Productivity of Production Factors in Polish Agriculture and in The Selected European Union Countries with Regard to The Common Agricultural Policy Payments

Abstract

The aim of the paper is to analyze the productivity of production factors of
Polish and selected EU farms from 2004 to 2017, taking into account the Common
Agricultural Policy (CAP) payments, based on the literature. In the postaccession
period, there was a marked increase in the efficiency of production
factors on Polish farms. The average land, labor, and capital productivity indices
from 2004 to 2017 were EUR 442.89/ha, EUR 4,774.35/AWU, and EUR 0.25/
EUR 1, respectively. In 2014, land productivity increased to EUR 1,591.3/ha
and labor productivity to EUR 11,800/AWU, amounting to 68.8% and 28.6%
of the EU-28 average, respectively, while capital productivity was higher (EUR
1.41/EUR 1) compared to the EU-28 average (EUR 1.29/EUR 1). The share of
CAP payments in the income of the Polish farms in 2014 increased to 49.5%;
however, this was still below the EU-28 average (61.1%). Regardless of the fact
that the total factor productivity (TFP) remains lower in comparison to other EU
countries, the increased efficiency of Polish farms in the post-accession period
should be considered as significant.

Keywords: productivity, production factors, CAP payments

JEL Classification: D24, O13, Q12