicationis being processed at the LAGs, the board mem-bers must comply with the provisions concer-ning disqualification laid down in the Act onAdministrative Procedure (598/1982). Wheredeemed appropriate, the provisions concerningdisqualification shall also be applied for the partof the employees engaged by the LAGs as well aswhen processing the applications in workgroups.

The members and deputy members of the board,members of the work groups as well as emplo-yees of the LAGs will sign a promise of confiden-tiality.

The LAG submits the application together withstatement of reasons to the relevant Employmentand Economic Development Centre. The appli-cation will become pending on the date when itis entered into the diary of the Employment andEconomic Development Centre.

The LAGs have to process the project applica-tions without delay.

9.2.2 Decisions

The Ministry of Agriculture and Forestry estab-lishes the annual financial framework for eachLEADER+ group, and the LAG concerned hasthe exclusive right to propose projects to be fi-nanced from the framework allocated to it. TheEmployment and Economic Development Cent-res make the decisions on granting the assistancebased on statements of the LAGs. The decisionon granting the assistance is made both for thecontribution from the Guidance Section of theEuropean Agricultural Guidance and GuaranteeFund and the national share. The decision onthe financing is made by the Rural Departmentof the Employment and Economic DevelopmentCentre in whose territory the LAG operates. Ifthe area where the LAG operates extends to theterritory of more than one Employment andEconomic Development Centre, the decision ismade by an authority in whose territory most ofthe municipalities covered by the LAG are loca-ted. To ensure complementarity, the projectsmust be processed in the project work group ofthe Employment and Economic DevelopmentCentres, secretariat of the regional co-operationgroup or in its rural section, according to a deci-sion made in each territory. In the processing ofthe projects in the said bodies the decision-ma-king model of the LEADER+ programme mustbe followed

The decisions on financing of enterprise projectsnot connected to farms are made at the RuralDepartments based on preparation according tothe Act on Support for Enterprises. The Rural

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Department is responsible for the implementati-on of an administrative procedure required bythe LEADER+ Community Initiative accordingto the At on Rural Industries Financing. Gran-ting (329/1999) the assistance is based on re-commendations of the LAG and the EnterpriseDepartment.

In the case of training projects other than thoseconcerning rural entrepreneurship the Rural De-partment request a statement from the Emplo-yment Department before making the decision,and a binding statement from the State Provin-cial Offices is requested on training projectsleading to basic or vocational degrees or projectsrelating in an essential way to cultural heritageor professional institutes for arts and culture.

The relevant procedures may be decided in eachterritory.

The Employment and Economic DevelopmentCentres may deviate from the proposals of theLAGs only for particularly weighty reasons,such as cases where the activity proposed is con-sidered to violate the provisions in force or theLEADER+ programme. This also concerns thestatement of reasons by the different authorities.

When granting the assistance the authority shalltake account of the national and Community le-gislation, relevant authorisation and the finan-cial framework available for the group in questi-on. The LEADER+ programme for Finland andthe development plan of the LEADER+ group inquestion must also be taken into account in thedecision. The authority must process the appli-cation without delay. The decision-making pro-cess at the Employment and Economic Develop-ment Centre should take no more than twomonths. Based on the experiences from the pre-vious programming period it can be assumedthat the project proposals will be better prepa-red when the groups have gained more experien-ce, and this will also speed up the decision-ma-king processes.

In the case of development projects the decisionsto grant the assistance is made either separatelyfor each year of implementation or for no morethan three years at a time, while the decisions togrant assistance for enterprise projects is madefor the whole period of implementation or nomore than three years. The decision has to be ac-companied by a statement of reasons, based oneither the proposal of the group or reasons forrejecting the project used by the authority withinthe scope of its discretion (consideration invol-ving matters of law).

Decisions on the use of technical assistance aremade by the Ministry of Agriculture and Fo-restry and the Employment and Economic Deve-lopment Centres.

As far as possible the LAGs should also take ac-count of the statutory eligibility criteria for the as-sistance. In particular, the groups have to makesure that the projects proposed by them are in ac-cordance with both the national LEADER+ pro-gramme and the development plan of the LAG.

The decision on assistance is sent to the appli-cant stated in the application form, and it is alsonotified to the relevant LAG.

9.2.3 Right of appeal

Decisions concerning the granting and paymentof assistance may be appealed to the Appeals Bo-ard for Rural Industries. Before making the deci-sion, the Appeals Board requests a statementfrom the Employment and Economic Develop-ment Centre and, when deemed necessary, thisrequests a statement from the relevant LAG tobe attached to the documents sent to the AppealsBoard.

9.2.4 Payment of assistance

The payment of assistance is applied for using aform ratified by the Ministry of Agriculture andForestry. The applicant submits the form to the

85

relevant LAG, which processes the form and ma-kes sure that it has been filled in correctly andcontains the required information and docu-ments. The LAG prepares the decision onpayment and submits this as its statement to theEmployment and Economic Development Cent-re. The processing of the applications forpayment by the LAGs should take no more thanone month. Decisions on the payment of assis-tance are made at the Rural Departments of theEmployment and Economic Development Cent-res. The authority has the public liability tomake sure that the payment criteria are met. As-sistance is paid on the basis of the approved rea-lised costs or, in the case of advance payments,based on cost estimates. The board members,deputy members, members of work groups andemployees of the LAGs are bound to an obligati-on to maintain secrecy concerning the informati-on obtained in connection with processing thepayment application, especially that the ruleslaid down by the Commission Regulation (EC)No 1685/2000 of 28 July 2000 laying down de-tailed rules for the implementation of CouncilRegulation (EC) No 1260/1999 as regards eligi-bility of expenditure of operations co-financedby the Structural Funds, are respected.

The authority granting assistance makes thepayment upon application based on an appro-ved account submitted by the beneficiary. Thebeneficiary should receive the payment withinthree weeks from the submission of the applica-tion.

The actual payment is made by the InformationCentre of the Ministry of Agriculture and Fo-restry, after obtaining a payment order from thepaying authority.

Payment must be applied for no later than threemonths from the termination of the periodgranted for the implementation of a develop-ment project or enterprise project. Assistancemay be paid for no more than two years after theend of the programming period.

Assistance for development projects is paid annu-ally on the basis of verified, approved costs in nomore than four instalments, including the pos-sible advance payment. The advance paymentmay be 30 per cent of the assistance at the maxi-mum. Advance may be for a non-profit organisa-tion governed by private law if sufficient reasonsfor this are provided. When deemed necessary,the Employment and Economic DevelopmentCentre may require that a security be lodged tomake sure that the advance is used for the inten-ded purpose. A security must be required whenconsidered necessary by the LAG or the Emplo-yment and Economic Development Centre. Therecipient of the advance has the primary liabilityfor possible infringements, but if the assistancecannot be recovered through recovery procee-dings, the State of Finland is liable for the advan-ce. Advance payments are not included in the re-quests for payment submitted to the Commission.

