Climate and institutional change versus expected economic performance of agricultural holdings

Abstract

Climate change, liberalisation of international trade in agricultural products and changes in the system of farms’ support result in the increasing importance of the risk problem in European and Polish agriculture. It can be expected that a change in market and production conditions will result in significant increase in income volatility. The scale of change will depend on the financial support directed to agricultural sector and farmers’ reactions. The study reveals that in the case of Poland the most likely scenario results in rather moderate deterioration in farms’ financial results measured under risk. Extreme deterioration can be observed in the liberal scenario under assumption of financial support elimination.