Rural development policy in Italy: The impact of growth-oriented measures on farm outcomes

Growth-oriented measures of the EU's rural development policy have been promoted to meet the aims of the Lisbon strategy. Th is article assesses their impact on performance-related variables of farms. We apply a conditional difference-in-differences approach to the 2003-2007 Italian FADN survey. No evidence emerges to indicate any impact of the measures on farm income, employment or partial productivities. Conversely, participation in the selected policy schemes resulted initially in a productivity increase and, subsequently, in enhanced farm performance. We argue that participation in the growth-oriented measures gave rise to a process of capital deepening that, in turn, elicited a productivity increase and, eventually, positive growth rates in farm performance. The estimated variations in capital intensity signal that the measures resulted in the activation of channels that are expected to positively affect farm performance after a time lag.