Project

5-State-Evaluation: Effects of farm investment support

Lead Institute BW Institute of Farm Economics

Involved Institutes LV Institute of Rural Studies

Among other things, the agricultural investment support program also supports the construction of new barns.

Evaluation of the rural development programmes of five German federal states in the programming period 2014-2020: Effect of farm investment support

Investments in machinery and buildings are crucial for farmers to stay competitive. The state supports such investments through grants. We investigate the effectiveness of these support measures.

Background and Objective

The Thünen Institute of Farm Economics and the Thünen Institute of Rural Studies evaluate the rural development programmes (RDPs) of the German states of Northrhine-Westphalia, Hessia, Schleswig-Holstein and Lower Saxony/Bremen. The main task is to assess the effectiveness of the support measures with regard to the goals set. One of the support measures is agricultural investment support aiming at improving farm competitiveness.
We investigate the relevance of the support measures as well as their effectiveness and efficiency.

Approach

The impact of the support scheme will be identified by means of with/without and before/after comparisons of structurally similar farms using a conditional difference-in-differences approach. To this end approval data from supported farms and annual accounts from supported and non-supported farms will be used. This analysis is accompanied by more long term oriented assessments of the development of agrarian structures.

Preliminary Results

(Preliminary) The results indicate that the subsidised investments have positive effects on the supported farms. However, the effect is substantially reduced by deadweight effects; i.e. that farms would have made the investments even without support.
Detailed results can be found in the federal state-specific projects reports.