SIZE VS EFFECTIVENESS OF AGRICULTURAL FARMS

Abstract

The size of farms is one of the most important factors affecting their efficiency. The size of farms affects the ability to invest and introduce technical progress, achieve economies of scale, both internal and external, as well as achieving higher efficiency. The aim of the work is to determine the variation in the effectiveness of production factors and the level of investment depending on the economic size of farms. Data from the Polish FADN database for the years 2010-2017 were used. It was found that along with an increase in economic size, the productivity of production factors increased, productivity in crop and animal production grew and the intensity of reproduction of assets increased. It was found that in farms of the first size class (about 10 ha) were characterized by low efficiency in all assessed aspects and achieved worse dynamics of effectiveness changes. In medium-sized farms (50 ha), a 30-80% higher level of all efficiency indicators was achieved and, in the case of work, efficiency even by 600%. It should be emphasized that farms classified as first class size have no development opportunities because they do not generate a sufficient surplus to provide income for the family and implement investments. The main function of small farms may be its social function and its income may only be an additional source of income for the farmer’s family. In order for Polish agriculture to be effective, intensive concentration processes are necessary.