Determinants of the Agricultural Budget in Poland in the Light of Its Relation to GDP and State Budget Expenditure

Abstract

The article attempts to identify the relationship between budget expenditure on agriculture and the dynamics of GDP and the state budget in Poland in the years 1995–2020. The aim of the research was also to identify the determinants of the dynamics of budget expenditure on agriculture, both endogenous and exogenous, also taking into account their delayed impact. The source of empirical materials on agricultural budget expenditures of Poland was primarily data from the Ministry of Agriculture and Rural Development. The data used in the analyses were standardised and adjusted by the price index. Moreover, an additive model of development tendency and a multiple regression function were used. The research results indicate that the agricultural budget was positively related to the dynamics of GDP and the dynamics of state budget expenditure. However, in the entire analyzed period, except for the years 2004–2008, the expenditure of the agricultural budget grew at a slower pace than GDP. The increase in the agricultural budget was primarily dependent on the increase in state budget expenditure and the level of European funds allocated to the sector under the instruments of the Common Agricultural Policy. It was also shown that the economic situation in agriculture, measured by the price scissors index, and changes in the level and structure of income of farmers’ households partially influenced the expenditure of the Polish agricultural budget, but with a one‑year delay.

Keywords

• budget expenditure
• agriculture
• cap
• gdp
• asif