3. Towards a comprehensive rural policy in Colombia

Colombia’s peace process placed the need for an integrated rural policy at the centre of the agenda

The 2016 peace agreement placed rural development as an engine for national growth and social cohesion. In 2012, the government of Colombia initiated a peace process with the FARC, with the aim to put an end to 50 years of conflict in the country. This process uncovered the urgent need to move away from a single vision of agricultural policy towards an integrated rural policy approach. During the negotiation process, the vice ministry office of rural policy was created (2013) with the aim to co-ordinate and address cross-cutting issues in rural economies, including infrastructure and land formalisation. Moreover, a number of policies were put in place to target the provision of public goods as a starting point for agricultural competitiveness, including science, technology and innovation support.

In 2014, the government appointed a mission of experts – the Mission for the Transformation of the Countryside (hereinafter, the Mission for the Countryside) – to set the vision and provide the guidelines to boost rural development in Colombia and thus support the peace process in the country. The mission acknowledged that “the traditional strategy of productive inclusion in isolation has not been effective and has made it difficult to fight against rural poverty” (DNP, 2015[4]).

The mission rightly pointed out the need to adopt an integrated and inclusive approach to rural development that recognises the diversity of rural areas and goes beyond the focus on agriculture development, with the aim to focus on improving economic, social and environmental dimensions for rural communities. To this end, the mission proposed 6 strategies with specific actions that involved policy and institutional changes (about 185 recommendations). Many of the strategies proposed in this document involve rural proofing the variety of sectoral strategies in the country (e.g. education, health, innovation) (Box 3.2).

A number of recommendations from the mission materialised in the following years, in particular those related to agriculture productivity, the creation of the land fund and the reform of the Colombian Institute for Rural Development (INCODER), whose tasks were divided into a new Agency for Rural Development (ARD) and the National Land Agency (ANT).

The guideline document of the mission supports and aligns with the peace agreement conducted by the Colombian government with the FARC. The first point of this agreement referred to the need to develop an Integral Rural Reform (IRR) to attain sustainable peace in the country. This reform calls for a comprehensive view that focuses on people to transform Colombian rural areas and eliminate poverty. The reform contains four pillars:

1. 1. Improving use and access to and of land. It involves the creation of a Land Fund to redistribute land to peasants without land and make land restitutions to victims that were dispossessed during the conflict.

2. 2. Establishing special Development Programs with a Territorial Approach (PDETs) that target the most needed municipalities: 170 municipalities were identified as those having suffered most of the violence during the internal conflict, with the highest poverty levels and weakest institutional presence (known as PDET municipalities). These municipalities receive co-ordinated government interventions for development.

3. 3. Creating 16 national plans to promote basic goods and services in rural regions around:

   1. a. Infrastructure: roads, irrigation districts, electricity, connectivity.

   2. b. Social development: healthcare, education, housing and drinking water.

   3. c. Incentives for the productivity of family farming: technical assistance, promotion of co-operatives, insurance and marketing, among others.

   4. d. Labour formalisation.

4. 4. Ensuring food and nutritional security through the strengthening of the family economy and local markets, as well as promoting campaigns for the production and consumption of foods with high nutritional value, taking into account the nutritional characteristics of each region.

The government made a commitment to implement all points of the agreement in 15 years. The government built an Implementation Framework Plan (PMI) to set the actions to implement the peace agreement. A national policy (CONPES Document 3932 of 2018) was established to link the commitments defined in the PMI with the planning, programming and monitoring public policy instruments (PND, 2018[8]).

An important element of rural reform is the approach to adopting a territorial policy approach. The government developed the PDETs as planning and management instruments to operationalise a place-based approach focusing on improving development in 170 municipalities identified as the most affected by the conflict, which are grouped into 16 subnational territories. These municipalities make up 36% of the national territory. Each PDET is operationalised through an Action Plan for Regional Transformation (PATR) that covers each of the 16 targeted territories, which are built across local meetings to identify and prioritise needs and opportunities. These PATRs have a planning scope of 10 years and should be updated every 5 years. Overall, the place-based approach (e.g. PDET) adopted by the IRR is well designed and represents an important tool to identify needs jointly with the community and address them through co-ordinated policy actions.

The goal of the national rural plans in the third point of this reform covers key priorities affecting rural regions in Colombia. These priorities are in line with the main rural challenges identified in Chapter 2 So far, the government of Colombia has developed 16 national plans tailored to rural development that focus among others on education, healthcare, housing, road and irrigation infrastructure among others (See Table 3.3). If well-coordinated, these national plans can achieve a reduction in rural poverty, especially extreme poverty, and narrow the gap between rural regions and cities.

The integrated approach proposed by the Mission for the Countryside and the peace agreement goes in the right direction and is well aligned with Principle 9 of the OECD Principle on Rural Policy “Implement a whole-of-government approach to policies for rural areas”.

The National Development Plan (PND) 2018-2022 adopts a sectoral approach to rural development, with differentiated policies by type of region

The PND 2018-2022 integrated some of the recommendations from the Mission for the Countryside and the peace agreement and proposed a number of thematic and transversal policies (called pacts) with the overarching goal to improve legality, entrepreneurship and equity in the country (DNP, 2018[10]). There is a specific pact for each of these 3 objectives, plus 13 transversal pacts and 1 pact for productivity and equity in regions. These pacts are implemented jointly, with the aim of attaining 20 thematic objectives that target the main challenges in the country.

The Pact for Entrepreneurship includes an institutional strategy entitled “Countryside with Progress: An alliance to boost the development and productivity of rural Colombia” that aimed at boosting development and productivity in “rural” communities. This strategy had five objectives with specific goals:

1. 1. Improve land tenure and land use planning to boost agricultural development, productive inclusion and legal certainty. It sets two specific goals:

   1. a. Increase the number of formalised titles on private properties from 1 056 to 24 350.

   2. b. Increase the number of formalised titles to improve access to land from 17 835 to 24 160.

2. 2. Encourage agricultural productivity transformation through production planning, cluster development and agro-industrial value chains.

3. 3. Improve sanitary conditions of agricultural products to benefit from the Free Trade Agreements through a plan comprehensive of health admissibility. This objective aimed at integrating 48 new agricultural products in international markets.

4. 4. Allocate at least 50% of agricultural sector investment to public goods and services to ensure farmers have access to active assets. This aimed at increasing the number of producers served with access to technology, products and service support (agricultural extension service).