If advance payment has been made to a project,the following payment may not be applied foruntil the share of the project corresponding tothe first instalment (i.e. the advance) and the se-cond instalment is implemented and the costs ac-crued correspond to the first and second instal-ments. The recipient provides an account of theuse of funds in connection with the paymentapplication.

An account of the realisation of the municipalfunding and other public and private funding(including payments in kind) must be attachedto the application for the payment of each instal-ment. The payment of the last instalment is sub-ject to the condition that the beneficiary of theaid submits an account of the activities, use offunds and realisation of the project within thetime limit and in accordance with the terms ofthe decision on the assistance.

In the case of building investments related to de-velopment projects the assistance is paid in nomore than five instalments, including the pos-sible advance payment. The advance payment

86

may be no more than 20 per cent of the totalamount of assistance. The last instalment shallnot be payable until the building is completed,and a certificate of the completion must be pro-vided, issued either by an inspector approved inthe decision on assistance or authority accordingto the decree of the Ministry of Agriculture andForestry.

Assistance for building relating to entrepre-neurial activity is paid in no more than fiveinstalments according to the stages of the buil-ding project. A certificate on this may be issuedby an authority according to the decree of theMinistry of Agriculture and Forestry or inspec-tor approved in the decision on assistance by theEmployment and Economic Development Cent-re. No advance payments may be made. The lastinstalment is paid after the building is completed

Assistance granted for investments other thanthose concerning building projects is paid on thebasis of the realised costs in no more than twoinstalments after the assets concerned have beenpaid in full and the ownership has been transfer-red to the applicant.

More detailed instructions on the payment pro-cedure may be issued by decrees by the Govern-ment and the Ministry of Agriculture and Fo-restry.

Payments in kind

Payments in kind may be approved as parts ofthe private financing.

Upon application the applicant must provide aplan concerning the use of the payment in kind.The LAGs shall consider whether the applicanthas the necessary skills and abilities to performthe envisaged payments in kind, and the authori-ty making the decision on granting the aid alsoapproves the use of payment in kind, whichmust fulfil the general eligibility criteria.Payment in kind may be assigning land or real

estates, implements or raw materials to the pro-ject research or professional activity as well asvoluntary work. Voluntary work may be inclu-ded in the costs and private financing of the pro-ject only in the case of non-profit projects, whileunpaid work for enterprises may not be conside-red voluntary work. Separate accounts must bekept on the payment in kind, indicating the typeof payment, unit price and total price, time andthe persons involved. The person doing the vo-luntary work must confirm the bookkeeping onthe work by his/her signature, and the assign-ment of other payment in kind must be confir-med by a signature of an external party, in addi-tion to the assignor. More detailed provisions onthe concept of approved voluntary work and themaximum unit prices, maximum amount perproject as well as maximum share of voluntarywork in private funding will be issued by a dec-ree of the Ministry of Agriculture and Forestry.

9.2.5 Bookkeeping and monitoring

The assistance is granted subject to the conditi-on that the beneficiary keeps separate accountsof the activities according to the decision. Howe-ver, separate bookkeeping is not required if theactivity is related to the business activity of thebeneficiary or other activity, and the implemen-tation and financing of the project can be indica-ted through a separate account of the economicoperator, enterprise or other corporation so thatthe control of the accounting can be conductedwithout difficulty.

The beneficiary has to keep all the receipts anddocuments relating to the activity so that they arereadily available for inspection. Bookkeeping andthe documents relating to this shall be kept as laiddown in the Bookkeeping Act (1336/1997). Ifthe economic operator or company is not obligedto bookkeeping according to the said Act and noprovisions on the bookkeeping in the matter con-cerned are laid in other legislation, the relevantprinciples on bookkeeping laid down in theBookkeeping Act shall be complied with. The

87

bookkeeping and related documents must be keptas provided in Sections 9 and 10 of the Act, but atleast for three years from the payment of the lastinstalment for the programming period by theCommission of the European Communities.

The administrative bookkeeping of the funds in-cluded in the State bookkeeping is conductedthrough the bookkeeping system of the Informa-tion Centre of the Ministry of Agriculture andForestry

9.3 F9.3 F9.3 F9.3 F9.3 Financial frinancial frinancial frinancial frinancial framewamewamewamewamework for LEADER+ grork for LEADER+ grork for LEADER+ grork for LEADER+ grork for LEADER+ groupsoupsoupsoupsoups

Each LAG is granted an annual financial frame-work. This covers the project funding to be app-lied for as well as the administration of theLAGs and the funds that may be needed for theacquisition of skills.

The establishment of the financial frameworkfor the first year of operation is based on thetype of the development project and the propo-sed measures, estimate by the group concerningthe need for financing as well as, to some extent,on the population of the territory of the LAG.When establishing the financial frameworks forthe following years the realised actions of thegroups are also taken into account, includingthe share of the tied and paid funds in the quotasfor the previous years, control information andrealisations of the principles of LEADER+.

The decision on the use of the financial frame-work is made by the LAG alone. However, themaximum amount of administrative funds andfunds for the acquisition of skills intended fornew groups within the annual financial quota isset upon the allocation of the financial frame-works, and the group cannot exceed these. Thismakes sure that most of the funds are used forproject financing.

If part of the annual financial framework re-mains untied, it may be transferred to the follo-wing year.

9.4 National netw9.4 National netw9.4 National netw9.4 National netw9.4 National network unitork unitork unitork unitork unit

The tasks and obligations of the national net-work unit for the part of services directed at theLEADER+ groups have been defined in this pro-gramme document (Chapters 5.3 and 9.4). Theduties are the same independent of the financingsource of the network unit and whether it is alsoresponsible for tasks outside the LEADER+ pro-gramme.

The national network unit is funded nationally,and it serves all the LAGs financed through thedifferent programmes (e.g. LEADER+, Objective1, Regional Rural Development Programme). Ifpossible, the activity of the joint network unitfor all LAGs will continue throughout the pro-gramming period 2000-2006. The administrati-on of the network unit will be organised basedon an open invitation to tender towards the endof 2001.

The network unit reports to the Ministry of Ag-riculture and Forestry on the use of funds andprogress of operations twice a year. When theactivity of the network unit comes to an end butbefore the application of the final instalment thenetwork unit files a final report on the activityand use of funds during the whole programmingperiod.

