POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS

European Commission POVERTY AND SOCIAL EXCLUSION IN RURAL AREAS Final Report Annex I Country Studies country: author: Ruta Braziene

Contents Executive Summary.......................... 245 1. Overview................................... 246 2. Main characteristics of rurality................. 247 3. Main characteristics of rural poverty............ 249 4. Rural poverty and policies.................... 254 5. Poverty and groups at risk: case studies on significant groups at risk....... 258 6. Conclusions................................ 260 7. References................................. 261 This study is supported for under the European Community action programme to encourage cooperation between Member States to combat social exclusion (2002-2006). This programme is managed by the Directorate-General for Employment, social affairs and equal opportunities of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be made of the information contained in this publication. http://ec.europa.eu/employment_social/spsi Contractor: Fondazione Giacomo Brodolini Contact person: Marilena Sacchetta www.fondazionebrodolini.it Authors of the Final Study: Paola Bertolini, Marco Montanari, Vito Peragine. National Corrispondents: Lilia Abadjieva (Bulgaria), Luc Behaghel (France), Paola Bertolini (Italy), Nikolaos Bouzas (Greece), Ruta Braziene (Lithuania), Patrick Commins (Ireland), Philomena De Lima (UK), Oana Gherghinescu (Romania), Elvira Gonzalez (Spain), Florindo Ramos (Portugal), Karen Refsgaard (Norway), Mateja Sedmak, Blaz Lenarcic (Slovenia), Elzbieta Tarkowska (Poland), Achim Vanselow, Claudia Weinkopf, Thorsten Kalina (Germany), Gabriella Vukovich (Hungary). Scientific Committee: Philomena De Lima, Marcello Gorgoni, Sabrina Lucatelli, Enzo Mingione, Karen Refsgaard, Annamaria Simonazzi, Francesca Utili European Communities, 2008 Reproduction is authorised provided the source is acknowledged. 244

Executive summary During the last few decades Lithuanian rural areas have undergone significant changes: the move to a market economy, land reform, integration into the EU and etc. Part of the population experienced hardship in adapting to the changing working and living enviroment. Rural areas in Lithuania could be characterized as 1) specialized in agriculture; 2) lacking alternative employment; 3) having poor infrastructure; 4) having developmental problems; 4) lacking or having limited accessibility to basic services; 5) poor investment. The Law on Territorial-Administrative Units is used in Lithuania for definition of rural areas. It also contains definitions of towns, small towns and villages. The definition of rural areas also appears in other official documents: the Lithuanian Rural Development Strategy (2005), National Strategic Plan for Agriculture and Rural Development 2007-2013 and etc. Population density in rural areas is low. No one of Lithuanian regions is classified as predominantly urban using both OECD and DG Regio typologies. According to the OECD NUTS 3 typology the whole Lithuanian territory is one region. Concerning risks of poverty and social exclusion, the rural population poverty risk was three times higher than for inhabitants of the biggest cities. Rural population are more dependent on social transfers. The highest relative poverty rate is in rural areas and the lowest is in the biggest cities. Below relative poverty rate is almost three times higher for rural than for urban population. Rural areas in Lithuania could be characterized by emigration of young people, decreasing birth rate and ageing of population. Specific rural poor groups are the following: small scale agriculture workers, pensioners, multi child families and social risk families. Developmental disparities are increasing within Lithuanian regions and social economic gap are widening among regions: significant differences exist in the shares of GDP by intermediate and predominantly rural areas. These last have less developed social infrastructure and poor access to drinking water and etc. Cumulative GDP growth is twice higher in intermediate rural areas. Strategic policy goals stated in some official documents (the Lithuanian Rural Development Strategy (2005), Rural Development Plan 2004-2006 Lithuania, Rural Development Programme for Lithuania 2007-20013 and etc.) for combating poverty and social exclusion suggest that a number of measures should be undertaken: increase integration of rural population into labour market, restructure poverty zones, and eliminate social disjuncture. The National Report on Strategies of Lithuania for Social Protection and Social Inclusion 2006-2008 makes several references concerning rural areas. It indicates differences in employment of men and women, lower disposable income growth; highest at risk poverty rate in rural areas. The Report also addresses issues of regional disparities in terms of health protection, long term care, insufficient development of economic activities, and slow introduction of new jobs. Concerning the issues of poverty and social exclusion the following measures should be undertaken: development of entrepreneurship among population by improving the environment favorable for the establishment of small and medium businesses; pursue sustainable development of agriculture and rural areas, expanding alternate activities to agriculture. For rural areas in particular, it is necessary to ensure access to complex services (pre-school education, day care, health and social services, family counselling, etc). 245