5. 5. Promote the inclusion of small producers to improve their conditions, both social and economic. This aimed at increasing the number of producers who benefited from inclusion strategies, including access to finance, markets and better risk management, from 33 642 to 91 511.

6. 6. Strengthen rural household income generation, based on the promotion of employability and entrepreneurship conditions associated with non-agricultural activities that promote social and productive inclusion in rural territories, according to the categories of rurality.

7. 7. Modernise and consolidate sectoral institutions and inter-institutional co-ordination and articulation to promote the transformation of agricultural and rural production at a territorial scale.

The vision of this strategy was set out as follows: “In 2022, the Colombian countryside is a determining factor in economic growth, it increases its competitiveness, strengthens its agribusiness and advances in the inclusion of small and medium producers in the markets. It boosts agricultural exports and achieves proper management of soils for agricultural purposes”. The leading ministry of this strategy is MADR.

Yet, out of the seven objectives of this strategy, only the first five had concrete goals with a budget attached to the National Public Investment Plan 2019-2022. This led to a strategy that was monitored mainly based on actions related to improving agricultural productivity (five first objectives), despite the inclusion of objectives that go beyond agriculture (Objective 6).

The other nine transversal pacts also defined relevant policies for rural development, which would be implemented jointly by different ministries. They included the harmonisation of agricultural production with the conservation and efficient use of natural resources (Pact for Sustainability), generating a sustainable model for digital connectivity in rural areas (Pact for the Digital Transformation of Colombia) or connecting the territory, increasing the links between city and countryside (Pact for the Digital Transformation of Colombia), among others.

The PND had also an important focus on empowering subnational governments in the development process and adopting an approach to mobilise functional relations across territories. These goals are materialised through the Pact for Decentralisation and Regional Pacts These pacts included the strategic projects identified in spaces for dialogue and agreement with the regions, which aimed at boosting the regional economies according to their vocation and potential. Therefore, they set differentiated development goals in nine macro-regions (functional groups of departments).

National plans overlap “agricultural development” and “rural development” concepts

Across OECD countries, there is an increasing recognition to move beyond agriculture in the design of rural policy, and englobe agriculture as one of its pillars. Rural development policy is a territorial policy targeting the needs of a specific area, whereas agricultural policy is largely dominated by sector-based goals. Although in several OECD countries agricultural policy has long included underlying objectives of rural development in its design, it remains largely dominated by sectoral approaches. For example, in broad terms, a major objective of rural development policy had been job creation in rural regions, while agricultural policy often focused on increasing production and farmers’ incomes.

Across OECD countries, strategic areas such as innovation and quality of life have gained weight in national rural polices, ranked as extremely important by 22 out of the 34 surveyed OECD countries, according to the 2018-19 OECD institutional survey (2020[11]). This does not hinder the high relevance of agriculture in rural policy, which is still a common feature across many OECD countries. Most OECD countries still classify agriculture as the most important strategic sector for rural policy (27 out of the 34 countries that answered this question).

In Colombia, the national policy framework still equates and uses rural policy and agricultural policy interchangeably. The PND 2018-2022 and many national policies in Colombia overlapped the concept of “agricultural development” with “rural development” and used the term “countryside” to refer to “rurality”. In policy, concepts are relevant as they can send ambiguous signs if their meaning is unclear or their use is not systematically attached to a policy objective. This is the case of the PND 2018-2022’s “Countryside with Progress: An alliance to boost the development and productivity of rural Colombia” strategy that aimed to develop “rural Colombia”, but five out of the seven measures of this strategy focused on improving the conditions for the agricultural sector and were linked to monitoring indictors. For example, the action line “Improving public goods and services”, a priority that is transversal to rural development, mainly targeted goods and services for agricultural productivity, such as agricultural extension services and irrigation.

It is worth noting that Countryside with Progress was supported by other pacts that include relevant policies for rural development, such as digital connectivity (e.g. Pact for the Digital Transformation of Colombia) or improving rural education (Pact for Equity), but its co-ordination is not clearly institutionalised in the PND. Many actions in Objective 7 of the Countryside with Progress strategy, which aimed to improve inter-ministerial rural development co-ordination, have not been implemented, such as the National Unified Rural Agricultural Information System.

The overlap between agriculture and rural policy also occurs across other policies at the national level. For example, innovation policy for rural areas has been reduced to agricultural innovation, while wide innovation polices in the country have lacked a spatial approach. In 2021, the national government approved a national innovation policy led by the Ministry of Science, Technology and Innovation (CONPES 3080) to address the main challenges of innovation in the country. While this policy has a specific action (No. 13) that aims to strengthen regional capacities in science and technology, the strategy does not recognise the particularities of rural context to adopt and diffuse innovation.

Moreover, many economic strategies in the national development policy framework in Colombia have lacked a placed-based approach, which can end up benefitting more actors in urban areas. This is the case of the Pact for Entrepreneurship, the PND 2018-2022’s pillar to boost economic development, which highlights the need to enhance the economic activity for rural areas; yet its different strategies and goals are rather general without addressing the particular needs and characteristics of rural economies. For example, key strategies in this pact such as “Increase threefold the number of high-potential entrepreneurship in the country” or “Reduce the costs for small- and medium-sized enterprises (SMEs) to access financial instruments” (DNP, 2018[10]) did not propose particular actions for potential entrepreneurs or SMEs looking for funding in rural areas, some of which might need a special approach due to the low access to broadband Internet or lack of Interaction with official institutions to access information on programmes or the financial mechanism.

The agricultural bias when referring to rural policy, in particular economic-related policies, might be explained by the agricultural sector setting clearer, more compact objectives than rural policy. Agriculture in Colombia, as in most countries, also has a clear constituency where the interest of farmers is easily identified and represented politically (Federal Reserve Bank of St. Louis, 2021[12]).

In a country of rapid urbanisation and high urban-rural inequalities in education and access to markets, the design and implementation of national development policies without clear recognition of the diverse characteristic of rural areas would likely mostly benefit urban firms and communities. Urban actors have often better access to information and closer relationships with policy makers. Overall, unlocking the potential of emerging rural economic activities and their interlinkages requires a set of policies for rural development that go beyond agricultural and social protection, and instead target the broader growth potential of rural regions.