The work of the unit is also monitored and di-rected by a guidance group set up for this purpo-se, with a representative from the Ministry ofAgriculture and Forestry.

An administrative inspection of the networkunit is conducted at least once during the pro-gramming period.

9.5 Monitoring9.5 Monitoring9.5 Monitoring9.5 Monitoring9.5 Monitoring

Monitoring provides information on the prog-ress and realisation of the objectives for the partof individual projects, development plan of eachLAG and the whole LEADER+ programme. The

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projectfunds(EU and State)

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activities at these three levels are monitoredthrough monitoring reports drawn up twice ayear and information recorded in the project re-gister. The monitoring measures are in accordan-ce with provisions laid down in Articles 34-37of Regulation 1260/99.

The implementers of the projects file a progressreport twice a year, and after the end of the pro-ject, in connection with the application for thelast payment, a final report is submitted. Thelast instalment is not payable until the final re-port has been submitted. The reports contain in-formation on the use of funds and realisation ofthe quantitative objectives, as well as a qualitati-ve description of the progress and realisation ofthe project. The project reports are submittedboth to the LAGs and the Rural Departments ofthe Employment and Economic DevelopmentCentres.

The LAGs file progress reports twice a year af-ter the implementers of the projects have sub-mitted their own semi-annual reports. In addi-tion to the use of administrative funds, the re-port covers the quantitative and qualitativeimplementation of the development plan, aswell the realisation of the principles of LEA-DER+, the composition of the board and deve-lopment of the membership of the associationor co-operative. The reports of the LAGs aresubmitted to the Ministry of Agriculture andForestry and the Rural Departments of theEmployment and Economic Development Cent-res.

Reports on the use of funds for the acquisitionof new skills are drawn up based on the sameprinciples, and the reports are submitted to theMinistry of Agriculture and Forestry.

The national network unit also submits a reporton the use of fund and progress twice a year.

More detailed instructions on drawing up themonitoring reports to the implementers of the

projects and LAGs are issued after the approvalof the LEAFER+ programme for Finland.

The Ministry of Agriculture and Forestry main-tains a register on the projects financed in its ad-ministrative sector. The authority enters the dataon the LEADER+ projects to the register in con-nection with the preparation of the decisions onthe projects as well as the decisions on grantingand payment of the assistance. The annual admi-nistrative funds for each LEADER group arealso considered a project. The implementationof the projects funded through LEADER+ is mo-nitored through the register and the bookkee-ping system (e.g. amounts of tied and paidfunds, realisation of the objectives). In connecti-on with a decision to grant the assistance the ini-tial state is also fed to the register for the part ofe.g. number of jobs in order to be able to assessthe results of the project in relation to the initialsituation.

The Ministry of the Interior maintains a joint in-formation system of all ministries, FIMOS2000,where the authorities participating in the finan-cing of the programme enter the data on the re-servations, commitments, payments and monito-ring indicators concerning the projects imple-mented through the EU programmes. A summa-ry of the implementation of LEADER+ is alsoentered to the FIMOS2000 register.

Monitoring Committee

The Monitoring Committee for the LEADER+programme is set up within no more than threemonths after the Commission has approved theprogramme document of Finland.

The task of the Monitoring Committee to be setup for LEADER+ is to ensure the efficiency andquality of the programme implementation. It ap-proves the annual and semi-annual reports befo-re they are submitted to the Commission, as wellas the possible change e.g. in the financial struc-ture before the Commission decision.

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The Ministry of Agriculture and Forestry drawsup the annual and semi-annual reports concer-ning the implementation of LEADER+. The

work group for LAGs processes the reports andthey are approved by the Monitoring Committeebefore the submission to the Commission.

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10.1 Contr10.1 Contr10.1 Contr10.1 Contr10.1 Contrololololol

The control of the LEADER+ Community Initia-tive includes administrative and on-the-spotchecks. The implementation of the measures aswell as the administrative inspections and cont-rols are also checked to make sure that theimplementation and control of the measurescomply with the national and EU requirementsfor financial management. The inspections alsocover the efficiency of the existing administrati-on as well as reported expenditure.

The administrative and paying authority for theLEADER+ Community Initiative in Finland is theMinistry of Agriculture and Forestry, which isthus responsible for the use of the structuralfunds to the Commission. The Ministry of Agri-culture and Forestry makes appropriate arrange-ments for the control of the use of funds so thatthe fulfilment of the criteria as well as compliancewith the terms for the granting and payment ofassistance are verified. Provisions on the responsi-bility for implementation will be laid down by aGovernment decree and rules of procedure of theMinistry of Agriculture and Forestry. For the partof control the responsibility for implementation isdivided so that the Control Unit is responsible forthe on-the-spot checks and the Rural Policy andStructural Policy Unit is responsible for the otherimplementation of the programme.

In the LEADER+ Community Initiative theLAGs also monitor the progress of the projectsand use of funds. The LAGs are also obliged toreport any violations of the rules to the Emplo-yment and Economic Development Centre thatgranted the assistance.

10.1.1 Administrative checks

Administrative checks include the checks madein connection with each application for assistan-

10 Control provisionsce and payment as well as, when deemed neces-sary, the related on-the-spot checks in order toverify the fulfilment of the criteria for the gran-ting and payment of the assistance. The admi-nistrative checks are conducted by the Rural De-partments of the Employment and EconomicDevelopment Centres based on guidelines fromthe unit administering the assistance at the Mi-nistry of Agriculture and Forestry.

The unit administering the assistance also con-ducts administrative checks at the Employmentand Economic Development Centres.

10.1.2 On-the-spot checks

On-the-spot checks (five per cent) based on Com-mission Regulation (EC) No 2064/97 are madeaccording to an annual control plan. The Mi-nistry of Agriculture and Forestry issues instruc-tions and is responsible for the arrangement ofthe on-the-spot checks of the projects included inthe programme. The Ministry may provide bydecree that the Employment and Economic Deve-lopment Centres or other authorities are used toassist in the control, as well as assign special cont-rol duties to other bodies. The on-the-spot checksof the projects are made either on the basis of ran-dom sampling based on risk analysis or as addi-tional control based on discretion for specialreasons. In the selection of the sample of the pro-jects for checks it should be made sure that thechecks will cover different types of projects of dif-ferent scales. On-the-spot checks based on samp-les cover all the rural development measures in-cluded in the programme, and the checks must beevenly distributed over the whole programmingperiod. Decisions on projects concerning the ad-ministrative funds of the LAGs are also includedin the random sampling process, and risk factorsobserved in connection with national or Commu-nity checks or otherwise during the implementati-on must be taken into account in the sampling.

