Impact evaluation of the Rural Development Programme support to small farms with regression discontinuity design

The viability of small farms and their participation in the market are demanding issues of the European agricultural policy. So it is important to appraise the most effective support measures to address these topics. The research objective is the evaluation of the net direct impact of the Latvian Rural Development programme (RDP) support to small farms on the farm economic indicators such as Balance, Utilized Agricultural Area, Intermediate Consumption, Labor and Productivity. To reach the research objective, Regression Discontinuity Design (RDD) method is applied. An outstanding advantage of the method is that the assessment can be carried out in conditions of limited data availability, when the larger number of farming indicators are unavailable and application of other methods is not appropriate. The results of the research prove that Program support contributes to the increase in all five indicators concerned. According to the specifics of the selected method, a single RDP sub-measure has been chosen for the study aimed directly at small farms. Applying the RDD method, a positive impact of support on indicators such as production subsidy and tax balance, agricultural land and productivity for a single beneficiary has been observed. A less pronounced positive impact on employment has been found. The impact on intermediate consumption expenses is small and positive. At the national level, the support has contributed to the substantial increase in the relevant indicators in the group of small-sized farms.