EU rural development support and young farmers’ economic performance: A comparative study of Poland and Germany

Support for young farmers is an important objective in the EU’s agricultural policy framework, aiming to promote generational renewal as a means of enhancing the competitiveness and sustainability of the EU’s agricultural sector. This paper focuses on the economic prospects of young farmers by estimating the microeconomic impacts of rural development programme (RDP) support on the economic performance of young farmers in Poland and Germany between 2007 and 2012. Using the synthetic control method and Farm Accountancy Data Network panel data, we find that the support had mixed effects. In Poland, RDP-supported young farmers underperformed relative to their unsupported counterparts, probably due to the entry of less-performing farmers into the sector, high environmental compliance costs and/or insufficiently tailored policy design. Conversely, old farmers benefited more, probably due to their superior entrepreneurial skills and lower commitment to adopting environmental practices. In Germany, RDP support improved the performance of young farmers, suggesting that it probably addressed some market imperfections. These findings underscore the limitations of a one-size-fits-all approach to supporting young farmers and the need for region-specific policies. Policymakers should mitigate unintended consequences, such as incentivising less-performing entrants, and better tailor interventions to the needs of young farmers. While our findings are specific to Poland and Germany, they contribute to broader policy discussions on the effectiveness of agricultural support for young farmers and highlight the need for further research in different contexts.