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All LAGs shall be subjected to at least onechecks during the programming period.

On-the-spot checks cover the activity, resultsand bookkeeping of the LAGs, realisation of thefinancing, reporting as well as the eligibility ofthe costs. The correctness of the decisions con-cerning the assistance and payment is also asses-sed by inspections concerning the quality of theadministrative decisions made by the Emplo-yment and Economic Development Centres, be-cause this is one way of verifying the efficiencyof the administrative system.

10.2 Sanctions10.2 Sanctions10.2 Sanctions10.2 Sanctions10.2 Sanctions

According to Section 46 of the Act on Rural In-dustries Financing, the payment of aid granted onthe grounds of the said act shall be terminatedand the aid shall be ordered recovered in full orpartly if the aid has been used for purposes otherthan it was granted for or the beneficiary of theaid has yielded false information influencing thegranting or payment of the aid or otherwise actedin a deceitful manner. According to Section 50 ofthe said Act, if the beneficiary of the aid has actedin a manner provided for in Section 46, theamount to be recovered may be raised by no morethan 20 per cent and in the case of a serious viola-tion by no more than 100 per cent.

The payment of the aid may be terminated and the aidmay be ordered recovered partly or in full if:

a) the aid has been granted or paid on falsegrounds

b) the beneficiary of the aid has without anycompelling reason terminated or essentiallyreduced the activity the aid was granted forwithin five years from the payment of the lastinstalment

c) the beneficiary of the aid has relinquishedproperty the aid was granted for otherwisethan by acquisition through inheritance to aperson who does not fulfil the eligibility crite-ria within five years from the payment of thelast instalment and without the consent of theEmployment and Economic DevelopmentCentre

d) the ownership of a general partnership, limi-ted partnership, co-operative or limited com-pany engaged in agriculture and forestry orentrepreneurial activity change otherwisethan by acquisition through inheritance sothat eligibility criteria are no longer met

e) terms laid down in the aid decision or docu-ment the aid is based on have not been comp-lied with

f) the beneficiary of the aid refuses to yield in-formation relating to the use or control of theaid or accounts or other documents to theinspectors or adequate assistance in perfor-ming the inspections

g) there is a weighty reason similar to thoselisted above for the termination or recoveryof the aid.

The Ministry of Agriculture and Forestry is res-ponsible for the recovery of the subsidies it hasgranted and termination of payment. In othercases the decision on recovery and terminationof payment is made at the Employment and Eco-nomic Development Centre which granted theaid. The unit administering the aid is responsiblefor the instructions concerning the further me-asures to be taken by the Rural Departments aswell as the monitoring of their implementation.The administering unit draws up the report oninfringement based on information from theEmployment and Economic Development Cent-res and forwards this to the control unit UCLAFfor reporting.

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The evaluation of the LEADER+ programmecomprises the ex ante evaluation of the pro-gramme and the development plans of theLAGs, the mid term and ex post evaluation ofthe programme, and voluntary self-evaluation ofthe groups themselves. The ex ante evaluationhas been dealt with in Chapter 3, and this chap-ter is mainly concerned with the mid term and expost evaluation of the programme.

The objective of the evaluation of the LEA-DER+ programme is to examine the solutionsthe LEADER+ programme, the LAGs and indi-vidual projects supported by the LAGs offer forreinforcing the viability of the rural areas.Another subject of evaluation is how well theintegrated and coherent approach, measurespromoting the pilot nature as well as the bot-tom-up approach have been realised in the pro-gramme implementation. The evaluation alsocomprises the practical decision-making pro-cedure in the LAGs.

The evaluation must consider the impacts of theprogramme in different areas and to what extentthe qualitative and quantitative objectives havebeen reached in each measure, taking into ac-count the administrative and economic aspectsas well as networking. It is also examined howwell the activity of the LAGs has followed theirdevelopment plans and the LEADER+ program-me for Finland and the general LEADER+ objec-tives of the Commission.

The authority in charge of the programme (mi-nistry of agriculture and forestry) will set up anevaluation system according to the guidelinesthat will be provided by the Commission. Theevaluation system shall be submitted for discus-sion to the Commission, and then adopted bythe monitoring committee of the programme.

11 Evaluation

The purpose of the external evaluator is to assistthe Monitoring Committee for LEADER+ andthe authorities involved in implementing theprogramme. When deemed necessary, the evalu-ator may also be requested to participate in themeetings of the Monitoring Committee.

The evaluation of LEADER+ must be conductedby independent external evaluators who are fa-miliar with the LEADER+ programme and itsspecial characteristics in relation to the Objecti-ve 1 and 2 programmes and the Regional RuralDevelopment Programme, using appropriateevaluation techniques. The party conducting themid term evaluation will be selected after the ap-proval of the LEADER+ programme for Finlandand the selection of the LAGs in 2001 based ona public invitation to tender. The selection ismade by the Ministry of Agriculture and Fo-restry on the proposal of the work group forLEADER+. The ex post evaluator of the pro-gramme is selected in 2006, also based on anopen tender.

The number of the monitoring indicators for theprogramme has been cut from the previous pro-gramming period to include such indicators onlythat are particularly important in view of themonitoring of the programme. This simplifiesthe monitoring at the national level and eases thework load at the level of the territories. In addi-tion to the indicators for monitoring the LEA-DER+ programme for Finland the LAGs have toselect appropriate indicators for the monitoringconcerning their own development plans. Theofficial data on monitoring indicators obtainedfrom the Hanke 2000 monitoring system areused in the evaluation. The data may be comple-mented by further indicators for monitoring theCommission may issue as well as information re-lating to monitoring indicators established andcompiled by the LAGs, statistics, as well as

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through other surveys, e.g. enquiries. The Fin-nish national and territorial authorities as wellas the LAGs have to make sure that all the mostimportant documents and monitoring data onthe projects are readily available to the evalu-ators.

Examples of monitoring indicators describing theimplementation of the LEADER+ programme:

• new / renewed jobs• new enterprises• number or persons participating in the trai-

ning and number of days of training• value of investments• number of participants in animating meetings

The realisation of the principles of LEADER ismainly evaluated through the qualitative desc-riptions of the LAGs, and the participation ofthe local residents in the administration of theLAGs is also examined.

