Evaluation of the promotion of investments in the processing and marketing of agricultural products

The evaluation's scope is to assess the effects of sub-Measure 4.2 'Investments in processing/marketing of agricultural products' of the 2014-2020 RDP in the federal state of Hesse (Priority 3: Food chain organisation, animal welfare, risk management).

The analysis is based on data from the granting authority, accounting data (including survey forms) and telephone interviews with supported companies. Survey forms, which are part of the project application documents, provide information about the structure of the companies, their investments and the economic situation before and after project completion (the so-called closing sheets present actual figures one year after project completion). The granting authority completes the survey forms based on the application documents.

Based on the collected data (including relevant CMEF output and results indicators such as O4 (Number of holdings supported) and R14 (Increase in efficiency of energy use in agriculture and food - processing in RDP supported projects)), before-and-after comparisons are carried out, and the effects of the subsidised investments are assessed.

Limitations are mentioned in terms of data availability and the possible impact of other external factors, such as the COVID-19 pandemic and Russia's aggression against Ukraine.

Since less than half of all funding cases approved by the end of 2021 were available for the analysis of effects, this report is an interim evaluation based on a relatively small database, allowing only preliminary results and conclusions. In addition, the data from the project closing sheets and interviews refer to different years, depending on when the project was completed. This implies that projects completed before 2020 were not yet affected by the COVID-19 pandemic. On the other hand, projects that were later completed were already influenced by the pandemic.

Conclusions and recommendations on the future of the funding measure must also consider the war in Ukraine and its unforeseeable economic consequences. Thus, more specific recommendations may only be made in the context of the ex post evaluation.

Other limitations related to the collected data include subjective views of interviewed beneficiaries, incomplete project closing sheets and the reference period of financial statements (calendar or marketing year).

The evaluation concludes that the utilisation of the funding measure is on track overall, but the corresponding target values were not adjusted until 2021. The measure was used rarely at the beginning of the funding period, but significantly more cases were approved from 2018, which was probably the result of increased advertising and advisory measures.

The approved projects have contributed to the objectives of the funding measure. Investments primarily served to expand capacities and modernise facilities. According to the supported companies, competitiveness has improved significantly on average due to the investment. However, improving energy efficiency is not mentioned as a main goal of the investment, energy efficiency improved by about 20%.

However, when considering the effects of the funding measure, the net effects of the support are substantially lower than the gross effects due to deadweight effects. In addition, 43 projects were approved by the end of 2021, but this number is small given the size of the food sector in Hessen. Sectoral effects are therefore not to be expected from this support. However, even with more applications, the planned funds are too low to see a sectoral impact.