Private capital in the rural development programme: The case of the Apulia Region, Southern Italy

Abstract

This study analyses the role of private capital in modernising agricultural holdings, as implemented by the Rural Development Programme (RDP). Specifically the authors refer to the Measure 121 (Axes I) of the RDP 2007- 2013, as decided by the Apulia Region; the main aim of this measure, in accordance with Art. 20(b)(i) of Council Regulation (EC) No. 1698/2005, is the modernisation of agricultural holdings through grants to be invested in farm machinery and equipment. The aim of this work is to verify how private capital (co-financing) that an agricultural holding is willing to invest influences the amount of public aid received. Leveraging the generalised propensity score (GPS) method, a doseresponse function is estimated based on a dataset of Apulia farms. The results highlight the influence of private capital in increasing the probability of firms being granted public aid.