The Significance of Farm Size in the Evaluation of Labour Productivity in Agriculture

Abstract

The paper deal with the analysis of difference in labour productivity of farms categorised according to their size, to determine if the set subsidy system influences labour productivity in the size groups of the farms. The source of data for enterprises analysis was the firms database, which contains accounting data of 926 farms with at least one employee. The observed data were from the 6 year period (2007–2012). The farms were divided, according to their size into four categories defined by the European Commission: micro, small, medium and large enterprises. The analysis of the labour productivity I based on the added value and labour costs revealed that there are big differences of the labour productivity levels in particular size groups of farms. The further analysis revealed that an adjustment of the farm approach of the labour productivity, when the paid operation subsidies are added (labour productivity II), changes this conclusion and the differences between particular size groups of farms decreased. Using σ-convergence, it was proved that the relative variability of the labour productivity II values decreased significantly in the case of the medium-sized farms. We can say that subsidies significantly influence the labour productivity in farms. On one hand, there is decrease of differences between the level values of particular size groups of farms; on the other hand, there is no significant decrease its variability (except the medium-sized farms).