Payments under the Common Agricultural Policy as a determinant of development of different types of agricultural holdings

Abstract

The main aim of this article was to investigate the influence of payments under the CAP on economic development of different types of farms. The main source of data was FADN database. A period of research covers the years of 2004-2013. The article referred to previous results of research in the field of payments and its role for the economic situation of agricultural holdings. Then the share of payments in agricultural income was examined as well as the use of subsidies on investments. The process of accumulation, both in real and theoretical approach, and influence of this phenomenon on change of economic size were also presented. In addition the paper analysed the changes in return on equity in order to show the changes in economic efficiency of farms. The analyses that were conducted showed a significant role of payments in the formation of incomes and accumulation. On the other hand payments may lead to decrease in efficiency. In long term there is a risk that dependence on payments in functioning of farm will be excessive.

Keywords

• CAP
• agricultural income
• accumulation
• return on equit
• farm profitability