The main objective of the present study is to estimate the extent to which the RDP
investment support has a complementary or a substitutionary effect on farm investments. In
order to answer this question, we attempt to quantify the potential deadweight loss by
estimating the extent to which the RDP beneficiaries would have undertaken comparable
investments also without the investment support. We find that the deadweight loss of the RDP
is close to 100%, implying that firm investment would have been undertaken also without the
support. These results suggest that capital market distortions are not significant in Schleswig-
Holstein. Similarly, no evidence was found that, due to programme support, farms would have
brought forward their investments planned originally in a later period, suggesting no evidence
of inter-temporal substitution of investments. These results are new, as the deadweight loss
and its conditionality have not been studied in the context of the RDP in Germany before.JRC.J.4-Agriculture and Life Sciences in the Econom
