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The Impact Assessment of the EU Pre-Accession Funds on Agriculture and Food Companies: The Croatian Case

The EU pre-accession funds available to EU candidate countries play an important role in their adjustment for membership. Croatia, as a candidate country, used the Special Pre-Accession Program for Agriculture and Rural Development and the Instrument for Pre-Accession Assistance – Rural Development, one of the goals of which was to strengthen the competitiveness of businesses in the agriculture and food production sectors. The usage period covered two EU programming periods, as well as a recession period in Croatia that lasted from 2009 to 2014. An insight into the available literature reveals a lack of rigorous research and evaluation of the results of using these funds in Croatia as well as in other beneficiary countries. This paper evaluates the effect of pre-accession EU grants on beneficiaries in the agri-food sector using a quasi-experimental approach on the case of Croatia. The grants were shown to have a positive effect on firm survival, as well as positive effects on obtaining bank loans and increasing turnover, value added, employment, and total factor productivity. Heterogeneous treatment effects show that the grants resulted in the greatest additionality for micro-sized firms located in Central Croatia. Cost-benefit analysis estimates an increase in the value added, which outweighs scheme-induced costs by 120 percent in the short run and 90 percent in the mid run.

public grants, policy evaluation, SAPARD, IPARD

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