Background
The assessment of the RDP Axis 1 - impacts174 on competitiveness of the agriculture enabled to understand to what extent the RDP interventions under Axis 1 affected the situation in the competitiveness of supported farms and in the agriculture sector of the Slovak Republic within three years after the programme´s start. The assessment has considered the following indicators:
CMEF: economic growth (net GVA), labour productivity and employment,
RDP-specific: farm property, commitments, production, profit per farm/AWU.
The collected evidence and related judgments were used in answering CMEF horizontal evaluation questions No 1, 5, 7 and 9. Results of the assessment served as the important information source for the programme authorities, policy makers, RDP Monitoring Committee and other rural development stakeholders in enhancing the quality of the programme design and implementation.
Method
The combination of PSM175, DiD176 and ATT 177 has been employed in conducting counterfactual analysis used in the assessment.
The extensive data base built by RIAFE on the information sheets of the Ministry of Agriculture of Slovakia has enabled to apply the described method (PSM, DiD and ATT). The database was used as the data source to conduct the counterfactual analysis. This database has covered 82,7% of the LPIS SK within the period of 2006-2009, out of which 74,4% were legal persons (cooperatives, limited and share holding companies) and 8,3% physical persons (family farms). The reasons for selecting this database for the assessment of the RDP Axis 1 - impacts were as follows:
Database covers 4 times bigger number of farms (2260 – 2613 farms sample) as FADN (600 farms sample),
The size of the database allows to compare treated and no-treated farms in the timeline (FADN has too little sample for this purpose),
174
The presented case was conducted within the mid-term evaluation of the RDP of Slovakia, conducted by the Research Institute of Agriculture and Food Economic (RIAFE) in Bratislava in collaboration with the private sub-contractor EuroConsulting ltd.
175Page 29, Approaches for assessing impacts of the Rural Development Programmes in the context of multiple intervening
factors, European Evaluation Network for Rural Development, 2010, Brussels
176
Page 30, Approaches for assessing impacts of the Rural Development Programmes in the context of multiple intervening factors, European Evaluation Network for Rural Development, 2010, Brussels
177
Page 66, Approaches for assessing impacts of the Rural Development Programmes in the context of multiple intervening factors, European Evaluation Network for Rural Development, 2010, Brussels
Database covers the whole territory of Slovakia and takes in consideration significant portion of agriculture land,
Except of economic indicators the database considers the entire structure of support instruments of the EU Common Agriculture Policy and Slovak Aid for agriculture and rural areas (the same structure as FADN).
The structure and size of the RIAFE database used in the assessment of the RDP Axis 1 - impact in 2006 – 2009 is shown in Table 13:
Table 18 The structure of the RIAFE database, based on the information sheets of the Ministry of Agriculture
Farms Numbers %
2006 2007 2008 2009 2006 2007 2008 2009
Legal persons 1392 1374 1331 1421 59,5 59,0 58,9 54,4
Physical persons 949 956 929 1192 40,5 41,0 41,1 45,6
Total 2341 2330 2260 2613 100 100 100 100
Source: MTE of the RDP Slovakia, RIAFE, Euroconsulting, 2010
For the purpose of the assessment of the RDP Axis 1 - impacts the evaluator has created a sample of farms based on the above database. The composition of the sample was identical across the period of 2006 – 2009.
The structure of the sample is shown in Table 14
Table 19 Structure of the sample selected for the assessment of impacts
Farms Numbers %
Legal persons 1047 66,6
Physical persons 525 33,4
Total 1572 100
Source: MTE of the RDP Slovakia, RIAFE, Euroconsulting, 2010
To conduct the counterfactual analysis the sample was used to construct the control groups of treated and not-treated farms. The structure of control groups is shown in Table 15:
Table 20 Structure of counterfactual analysis
Legal form Number % Legal person Physical person Total Legal person Physical person Total Treated 279 110 389 26,6 21,0 24,7 Non-treated 968 415 1183 73,4 79,0 75,3 Total 1047 525 1572 100 100 100
Source: MTE of the RDP Slovakia, RIAFE, Euroconsulting, 2010
“Treated” are farms which have received the support from investment measures of Axis1, RDP 2007 – 2013. “Non-treated” are those that have not received the support from Axis 1, however they could
receive support from previous programmes. The assessment period was 2006 - 2009, with baseline data collected in 2006. In addition each year of the period was analysed separately.
The assessment was conducted at following levels:
NUTS I (Slovakia)
o All farms
o Legal persons
o Physical persons
NUTS III (8 regions)
o All farms
The assessment was conducted as follows:
Selection of impact indicators (based on the RIAFE database) using factor analysis,
Estimation of prosperity matching score using impact indicators,
Selection of matching method algorithm,
Analysis of results for treated and non-treated farms,
Calculation of DiD and ATT.
Based on factor analysis the following indicators have been selected for the assessment:
GVA (Slovak crowns)
Labour productivity (GVA/FTE)
Employment (AWU),
Farm property (Slovak crowns),
Commitments per farm (Slovak crowns),
Production per farm (Slovak crowns)
Profit per farm, AWU.
The following indicators have been used in estimation of propensity matching score (PSM) and creation of the matching sample of treated and not-treated farms:
Employment (AWU),
Commitments (Slovak crowns),
LPIS (Agriculture land registered in LPIS in ha),
Production per farm (Slovak crowns),
GVA (Slovak crowns).
As matching method algorithm was selected for Data Matching: Greedy software NCSS 2007, which is the method of searching the conformity of words in the chain “from one to another”. All above indicators and the indicators: profit per farm and labour productivity was used in this algorithm.
Based on this estimation the share of matching farms on the total sample used in the assessment was as shown in Table 16.
Table 21 Number and share of treated and non-treated farms in the period of 2006 – 2009
Group Number matched %matched unmatched % unmatched 2006 P1 389 311 79,95 78 20.05
P0 1184 991 83,70 193 16,30
Group Number matched %matched unmatched % unmatched P0 1184 967 81,67 217 18,33 2008 P1 389 315 80,98 74 19,02 P0 1184 998 84,29 186 15,71 2009 P1 389 308 79,18 81 20,82 P0 1184 1001 84,54 183 15,46
Source: MTE of the RDP Slovakia, RIAFE, Euroconsulting, 2010
Results
Assessing the RDP Axis 1 effects on competitiveness of the agriculture sector in Slovakia has enabled to produce the following evaluation results:
The property of supported farms has increased significantly compare to their non-supported pairs. In case of physical person, the increase of property would happen even without the aid.
RDP beneficiaries had higher in-depth situation at the beginning of the programming period compare to others, however the difference has decreased at the time of the assessment, less in the case of physical persons compared to legal entities.
The support was accompanied with a high deadweight rate (227%) and differentiation between treated and non-treated farms, which might have a consequence on the ability to absorb funds in the future.
In relation to production, the treated farms have shown more production stability (mainly in case of physical persons) than their non- treated counterparts.
In general the GVA has decreased in the agriculture sector, however it was less significant in the group of supported farms.
The RDP support had negative influence on the farm profit (more in the case of legal persons and the physical persons), probably due to depreciation of newly purchased machinery. A similar situation was observed in the profit per AWU.
The employment has decreased in both groups – treated and non-treated, however the decrease for supported farms, was lower than for those that have not received the aid.