The Efficiency of Public Financial Support Investments into Dairy Farms in Poland by the European Union

Krzysztof Zalewski,Andrzej Parzonko,Tomasz Rokicki,Piotr Bórawski,Lisa Holden,Ireneusz Żuchowski

doi:10.3390/agriculture12020186

Abstract

The main aim of this research was to evaluate the efficiency of the use of public financial support investment activities into selected dairy farms in Poland. The research targeted 207 farms that earned their living through milk production and benefited from the 2011–2014 European Union (EU) financial support for investments carried out under the “modernization of agricultural holdings” included in the Rural Development Programme (RDP 2007–2013). Two research hypotheses were developed for this work. The first research hypothesis, “the possibility of obtaining funding for an investment is a factor that determines its implementation”, was positively verified. This was mainly due to the size of the investments carried out in the research farms, where an average increase in fixed assets was recorded at the level of 90%. The econometric calculations were carried out indirectly from the declarations of the farmers themselves, who, during the research, excluded the possibility of carrying out investments without receiving external support. The second research hypothesis, “investments carried out in farms improved their economic situation”, was positively verified. This was shown with the calculated results of agricultural income in the research farms, which increased in the analyzed period from 66.5%, to 125%.

Highlights

Public support is a disruption, by the state institutions, of the economic system
This paper shows how the received investment support affects agricultural income, and how agricultural income is correlated with other economic indicators of a farm
Gross investments (SE516) are the values of the purchased and manufactured fixed assets reduced by the values of the sold and transferred free-of-charge fixed assets in the accounting year, plus the difference in the value of livestock [33]

Summary

Introduction

Public support is a disruption, by the state institutions, of the economic system. The idea is to allocate, in any form, assistance to an entity or group of market entities, and the implementation of goals is set by the legislature (economic, social, environmental, etc.). The result of the conviction that public institutions can determine who achieves market success better than the market itself and, have the right to intervene because of the differences between entities to achieve the previously assumed goal [1]. The investments help to improve efficiency and to reduce the lack of labor [2]. They help in achieving the better sustainability of dairy farms [3]

Objectives

Methods

Results

Discussion

Conclusion