Diversification of income parity among agricultural farms based on the Polish experience

Abstract

The objective of the study was to examine the occurrence of farm income disparity in Poland on average in the study sample and in the groups of farms designated according to their economic size expressed by the standard output value from selected agricultural types and economic size classes. The results showed that farmers’ income is often lower than an average income in the national economy and in some cases farmers are not reimbursed for their own labour input. However, a significant diversity in income disparity was observed between farms. In the most beneficial situation were farms in the 5th economic size class with the highest income without subsidies. The farms in the 3rd and 4th class achieved the income parity comparable to other sectors of economy but this was possible through subsidies under the CAP. On the other hand, the results of farms in the 6th economic size class were much worse. The farms often did not generate income at all or its level was very low, even with the support of subsidies. It was concluded that the CAP intervention should be better targeted in order to reduce farm disparity as overall support for all is ineffective.

Keywords

• farm income disparity
• subsidies
• farm efficiency