MADR heads the rural policy in Colombia with a strong agricultural focus

MADR is the institution in charge of agricultural, fishing, forestry and rural development in Colombia (Decree 1985 of 2013). The ministry, together with its affiliated bodies, has two main objectives:

• Promote rural development with a territorial approach and strengthen the productivity and competitiveness of agricultural products, through comprehensive actions that improve the living conditions of rural inhabitants, allow the sustainable use of natural resources, generate employment and achieve sustained and balanced growth of the regions.

• Promote the articulation of institutional actions in rural areas in a focused and systematic manner, under principles of competitiveness, equity, sustainability, multisectorality and decentralisation, for the socio-economic development of the country.

The policy scope of the ministry includes defining, implementing and evaluating policies for agriculture, fisheries and forestry, with a particular focus on poor populations and victims. With regards to the design and implementation of the rural policy with a territorial approach, the ministry is in charge of policies related to land use management of rural property and productive soil, productive capacities and income generation in rural communities and management of rural public goods (Decree 1985 of 2013). The leading institutional role of MADR in rural development is consistent with the relevance that agriculture still has in the employment of rural communities (52% of rural employment).

This institutional structure where the agriculture ministry is the lead ministry to delivery rural policy is also common across 62% of OECD countries (21 out of the 34) reviewed by the 2018-19 OECD institutional survey (2020[11]). Yet, in an increasing number of countries (8), the lead ministry on rural policy is not directly associated with agriculture or rural development, e.g. the Ministry of Enterprise and Innovation in Sweden or the Ministry of Industry, Business and Financial Affairs in Denmark.

Based on the PND's vision, MADR developed the Agricultural and Rural Development Policy 2019-2022, which defines the strategic guidelines and actions to improve the productivity, competitiveness and profitability of the rural economy. The strategic actions, objectives and monitoring indicators of this policy are detailed in the Institutional Strategic Plan 2019-2022.

This policy highlighted the need to address land property rights, infrastructure for rural areas, agricultural productivity and rural-urban migration as main challenges for rural development. It also stresses the need to mobilise non-agricultural activities, given the undergoing diversification process in rural economies. The policy had three policy pillars, each with a number of strategic actions (Table 3.1):

1. 1. Rural development, which includes the social and productive organisation of the land, investment in the provision of public goods and services and the generation of productive capacities and income by the rural population.

2. 2. Productivity and profitability for greater competitiveness of the agricultural sector.

3. 3. Modern institutional framework to manage and implement the actions of the two former strategies.

Agriculture as an engine for non-agricultural activities

Agriculture is the main employer in Colombian rural areas and continues to be an important sector for the Colombian economy. This sector employs about 62% of the rural workforce and accounts for 16.4% of workers in the country (around 3.9 million people), which is more than Latin American countries like Mexico (12.8%), Brazil (9.4%), Chile (9.2%) or Argentina (0.1%). Likewise, agricultural contribution to national gross domestic product (GDP) (6.3%) is higher than the average of OECD (3.6%) and Latin American (4.5%) countries.

The diverse climate and topography allow for the cultivation of a wide variety of crops and forest products. Thermal floors also influence cultivation. Crops (e.g. coffee, banana, cocoa) account for most of Colombia’s agricultural GDP (71% in 2019), with an increase in the last 15 years (63% in 2005), while the rest is linked to the livestock subsector (23%), forestry (3.2%) and fisheries (2.9%).

In the global context, Colombia ranks third in coffee and fourth in oil palm production. Moreover, it is the 13^th-largest producer of beef and poultry in the world (USDA, 2021[21]).

The ongoing quest for greater agricultural productivity

Despite this potential, the share of agriculture in the national GDP has decreased in the last decades. It has been associated on the one hand with the country’s development process and the increase of its service sector. On the other, persistently low agricultural productivity along with low-quality standards to open international markets have negatively affected the economic performance of the sector, despite its relatively high impact on employment.

The sector productivity is persistently low. While the productivity of the agricultural sector has increased in the last decades, its rate of growth lags behind other countries in the region. Between 2001 and 2016, productivity has grown (measured through the total factor productivity or TFP) at a slower pace (0.6 %) than the average of Latin American countries (1.8%), including Brazil (3.1%), Peru (2.5%) or Chile (2.2%) (Parra-Peña, Puyana and Yepes, 2021[22]).1 It has translated into relatively low growth of agriculture GDP in Colombia (2.8% from 2000 to 2019), relative to countries like Chile (3.8%) and Peru (3.7%).

The low productivity growth of Colombian agriculture is driven by a combination of factors, some directly linked to the agricultural sector and its structure and others related to general conditions in rural areas of Colombia.

Factors directly linked to agricultural include:

• Small farms based on family farming. Atomised agricultural production is composed of family farms operating on relatively small areas of land (65% of agricultural production units operate in less than 4 hectares) and with an incipient culture of co-operatives. Family farms have on average less income per unit of work and are more labour force intensive than large farms (Hamann et al., 2019[23]; Berry, 2017[24]). Therefore, most farmers in Colombia have too little land to be able to reach a minimum efficient scale of production and its family nature often translates into few skills and free time to adopt new production processes and marketing strategies.

  Such fragmentation in the land also makes it difficult for farmers to either expand or leave agriculture. As in many OECD countries, fragmentation makes it difficult to assemble contiguous parcels of land that are required for modern farm operations and the value of land falls because it is less profitable to operate, locking some families in a circle of poverty (OECD, 2018[25]).

• Lack of basic goods and services for agricultural production. In Colombia, 70% of farms do not use machines for their production process, following a trend in which the smaller the size of the production units, the greater the labour intensity (Hamann et al., 2019[23]; Berry, 2017[24]). Moreover, Colombia’s production of fertilisers does not meet internal demand, which requires importing close to 70% of its total fertiliser consumption, especially urea, ammonium phosphate (DAP), mono ammonium phosphate (MAP) and potassium chloride. The cost of fertilisers can represent between 20% (e.g. for bananas, Panela cane) to about 30% (e.g. maize) of the total cost of production, particularly affecting small farmers (OECD, 2015[18]).

• Other factors include lack of information when choosing the right crops for the land, inefficient fertiliser use and overuse of pesticides.

Factors related to overall rural conditions include:

• Problems with basic enabling factors for rural development, including lack of infrastructure such as roads, aqueducts, sewerage and mills, and low skills and education attainment with difficulties in access to finance and insurance (Chapter 2).