1. Overview Processes of social, economic, and political transformation after regaining independence in Lithuania in 1990 caused hyperinflation, high unemployment rate, increase of poverty rate and social exclusion. About 97.4 % (63.6 thousand sq. km.) of Lithuanian surface area is rural. No one of Lithuanian regions is classified as predominantly urban using both OECD and DG Regio typologies. According to the OECD NUTS 3 the whole Lithuanian territory is one region. Population of Lithuania is approximately 3.46 million. One third of total Lithuanian population lives in rural areas. More than 51% of rural population are engaged in agriculture. The land reform started in 1991. Till January 2005 property rights was restored to 4.1 million ha or 92 % of the claimed area. During the reform from Soviet times inherited big collective farms replaced by farmers and family farms, agricultural companies and very small scale (2-3ha) holders of agricultural land. The number of farmers farms is increasing, while the number of family farms as well as agricultural partnerships and other kinds of agricultural enterprises and the area of land at their disposal is diminishing. Economic development is very important for Lithuanian seeking to diminish Lithuanian gap from the EU average and diminish differences between particular regions in Lithuania. Since 2003 Lithuania is among the countries having the most rapid GDP growth (in the period 2000 2004 the average annual was 6.7 %). GDP growth was 7.8% in 2006. But GDP still it is one of the lowest within the EU, constituting 55 % of the EU average in 2006. Lithuanian rural areas encounter problems of development, lack of accessibility to basic services, lack of human capital. There are considerable differences in quality of life between rural and urban areas. Official and unofficial migration should be also taken into account: it has been calculated that since 1990 400,000 persons left the country. Rural population is ageing. Considerable differences in quality of life between rural and urban areas should be mentioned. According to the Lithuanian Department of Statistics Data, relative poverty rate in Lithuania in 2005 was 16.9 %. Poverty in Lithuania is linked to living area, educational level, sphere of employment, as well as family structure and size. National Statistics indicate increasing differences between urban and rural areas. In 2005, for rural population, the poverty risk was three times higher than for inhabitants of the five biggest cities. The most vulnerable groups for poverty and social exclusion in rural areas are children, social risk families, elderly, and small scale agriculture workers. For analysis of poverty and social exclusion several strategic documents should be mentioned: Rural Development Plan 2004-2006 Lithuania, Rural Development Programme for Lithuania 2007-2013, Single Programming Document for Lithuania 2004-2006, Lithuanian Poverty Reduction Strategy (2000), National Action Plan Against Poverty and Social Exclusion in 2004-2006 and National report on strategies of Lithuania for Social Protection and Social Inclusion 2006 2008. The most significant measures for preventing poverty and social exclusion mentioned in strategic documents is to promote social integration of socially excluded groups into labour market and into society, to decrease overdependence on agriculture in rural areas by establishing new working places, to increase entrepreneurship of rural areas, to create more qualitative living environment (culture, leisure activities, sports and etc.) for rural inhabitants. 246

2. The concepts of rural areas and rurality in Lithuania Main indicators used for definition of rural areas and ruralities both in official documents and scientific literature emphasised several aspects: density of population, dependence on agriculture, lack of access to basic services, poor development of business, infrastructure and transport. The Law on Territorial-Administrative Units (adopted on 19 July 1994 no. I-558) identifies rural and urban territories in Lithuania. The Article defining the concept of living localities contains definitions of towns, small towns and villages: The towns are defined as compactly built up residential areas with a population exceeding 3000 ; Small towns as a compactly built up residential areas with a population from 500 up to 3000 ; Villages are other residential areas having no characteristic features of a town and a small town. According to the law On the Territorial Administrative Units of the Republic of Lithuania and their Boundaries (Adopted on 19 July 1994, No. I-558), Lithuania is divided into administrative units: municipalities and counties. Municipality is defined as a territorial administrative unit administered by the bodies self-government elected by the community pursuant to the Law of Self-government of the Republic of Lithuania and other respective laws. Municipality consists of populated areas. The main criteria for the establishment of municipality are related to the ability of the municipality to manage and maintain the environment, municipal economy, provide services to the inhabitants of this municipality as well as how the municipality is capable of implementing other functions prescribed by the Law of Self-government. County is defined as a higher administrative unit of the territory whose administration is organised by the Government of the Republic of Lithuania pursuant to the Law on Administration of the County and other respective laws. A county consists of the territories of municipalities that are characterised by the common social, economic and ethno-cultural interests. In the Lithuanian Rural Development Strategy (2005), it is stated that rural areas are considered all territories, which do not fall under the categories of urban territories or urban type settlements. Treinys and Balezentis (1999) define rural area as a territory, which is: Dominated by natural environment, agriculture, forestry, fishing and recreation; Characterised by low concentration of population constituting territorial rural communities. Armaitiene (Armaitiene et al, 1999) defines rural areas as depopulated density and people engaged in agricultural territories. In the report, Development of Lithuanian village prepared by the Lithuanian Institute of Agrarian Economics, rural area is defined as a territory dominated by the natural environment and a low density of population (Development of Lithuanian village, 2005). Main characters of rural areas presented in the National Strategic Plan for Agriculture and Rural Development 2007-2013 are summarized in table 2.1.1. 247

