Is small beautiful? Techinical efficiency and environmental sustainability of small-scale family farms under the conditions of agricultural policy support

Abstract

The need to guarantee the efficiency of the agricultural sector and to shape production in order to limit its negative impact on the natural environment is one of the most important priorities of the European Union's (EU) Common Agricultural Policy (CAP). In particular, the relationship between efficiency and environmental balance under the policy support for small-scale family farms has not been widely established. Answering this question is important because small-scale farms are the basis for the functioning of agricultural sectors in many regions of the world. Such a situation takes place also in the countries of Central and Eastern Europe (CEE), which, apart from some exceptions (e.g. the Czech Republic), are characterised by a fragmented agrarian structure. Hence, the article is an attempt to identify the connection between the economic and ecological performance of small-scale farming in five countries. As three countries under study belong to the European Union's agricultural support system and two are outside this system, the next target is to check whether farms in countries covered by the CAP showcase higher economic and environmental indicators. The study was based on surveys conducted in small-scale farms in Poland (710 farms), Lithuania (1000), Romania (900), Serbia and Moldova (550). To find the results, data envelopment analysis (DEA), single-factor analysis of variance (the ANOVA method) and linear ordering methods were used. Two main conclusions were drawn: First, regardless of the support system (EU vs. national), the researched farms are characterised by relatively low technical efficiency and relatively high environmental sustainability. Thus, it can be concluded that they are rather weak economically but environmentally friendly. Second, there are no statistically significant differences in the environmental balance and technical efficiency for farms in EU countries (Poland, Lithuania and Romania) and non-EU countries (Serbia and Moldova), despite the fact that the latter obtained significantly lower agricultural support.