• Informal access and high concentration of land. There is an important share of landowners without legal titles, which leads to uncertainties and acts as a barrier to farmers accessing capital (OECD, 2021[14]). Moreover, the unequal distribution of land leads to uneconomic fractioning and an unproductive concentration of land (OECD, 2015[18]).

• Internal conflict has dispossessed people of their land and created uncertainty for investment. Based on analysis of 852 units of agricultural production (UPAs) (2007[26]), López and González estimate that the elimination of political violence (armed groups, displacement) would contribute to an average increase of 6% in agricultural productivity.

These issues also prevent greater value-added in forward and backward linkages in agriculture and thus the creation of stronger rural value chains. In terms of backward linkages, agriculture production in Colombia relies heavily on imports of intermediate inputs, mainly wheat and grains for animal consumption and pesticides. In fact, the share of agricultural imports in Colombia (12.4%) is higher than the OECD average (6.3%) and the selection of Latin American countries (7.1%). This relatively high dependency in agriculture reveals an underdeveloped internal value chain for agriculture that increase the sector’s vulnerability to international price shocks.

When it comes to forward linkages, the capacity of the agricultural sector to add greater value to agricultural production has important scope for improvement. According to Parra-Peña, Puyana and Yepes (2021[22]), the Colombian agricultural sector generates USD 0.67 on value transformed for each USD of agricultural primary production (measured through the transformation ratio)2, which is above transformation ratios in Brazil (USD 0.53) or Peru (0.55), but far lower countries like Chile (1.11) or Mexico (1.18).

Such medium-low capacity to add value in agriculture reflects a greater share of export of primary products for consumption (37% over total exports), in contrast with processed products for consumption (17%) or industry (11%). Again, this share of primary export is above the share in other Latin American countries like Mexico (47% of export from processed goods for consumption), Argentina (39% processed goods for industry). Colombia’s agro-food exports are almost equally split between those destined for final consumption (54%) and those sold as intermediate inputs (46%) for use in manufacturing.

These challenges are not new for the Colombian government and MADR has made headway in programmes used to solve those challenges specifically related to the agriculture sector, in line with OECD recommendations to enhance productivity in agriculture in Colombia (Box 3.4). In particular, MADR has made important progress in addressing the provision of goods and services for the agricultural sector, including technological transfer (Recommendation 1.a) and strengthening the sanitary and phytosanitary systems (Recommendation 4.b) (2015[18]).

The government has also heled mitigate the vulnerability from the high reliance on imports of agricultural inputs with an Andean Price Band System, which aims to stabilise import prices for 13 commodities including a number of grains for animals. Subsidies are also provided for the purchase of seeds and fertilisers, and specific programmes of preferential interest rates are helping farmers access credit and insurance (OECD, 2021[14]).

The government issued a national policy to improve agricultural productivity and competitiveness (CONPES Document 4098 - Policy to Promote Agricultural Competitiveness) (DNP, 2022[27]), which identifies the priority actions that complement existing productive programmes for farmers, strengthening the agricultural policy in line with OECD recommendations (2015[18]). This national policy provides a solid diagnosis of the challenges in rural economies, with a concrete roadmap to enhance the productivity of the agricultural sector. To this end, most of the actions recommended in this policy are centred on improving information for public policy, promoting food value chains that involve vulnerable groups and strengthening the agricultural innovation ecosystem through better infrastructure and easing financial access.

Enhancing bioenergy strategies to promote circular process in agriculture

Bioenergy can play a strategic role in meeting multiple goals in Colombia, from cleaner energy production (e.g. biofuels or combustion for electricity) and improving access to affordable, reliable energy supply to providing a new source of income to agricultural companies. Colombia benefits from substantial potential bioenergy feedstock, e.g. palm, sugar, biomass from agriculture or organic waste (OECD, 2022[36]).

On average, around 178 million tonnes of organic waste are produced each year in Colombia from agricultural activities (41%), livestock (58%) and the residential sector (<1%) (OECD, 2022[36]). While some of this waste goes through a compositing process to increase its value as fertiliser, the majority is reintegrated into crops in a non-technical way, which has been linked with decreasing land productivity (Government of Colombia, 2019[37]). The Colombian government has estimated that agricultural biomass residues, via direct combustion and/or anaerobic digestion, could be converted to a fifth of Colombia’s total energy supply (around 8 mega tonnes of oil equivalent of energy) (UPME, 2011[38])

Most agricultural residue currently used for bioenergy in Colombia comes from palm oil and sugar crops. These are used for the production of biodiesel and bioethanol. Manuelita and Ingenio Risaralda S.A. are positive examples of companies cogenerating electricity from sugarcane bagasse and palm fibre and selling electricity surplus to the grid. This type of cogeneration allows the company to withstand shocks from the shortage of energy supply, reduce energy prices, improve the carbon footprint of the production and obtain income.

However, there are a number of unexploited opportunities for bioenergy production in canola or sunflower, forestry residues and developing value chains with new production processes and products (Figure 3.1). Unlocking opportunities from bioenergy requires further policy actions to encourage investment and market conditions for clean energy generation from waste and residues.

To this end, the OECD (2022[36]) identified a number of policy actions that should be put in place by the Colombian government (Box 3.7). Of particular importance for rural policy is the need to improve institutional co-ordination (e.g. between MADR and the Ministry of Mining and Energy) to facilitate bioenergy projects in agriculture, particularly in small farmers’ associations, as these projects can be difficult in nature given the complex chain of sourcing, sorting and treatment of waste. Moreover, support for innovation and local technical capacity is required to enable solutions that are suited to the Colombian context. For example, training farmers to use biodigestion to convert organic waste from farms into bioenergy and biofertilisers.

Box 3.7. OECD recommendations to unlock bioenergy potential in Colombia

In 2022, the OECD conducted a study to support Colombia’s efforts to achieve its clean energy ambitions through measures that can strengthen opportunities for bioenergy development. While the government has set forth a number of important policy strategies to realise its clean energy ambitions (e.g. 2018 Green Growth Policy and 2021 Energy Transition Policy), the country currently only uses a limited capacity of its feedstock to produce energy but there is a large array of options that can be further explored (Figure 3.1).

Actions to encourage clean energy generation from waste and residues in Colombia include:

• Establishing clear targets for bioenergy capacity additions in energy and electricity market plans.

• Improving institutional co-ordination to ensure the opportunities for bioenergy development are reflected across related public and economic policies. This is particularly relevant for rural economies is the co-ordination between MADR and the Ministry of Mining and Energy.