Table 2.1.1 Main characters of rural areas in the National Strategic Plan for Agriculture and Rural Development 2007-2013 Rural areas Rural areas specialised in agriculture Rural areas with problems of development Cultural heritage rural areas Remote rural areas Main characters Farmer s farms, family farms, agricultural companies, very small scale (2-3 ha) holders of agricultural land; fragmentised farming areas. Underdeveloped rural infrastructure (poor business infrastructure, poorly developed rural leisure infrastructure and activities); lack of accessibility to basic services, poor investments, lack or insufficient human capital, lack of knowledge and experience in the fields of management and marketing; obstacles for providing alternative activities. Sites of cultural value (villages, manors, etc.); rural crafts, production of traditional housekeeping equipment, traditional national garments as well as other traditional handicraft wares Limited roads and electricity connections, poor quality drinking water, lack of or limited access to central heating systems, sewage and telecommunications network; lack or limited access to services: banking, postal, medical etc. 248

3. General issues concerning rural poverty in Lithuania Based on the analysis of National and Regional Statistics, various studies allow indicating that rural population is more endangered concerning poverty and social exclusion. The differences between urban and rural areas are constantly increasing. In 2005, for rural population, the poverty risk was three times higher than for inhabitants of the five biggest cities. Rural population are more dependent on social transfers and social services. In 2005, the highest relative poverty rate was found in rural areas and the lowest in the biggest cities. Below relative poverty rate in 2005 there were 29.7% rural and 10.6% urban population. The highest relative poverty rate was found in rural areas, especially in remote rural areas near the Lithuanian State borders. 3.1. Who are the rural poor? Analysis of Department of Statistics data allows identifying the following rural poor groups in Lithuania: 1. Agricultural workers. According to the Lithuanian Department of Statistics data on relative poverty rates by socio-economical group, agriculture workers are in the highest poverty risk group. Relative poverty rate decreased for agriculture workers from 30.1% in 2004 to 21% in 2005. European Union transfers contributed to this reduction, by increasing incomes in agriculture. 2. Pensioners receiving minimal pensions (Approximately 200,0 LT). Minimal pensions and income from small scale agriculture could hardly satisfy their needs. The elderly population find it very difficult to restructure their farm and to find an alternative income or employment source. 3. Multi child families (3 or more children). Lone parent families with many children constitute considerable part of the rural poor. Another negative factor is the low educational level of the members of the household. 4. Social risk families. The number of social risk families is constantly increasing in Lithuania. The number of social risk families is considerably higher in rural areas. Social risk families are characterised by the following factors: alcohol and drugs use, violence, dependence on gambling, lack of social skills, and dependence on social benefits (very often inappropriate use of State support - not to satisfy the needs of the family and/or children.). 3.2. Key facts and figures on poverty and social exclusion in rural areas The rural population is decreasing due to falling birth rate and a high death rate in rural areas. In 2006 age adjusted death rates for the rural population were 1.2 times higher than those for the urban population. At risk poverty rate for rural areas was 34.0% in 2006 (in comparison to urban areas 13.1%). At risk poverty rate, before social transfers, excluding pensions was 42.4% in 2006 for rural areas (for urban areas 18.7%). Disposable income of the rural population in 2006 was 729 Lt per one household member a month, while that of the rural population 584 Lt. Compared with the previous year, disposable income of the rural population increased by 25%. Important factors for the growth of disposable income were as follows: social transfers, growth in income from agriculture, support from the EU structural funds. According to the Household Survey (carried out I quarter 2007), 42 % of households had personal computers at home: 53 % in urban and 24 % in rural areas. The Internet in rural areas was used by each forth household (in comparison to the urban areas each second household used the Internet at home). The educational level of the rural population is inferior to that of the urban population. The number of social risk families is higher in rural areas; Only 20-30% of rural population supplied by the centralised water; Approximately 700,000 rural inhabitants use drinking water from 300,000 dug wells. The problem is that 249