The evaluation is also concerned with the reali-sation of the pilot nature of the projects, whichreceives considerable emphasis in the program-me. This is assessed based on the following fac-tors, among other things:• development of new local products and servi-

ces• new methods to combine the human, natural

and/or economic resources of the area, aimedat better utilisation of the opportunities exis-ting in the territories

• combining and co-operation of sectors ofeconomic activity that have traditionally beenseparate (e.g. the so-called third sector andcompanies)

• new means to involve the local residents inthe decision-making procedure and imple-mentation of the projects

In addition to the programme level of the LEA-DER+ for Finland and the level of the LAGs, theevaluation must also cover the functioning ofthe national network unit.

In the evaluation special attention should be di-rected at the environmental impacts of the LEA-DER+ programme for Finland, developmentplans drawn up by the LAGs and individualprojects. Both negative and positive impactsshould be taken into consideration, togetherwith the application of the EIAprocedure(environmental impact assessment) atthe different levels. One important aspect consi-dered in the evaluation is to what extent the en-vironmental values have been taken into indust-rial use without compromising the preservationof biodiversity.

Further, in the evaluation particular emphasismust be given to the realisation of equality. Inaddition to the perspectives of men and womenthe impacts of the measures in view of the deve-lopment of the living conditions for the youngare estimated. It is also considered to what ex-tent the measures are directed at the unemployedand rural people threatened by social exclusion.The consistency of the measures financedthrough LEADER+ with the Community ruleson competition is also examined.

The LEADER+ Monitoring Committee will es-tablish more detailed requirements for the midterm evaluation, which must take account of theguidelines for conducting the mid term evaluati-on the Commission may issue during the pro-gramme implementation.

According to Article 2, paragraph 2 of the Gene-ral Regulation, the results of the first mid termevaluation must be submitted to the Commissi-on by 31 December 2003, after having been dis-cussed at the Monitoring Committee.

Based on the mid term evaluation the financialframeworks for the LAGs may be revised depen-ding on the implementation of the developmentplan in relation to the set objectives. Accordingto Article 42, paragraph 4, the second, up-datedmid term evaluation must be completed by 31December 2005.

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The party conducting the ex post evaluation isselected in 2006 by an invitation to tender. Theguidelines concerning the ex post evaluation theCommission may have issued during the pro-gramming period will be taken into account.

The costs of the mid term and ex post evalua-tions will be paid from the technical assistancefor LEADER+.

In addition to the official evaluation, the LAGsshould evaluate their own activities from thevery beginning of the development plan in orderto be able to monitor whether the desired resultscan be reached. Self-evaluation should cover all

aspects of the groups activities, such as the effi-ciency of the every-day processes, i.e. advice tothe territory and projects, processing of projectapplications and monitoring of the payments,participation of the board of the LAG in advan-cing the development plan, how well the pro-jects financed by the LAG contribute to the ob-jectives of the development plan, as well as thecontacts established between the LAG and otheroperators, e.g. implementers of the projects, va-rious training and development organisations inthe territory, other LAGs, financing authoritiesand other authorities. Self-evaluation providesthe LAGs with current information on the re-sults of their activity and development needs

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Consultation of different partners

In accordance with the guidelines for LEADER+,all the most important parties have been heardbefore the submission of this programme docu-ment to the Commission. The draft of the pro-gramme document was sent to the different mi-nistries (Ministry of Trade and Industry, Mi-nistry of the Interior, Ministry of Labour, Mi-nistry of Education, Ministry of the Environ-ment, Ministry of Social Affairs and Health, Mi-nistry of Finance) all departments of the Emplo-yment and Economic Development Centres (Ru-ral Departments, Enterprise Departments, Emp-loyment Department) Federations of Regions,Regional Environment Centres, Departments ofEducational and Cultural Affairs at the StateProvincial Offices and the Federation of Munici-palities, as well as the LAGS that had submittedapplications concerning LEADER+.

Among the various interest groups relating toLEADER+, the programme document was sent tothe Finnish- and Swedish-speaking Central Orga-nisations of Agricultural and Forestry Producers,the Association of Rural Advisory Centres, the ru-ral research and education centres of the Universi-ty of Helsinki, the Federation of Finnish Enterpri-ses, 5 municipal industrial companies, the FinnishVillage Action Movement, the Finnish Associati-on for Nature Conservation, the Coalition of Fin-nish Women’s Associations for Joint Action, theEmployers’ Confederation of Service Sector In-dustries in Finland, the Finnish 4H association,the Women’s Advisory Organisation for Develop-ment of Rural Areas, the Martha Organizationand the Finnish Crafts Organization. The Regio-nal Environment Centres were also requested toinform the environmental organisations operatingin their territories on the draft.

12 Consultation and participation of different partnersin the monitoring committee

Results of the consultation / the most importantobservations

In general the parties who gave their statementwere quite satisfied with the structure and con-tents of the LEADER+ programme. In particu-lar, it was considered positive that the contentsof the programme were based on the develop-ment plans of the LAGs, as well as the fact thatthe programme provides only the general frame-work for the implementation of different kindsof development plans.

Several LAGs as well as some representatives ofthe territorial administration expressed theirconcern that the funds reserved for the admi-nistration of the LAGs might be inadequate asthe amount of work done by the groups isgoing to increase. A number of parties alsoconsidered that the objective of targeting 35per cent of the funding to enterprise projectswas too ambitious, while others saw the strongemphasis on industries as very positive. Thequantitative objectives of the programme werealso regarded as too optimistic, and theyshould be lowered. The complementarity in re-lation to the other programmes also neededfurther specification. A number of groups andthe Employment and Economic DevelopmentCentres also wished that the reporting schedu-les of the implementers of the projects andLAGs be staggered. The programme has beenrevised for the part of the above issues, amongother things, after the statements.

Some of the proposed changes were not in ac-cordance with the Commission guidelines andhad to be disregarded.

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Composition of the Monitoring Committee

According to the principle of tripartition, theMonitoring Committee is composed of the rep-resentatives of the national and territorial autho-rities and social partners based on equal repre-sentation. In order to secure the equal represen-tation between the sexes, the share of men andwomen must be 40-60 per cent. Representativesfrom the Ministry of Agriculture and Forestryact as the chairman and secretary of the Monito-ring Committee.

The members of the Monitoring Committeecome from the Ministry of Agriculture and Fo-restry, Ministry of the Interior, Ministry of Tradeand Industry, Ministry of Labour, Ministry ofthe Environment and Ministry of Education. Re-gional administration is represented by membersfrom the Rural, Enterprise and Employment De-

partments of the Employment and EconomicDevelopment Centres as well as the RegionalCouncils, Regional Environment Centres andDepartments of Educational and Cultural Af-fairs at the State Provincial Offices. Membersrepresenting the interest groups come from theFederation of Finnish Enterprises, Associationof Finnish Local and Regional Authorities, mu-nicipal industrial companies, Central Organisa-tion of Agricultural and Forestry Producers, Fin-nish 4 H Association, Association of Rural Ad-visory Centres, Finnish Crafts Organization, thetheme group for young people of the Rural Poli-cy Committee and Finnish Village Action Move-ment. The LAGs are also represented in the Mo-nitoring Committee.

