Project

5-State-Evaluation: Effects of investment support for agri-food companies

Lead Institute BW Institute of Farm Economics

Involved Institutes LV Institute of Rural Studies

Recipients of the market structure aid are, for example, the agricultural trade, dairies, bakeries as well as butchers.

Evaluation of the rural development programmes of five German federal states in the programming period 2014-2020: Effects of investment support for agri-food companies

The competitiveness of the agricultural sector depends very much on the processing and marketing of the produce. Therefore, processing and marketing has been supported intensively with public funds since decades. We investigate the effectiveness of this support measure.

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 measures is to support investments by processing and marketing companies of agricultural products aiming at improving the competitiveness of the food and agricultural sector.

We investigate the relevance of the support measures as well as their effectiveness and efficiency.

Approach

The analysis uses before/after comparisons of supported companies using formal questionnaires and telephone interviews with managers. This analysis is accompanied by more long term oriented assessments of the development of the food industry using secondary data.

Our Research Questions

What is the effect of the support of processing and marketing companies on

productivity and resource efficiency?
the introduction of new products and production processes?
employment and added value in the agricultural sector?
the competitiveness of the agricultural sector?

Preliminary Results

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