30% of dug wells used for drinking water in rural areas are contaminated with nitrates. Rural areas (especially remote rural areas) have difficulties to access basic medical and social services. Lithuania has a quite well developed road system, but inhabitants of rural areas still face problems in establishing road connections to households and farmsteads. Significant differences exist according to the remote roads maintenance at the critical weather conditions. 3.3. Strategic documents For analysis of poverty and social exclusion several strategic documents should be mentioned: Agriculture and Rural Development Plan 2000-2006, Rural Development Plan 2004-2006 Lithuania, Rural Development Programme for Lithuania 2007-2013, Single Programming Document for Lithuania 2004-2006, Lithuanian Poverty Reduction Strategy (2000), National Action Plan Against Poverty and Social Exclusion in 2004-2006 and National report on strategies of Lithuania for Social Protection and Social Inclusion 2006 2008. The National Action Plan against Poverty and Social Exclusion in 2004-2006 states that Disposable income of rural resident s stands below the urban average by approximately one-third. Moreover, the structure of income of urban and rural households differs considerably as well. Income from work comprises 71 percent of disposable income of urban households, whereas for rural households the rate is 63 percent. Social benefits accounted for 21 percent of disposable income of urban residents and 32 percent for rural residents. Rural households (about 286, 0 LT) and farmer households (approximately 330, 0 LT) generate the lowest disposable income on benefits, scholarships, etc. Moreover, income derived from sustenance farming accounts for approximately a half of total income of the majority of farmer households. Farmers involved in sustenance farming face a shortage of money, though, and comprise one of the most deprived social groups. Low income of workers of agricultural companies is largely predetermined by part-time work Strategic goals towards combating rural poverty are: To fight against rural poverty and revive rural locations facing unfavourable circumstances, to enhance local employment initiatives; to encourage the creation of social companies. The National Report on Strategies for Social Protection and Social Inclusion 2006 2008 states that the highest at-risk-of-poverty rate was in rural areas, the lowest in large cities. In 2005 compared to 2004 the at-risk-ofpoverty rate in urban areas slightly decreased, and in rural areas increased. In comparison to the average, high poverty risk group covers single persons (25.8%) and in particular single elderly persons in the age of 65 and older (27.1%). Rural Development Programme for Lithuania 2007-2013 (Draft, December 29, 2006). The national development strategy focuses on social integration and elimination of distinctions between rural and urban areas. 3.4. Stakeholders in the analysis of poverty Most stakeholders addressing issues of poverty do not differentiate between rural and urban areas. Several stakeholders could be mentioned in this context: The United Nations Development Programme various studies (using both quantitative and qualitative research methodology); Non Governmental Organizations (NGO s) National portal on Poverty issues skurdas.lt (poverty) - Studies, quantitative and qualitative research; actions, initiatives and etc. Lithuanian Free Market Institute - Studies, quantitative and qualitative research; Public actions and debates. Political parties (especially the farmers and peoples party Valstieciu partija (in Lithuanian; in some sources translated also as a The Lithuanian Peasant Popular Union or Union of Farmers and Peoples Parties). The notion of the farmers and peoples party is we stand for better life of people in rural areas. 250

3.5. Data availability Finding appropriate data for more detailed analysis of poverty and social exclusion in rural areas is very difficult. There is no comprehensive data about poverty and social exclusion in Lithuania. Of course, some reliable data sources could be mentioned in this context (official data presented by Lithuanian Department of Statistics, data collected by Universities and Research Institutes, Non-governmental organizations data and etc.). Department of Statistics to the Government of the Republic of Lithuania (Statistics Lithuania) (Internet access: http://www.stat.gov.lt). It presents data on poverty rate by socioeconomic group, family type and so on. For analysis of poverty and social exclusion: - Household Budget Survey (HBS); - The Survey on Income and Living Conditions (SILC) since 2005; - Regional Statistics database. Data, collected by Universities and Research Institutes: - Lithuanian Institute of Agrarian Economics economical analysis of various aspects of agriculture sector; - Lithuanian University of Agriculture, Department of Rural Development and Administration; - Kaunas University of Technology, Department of Sociology (2005-2007). Collection of the data in seven municipalities on quality of life in rural areas; Non governmental organizations, funds and etc. In this context could be mentioned UNDP and OSF (Open Society Fund) projects, communities portal (bendruomenes.lt), portal on poverty issues skurdas.lt. 3.6. Multi dimensional analysis of poverty and social exclusion in Lithuania Age and education Natural increase of rural population is negative number of deaths exceeds number of births. The birth rate in rural areas is by 30% higher than in urban areas, but the percentage is annually decreasing. The death rate in rural areas is very high. It is by 75% higher than in urban areas and makes a negative impact on natural population increase. Ageing of rural population. The rural population is ageing. Every fourth rural resident is above 60 years old. According to the Lithuanian Department of Statistics data in February 2002 the share of population between 15 and 64 years was lower in rural areas (61.5%) than in urban areas (69.4%). At the same time the share of population over 64 years was significantly higher in rural areas (17.9%) than in urban areas (12.4%). Households with higher average age are often found in the lowest income quintile. The population survey data shows that out of 1000 inhabitants, 658 urban inhabitants have higher, technical or secondary education. The comparable figure in rural areas is 453. The level of higher education is three times lower among the rural population. This indicates that people living in the rural areas are less prepared for undertaking various business activities, the development of competitive agriculture or work in other industries. In rural areas life-long learning has been increasing but still remains inferior to that amongst the urban population. Types of activities Lithuanian labour market has undergone significant changes during the process of transition but agriculture, hunting, forestry still remain key sectors in rural areas and employ 51% of the rural population. Strong overdependence on agriculture sector has negative impact on the implementation of rural development strategy. The second largest employment sector in rural areas is the service sector it employs 20% of the total rural working population. The rest of the rural population is engaged in education, health care and social services and construction industry. Alternative economic activities are increasing mainly in urbanized rural areas. Location There s no official Statistical data on poverty in particular regions. Increasing regional disparities could be men- 251

