An Impact Assessment of the Young Farmers Scheme Policy on Regional Growth in Greece

Abstract

Generation renewal in farming is an urgent matter for European policy institutions that strive to maintain social cohesion and improve economic development in rural areas. Aids to young Europeans to enter the agricultural business sector have been available since 2000 to counter the negative effect of an aging rural population. This study examines for the first time the impact of the Pillar II policy measure for generation renewal on regional economic growth. The well-established input–output method was selected to estimate the income and employment effects of the policy measure, and it served as a concrete impact analysis tool. Within the AGRICORE project study for the Young Farmers Scheme in Greece, two input–output models were constructed for Thessaly and Central Macedonia, the two most agriculturally oriented regions (NUTS-2 level), to estimate multipliers and elasticities for an ex-post impact analysis of the payments of Measure 6.1 "Start-Up Aid for Young Farmers" for the CAP 2014–2020 period. Results indicate that regional output and employment are significantly benefited from the generation renewal policies while income generation is positive but at a lesser extent. Furthermore, indirect jobs created in rural areas equal to 20% of the direct employment expressed as the number of new entrants. Consequently, the Measure proves to stimulate regional output, refresh the agricultural population and enhance rural employment, and it can be a useful tool for policy makers to support rural welfare and maintain social and economic cohesion.