Does the European Union Start-Up Aid Help Young Farmers to Innovate and to Join Networks?

Anna Carbone (), Felicetta Carillo, Pavel Ciaian, Roberta Sardone, Federico Antonioli and Juan Tur Cardona
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Anna Carbone: Department for Innovation in Biological, Agro-Food and Forest Systems, University of Tuscia, 01100 Viterbo, Italy
Felicetta Carillo: CREA-Council for Agricultural Research and Economics, 00187 Rome, Italy
Roberta Sardone: CREA-Council for Agricultural Research and Economics, 00187 Rome, Italy
Federico Antonioli: EU Joint Research Centre Seville, 41092 Seville, Spain
Juan Tur Cardona: EU Joint Research Centre Seville, 41092 Seville, Spain

Agriculture, 2024, vol. 14, issue 10, 1-23

Abstract: The endurance and vitality of European agriculture are threatened by the aging of farmers, together with the lack of generational change. The small share of young farmers also impacts on the innovative capacity and competitiveness of the sector. The Common Agricultural Policy of the European Union started addressing the issue long ago by providing financial aid to help young farmers to start up. Over time, the aid increased and packages of measures were set to reinforce the aid and to promote investments, innovations, and networks at the farm level. While the literature focuses on analyzing the effectiveness of the start-up aid in fostering new entries, this paper assumes an original perspective as it seeks to assess whether this aid has actually promoted innovations and networks in the beneficiary farms. The analysis relies on sample data collected in 2021 in Italy and Poland via interviews of 500 farmers under 40 who had entered the sector both with and without the aid. A probit model estimates whether the beneficiaries have a higher probability to innovate and network. Then, the contribution of the aid to the intensity of the adoption of innovations and networks is estimated via an Average Treatment Effect on the Treated model (ATT). Results suggest that the start-up aid increased the adoption of innovations and networks. The ATT indicates that this positive effect holds even after correcting for self-selection bias. By adopting an original perspective, our analysis suggests that the start-up aid for young farmers goes beyond rejuvenating agriculture by fostering innovation at the farm level and by promoting networking, thus enhancing agricultural change. However, farmer behaviors in the two countries are different, suggesting quite complex patterns for the impact of this measure.

Keywords: Common Agricultural Policy; start-up aid; young farmers; innovation; networks; probit; Average Treatment Effect on the Treated model; Italy; Poland (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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