tioned due to other indicators: share of GDP, amount of persons dependent on social transfers, social risk families, long term unemployment, youth unemployment rate and etc. Capital Lithuanian rural economy could be characterised as over dependent on agriculture sector, lack of alternative sectors. It could be characterized by lack of investment in farms, farms machineries and other sectors. Gender There are a lot of gender differences in rural areas. The difference in employment of men and women is higher than in urban areas and accounts for 9.4% in rural areas and 5.7% in urban areas, respectively. The level of women s income is lower than that of men and constitutes approximately 80% of men income. Especially vulnerable groups of women in terms of poverty and social exclusion are the following: working in family farms as agriculture workers, unpaid domestic workers etc. They often have no social insurance, regular income. Ethnicity The Lithuanian Department of Statistics makes no distinctions according to the ethnical structure of rural and urban population. Lithuania is a very homogeneous country according to the ethnical structure. Lithuanians constitute approximately 80 % of population. The largest ethnic minorities are 6.7% of Poles and 6.3 of Russians. Infrastructure, access and utilities The standard of the infrastructure is poorer in rural areas than in urban areas. The current infrastructure has been inherited from the Soviet times. The underdeveloped rural infrastructure is considered a serious weakness for the Lithuanian rural society. Although there are no villages without electricity, wide disparities between rural and urban areas exist in water supply, central heating systems, and sewage and telecommunications networks. There are also considerable regional disparities. Remote rural areas could be characterised as having poor rural roads infrastructure, problems of development. In many rural areas there are no technical abilities to use broad stripe Internet connection. Also for rural population the cost of Internet is quite high. Almost all bigger residential rural areas have at least one shop selling the most needed food products and other goods, cafe or bar. Motor shops are serving people living in more remote areas. Other services such as banks, postal, medical usually function in bigger rural areas and therefore create inconveniences for the rural population. Persons living in rural areas are affected more often by the material deprivation in the dwelling: 53.5% of rural population lack of indoor flushing toilet, 46.8 Lack of bath or shower (See Figure 3.6.1). Types of social financial support Medical assistance Rural remote areas are lacking of the medical infrastructure and staff. A tendency to centralise hospital facilities has negative impact on rural population to access basic medical services. Due to emigration of the medical staff, there are difficulties of locating or delivering medical specialist care in the rural areas. For considerable part of the rural population it is difficult to access medical services, especially services of doctor s specialists. Social services The system of social support underwent reform. Provision of social services is decentralised. Demand for social services is constantly increasing in rural areas. Particular attention is paid to the problem areas and regions with higher rates of morbidity and mortality, social and economic problems. Migration and commuting For Lithuania free movement of workers means not only development of opportunities for population to find a suit- 252

Figure 3.6.1. Persons living in households affected by material deprivation by place of residence and material deprivation in dwelling dimension. 2005. (%) able and well paid job but also threats for the labour force lost. Rural areas are much more affected by migration than urban areas. In some areas only elderly population has remained. There is a tendency of migration from rural areas which in 2005 was minus 1.4 thousand people although not as big as from urban areas (7.4 thousand). It is normally older people that move to rural areas, while young people between 25 29 years especially women move away from rural areas. Migration bears several negative effects on rural areas. Other categories of risk Other categories at risk of poverty include: a) long term unemployed persons in rural areas a considerable higher share of the rural population could be defined as long term unemployed; b) retired population with very low pensions; c) Unemployed youth. 253

4. Assessment of relevant policies for fighting poverty and social exclusion in the rural areas. 4.1. National policies in the field of agriculture and rural development In 1991, the Lithuanian government approved priority agriculture workers support programme. In 1993 it approved a first strategic document National agriculture development programme till 2000. The implementation of National Agriculture Development Program foresaw 11 sub- programs. This programme anticipates principles of agricultural reform, property privatization, market relations and etc. Purpose of the reform was to create effective economic units in the agriculture sector. Background of the reform was land privatization. In 1996 National agriculture development programme was revised because its implementation was far from the early provisions. Considerable part of this programme was not implemented too, however. Financial instruments for the development of the agricultural sector and land reform were very limited. In 1992 the Agriculture workers support fund was established. In 1994 Lithuanian Republic Agriculture Support Fund was established. This Fund was financed from the State budget and worked till 1997. In 1997 the Lithuanian Government decided to establish a rural Support Fund. Preparation to enter the EU was a very important stage for National agriculture and rural development policy sector. Since 1995, consultations with European Union institutions about legal, institutional and financial aspects of Lithuanian membership started. In 2001 Government stated Lithuanian negotiation position Agriculture and notion that Lithuania until January 1, of 2004 will be able to implement notions of EU law. In 2000 the Lithuanian Parliament stated the Agricultural and rural development strategy and 29 programmes for implementation of the strategy. Main goal of the strategy was to create environment for diverse economic and social rural development, environment and ethno-culture, conditions to improve quality of life and integrate into the EU. The Strategy foresees the following development policy objectives: investment into farms, modernization of farms and diversification of their activities; development of good quality products production and marketing; increase of employment stimulating alternative activity and improvement of social conditions; renovation of rural areas and development of infrastructure; Environment and improvement of nature resources handling. Strategy foresees agriculture priorities and other priorities of rural development. One of the priorities was the decentralization and modernization of the rural social infrastructure. In 2002 the Lithuanian Parliament stated a Long term State development strategy. An important part of this document regards agriculture and rural development. This document contains notions on long term Lithuanian economic development until 2015. This document specifies main problems of the sector: lack of competition abilities, poor production and social rural infrastructure. Strategic vision of Lithuanian village was formulated: Lithuanian village convenient space for work, living and leisure with developed production and social infrastructure, educated and initiative community, healthy environment and nice landscape. For implementation of the vision raised the following strategic goals: sustainable agriculture and rural development with modern production and social infrastructure and healthy environment; competitive, open for innovation agriculture and food market; opening business, work and social conditions for rural inhabitants. SAPARD support has had a positive impact for preparation of Lithuanian agriculture sector for EU membership: allowed modernization of farms, develop alternative business, rural tourism, services and other activities. Format necessary structures, educate and inform rural inhabitants. Most of the applications were submitted for the first area, namely investment into the primary agricultural production, and the majority of the applications awarded 447 were targeted to this area. The fourth area development of the rural infrastructure take the second position according to the number of the contracts signed 182, although it is in the first position according to the number of projects rejected 139. The least part of the applications 3 were submitted to the fifth area, namely forestation of the agricultural land and development of the forest infrastructure, and no contracts were signed. 254

