Periodic evaluation of EU Member States Rural Development Programme (RDP) specific policy interventions is considered crucial in policy development. The main reasons for the evaluation of specific policy interventions are the assessment of a programme’s impact, the improvement of programme management and administration, identification of necessary improvements in the delivery of interventions and meeting the accountability. The core question to be answered in programme evaluation is whether the stated objectives are accomplished by particular intervention (support or „treatment” provided to programme participants). The main problem in the process of evaluation is the assessment of the counterfactual outcome by modelling the situation where treatment is absent. The counterfactual outcome has to be estimated by statistical methods as it is usually not observed. General equilibrium effects occur when a programme affects units other than its participants. The most important possible impacts are the substitution effect and the displacement effect. Displacement effects are unplanned and indirect. They usually play a more important role in the evaluation at the programme level than in the evaluation of RDP individual measures. Displacement effect is the programme effect that occurs in a programme area at expense of another area. It takes place if farms located in one geographical area, which is not a subject to RD support, becomes adversely affected by a support provided to farms located in another geographically area. The existing study provides an assessment of the displacement effects on the employment in unsupported units at the programme level after the net effects on the employment calculated at the measure level are aggregated over the entire programme.

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Less favoured area (LFA) payments and organic farming (OF) payments represent a third of all public funding available for RDP 2007–2013 in Latvia and are used by about two- thirds of all farms. The aim of the study is to assess the economic impact of LFA and OF payments. The data from Rural Support Service, FADN and statistics of agricultural sector were used to conduct the study. A group of farms receiving support payments was compared with a group without this kind of support, in order to evaluate the impact of support payments. The results show that LFA payments have facilitated a significant income growth, especially for small farms. They have also contributed to more intense use of the land. Since OF support has not contributed enough to the agricultural production, direct payments to production will increase economic impact of support payments.

The core question to be answered in periodic evaluations of EU Member States Rural Development Programme (RDP) specific policy interventions is whether the stated objectives are accomplished by particular intervention (support or „treatment” provided to programme participants). Programme effects should normally be expressed in “net” terms, which means after subtracting the effects that cannot be attributed to the intervention, and by taking into account indirect effects (deadweight, leverage, displacement, substitution and multipliers). The level of the estimation of indirect effects (micro or macro level) depends on the size of the interventions and country specific issues. In the ex-post evaluation of the Latvian Rural Development programme 2007-2013, deadweight effects, leverage effects and multipliers are estimated at the individual measure (micro) level, while substitution and displacement effects are aggregated over the sets of measures. Multiplier effect is a secondary effect resulting from increased income and consumption generated by the public intervention. Multiplier effects are cumulative and take into account the fact that a part of the income generated is spent again and generates other income, and so on in several successive cycles. In each cycle, the multiplier effect diminishes due to purchases outside the territory. The existing study provides an assessment of the multiplier coefficients (multipliers) for the economic growth in terms of Gross Value Added and for the employment creation in terms of Annual Working Units. The research results show that total estimated programme secondary cumulative impacts on economic growth and employment over the entire economy are significant and positive.