The Commission representative has an advisoryrole in the Committee.

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The LEADER+ programme complements andreinforces the other rural development program-mes. The main differences between LEADER+and the other programmes is the small scale andlocal orientation emphasised in LEADER+,which brings together the resources at the local le-vel and aims at activating the rural residents. Theobjective is to encourage the rural population toseeing that they can influence their own life andfuture. The decision-making model of LEADER+provides a new channel for influence, and the ter-ritorially-based decision-making influences theprojects to be selected in an essential way.

The LAGs are actively searching for new ways ofpractical co-operation with regional authoritiesand other parties involved in rural developmentto avoid overlapping. Due to the differentperspective, the project financing through LEA-DER+ is allocated on different grounds than inthe mainstream programmes. LEADER+ makes itpossible to extend the scope of application of theEAGGF to finance projects outside the Objective1 and 2 areas that otherwise would not be eligiblefor financing. In the case of enterprises, financingis mainly directed at very small firms employing1-2 persons. Unlike in the mainstream program-mes, international joint projects with similargroups in other countries are also eligible for fi-nancing through LEADER+.

LAGs may be financed through programmes ot-her than LEADER+, e.g. the Regional Rural De-velopment Programme or Objective 1 program-me, i.e. they have matured so that it has beenpossible to include them in the so-calledmainstream programmes. However, there maynot be more than one LAG in each territory, andthus the overlap of LAG activities financedthrough different programmes is not possible.The administration model also makes sure thanno overlapping in the financing may occur.

13 Compatibility with other community programmes and policies

LEADER+ constitutes an important part of theprogramme-based rural development, includingthe Regional Rural Development Programmesand the Horizontal Rural Development Pro-gramme, which covers the whole country. Theseare complemented by e.g. the national foreststrategy and legislation regulating the use of fo-rests as well as national support measures. Theprogrammes have been designed to complementeach other so that in the Horizontal Rural Deve-lopment Programme the main emphasis is on en-vironmental measures, including the preservati-on and maintenance of traditional biotopes rela-ted to agricultural production.

The restrictions due to the common agriculturalpolicy and, in particular, the implementation ofthe common market arrangements have been ta-ken into account in the LEADER+ programme.The measures included in the plan are targetedat promoting projects and measures that willreinforce the impacts and efficiency of the mar-ket arrangements or that will direct the produc-tion away from sectors where the production isalso restricted through market arrangements.

The enterprises and industrial activity receivingthe aid will not distort the competition in a man-ner referred to in Articles 80-85 of the AccessionTreaty. A significant share of the activities eli-gible for the aid are covered by the exceptionalprovisions laid down in Article 2 of Council Re-gulation (EEC) No 26/XXX concerning the app-lication of competition rules to the productionand trade of agricultural products. Enterpriseswith prohibited contracts with enterprises in ot-her countries or that meet the criteria for otherprohibited actions or that would practise im-ports or exports through contractual arrange-ments that violate the rules of the competitionpolicy are not expected to appear even as appli-cants for the aid through LEADER+.

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13.1 Horiz13.1 Horiz13.1 Horiz13.1 Horiz13.1 Horizontal Rurontal Rurontal Rurontal Rurontal Rural Deal Deal Deal Deal Devvvvvelopment Prelopment Prelopment Prelopment Prelopment Progrogrogrogrogrammeammeammeammeamme

The Horizontal Rural Development Programmecontains measures which have direct impacts onarable land and the environment. Instead,through LEADER+ financing is directed at me-asures promoting small-scale processing of pri-mary products or the social and economic welfareof the rural areas. Thus the programmes do notoverlap. The primary objective of LEADER+ is todiversify the industrial structure of rural areasand increase the opportunities to earn one’s liveli-hood from sources other than agriculture.

13.2 Objectiv13.2 Objectiv13.2 Objectiv13.2 Objectiv13.2 Objective 1 pre 1 pre 1 pre 1 pre 1 progrogrogrogrogrammeammeammeammeamme

In 2000-2006 two Objective 1 programmes arebeing implemented in Finland, one for Easternand one for Northern Finland. The programmefor Eastern Finland covers the regions of Etelä-Savo, Kainuu, North Karelia and Pohjois-Savo,while the programme for Northern Finland co-vers one region as a whole, that of Lapland, andparts of the regions of North Ostrobothnia,Central Ostrobothnia and Central Finland. Thepopulation of the Objective 1 area is a little overa million.

The Objective 1 programme is financed throughfour funds: EAGGF, ERDF, ESF and FIFG. Thepublic funding for the Objective 1 programmefor Northern Finland totals EUR 642.81 milli-on, and the EU contributes EUR 321.40 millionof this. The public funding for the Objective 1programme for Eastern Finland totals EUR1,253.19 million, of which the EU contributesEUR 626 million. The programmes for bothNorthern and Eastern Finland contain a specificpriority for rural measures, which is mainly fi-nanced from the Guidance Section of the Euro-pean Agricultural Guidance and GuaranteeFund.

In Eastern Finland the objective is to expand andreinforce the economic basis for agriculture by di-versifying the rural industries, improving their

competitiveness and developing the operating en-vironment of rural enterprises. Production chainsbased on the local raw materials as well as theresources and natural values of the territories arereinforced, with special emphasis on the weaklinks in the chain. The rural entrepreneurial acti-vity is developed based on the clusters and pro-duction chains, and special attention is directed atimproving the skills of the rural population rela-ting to the information society and communicati-on. The structure of the jobs is developed so thatthe possibilities of, in particular, the rural womenfor self-employment are improved. The priorityconcerning the rural areas is divided into measu-res to promote agricultural investments, start-upof young farmers, rural development and adjust-ment, forestry and training.

In the rural strategy for Northern Finland theobjective is to control the migration away fromthe rural areas by securing adequate opportuni-ties for earning the living, especially for theyoung, as well as a good living environment.Based on these objectives, the measures are inthe first place directed at securing the continuati-on and improving the competitiveness of basicproduction, improving the structure of farmsand the living, working and production condi-tions, diversification of the industrial basis ofrural areas, developing the operating environ-ment, promoting interaction between rural areasand population centres, as well as improving thelevel of skills, local initiative, services and infra-structure. All four funds referred to above are in-volved in the implementation of the measures in-cluded in this priority.