• Strengthening market signals such as progressive increases in landfill fees paid by waste producers, which remain low compared to other OECD countries, to improve the economics of sorting, treatment and recovery of waste for energy production.

• Providing the needed incentive for businesses and industry to seek alternative pathways to waste disposal.

• Working with financial stakeholders, building upon existing funds such as national development bank Findeter financing for local and municipal infrastructure projects, to implement targeted financial measures that increase the flows of capital to bioenergy projects.

• Training and capacity building, alongside public support for new and innovative technologies and business models, to develop a robust pipeline of bioenergy solutions adapted to the Colombian context. Stakeholders like Colombia’s National Centre for Cleaner Production and Environmental Technology can build awareness in the market and enable technical capacity.

Figure 3.1. Potential products and uses of bioenergy resources

Source: OECD (2022[36]), Enabling Conditions for Bioenergy Finance and Investment in Colombia, https://doi.org/10.1787/20f760d6-en.

Tourism to help preserve the environment, empower minorities and boost traditional economic activities

The tourism sector is itself an increasingly important source of development for rural communities in Colombia. Currently, it contributes 2% to Colombia’s GDP and has become the primary service export in Colombia and the second overall export behind the oil industry, generating 52% of foreign exchange (OECD, 2020[35]). In fact, the income from foreign exchange for tourism has exceeded that from coffee and any other agricultural/livestock product (Garavito, Rozo and Mojica, 2019[39]).

The country’s peace agreement opened up once-inaccessible parts of the country and improved the security perception: tourism has been one of the activities that has benefitted the most from this in the post-conflict era (Esteban and Bonilla, 2017[40]). The tourism sector in Colombia experiences exponential growth, with a record number of 4.5 million inbound visitors (3% annual growth) in 2019, just before the COVID-19 pandemic. This sector employs about 9% of jobs in Colombia (around 2 million jobs in 2018) (OECD, 2020[35]). While not all of these workers are located in rural regions, the important biodiversity and number of nature destinations in the country make tourism an increasingly important economic activity for the rural economy.

Tourism can fulfil multiple goals to increase rural well-being in Colombia. It can provide alternative income and job opportunities for rural communities. Tourism demands services and goods from a variety of economic sectors, including transport, retail, housing and agriculture. Most of the jobs provided by tourism in Colombia are concentrated in passenger transport supporting services (39% of people employed in tourism in 2018), followed by the food and beverage serving industry (36%) (OECD, 2020[35]). Moreover, tourism can be an engine to advance the implementation of the peace process and offer an alternative source of living to get people out of illegal businesses in the countryside. Tourism in a country rich in natural resources can also help preserve biodiversity and environmental ecosystems.

However, the sector, like many activities in rural areas, faces major challenges in terms of security and the provision of basic services and infrastructure. Security, again, is probably the major issue for tourism attraction. According to the World Economic Forum (WEF) Travel and Tourism Competitiveness Index, Colombia ranked last among the 136 countries analysed in the dimension of security (Ministry of Commerce, Industry and Tourism, 2019[41]). Many destinations where security has improved substantially suffer from the general perception of insecurity that comes from years of high levels of internal conflict and illegal traffic. In fact, a survey of 206 potential European tourists conducted in 2020 revealed that Colombia as a destination is perceived as more dangerous by potential tourists than by actual tourists who have visited it and perceive it as much safer and more attractive (Antošová, Lima Santos and Stradová, 2020[42]).

Other pressing challenges for tourism attraction in Colombian rural areas include deficient accessibility (ground and port infrastructure) and quality of public services in touristic destinations (healthcare, water) along with the slow adoption of digitalisation. Likewise, factors such as high labour informality, low worker skills (e.g. English language) in the provision of tourism service along with environmentally unsustainable tourism practices diminish the capacity of tourism to share benefits with the population and to have a positive impact on the environment.

To address the main bottlenecks in the tourism sector in the medium and long terms, the Tourism Sector Plan 2018-22 “Tourism: The purpose that unites us” defined strategies to improve Colombia’s competitiveness as a tourist destination through major strategic lines that include: the generation of institutional conditions for the tourism sector, better infrastructure and connectivity and strengthening human capital, among others (Ministry of Commerce, Industry and Tourism, 2019[41]). The ministry relies on the National Tourism Council, representing 13 different ministries and other agencies to implement this plan and ensure a whole-of-government approach to tourism development.

Some of the flagship strategies to support tourism include the certification programme for tourism service providers and destinations in order to create a culture of excellence in tourism operations and a focus to ensure security and safety for the users and customers of tourism services. The latter programme is done through a join collaboration with the Ministry of Defence to co-ordinate the Tourism Police, a specialised body that ensures and supervises tourism activity in the public and private sectors.

Tourism is an inter-sectoral activity that can mobilise different development agendas in rural communities, including environmental protection, improving the quality of food production and off-farm income for farmers as well as the valorising culture of traditional communities.

Mobilising renewable energy sources to create new job opportunities

Colombia has an important renewable energy potential, including large, solar and wind resources. Investment in these clean energy solutions offers the opportunity to boost the reliability and affordability of energy supply, whilst decarbonising the country’s energy mix and creating new income sources for rural communities.

These favourable conditions for wind and solar energy have remained mostly untapped. Potential from wind energy generation in the department of La Guajira in the north of Colombia is estimated at 18 gigawatts (GW) (Mordor Intelligence, 2020[49]), more than all currently installed electricity generation capacity in Colombia. Furthermore, average annual wind speeds in certain locations off-shore of La Guajira are as high as 11 metres per second (IDEAM, 2020[50])making Colombia 1 of only 2 regions in all of Latin America to reach these high levels, at more than double the minimum wind speed needed for utility-scale installations (Norton Rose Fulbright, 2016[51])

Potential for large-scale solar generation is also particularly strong in the Orinoco region in the east and San Andrés Island in the Caribbean (IDEAM, 2020[52]), where average radiation reaches as high as 6.0 kWh/m² per day, much higher than countries considered a big player in a solar generation like Spain (on average around 3-3.5 kWh/m² per day in solar irradiance) (World Bank, 2020[53]; IRENA, 2020[54]).

This type of renewable energy project is not going to create many jobs but can bring some additional income and employment opportunities in rural areas. Some of the benefits that rural communities can obtain from renewable energy projects include:

• The greater tax base in hosting communities can be invested in improving service delivery, as was the case in Abruzzo, Italy, or Scotland, United Kingdom (OECD, 2012[55]).

