Agricultural and food industries constitute a significant part in the economy of European Union (EU), thus providing 15 million jobs and creating 4.4% of the gross domestic product. EU Common Agricultural Policy (CAP) is adopted in all 27 member states and a significant part of budget is allocated to implement it - in 2008 it was 58.8 billion EUR or 44.5% of the total budget. This research performed the analysis of the theoretical, historical and economic aspects of the CAP. Eight main stages of the reform can be distinguished in the CAP development. They have their own characteristics, goals and main support tools. The process of the CAP reform has not been finished yet.

The study summarises the theoretical and legal aspects of the main types of area payments in Latvia. From the point of view of theoretical and legal arrangements, the area payments may be broken down in two large groups: direct payments and area payments foreseen under Rural Development Programs. The legal package regulating Area Payments consists of the EU regulatory enactments (Council or Commission Regulations) and regulatory enactments of Latvia (Laws and the Cabinet (MK) Regulations). The institutional implementation system of each group of Area Payments is relevant and distinct. The present study analyses 11 different types of Area Payments. Over the period 2004 - 2007, farmers have received LVL 430 million in different Area Payments constituting 58.5% of the total amount of support.

Latvia is a territorially small country with small open economy, and its main and the most competitive recourses are highly educated society and well developed science which is based on research, innovation and modern technologies. To create a well functioning innovation system as a part of knowledge-based economy, several conditions has to be met to insure that all parts of national innovation system effectively work together. This article is dedicated to analysis of financing mechanisms that can be used by research institutes in the field of agriculture in Latvia to ensure sustainable rural development. The research in the field of agriculture in Latvia is mainly performed by the state research institutes and research agencies of Latvia University of Agriculture. To provide favourable environment for development of research and science, there is set legislation framework and financing mechanisms such as base financing from the state budget, state research programmes, European Commission Framework Programmes, and the European Union (EU) Structural Funds assistance. The analysis has shown that support of EU Structural funds has positive impact on number of applied research carried out in research institutes in the field of agriculture in Latvia. EU Structural funds assistance helps to develop fundamental research activities and innovative approach to the science that is one of the preconditions for the development of states' competitiveness. In conclusion, the authors resume that it is necessary to establish a strong link between higher education institutions, research institutes, and entrepreneurs in the process of building effectively working national innovation system.

The article deals with the issue of rural development in Poland. The aim of the article is to determine the dynamics of change in the level of socio-economic development of rural communes in Poland (NUTS 5) in the years 2004 – 2014 through verification of the hypothesis of the existence of beta-convergence. The beta-convergence approach is verified by econometric modelling techniques. The statistical data came from the Local Data Bank (LDB) of the Central Statistical Office (CSO). Based on the analysis of changes in the development level of the rural areas in Poland it was stated that there is convergence. However, the strength of the convergence process is different depending on the dimensions of development. It reported a strong relationship between the average growth rate of aggregate indicators relating to the financial dimension. In other dimensions, such as labour market, living conditions, health and social care, education, demography and culture, it showed the occurrence of slow convergence processes.

Energy transition from the fossil fuel dominating to the one based on renewable energy sources (RES) takes acceleration with the internationally recognised need to stabilise the global warming. Therefore, there is a general consensus that the initiative of the wide use of RES is manifold in its nature making an impact not only on the environmental issues, but also adding to the so desired customer involvement and rural development as well. Rural dimension in reaching the EU targets should arguably be a priority as RES utilisation is decentralised in its nature. Despite the fact that EU with its main strategic documents gives a clear direction on RES utilisation through wider involvement of citizens, especially in rural places, there are certain grounds for stating that a current situation and future insights among EU Member States still differ. Lithuanian case was chosen to explore the sustainability gaps regarding the RES utilisation development in rural places. Literature review is employed to choose the most suitable way aiming to explore and evaluate the RES utilisation development in rural places regarding the sustainability issues. This article adds to understanding and evaluating the main obstacles of the well balanced RES utilisation development in rural places.

