Abstract
Crop diversification finds an important place in the strategy of dealing with risk and uncertainty related to climate change. It helps to increase the resilience of farmers, significantly improving their income stability, but at the same time, it can lower the economic efficiency of small farms. The aim of the article is to identify the determinants of crop diversification and the impact of crop diversification on the economic efficiency of small farms in Poland. This article first provides a critical review of the literature on crop diversification, its role in stabilizing agricultural income and its impact on economic efficiency in small farms. Secondly, the level of crop diversification was determined and empirical research was conducted considering the economic, social and agronomic characteristics of farms. Thirdly, the economic efficiency of farms diversifying crops was compared with farms focused on one type of production. The research material consisted of small farms participating in the Polish system of collecting and using farm accountancy data (FADN) in 2018. The level of diversification was determined using the Herfindahl-Hirschman Index. The factors influencing crop diversification were identified using the logit regression model. The Mann–Whitney U rank sum test was used to assess the significance of the differences in distributions. The research results indicate an average level of crop diversification in small farms in Poland and its regional differentiation. In addition, a statistically significant positive impact on the probability of crop diversification in small farms in Poland was found of variables such as the level of exposure of agricultural production to atmospheric and agricultural drought and the location of the farm in the frost hardiness zone and a statistically significant negative impact of the variable: value of fixed assets. The existence of significant differences in the level of economic efficiency of farms diversifying crops and farms focused on one profile of agricultural production was proved. The study is an important voice in the discussion on increasing measures to strengthen support for small farms that diversify crops so as to ensure their greater stability and economic efficiency.
Highlights
Diversification of agricultural holdings consists in transforming homogeneous agricultural production into diverse
Small farms diversifying crops were characterized by significantly lower productivity and profitability of land than farms focused on one production profile
Small farms diversifying crops were characterized by a much lower ability to self-finance and create savings than farms focused on one production profile
Summary
Diversification of agricultural holdings consists in transforming homogeneous agricultural production into diverse. Ardakani, Bartolini and Brunori [17] used an innovative approach to defining small farms in their research and proposed a composite index of farm structure, which took into account the average values of the following categories: area of holdings (ha), livestock units of holdings (LSU), labor force of holdings (AWU) and standard output of holdings (EUR). In their study, they assumed that a small farm is one that is not productive enough (considering inputs and results)
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