• Extra income for land owners and land-based activities. For example, farmers and forest owners who integrate renewable energy production into their activities have diversified and stabilised their income sources (OECD, 2012[55]).

• New indirect jobs. While the number of new jobs created by renewable energy projects is limited (mainly in operating and maintaining equipment), rural communities can implement strategies to benefit from indirect jobs arising along the renewable energy supply chain (construction, manufacturing and specialised services). This was the case in Extremadura, Spain, where the newest manufacturing jobs were created in firms producing metal frameworks to support solar energy installations (OECD, 2012[55]).

• Deliver affordable and clean energy. Some Colombian regions, mainly rural ones, still rely heavily on thermal power generation using fossil fuels. For example, Córdoba, La Guajira and Norte de Santander in the northern part of the country relied exclusively on coal for electricity generation in 2017.

Making a positive connection between renewable energy development and local economic growth in Colombia will require more coherent strategies to embed energy strategies in the local economic development strategy. It is especially relevant to ensure these projects reflect local needs and integrate rural economies within larger supply chains. As these projects use significant areas of land, the government should evaluate with local communities the adverse effects of renewable energy projects on current or potential economic activities, including agriculture and tourism.

Making the most of mining to attain climate goals and improve rural well-being

Meeting the Paris Agreement goals will require a massive deployment of clean energy technologies, whose production will in turn rely on important amounts of critical minerals such as copper, lithium, nickel, cobalt and rare earth elements (IEA, 2021[56]). Clean energy technologies require more minerals than fossil fuel-based counterparts. For example, a typical electric car requires six times more minerals than a conventional car (e.g. lithium, cobalt and manganese for the longevity of its battery) and an onshore wind plant requires eight times as many minerals as a gas-fired plant of the same capacity (IEA, 2020[57]).

This led to the potential demand for some minerals for the clean energy transition that is in many cases greater than the current production levels. Therefore, many OECD governments have defined access to minerals and metals as a strategic security priority for sustained development, e.g. the European Green Deal and the Canada-US joint action plan to increase autonomy in critical minerals (Sanabria, Forthcoming[58]).

Colombia has a geological potential that could leverage the increasing mineral demand to support the global energy transition and unlock new job opportunities for rural economies. Currently, the mining sector has a presence in 250 municipalities and represents 12% of the foreign investment into the country and 27% of national exports. As in other OECD countries, if well-managed, this sector can contribute to rural development beyond the economic dimension, for example through infrastructure development, social investments, innovation and the creation of local value chains (OECD, 2017[59]).

Colombia has a high potential for large-scale, such as nickel, and smaller-scale mining projects, such as gold, platinum, emerald, limestone, copper and manganese ores, and gypsum, among others. It has still untapped deposits of nickel, the most important component of the stainless steel industry, which is already one of the top exported minerals in Colombia (together with coal and gold). Furthermore, the country has deposits of rare or strategic minerals in areas that have never been explored due to the conflict (Ramos, 2021[60]), including coltan deposits, a mineral widely used for the electrical components industry worldwide.

However, the mining sector faces entrenched challenges in information about the mineral potential, infrastructure, illegal mining and low development of value chains, e.g. gold (Ministry of Mines and Energy, 2019[61]). For example, there is scope to enhance information about critical minerals required for green technologies and other minerals like copper, in which there are indicative reserves but only one project in the country. Moreover, the country has an increasing issue with the license to operate, with growing reticence in some communities towards mining ventures.

There is also a pressing challenge to support coal communities in the north and centre of the country to attain new economic opportunities in the face of the coal mining transition. This energy mineral is present mainly in regions such as La Guajira and Cesar basin and the regions of Boyacá and Cundinamarca. However, global prices have battered coal and demand is set to end in the medium term due to commitments to reach global climate goals. Early just transition initiatives to leverage the know-how of coal workers and help them shift into new jobs should be a priority for these communities. Experiences in other OECD countries (e.g. Finland, Poland) have shown that close work with mining companies to explore new business alternatives focuses on leveraging workers’ know-how, either to explore another type of mining or enter into mining-related industrial activities, as well as long-term plans with finance can lead to diversification of mining communities (OECD, 2019[62]).

Mining outcomes can be shaped by policy to ensure environmental sustainability and link with local expectations. The Colombian government can unlock mining potential and ensure environmentally sustainable practices with policies that first ensure well-being of people. The government should focus on a mining policy centred on improving well-being of host communities and decarbonising mining value chains. It can include incentivising mining electrification with renewable sources (e.g. as in Western Australia) and mining automation (e.g. Norrbotten in Sweden) to reduce the mining carbon footprint and enhance female and youth participation in the mining workforce (Sanabria, Forthcoming[58]).

Moreover, the country needs a co-ordinated policy to enhance the benefit-sharing of mining projects and involve local communities, including Indigenous peoples. To this, Colombia can learn from other countries that have promoted Indigenous business participation in energy projects (e.g. in British Columbia, Canada) or created regional centres for excellence to build capacity and connect Indigenous peoples with local business programmes (Ontario, Canada) (Sanabria, Forthcoming[58]).

The IRR, the basis for a national rural policy in Colombia

Because the peace agreement largely deals with addressing the complete development needs in those rural municipalities that were most directly affected by the decades-long armed insurrection, it is in effect a rural development policy. The peace agreement itself is a formal commitment to the people in those regions that it will make the necessary investments to improve rural well-being and contribute to the end of violence. A further reason to see the agreement as a significant policy innovation is that it commits the government by law to a 10-to-15-year process that will extend across multiple administrations. Moreover, progress in implementing the agreement is being directly monitored by external groups and there are multiple stages for formal evaluations of progress.

The peace agreement was mainly designed to end armed violence and has the structure of an integrated rural development approach that can be applied across the entire country. In particular, the IRR of the peace agreement is highly compatible with the philosophy of rural policy developed by the OECD. Certainly, the problems in the municipalities where conflict was more intense do not characterise all of rural Colombia. Yet, because conflict occurred across such a wide variety of rural regions, there are opportunities to use the implementation experiences from the PDET programme as guidance for neighbouring territories with similar geographies and development opportunities.