13.3 Regional Rur13.3 Regional Rur13.3 Regional Rur13.3 Regional Rur13.3 Regional Rural Deal Deal Deal Deal Devvvvvelopment Prelopment Prelopment Prelopment Prelopment Progrogrogrogrogrammeammeammeammeamme

The Regional Rural Development Programme isfinanced from the Guarantee Section of the Eu-ropean Agricultural Guidance and GuaranteeFund (EAGGF-Guarantee Section). The publicfunding for the programme totals EUR 387.77million, of which the EU contributes EUR116.33 million.

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The objective of the Regional Rural Develop-ment Programme is to stop the depopulation ofthe sparsely populated rural areas and ruralheartland areas and through this to achieve amore balanced development and structure of thepopulation in the programme area (populationobjective). Other objectives, and partly measuresto achieve the end, are the preservation of ruralvillages as active environments for living, workand entrepreneurship (residence objective), di-versification of the industrial structure to meetthe demand, increasing entrepreneurial activityand employment opportunities, as well as rein-forcing the economic basis of farms (emplo-yment and industry objective), extensive impro-vement of knowledge and skills, which promo-tes the achievement of all other objectives (st-rengthening of expertise objective), as well assupporting measures with positive impacts onthe state of the environment (environmental ob-jective).

The priorities of the Regional Rural DevelopmentProgramme are:

1. Development of agriculture and forestry2. Diversification of rural industries3. Development of rural communities


In 2000-2006 two Objective 2 programmes willbe implemented, one for Southern and one forWestern Finland. The objective is to develop ru-ral and urban areas seriously affected by thestructural change. In Southern Finland the pro-gramme covers the following regions or parts ofthem: South Karelia, Kymenlaakso, Itä-Uusi-maa, Päijät-Häme, Kanta-Häme, Uusimaa andVarsinais-Suomi. The programme for WesternFinland covers Satakunta, Pirkanmaa, CentralFinland, South Ostrobothnia, Central Ostro-bothnia, Ostrobothnia and North Ostroboth-nia. The total population of these regions isabout 1.6 million, which is 31 per cent of theFinnish population.

The Objective 2 programmes are financed fromthe European Regional Development Fund(ERDF) and the European Social Fund (ESF). Thepublic funding for the Objective 2 programme forWestern Finland totals EUR 710.3 million, andthe EU contributes EUR 284.1 million of this. Thepublic funding for the Objective 2 programme forSouthern Finland totals EUR 545.9 million, ofwhich the EU contributes EUR 218.3 million.

The objective of the programme for the part ofrural areas is to secure the general operatingconditions for entrepreneurial activity, e.g.through measures improving the regional struc-ture and environment of the countryside by me-ans of projects concerning the water supply androads, energy supply and communications aswell as the environment. Basic services relatingto e.g. culture are also very important to encou-rage the more highly educated people to stay inor move to the countryside.

Another main objective is the development ofthe interaction between the urban and rural are-as in order to increase the employment opportu-nities through co-operation based on partner-ship. The different lines of business and clustersin the development of enterprises provide excel-lent opportunities for such interaction.


The implementation of the Objective 3 program-me is based on the ESF framework drawn up forthe programming period 2000-2006 on the ba-sis of the General Regulation concerning thestructural funds of the European Union and theRegulation of the European Social Fund. Theframework is also linked to the National ActionPlan (NAP) of the Finnish employment policyaccording to the EU guidelines concerning emp-loyment.

The horizontal focal areas of the ESF frameworkinclude the information society, equality, localpartnership, sustainable development and anti-

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cipation, and these need to be taken into ac-count through the penetration principle in allEFS actions.

The actual areas of focus in the framework are:• improving the position of those affected bylong-term unemployment and utilisation of thedemand for labour• promoting equal opportunities in the workinglife and preventing social exclusion• improving the quality and impacts of trainingand reinforcing the relationship between trai-ning and working life• promoting entrepreneurship, innovative deve-lopment of the mobility of labour, working lifeand the work organisations

The public funding for the Objective 3 program-me totals EUR 1,039.4 million, of which the EU(ESF) contributes EUR 415.8 million.

13.6 Equal13.6 Equal13.6 Equal13.6 Equal13.6 Equal

The objective of the Community InitiativeEQUAL is to find new means of preventing allkinds of discrimination and inequality on the la-bour market by means of international co-ope-ration. The Community Initiative is also con-cerned with the social and professional integrati-on of the asylum-seekers. EQUAL is financedfrom the European Social Fund.

EQUAL is implemented according to prioritiesestablished on the basis of the four pillars of theEuropean employment strategy. Finland hasproposed the following priorities and measuresto be selected. The integration of refugees is in-cluded in the priorities on the basis of the gene-ral rules.

1. Employment

Facilitating the entry and return to the labourmarket to create an open market , which alsoserves those with difficulties in integrating intothe labour market.

Prevention of racism and hatred towards foreig-ners on the labour market.

2. Entrepreneurship

Reinforcing the socio-economic structures (thethird sector), in particular, the public serviceswith special emphasis on improving the qualityof the jobs.

3. Adjustment

Supporting the adjustment of the enterprises andemployees to the structural change in theeconomy and use of information technology andother new technologies.

4. Equal opportunities for women and men

Reducing the gap between the sexes and dispel-ling the traditional division of jobs between menand women.

To be able to implement more extensive pro-jects, the practical implementation of EQUALis based on territorial or sectoral holistic andintegrated Development Partnerships (DP). Theparties involved determine the object to be de-veloped and agree on the strategy and the me-ans to be used, based on innovative approa-ches. The DPs launch international co-operati-on and participate in thematic co-operation aswell as dissemination and mainstreaming ofgood practices.

The DPs are responsible for the progress of ac-tions included in their programmes, organisati-on of the co-operation between the DP projectsand other parties involved, information, ap-propriate use of funds, monitoring of privateand public funding and publication of informa-tion on the results, compilation and publicationof other monitoring data, final report as well askeeping the documents relating to the project.One of the partners is responsible for the admi-nistration and finances of the DP.

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Those launching the DPs have to make sure thatthe essential operators, such as citizens’ organisa-tions, labour market, enterprises (especiallySMEs), territorial and local authorities, educationestablishments and research institutes are invol-ved in the activity. It is of primary importance tosecure the participation of small and new actorswith innovative ideas, as well as the target groupsand their representatives and their possibilities toinfluence the actions. As far as considered pos-sible, the LAGs may participate in the co-operati-on with the Development Partnerships.

