Rapid change in the international economy - globalisation, improved communications and reduced transportation costs, changing trade patterns for commodities, and the emergence of important non farm activities in rural regions - confront rural regions with some obvious threats but also with significant opportunities. Against this background, policy makers increasingly recognise that traditional sectoral policies need to be upgraded and, in some cases, phased out and substituted with more appropriate instruments. Particular concerns are raised by the modest positive impact that agricultural subsidies have on general economic performance even in the most farming dependent communities. Indeed, with farm families relying increasingly on off-farm employment, the economic success of rural communities will depend on the development of new economic engines.
In this context, OECD governments are showing increasing interest in a more place-based approach to rural policy that emphasises investments rather than subsidies and that is able to integrate different sectoral policies and improve the coherence and effectiveness of public expenditure in rural areas.