Leveraging this IRR to develop a comprehensive national rural policy needs greater integration with policies for the rural economy (e.g. tourism, sustainable mining) and an approach that moves away from the programmatic view to deal with polices for rural regions in Colombia’s national policy framework (PND). While some current productive government programmes relieve short-term needs in rural communities, such sectoral actions will require coherent co-ordination to address cross-cutting rural challenges in order to deliver sustainable improvements in rural well-being. Beyond the design of this comprehensive rural policy and given Colombia’s historic capacity for policy diagnosis, political commitment to the implementation of this policy as a priority in the development agenda is likely the most relevant action for greater well-being in rural Colombia (to be discussed in Chapter 6).

Lessons from the OECD Rural Well-being Framework for Colombia

A comprehensive rural policy for Colombia should therefore prioritise actions on those cross-cutting enabling factors for rural development to ensure sustainable growth of rural regions, peace and national development. These priorities are listed below. The next three chapters of this review will further analyse these factors and propose policy actions to address them.

• Infrastructure development. Despite progress, infrastructure is still insufficient in quality and quantity to provide rural communities access to markets and services and help diversify and improve the resilience of rural economies (Chapter 2). Today, there is an opportunity to palliate the lack of connectivity by developing communication infrastructure in rural regions (Chapter 4).

• Access to and quality education and healthcare. Better well-being involves better access to public services like education and healthcare. Lack of education has prevented rural communities from accessing and adopting innovations and attaining a better quality of life (Chapter 4).

• Informal land tenure. Improving land formalisation and regularisation help reach multiple goals, including boosting land investment, allowing farmers to access finance, protecting the environment and improving social cohesion, e.g. between Indigenous communities and farmers (Chapter 5).

• Lack of consolidated systems of rural information. As described earlier in this chapter, the lack of interoperability among sectoral and rural information systems across MADR agencies diminishes the capacity of government programmes to reach the right beneficiaries, adapt to local conditions and conduct development plans.

• Low institutional capacity in rural regions has made difficult the provision of security and justice as well as the enforcement of regulations and co-ordination of policy implementation at the local level (Chapter 6).

• Security and accountability are a transversal problem for development in Colombia and likely the more complex issue. Addressing illegal activities and violence against social leaders and civic groups is the first building block for development in the country, whose security approach needs to be centred on protecting people in the country, regardless of age, ethnicity and geographic location, while encouraging and safeguarding civil society to denounce corruption.

The development of this national rural policy in Colombia can take stock from the OECD Rural Well-being Policy Framework and the supporting OECD Principles on Rural Policy adopted by OECD member countries to increase prosperity and improve the living standards of their citizens in rural areas. This framework places the well-being of citizens at the forefront of its objective, recognising the diversity of rural regions and the need for forward-looking approaches to improve communities’ resilience and anticipatory capacity to any future shock (e.g. climate change, digitalisation, demographic change) (Box 3.10). The framework calls for a multi-dimensional rural policy approach:

• Policy objectives should embrace economic, social and environmental objectives. Transition from a predominate focus on economic dimension (e.g. productivity and income) to encompass a broader concept of well-being that includes environmental and social dimensions. For Colombia, this transition is still in progress as most of the rural programmes still very much focus on productivity, particularly agricultural ones.

• Policy needs to recognise different types of rural regions. A policy approach that recognises the diversity of rurality requires sound definitions to identify the variety of rural places and their characteristics. In Colombia, policy still has a strong focus towards defining rural as a leftover of urban centres, without recognising different types of rural (Chapter 2).

• Different stakeholders need to be involved. Effective adoption and implementation of rural policies necessitate strong engagement of the private sector and civil society, as well as effective multilevel governance mechanisms to support collaboration between all levels of government. The framework call to recognise that rural people and businesses know their own needs best, which needs meaningful engagement and work with the private sector and civil society in the implementation of rural policy (Chapter 6).

Box 3.10. OECD Rural Well-Being Policy Framework

First developed over 40 years ago, the OECD’s rural development framework has helped guide member countries’ efforts to increase prosperity and improve the well-being of rural people and has continued to evolve, keeping pace with changing times and reflecting the organisation’s latest thinking.

Rural Well-being: Geography of Opportunities (OECD, 2020[11]) is the latest iteration of the rural development framework. It extends and refines the OECD’s earlier work, taking advantage of new analysis to reflect to a greater degree the diversity of rural places and the need for a more comprehensive policy approach.

The new framework’s subtitle, “Geography of Opportunities”, reflects the central finding that while rural places are not without their challenges, they are also unquestionably places of opportunity, particularly with accelerated digitalisation. With well-designed rural policies that leverage local assets that are executed in co-ordination across levels of government and between the three key actors of government, the private sector and civil society, rural development policy can deliver more prosperous, connected and inclusive rural places that offer greater well-being.

In short, the Rural Well-being Framework shifts from a one-dimensional to a multi-dimensional view of rural policies.

Figure 3.2. OECD multi-dimensional view of rural policies

Source: OECD (2020[11]), Rural Well-being: Geography of Opportunities, https://doi.org/10.1787/d25cef80-en.

Using the OECD Principles for Rural Policy for Colombia to set the comprehensive rural policy

As in many policy areas, rural policy is cross-cutting by nature and involves a variety of governmental and non-governmental actors. Addressing the interdependencies of rural policy and attaining the sustainability of policy outcomes require the adoption of multilevel governance mechanisms with strong multi-stakeholder engagement. The OECD Principles for Rural Development serve as a tool to guide the implementation of rural policy (Box 3.11).

Box 3.11. The OECD Principles on Rural Policy

The Principles on Rural Policy crystallised over 20 years of the OECD’s work on rural development and were developed through a comprehensive review process with OECD member countries and key stakeholders. They were adopted by the OECD Regional Development Policy Committee in March 2019.

They target: i) national ministries dealing with rural areas, rural policies and sustainable development, notably ministries responsible for regional development, in OECD member and partner countries; ii) subnational levels of government and stakeholders involved in or affected by rural policy (e.g. from civil society, the private sector, academia or financial institutions).

They cover 11 principles defined in 3 key axes:

Targeting policy actions for all types of rural areas

1. 1. Maximise the potential of all rural areas.

2. 2. Organise policies and governance at the relevant geographic scale.

3. 3. Support interdependencies and co-operation between urban and rural areas.

Adopting integrated and effective strategies to build smart, sustainable and inclusive rural areas fit for the future

1. 4. Set a forward-looking vision for rural policies.

2. 5. Leverage the potential of rural areas to benefit from globalisation, trade and digitalisation.

3. 6. Supporting entrepreneurship to foster job creation in rural areas.

