Thematic report: expenditure analysis

The study is carried out in the framework of the independent evaluation service of the regional 2014-2020 Rural Development Programme (RDP) for the Marche region. The report covers the 2016-2022 period.

The scope of the evaluation is to focus on the delivery system of RDP, more specifically through: (1) the analysis of expenditure progress; (2) the analysis of the administrative time required for payment and calculation of the efficiency of extensions granted concerning the number of beneficiaries and resources used; (3) identify a methodology for defining the information required by the Italian Ministry of Agricultural Food and Forestry Policies related to regional specificities for 2023-2027; and (4) the development of a computer model capable of automatically calculating the various levels of output according to the available resources and planned unit amount (PLUA) for each type of project.

The methodological approach used is mainly quantitative and relates to the reconstruction of historical data on the timing of payments made for some of the most significant measures in 2014-2022. The historical data was used to analyse the current RDP's expenditure trend and verify its use for the 2023-2027 RDP's expenditure and output indicators.

The main data source was monitoring and administrative data. The main files used were expenditure tracking files, which only considered beneficiaries who received payments.

For area-based measures, all applications were considered that had an allowable quantity in the 'BD DSSTEST 2020'. Through statistical elaborations of these data, the areas were defined by crop/intervention and the premium paid in 2020 for Measures 10, 11, 13 and 14.

The main limitations for quantifying unit amounts were the uncertainty of applying some methodological indications from community guidelines and MIPAAF experts, as well as the differences between interventions in the new programme. It was not possible to have some key details for area-based interventions (i.e. the level of premiums per hectare) in time, which are subject to continuous and sometimes significant variations.

The analysis of historical data shows that for several of the considered investment measures, the time between the closure of calls and projects saw very high values, on the order of 5-6 years. The lengthened timeframe is due to different factors, such as extensions granted for finalising the work, or due to delays for the requirement of administrative verifications (investigation time for direct payment and completion of payment).

The comparison of the expenditure data in 2021 and the plan shows that except Priority 4, which reaches 72% of the available funds, almost all other Priorities and Focus Areas (FA) are below 50% (FA 2A, for example, is still stuck at 24%). Thus, adjustments in the procedures remain essential to conclude all payments within the 2023-2029 programme period.

Given the context of the 2014-2022 programme, extensions have been a very useful tool for both the region and beneficiaries, who, in most cases, could not meet the deadline set by the call for proposals. However, this tool had a cost on the administrative process of the applications to which an extra process was added. Despite the positive outcome of using this tool, it is not recommended to extend it to calls where there is no explicit need.

The timing recorded in recent years is largely related to non-repeatable exogenous factors, which should, therefore, not affect the future. The indications from historical data on payment timing can, therefore, not be used fully, as they have recorded payment intervals above the maximum that can be used for 2023-2029 planning.

It is noted that for some measures, such as those dedicated to the maintenance of organic farming, it is desirable that the budget allows farms that currently use these techniques not to leave organic production. A comparison of the current payments made by 2014-2020 RDP measures with the payments calculated by the Council for Agricultural Research and Economics (CREA in Italian) for the corresponding measures of the 2023-2027 programming shows that the latter reach significantly higher levels for almost all measures and most crop groups. Given the budget allocated to the region using the estimated premium levels from CREA, there would be a considerable organic reduction in the area under commitment.