This study analyses the impact of government subsidy schemes on farm production capacity, technical efficiency and use of idle production factors (land and labour) in the olive and vineyard sectors of Albanian agriculture. The paper uses a quasi-experimental design by applying a propensity score matching method based on a structured survey conducted in 2013. The results show that the government subsidy scheme had a net positive impact on areas planted with olives and grapevines, and on part-time on-farm employment. On the other hand, no significant net impact was observed regarding farm size and crop yields. This is the first time that such an in-depth impact assessment of government subsidies in the agriculture sector has been carried out in Albania, thus the results will be useful both for scientists and policy makers in agriculture and rural development.