According to data of the National Paying Agency, 610 million Litas were contracted over the whole period of the call for proposals. That accounts for 64 percent of the total funds allocated to the programme (see Table 4.2.1). Table 4.2.1 SAPARD Funding in Litas According to the Areas during the Seven Stages Priority areas Sum of the Sum of the The percentage of the awarded allocations Allocations applied Allocations awarded applied out of the total funding applied 1st area 323.433.532 232.869.939 72% 2nd area 363.427.091 234.632.460 65% 3rd area 62.330.531 34.157.213 55% 4th area 184.309.555 96.290.959 52% 5th area 279.213 - - 6th area 11.364.835 10.370.903 91% 7th area 1.867.109 1.867.109 100% Total 947.011.866 610.188.583 64% Source: National Paying Agency (www.nma.lt/?4013367983) The SAPARD programme failed to reduce the regional disparities of the economical development: namely the stronger regions used the allocations more efficiently. 4.2. The new rural setting 2007-2013 For 2007 2013 strategic priorities for rural areas would be rapid development of the economy, creation of better working places and social cohesion. The notion that rural development should be obtained through establishing a competitive environment is particularly important for new EU members facing a dramatic process of restructuring of the agricultural sector. Rural development policy should serve the needs of people. Rural development policy is implemented by cooperation of rural communities, private organizations and State institutions. Its implementation background: united programming, financing and control system, corresponding to local demand. In the Rural Development Programme for Lithuania the poverty and risk of exclusion has been taken into account. Particularly two Axes will address the problem, namely Axes 3 (Quality of life) and 4 (Leader). The key problems identified for Axis III are the following: Low income and lack of sources of income (overdependence on agriculture); Insufficient social and physical infrastructure; Lack of skills and local initiatives for rural areas; Need to preserve cultural heritage. It is mentioned that it is necessary to decrease employment in agriculture and look for alternative income sources for rural population. Also it is very important to develop rural infrastructure by improving living conditions and physical rural infrastructure. Priorities as stated in Rural Development Programme for Lithuania are as follows: 255

Table 4.3.1 Priorities in Rural Development Programme Priorities Priority III. 1. Creation of alternative jobs and income sources (development of crafts, rural tourism). Forestry considered as one of the diversifying activities. Priority III.2. Improvement of social and physical infrastructure, protection and enhancement of cultural heritage (making rural areas more attractive for living, improving living conditions). Enhancing the human capital in rural areas. Priority III.3: Enhancing the human capital in rural areas (increasing the level of income in rural areas). Measures Diversification into non-agricultural activities; Business creation and development; Encouragement of rural tourism services, conservation and upgrading of the rural heritage; Implementation local development strategies. Village renewal Inter-territorial and trans-national cooperation; Support for acquiring of skills and animating the inhabitants of LAGs territories. 4.3. Educational policy The most important educational policy goal is to ensure access to education aiming at creating appropriate conditions for training and studies to all students of the country. Measures were taken in 2004-2006 to optimize and renovate schools, to supply schools with teaching aids by using the World Bank program on the improvement of schools. The most relevant measures implemented in the field of providing education services for rural residents include: further development of pre-school and pre primary education, giving special attention to ensure the provision of such services for children from families in social exclusion and social risk. Especially important measures for the rural areas is the fact that municipalities were supplied with transportation means for delivering children to schools and ensuring free of charge meals for children from families in need. Two measures could be mentioned in this context: the 2006 2008 Investment Programme on the provision of yellow buses to schools, and the 2005 2008 Programme The Yellow Bus on transportation of schoolchildren with special needs. Accessibility of pre primary education in rural areas pre primary education in rural areas is attended by approximately 63% of children. An important educational policy measure is to reduce regional disparities (first of all in pre-school and pre-primary education) for children from families in (or at risk of) social exclusion. Prevention of children school non attending or early drop out of school: the Ministry of Education and Science organized special actions to obtain that all the children attended school and finished education endeavouring in 2004-2006. Concrete measures to ensure pre-school and pre-primary services for children from families in (or at risk of) social exclusion are the following: Elaborate and introduce a Programme for the development of pre-school and pre-primary education. Elaborate a model for the improvement of living and educational conditions for children from birth until the start of compulsory education and implement it. 4.4. Employment Policy The most important initiatives concerning employment are the following: Increase labour market participation (stimulating quality and safe employment, leading to the general increase in the labour force activity rate, including that of women). Strengthening of social inclusion (employment of jobless people, individuals willing to reconcile family responsibilities and working duties, the disabled, senior persons, and other individuals, who find it difficult to integrate into the labour market). 256