4. 7. Align strategies to deliver public services with rural policies.

5. 8. Strengthen the social, economic, ecological and cultural resilience of rural communities.

Engaging stakeholders in policies for rural areas

1. 9. Implement a whole-of-government approach to policies for rural areas.

2. 10. Promote inclusive engagement in the design and implementation of rural policy.

3. 11. Foster monitoring, independent evaluation and accountability of policy outcomes in rural areas.

Figure 3.3. Eleven OECD Principles on Rural Policy - A toolkit for implementation

Source: OECD (2019[9]), OECD Principles on Rural Policy, https://www.oecd.org/cfe/regionaldevelopment/Principles%20on%20Rural%20Policy%20Brochure%202019_Final.pdf.

All these principles are difficult to adopt at once but, for Colombia, broadening its rural policy approach is already a good step that can have a positive impact on the way ministries and rural communities perceive rural policies. The country has many elements that can facilitate the adoption of the OECD Rural Well-Being Framework and principles and could build on them to speed up the implementation of this policy:

Suggestions for targeting policy actions for all types of rural areas, include:

• Definitions (Principle 1). As discussed in Chapter 2, the country already has a granular definition for statistical purposes that differentiate rural and urban areas and a second definition proposed by the Mission for the Countryside, which differentiates among the type of rural municipalities, following population and functionality criteria. This duality of definitions still creates confusion for policy making and civil society. (Chapter 2). Therefore, the government, supported by DANE, should work on homogenising both definitions across levels of government and statistics. Other OECD countries like Chile have set up a temporary inter-ministerial committee to homogenise definitions of rural areas across different sectoral polices. This work should leverage the progress made with the functional definition of subregions. Furthermore, including a sense of proximity or accessibility to functional urban areas to differentiate between remote and close to cities could be an important addition.

• Development policies at the right geographical scale (Principle 2). Recognising rural particularities is one of the pressing actions for Colombia. As mentioned before, many national policies (e.g. innovation or productivity) do not have a differentiated approach for rural regions but rather do adopt a sectoral approach differentiating the agricultural sector. This difficulty is not particular to Colombia, as other OECD countries are also looking for the right measures to identify and embed rural characteristics inside sectoral policies. A good example is an ongoing effort by the OECD to adjust measurements of innovation to reflect rural realities (Box 3.12).

• Support interdependencies and co-operation between urban and rural areas (Principle 3). Once the right definitions are in place, actions to facilitate co-operation or joint projects among rural and urban municipalities can open up new sources of income for farmers and boost regional growth. In Colombia, these actions need to begin by mapping the urban-rural linkages that exist in the country across different dimension: economic (e.g. communing, business support), social (e.g. shared education services) or environmental (e.g. shared management of waste or water). Other actions to facilitate inter-municipal co-operation include reducing red tape to co-operate or incentives for join planning like contracts (Chapter 6).

Suggestions for adopting integrated and effective strategies include:

• Set a forward-looking vision for rural policies (Principle 4). In an increasingly interconnected and complex system, unexpected shocks have the potential to divert planned outcomes and disrupt rural economies and communities. While there is increasing acceptance of the importance to include future thinking in policy, policy-making processes at the regional and local levels tend to observe the future passively, often being reactive rather than proactive. Actively thinking about different futures is particularly relevant for rural regions in Colombia, which are at the frontline and ill-prepared to face some of the global megatrends: climate change, digitalisation or depopulation. The Colombian national rural policy should embed a forward-looking and adaptive approach that offers some flexibility to adapt to unexpected shocks and entails possible strategies for today’s global megatrends. The example of Ireland’s national rural policy can be of guidance for Colombia (Box 3.13).

• Leveraging the potential of rural areas to benefit from globalisation, trade and digitalisation (Principle 5) requires setting an enabling environment for rural communities to interact with external markets and actors (e.g. universities, international fairs of agriculture, etc.). To this end, digital connectivity is essential, not only in terms of access but also quality. Chapter 4 will discuss how to improve digital connectivity in Colombian rural areas.

• Supporting entrepreneurship to foster job creation in rural areas (Principle 6). Adapting the policy support to innovation and entrepreneurship in rural areas is of great importance to promoting stronger value chains in rural areas based on inter-sectoral collaboration (e.g. bioenergy). To do so, innovation and entrepreneurship policies need further rural focus. For example, the national innovation policy should involve the agricultural innovation system to target the creation of a broader rural innovation system. In the case of entrepreneurship, the national policy (CONPES Document 4011) already has some specific strategic actions to boost rural entrepreneurs, which is a good base to upscale rural SMEs and start-ups. However, many relevant strategies in this entrepreneurship policy are still generic actions to improve the ecosystem for entrepreneurs, e.g. the strategies of sophistication of financing mechanisms for entrepreneurship or the construction of support networks among entrepreneurs are strategies (Box 3.14).

• Align strategies to deliver public services with rural policies (Principles 7), as Colombia requires a particular focus on improving accessibility of rural communities to markets and services, education and healthcare. The challenge of service provision in rural areas due to population ageing and low economies of scale has led governments to look for new ways to provide services beyond traditional models. These strategies will be discussed in the next chapter.

• Strengthen the social, economic, ecological and cultural resilience of rural communities (Principle 8). This involves ensuring the sustainable management of natural capital and land use and enabling the creation of value from ecosystem services, which for Colombia comes down to addressing issues of land use management and land formalisation. This action requires legal clarity and active policies to involve ethnic communities in regional development (Chapter 5).

Suggestions for implementing the rural policy by engaging different rural stakeholders include:

• Implement a whole-of-government approach to policies for rural areas (Principle 9) with a co-ordinating body or mechanism to formally establish inter-ministerial co-operation for rural-related policies. To this end, some countries have established national councils (Chile, Finland), while others presidential inter-ministerial bodies (Korea) (see Chapter 6)

• Promote inclusive engagement in the design and implementation of rural policy (Principle 10) involves engaging with all sectors and levels of government to design and implement national policies that improve the well-being of rural areas. For Colombia, this requires a better arrangement to boost local capacity and further involve the private sector in rural agendas.

• Foster monitoring, independent evaluation and accountability of policy outcomes in rural areas (Principle 11). As mentioned in this chapter, moving from a monitoring system based on coverage towards one that evaluates outcomes in income or well-being can set the right incentives for policies. It also requires a multi-year and transversal budget for rural policies (Chapter 6)