Common challenge: Local municipalities in border areas are particularly suffering from economic depression and decrease of population. However, in these areas in both sides of the border still exists an authentic rural lifestyle, culture and business activity, mainly including culture and nature based tourism, handicraft and agriculture. The main problem for local entrepreneurs is the ability to sell their products or provide services on site due to the absence of a comfortable and high-quality roads, connecting remote territories with district centres and national main routes and settlements. Farmers producing ecological products have to make an extra effort and to use alternative forms of transportation, which increases their costs and makes the product less competitive. A direct contact between food producers and end customers is getting more important these days. It enables for farmers to offer higher value for customer and to receive fair price for their products. Project objective: The project objective is increased SME development in Setomaa and Pechory district, which will be achieved through traditional business promoting and improved infrastructure. It is expected that ca 30 SME’s from project area (ca 15 from Värska/Saatse area and ca 15 from Pechory district) will be actively and substantially involved to project activities and benefit directly from improved infrastructure. Main outputs: It is expected that ca 30 SME’s from project area (ca 15 from Värska/Saatse area and ca 15 from Pechory district) will be actively and substantially involved to project activities and benefit directly from improved infrastructure. As a result of project activities these businesses get new opportunities for growth and higher competitiveness. They will be provided with new skills and knowledge for product development/marketing. New and improved infrastructure enables them to enlarge their client base and to establish new business contacts using short supply chain (direct sale to the clients in the farm, in market places etc). Additionally even more SME’s from project area (up to 50) will use the market places established in Pechory and Värska for direct selling to the end-customers using short supply chain. Main activities: 1) Arrangement of fairs, study tours, seminars and workshops for SME';s 2) Construction of market place in Pechory and equipping 2 market places in Pechory and Värska 3) Reconstruction of the road Värska-Saatse-Ulitina-Est/Rus border (14,618 km) and Krupp-Kulje road (6,482 km) 4) (Re)construction of 3 foot/cycle ways and 3 parking areas in Värska area Approach and cross-border cooperation reason: Partners have decided to use sectoral approach in project implementation and have selected the target group from specific field- rural SME';s and persons interested in entrepreneurship in non-traditional farming sector. The sectoral approach makes project activities more attractive for target group as the approach and the content will be more appropriate and practical. In that way it is possible to meet their specific needs and expectations. Since there is lack of co-operation between farmers in border areas, low know-how on how to produce farm products for higher added value and to establish short supply- chain, then it is needed to organize different activities and events. The main working method of the project is to bring experienced and young entrepreneurs working in the same business field together, and let them to establish personal contacts with colleagues acting in same sector. The role of project partners is to offer them a platform (series of events) suitable for exploring possibilities for further cooperation. High quality road infrastructure is essential part of good business environment in any region, incl. rural remote areas. Therefore partners have decided that investments to local roads in rural areas connecting rural villages (where non-traditional farming takes place) with local centers (Värska, Pechory) is needed. Using cross-border cooperation for project implementation is essential, because the SME’s from project area share the same challenges and problems and it’s useful to use the experiences of both regions for solving them. Joint approach is used in creation of infrastructure for SME’s from project area, improvement of their skills and knowledges and in establishing of sales opportunities in market places.