Development of entrepreneurship skills among the population, particularly in rural areas (encouragement of young persons to start their own business). Sustainable development of agriculture and rural areas (Improve occupational skills of farmers and other rural population involved in the activities related to agriculture, forestry or alternative businesses). 4.5. Pensions Reform In particular important is implement in practice notion that pensions for elderly would have to ensure their needs, lead full fledged life and actively participating in the social, economic and cultural life of the society. 4.6. Social inclusion policy 2007-2013 At the end of 2006 (December, 2006) Lithuania adopted their National Strategic Reference Framework for Regional Policy (NSRF) 2007-2013, which set out their policy for the 2007-13 structural funds programmes, showing how the strategy is consistent with the Community Strategic Guidelines and the Lisbon National Reform Programme. All Lithuania is covered by convergence objective. The Lithuanian National Strategic Reference Framework (NSRF) core targets refer to: accelerating the economic growth in the long-term, creating more and better workplaces, and developing social cohesion. In order to achieve those targets, the NSRF is built upon three strategic objectives and ten priorities: (See table 4.2.3). Table 4.7.1. Strategic objectives and priorities - The Lithuanian National Strategic Reference Framework (NSRF) Strategic objectives Productive human resources for the knowledge society Competitive economy Life quality and cohesion Priorities Attract and retain people in the labour market; More active lifelong learning; Develop the labour force of the highest qualification; More efficient public administration. Increase business productivity, particularly by creating favourable environment for small and medium sized enterprises and innovation; Increase the comparative share of high added value business; Make the economic infrastructure more effective Make better use of the local potential; Provide qualitative and accessible public services; Better quality of the environment. 257

5. Case study on children in social risk families 1 History Processes of globalization, transformation influenced changes in all spheres of Lithuanian society. Increasing social differentiation caused increase of inequality and social exclusion. Increased number of social risk families in rural areas evolved during the last 10-15 years. Social risk family family which is in crisis because one or several family members have dependence on alcohol, narcotics, lack of social habits, lack of abilities to adapt to social environment; and etc. 2 Elements of risk Different types of risk: poverty, unemployment, limited possibilities to participate in labour market for parents; early children school drop-out, alcoholism, criminality, large families with many children, child neglect and etc. 3 Dimension and location This group is concentrated in remote regions, predominantly near Lithuanian Russian, Lithuanian Byelorussian and Lithuanian Latvian borders. According to the data of Ministry of Social Security and Labour in 2000 in Lithuania were 18.1 thousands. Of social risk families and 40.3 thousands of children in it. More detailed statistical information about social risk families is presented in table: Social risk families and number of children in Lithuania, 2005. 4 Gender Is there a specific gender dimension in the group? Considerable part of social risk families constitutes single parents families (especially single mothers). 5 Literature In current Lithuanian discourse several articles on these group are available: In scientific journals: Filosofija. Sociologija (Internet access: http://www.maleidykla.katalogas.lt), Pedagogics and etc. 6 Institutions First of all, with problem of this group is dealing State Child Rights Protection and Adoption Service under the Ministry of Social Security and Labour. At the local level there different institutions both governmental and nongovernmental dealing with issues of social risk groups. 7 National/local policies Programmes preventing crime among children and drug addiction: organising summer camps, etc. (10 million LT allocated); National Programme for Complex Assistance to Parents Before and After Child Birth until the Start of the School: ensuring accessibility to complex services (pre-school education, day care, health and social services, family counselling). 8 EU funds Have EU financial instruments (such as the European Social Fund, Leader, Equal, etc ) been used to combat the risk for the group? Yes. 9 EU rural development policy Have the EU rural development policy taken the group into account? Yes, partly. 11 Good practice Several examples of good practice could be mentioned in this context: Pasvalys region municipality has established an institution of social services Gruziai child care house financed from the Pasvalys region municipality. Child care house is taking services of care, education for children without parental care. For children is provided temporary or permanent care. The public organization,,institute of family relations together with the public organization,,secure child centre started to implement project,,nurturing of healthy life style habits and psychological well being among Kaunas region risk group children. 12 Financial resources Not available. 258

Social risk families and number of children in Lithuania, 2005 County Number of Number of children in Total number of children social risk families social risk families in county Vilnius 2954 5834 178096 Kaunas 3864 7844 158008 Klaipeda 1689 3691 78618 Panevezys 1875 4255 70076 Siauliai 1683 3731 89654 Utena 1143 2508 40329 Alytus 731 1891 43562 Marijampole 1061 2682 43819 Taurage 761 2111 35390 Telsiai 658 1788 43421 Total 16419 36251 11400615 Source: Department of Statistics under the Government of the Republic of Lithuania, 2006 259

