Guidelines ‘Assessing the effectiveness and efficiency of CAP income support instruments’

As CAP income support interventions are now integrated in Member State CAP Strategic Plans for 2023-2027, their effectiveness and efficiency will need to be assessed, as part of the EU requirements regarding CAP evaluation. To facilitate this process, the EU CAP Network, supported by the European Evaluation Helpdesk for the CAP, in collaboration with academic experts, has devised methodological guidelines, within the Thematic Working group on ''Assessment of CAP income support interventions'' that took place from April 2023 to February 2024. These guidelines detail quantitative analysis methods for assessing the impact of CAP income support interventions on farm income.

Various CAP income support interventions (ISI), such as: Basic Income Support for Sustainability (BISS), Complementary Redistributive Income Support for Sustainability (CRISS), Coupled Income Support (CIS), Direct support provided to areas facing natural or other area-specific constraints (ANC) and Area with Specific Disadvantages (ASD), and Complementary Income Support for Young Farmers (CIS YF), are addressed in the guidelines, which offer a comprehensive evaluation framework for assessing CAP income support instruments.

For each sub-topic (income level, volatility and distribution), the Thematic Working Groups' experts have established judgment criteria and relevant indicators, providing technical guidance for carrying out quantitative analyses, as well as hands-on examples on how to interpret findings.

Professor Simone Severini of the University of Tuscia (IT) highlights the challenge of evaluating the net effect of these interventions due to the lack of a counterfactual scenario. Thus, the guidelines propose comparing the current situation with CAP income support to a hypothetical scenario without it.

By simulating scenarios with and without CAP support, evaluating cost-effectiveness, and utilising data from sources like FADN, Member States can effectively assess the net impact of CAP income support interventions on farm income during the 2023-2027 CAP programming period.

One recommended method considers the Income Transfer Efficiency (ITE) of ISI, which reflects the net share of support transferred into farm income, accounting for the income foregone due to, e.g., transaction costs and/or input price increases.

Another approach outlined in the guidelines for assessing cost-effectiveness examines the extent to which desired outcomes were achieved at minimal expense. This involves comparing observed impacts on farm income levels, volatility, and distribution with the costs of implementing the policy.

The guidelines offer a comprehensive overview of three quantitative approaches needed for calculating ITE, enabling the assessment of the net change in impact indicators, as required by Regulation (EU) 2021/2115. Both simpler and more advanced approaches are provided, each with their own advantages and disadvantages.

Member States are at liberty to reflect and choose the most appropriate approach, given their specific context and/or objective.