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The Assessment of the Effects of Investment Support Measures of the Rural Development Programmes: the Case of the Czech Republic

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  • Medonos, Tomas
  • Ratinger, Tomas
  • Hruska, Martin
  • Spicka, Jindrich

Abstract

Investment support has been considered a principal vehicle for enhancing the competitiveness of Czech agriculture since the early days of economic transition. However, thus far, little attention has been paid evaluating the actual effects of corresponding support programmes. The objective of this paper is to assess economic and other effects of Measure 121 “Modernisation of Agricultural Holdings,” of the Rural Development Programme (RDP) 2007-2013 on Czech farms. The counterfactual approach is adopted to investigate what would have happened if the supported producers had not participated in the programme; the resulting indicators are than compared. The quantitative analysis of programme effects is complemented by a qualitative survey on 20 farms that received investment support between 2008 and 2010. The quantitative assessment showed significant benefits of investment support in terms of business expansion (Gross Value Added) and productivity (GVA/labour costs) improvements. These results were confirmed by the qualitative survey. Finally, the issue of deadweight as related to investment support is discussed: the figures on very low net investment relative to the provided public support at the sector level, as well as answers of respondents both indicate possible significant deadweight. The presented results refer to the research carried out in the two projects – “Multifunctional agriculture for the benefit of society and rural development“(MZe RO0911) conducted by Institute of Agricultural Economics and Information“ and “ The Czech Republic in the European Research Area” (MŠMT LM2010010) conducted by Technology Centre ASCR.

Suggested Citation

  • Medonos, Tomas & Ratinger, Tomas & Hruska, Martin & Spicka, Jindrich, 2012. "The Assessment of the Effects of Investment Support Measures of the Rural Development Programmes: the Case of the Czech Republic," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4), pages 1-14, December.
    • Handle: RePEc:ags:aolpei:146265
    DOI: 10.22004/ag.econ.146265
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    1. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
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    Cited by:

    1. Jerzy Michalek & Pavel Ciaian & D'Artis Kancs, 2016. "Investment Crowding Out: Firm-Level Evidence from Northern Germany," Regional Studies, Taylor & Francis Journals, vol. 50(9), pages 1579-1594, September.
    2. Kirchweger, Stefan & Kantelhardt, Jochen, 2014. "Structural Change and Farm Investment Support in Austria," 88th Annual Conference, April 9-11, 2014, AgroParisTech, Paris, France 170545, Agricultural Economics Society.
    3. Victoria GANEA & Oleg BUJOR & Diana GROZAV, 2014. "Operation Principles Of Innovational Policy In Order To Intensificate The Economic Growth," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 3, pages 73-84.
    4. Ondřej Dvouletý & Ivana Blažková, 2019. "Assessing the microeconomic effects of public subsidies on the performance of firms in the czech food processing industry: A counterfactual impact evaluation," Agribusiness, John Wiley & Sons, Ltd., vol. 35(3), pages 394-422, July.
    5. Zoltán Bakucs & Imre Fertő & Zsófia Benedek, 2019. "Success or Waste of Taxpayer Money? Impact Assessment of Rural Development Programs in Hungary," Sustainability, MDPI, vol. 11(7), pages 1-23, April.
    6. Whelan, Adele & McGuinness, Seamus & Barrett, Alan, 2021. "Review of International Approaches to Evaluating Rural and Community Development Investment and Supports," Research Series, Economic and Social Research Institute (ESRI), number RS124.
    7. Ratinger, Tomáš & Medonos, Tomáš & Hruška, Martin, 2015. "The empirical assessments of the effects of the investment support to agriculture in the Czech Republic," 147th Seminar, October 7-8, 2015, Sofia, Bulgaria 212242, European Association of Agricultural Economists.
    8. Mezera, Josef & Spicka, Jindrich, 2013. "Economic Effects of Investment Support of Adding Value to Food Products," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(1), pages 1-11, March.
    9. Paulina Permatasari & Assyifa Szami Ilman & Carol Ann Tilt & Dian Lestari & Saiful Islam & Rita Helbra Tenrini & Arif Budi Rahman & Agunan Paulus Samosir & Irwanda Wisnu Wardhana, 2021. "The Village Fund Program in Indonesia: Measuring the Effectiveness and Alignment to Sustainable Development Goals," Sustainability, MDPI, vol. 13(21), pages 1-30, November.
    10. Ratinger, T. & Medonos, Tomas & Hruška, M., 2013. "An Assessment of the Differentiated Effects of the Investment Support to Agricultural Modernisation: the Case of the Czech Republic," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 5(4), pages 1-12, December.
    11. Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2020. "Sustainable Economic Development of Farms in Central and Eastern European Countries Driven by Pro-investment Mechanisms of the Common Agricultural Policy," Agriculture, MDPI, vol. 10(4), pages 1-19, March.
    12. Javier Castaño & Maria Blanco & Pilar Martinez, 2019. "Reviewing Counterfactual Analyses to Assess Impacts of EU Rural Development Programmes: What Lessons Can Be Learned from the 2007–2013 Ex-Post Evaluations?," Sustainability, MDPI, vol. 11(4), pages 1-22, February.
    13. Hlavsa, Tomáš & Hruška, Martin & Turková, Edita, 2017. "The impact of investment support from the Rural Development Programme of the Czech Republic for 2007-2013 on the economic efficiency of farms," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 119(1), April.
    14. Ondřej Dvouletý & Ivana Blažková, 2019. "The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry," Sustainability, MDPI, vol. 11(2), pages 1-24, January.
    15. repec:lic:licosd:37015 is not listed on IDEAS
    16. Irena KRISCIUKAITIENE & Gerald SCHWARZ, 2014. "Key Determinants Of The Productivity Of The Agricultural Sectors In Lithuania And Germany: What Role Do Rural Development Programmes Play?," ECONOMY AND SOCIOLOGY: Theoretical and Scientifical Journal, Socionet;Complexul Editorial "INCE", issue 3, pages 67-72.

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