Eco-efficiency of small-scale farming in Poland and its institutional drivers

Abstract

The concept of eco-efficiency, which can be defined as the simultaneous ability to achieve economic results with the least possible degradation of the environment, has recently become a subject of lively discussion among politicians and scientists. It has also been discussed in the context of small-scale arable farms. Central and Eastern European countries, including Poland, fit perfectly into the issue of small-scale farms eco-efficiency due to their relatively high share in the total number of farms. The implementation of the sustainable agriculture model, however, would not be possible without an efficient institutional environment. Thus, the main objective of this paper is to assess the eco-efficiency of small-scale farms in Poland and to identify the relationship between eco-efficiency and institutional variables according to the framework of New Institutional Economics. The novelty of our approach is that it uses the modified and extended concept of the eco-efficiency, which on the output side includes proxy variables of environmental public goods. As a part of the research procedure, a two-stage analysis was conducted. Firstly, radial eco-efficiency scores and slacks for individual effects were estimated using non-parametric Data Envelopment Analysis. Secondly, the relationship between eco-efficiency and institutional explanatory variables was identified based on the double-bootstrapped truncated regression model according to Simar and Wilson procedure. The most eco-efficient farms were those with a relatively larger area, for which agriculture was the main source of income, which used some form of contracting when selling products, which primarily supplied themselves with inputs, and which specialized in permanent and horticultural crops.