In the EQUAL Community Initiative importantstrategies and means producing particular valueadded in relation to the national strategies are• possibility to experiment with new, holistic

solutions to prevent discrimination and socialexclusion

• measures are targeted specifically at those whoare in the weakest position on the labour mar-ket or excluded from the social context

• value added from international co-operationavailable either through new kinds of part-nerships or experiences and strategies of ot-her countries that have not yet been appliedin Finland

• requirement concerning the participation andresourcing of the target groups

• the system for disseminating and mainstrea-ming good practices at different levels, inclu-ding the European level and

• mainstreaming of equality between the sexesand promotion of equal opportunitiesthrough special measures.

The public funding for the Community InitiativeEQUAL totals EUR 144.6 million, of which theEU (ESF) contributes EUR 72.3 million.

13.7 INTERREG III13.7 INTERREG III13.7 INTERREG III13.7 INTERREG III13.7 INTERREG III

The objective of the Interreg Community Initia-tive is to reinforce the economic and social cohe-sion of the Community by promoting cross-bor-der co-operation between the countries as well

as inter-territorial co-operation and balanced de-velopment in the European Union.

Interreg is financed through the ERDF, but itsscope has been extended to measures normallyfunded through the ESF and EAGGF. The publicfunding for the Community Initiative INTER-REG III totals EUR 276.6 million, of which theEU (ERDF) contributes EUR 137.2 million.

Finland is involved in seven Interreg III A pro-grammes, of which three concern Finland andSweden (Archipelago, Merenkurkku-MittSkan-dia, Arctic area of the Nordic Countries) threeFinland and Russia (Kolarctic, Karelia, South-east Finland) and one Finland and Estonia (co-astal areas of Southern Finland). Only the re-gions of Satakunta, Pirkanmaa and Central Fin-land are completely outside the A programmes.All programmes involve elements concerning ru-ral development, but these do not constitute anypriorities or measures of their own.

Finland also participates in two Interreg III Bprogrammes. In the programme for the BalticSea the whole country is considered eligible forthe aid. Co-operation partners are Sweden, Den-mark and Germany, as well seven non-memberstates. The programme for Northern Peripherycovers the northern parts of Finland, Sweden,Norway and Scotland (for the most part Objec-tive 1 areas) as well as Iceland, Faeroe Islandsand Greenland. These programmes also containelements relating to rural development.

Even if funding for rural development measuresmay also be available through the Interreg pro-grammes, the approach is different from that inLEADER+. In Interreg projects the main empha-sis is on cross-border co-operation, i.e. in prin-ciple all projects eligible for the financing shouldinvolve partners from at least two countries.

Due to the administrative requirements for co-operation, the partners are often public sector or-ganisations, but in certain programmes (e.g. A

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programme for the Archipelago area) co-operati-on on a smaller scale also receives considerableemphasis. In principle, however, all Interreg pro-grammes involve the possibility for projects con-cerning networking and exchange of experiences,which may complement the LEADER activities.

13.8 Urban13.8 Urban13.8 Urban13.8 Urban13.8 Urban

The objective of the URBAN Community Initia-tive for the programming period 2000-2006 is

the economic and social animation of urban are-as in crisis and promoting sustainable develop-ment. There is one Urban programme for Fin-land, and like in the previous programming peri-od, this is drawn up by the cities of Helsinki andVantaa. The public funding totals EUR 20.1 mil-lion, of which the EU (ERDF) contributes EUR5.3 million.

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Suomen LEADER+ -ohjelmaa toteuttavat paikalliset toimintaryhmät1. Elävät jokivarret, maaseudun toimintaohjelma 2000-2006/ Peräpohjolan kehitys ry

2. Kainuun naisyrittäjyys LEADER Plus/ Kainuun naisyrittäjyys LEADER ry

3. Oulujärvi LEADER+ -kehittämisohjelma 2000-2006/ Oulujärvi LEADER ry

4. Nousevan rannikkoseudun kehittämissuunnitelma vuosille 2000-2001/ Nouseva rannikkoseutu ry

5. Kotikylä+ LEADER+ -kehittämisohjelma vuosille 2000 - 2006/ Pirityiset ry

6. NHS Pohjanmaan Jokilatvat kehittämisohjelma 2001 - 2006/ NHS -LEADER II ry

7. Rieska LEADER -kehittämissuunnitelma, Rieska-LEADER ry

8. Kehittämissuunnitelma 2000-2006 Aisapari/ Härmänmaan ja Järviseudun Kehittämisyhdistys ry

9. Suupohjan LEADER+ kehittämissuunnitelma vuosille 2000-2006/ Suupohjan kehittämisyhdistys ry

10. Kehittämissuunnitelma vuosille 2000-2006/ Kalakukko 2006 ry

11. Viisari maaseudun kehittämissuunnitelma 2001-2006/ Maaseudun kehittämisyhdistys VIISARI ry

12. RaJuPuSu -LEADER+ -ohjelma/ RaJuPuSu LEADER ry

13. KASKYNKKÄÄ 2000-2006, Keski-Karjalan LEADER+ -ohjelma/ Maaseudun kehittämisyhdistysKeski-Karjalan Jetina ry

14. Joensuun seudun LEADER+ -ohjelma 2000-2006, moniarvoinen ja aktiivinen kansalaisyhteiskunta/Joensuun seudun LEADER -yhdistys ry

15. Vaara-Karjalan kehittämissuunnitelma v. 2000-2006/ Vaara-Karjalan LEADER ry

16. Pomoottori kehittämissuunnitelma 2000-2006/ Pomoottori ry

17. Ykkösmaaseudun kehittämissuunnitelma v. 2000-2006/ Kantri ry

18. Pohjois-Satakunta LEADER+ -kehittämisohjelma/ Aktiivinen Pohjois-Satakunta ry

19. MEHU -ohjelma vuosille 2000-2006/ Karhuseutu ry

20. Kestävän elinvoimaisuuden tie - Varsinais-Suomen jokivarsikumppanit ry:n kehittämissuunnitelma2001-2006

21. Med fulla segel framåt - Taysin purjein eteenpäin/ I samma båt - Samassa veneessä rf

22. Etelä-Karjalan LEADER ry

23. SEPRA KEHITTÄMISOHJELMA, Asukaslähtöinen kehittämisohjelma vuosille 2000-2006/Kehittämisyhdistys Sepra ry

24. Etelä-Päijänteen LEADER+ -ohjelma/ Päijät-Hämeen maaseudun kehittämisyhdistys ry

25. Vår västnyländska Saga, lokalt utvecklingsprogram för Västnyland 2000-2006/ Pomoväst rf

1

Documents

LEADER+ programme for Finland - Valtioneuvosto