The evaluation of EU Member States’ co-founded programmes was assigned particular importance in recent years. The core question to be answered in programme evaluation is whether the stated objectives are accomplished by particular intervention. Until recently, the use of ‘naïve’ estimates was common in the evaluations of EU Member States Rural Development Programmes. The use of these estimates leads to potentially substantial selection bias resulting from using the outcomes of non-participants as a proxy for the possible outcomes of participants in the case of non-participation. The effectiveness of interventions on outcomes of interest can be better evaluated by propensity score matching (PSM). The objective of the study is to determine the net average effects from semi-subsistence farm support measure of the Latvian Rural Development Programme 2007 – 2013. To reach the research objective, propensity scores based on the most important characteristics were calculated for participants and non-participants of the measure and average treatment effects for gross value added were evaluated by matching methods. The research results show that the positive programme effects evaluated by ‘naïve’ estimators are overestimated in comparison with the results obtained by more rigorous PSM method.

Rural areas in Poland are characterized by great diversity in their functional spatial structure. Throughout history, their distinct features have been shaped by natural, historical and socio-economic factors. The aim of this study was to analyze the changes in the functional spatial structure of North-Eastern Poland. The analysis involved a comparison of data for 1988 and 2012. Research data was supplied mainly by the Central Statistical Office in Poland. The key drivers of change in the investigated region are agriculture, tourism, forestry and environmentally-friendly industrial processes. The results of the economic and social development are constantly changing in rural areas. Based on analysis, the functional structure of rural areas in North-Eastern Poland between 1988 and 2012 shows that they are more diversified. Over the years, rural areas in North-Eastern Poland were identified with agriculture but now they have multifunctional character.

Rural areas in Poland are vastly differentiated in their level of social and economic development. Adverse natural, social, economic and technological processes contribute to the formation of problem areas. Negative phenomena can spread across several municipalities, contributing to the number and severity of problems. Rural municipalities characterized by a low level of social and technical development are not attractive sites for prospective investors or home buyers. Geographical location can also contribute to the formation of problem areas. The Region of Warmia and Mazury borders the Kaliningrad Region, and it is one of the least developed areas in Poland. Rural areas in Warmia and Mazury are characterized by significant disparities in the level of social and economic development. The aim of this paper was to identify problem rural areas in the Region of Warmia and Mazury based on indicators of social, demographic, economic and infrastructure development. Problem areas in the Region of Warmia and Mazury were identified using Hellwig’s taxonomic measure of development. The results of our analysis indicate that in rural areas in the Region of Warmia and Mazury, the most severe problems are observed in typically agricultural municipalities which have a peripheral location and where state-owned farms had acted as the main employer.

The theoretical part of the paper presents an overview of trends in the solution of economic and social problems in rural areas and rural development. It also makes an inventory of modern theories on European rural development and analyses aspects of strategic management of the activities of regional and rural communities. The documentary part of the paper analyses the EU and Lithuanian regional and rural development policy, the developments in the implementation of the EU LEADER programme in Lithuania in 2003 – 2010 and opportunities for its improvement, the establishment of local action groups (LAGs) and their key activities. The empirical part of the paper examines the activities of LAGs in Ukmerge and Radviliskis regions and offers a comparative analysis of the content of five strategies produced by the two LAGs for the period between 2003 and 2013. The research has demonstrated that the five rural development strategies of both LAGs are based on the principles of collaboration among the representatives of local authorities, businesses and rural communities, continuity and consultations with local population. The discussion part focuses on the guidelines for the improvement of the strategic management of rural development. The conclusions present an overview of the typical features, priorities, aims and objectives of the strategies of both LAGs.

This article aims to analyse the main features, importance and benefit of wellbeing research for rural development. Wellbeing research, which is becoming more and more important in social sciences discourse and its interrelations with rural development were analysed using analysis and synthesis of scientific literature, logic and systematic analysis, comparison and graphic modelling methods. The interest in the research significantly grew at the end of the 20th century and it is already recognized as a challenge and/or new instrument evaluating the progress and development of society. It should be noted that this direction of research can be adapted to different territorial levels. Wellbeing research is not only about the worldwide (macro level) wellbeing of nations, but also highlights specific features of smaller units like rural areas and their development (micro level). So when implementing the wellbeing research it is important to choose correctly whether objective or subjective wellbeing can be evaluated based on what positive or negative aspects it gives at the local level. This article deals with the main features of wellbeing research and what is common between this research and rural development as well as what benefit they give to rural communities and development. Research results show that benefit of wellbeing research for rural development is important because it allows to get information about the wellbeing situation of rural people, reveals existing problems and positive changes, gives an opportunity to observe how to improve the evaluation of wellbeing and informs rural actors about their role in the wellbeing research and their possible influence on the rural development.