6. Conclusions Analysis of scientific literature, statistical data and official documents allows concluding, that: The Law on Territorial-Administrative Units is used in Lithuania for definition of rural areas. It also states definitions of towns, small towns and villages. The definition of rural areas also appears in other official documents: the Lithuanian Rural Development Strategy (2005), National Strategic Plan for Agriculture and Rural Development 2007-2013 and etc. No one of Lithuanian regions is classified as predominantly urban using both OECD and DG Regio typologies. According to the OECD NUTS 3 typology the whole Lithuanian territory is one region. Department of Statistics to the Government of the Republic of Lithuania (Statistics Lithuania) distinguishes between rural and urban poverty. The rural population poverty risk is three times higher than for inhabitants of the biggest cities. The highest relative poverty rate is in rural areas and the least in the biggest cities. At risk poverty rate in rural areas tends to increase. Developmental disparities within Lithuanian regions and widening social economic gap between the regions are increasing: significant differences in the share of GDP, cumulative growth of GDP and GDP per capita, according to the intermediate and predominantly rural areas. Rural areas in Lithuania are 1) specialized in agriculture; 2) lacking of alternative employment; 2) having poor infrastructure and problems of development; 4) lacking or having limited accessibility to basic services. Concerning socio-economic features of rural households, demographic indicators display significant differences between rural and urban areas. Rural areas could be characterized by the emigration of young people, decreasing birth rate and ageing of population. The rural population is more dependent on social transfers. Strategic policy goals stated in some official documents (the Lithuanian Rural Development Strategy (2005), Rural Development Plan 2004-2006 Lithuania, Rural Development Programme for Lithuania 2007-2013 and The National Report on Strategies of Lithuania for Social Protection and Social Inclusion 2006-2008) for combating poverty and social exclusion are the following: increase integration of rural population into the labour market, restructure poverty zones and eliminate social disjuncture. 260

7. References Braziene, R., Guscinskiene, J. (2004). Patterns of Social Exclusion in Lithuania // Filosofija. Sociologija. Vilnius: Lietuvos moksl akademijos leidykla. p. 50-56. (in Lithuanian). Braziene, R. Valackiene, A., (2006). Advantages and disadvantages of structural funds support in Lithuania: a case of Panevezys region // 5. Knowledge, Economy and Management Congress, November, 3-5, Kocaeli, Turkey: proceedings book. Vol. 1. Istanbul: Kocaeli University. p. 876-890. Level of Life and Poverty 2004. (2005). Lithuanian Department of Statistics, Vilnius. Lazutka, R. Standard of Living and Poverty. Lithuanian Human Development Report. Vilnius, 2000. (In Lithuanian). Lithuanian Human Development Report 2002-2003. (2003). Knowledge, information, technology and human development. United Nations Development Programme, Vilnius. Living Standard and Poverty, 2005. (2006). Statistics Lithuania, Vilnius. The Lithuanian National Strategic Reference Framework (NSRF) National Action Plan against Poverty and Social Exclusion in 2004-2006. Vilnius, 2006. National Report on Strategies for Social Protection and Social Inclusion 2006 2008. Vilnius, 2006 Poviliunas, A. Rural Exclusion Profiles. (2003). Vilnius, Kronta. 112 p. (In Lithuanian). Rural Development Programme for Lithuania 2007 2013, http://www.zum.lt/min/failai/2007_01_22_rdp_2007-2013_tikrasnaujas3.pdf Rural Development Plan 2004-2006 Lithuania. Ministry of Agriculture of the Republic of Lithuania. Vilnius, 2006. Sileika, A., Zabarauskaite R. Poverty, its measurement and tendencies in Lithuania. Ekonomika, 2006. (In Lithuanian). Single Programming Document for Lithuania 2004-2006. Treinys M., Balezentis A. Kai kurie teoriniai ir metodologiniai kaimo plòtros strategijos klausimai//lietuvos kaimo plòtros politika ir mokslo uïdaviniai. - Vilnius, 1999. The Future of Rural World. - In: http://europa.eu.int http://www.esparama.lt/lt/pasirengimas/strategija National Paying Agency http://www.nma.lt The Social Report. 2005-2006. The Ministry of Social Security and labour. Vilnius, 2006. Ministry of Finance of the Republic of Lithuania: http://www.finmin.lt Department of Statistics to the Government of the Republic of Lithuania (Statistics Lithuania) : http://www.stat.gov.lt EU webpages http://ec.europa.eu/employment_social/social_inclusion/jrep_en.htm http://eur-ex.europa.eu/lexuriserv/site/en/oj/2006/l_055/l_05520060225en00200029.pdf http://europa.eu/scadplus/leg/en/lvb/l60042.htm http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/050706osc_en.pdf http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/l_29120061021en00110032.pdf http://ec.europa.eu/comm/competition/state_aid/regional/rag_en.pdf http://ec.europa.eu/regional_policy/newsroom/pdf/scoreboard020407.pdf http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/index_en.htm 261