Is the setting up aid mitigating the generational renewal problem in farming?

This study is the first to evaluate the setting up aid (SUA), in the Rural Development Programme. For Sweden, we investigate if the aid, firstly, speeds up the transition process to become manager of a farm and, secondly, affects income from farming and survival of the farm. The approach builds on a regression discontinuity design and explores an age 40–the eligibility requirement in the SUA. We find that the SUA has an impact on the transition to farm management, as well as it increases income from farming and farm survival. Consequently, the aid is likely to fulfil its aim of attracting young people into farming.