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Economic Situation of Organic Farms in Poland on the Background of the European Union

Arkadiusz Sadowski, Monika Wojcieszak-Zbierska and Jagoda Zmyślona

No 319699, Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej from Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI)

Abstract: Organic agriculture is a relatively new production system, which is growing in importance worldwide. As in all enterprises, economic results are important for organic farms. This article aims to determine the economic situation of organic farms against the background of conventional entities on the example of Poland by comparing production potential and relations between production factors, production volume, and the economic results. The analysis was based on the data of the Polish FADN. Since organic farms in Poland are subject to the special EU support, the economic results were presented in two variants, i.e. with and without subsidies for operating activities. Such an approach constitutes an attempt to assess to what extent the two analyzed groups (i.e. organic and conventional farms) can function on the market without public support. The analysis was conducted for two extreme periods, i.e. 2007-2009 and 2016-2018. The first one marks the moment of launching the first Rural Development Programme in Poland for a full seven-year implementation period. The year 2018 provides the latest data available. According to the results, organic farms have lower production potential than conventional farms and less favourable relationships between production factors. Yields and animal productivity are also lower. More importantly, they achieve much lower economic results, which are in large part generated by direct payments. In conclusion, the study showed a high production and income inefficiency of organic farms and their significant dependence on public support.

Keywords: Agricultural; Finance (search for similar items in EconPapers)
Date: 2021-06-21
New Economics Papers: this item is included in nep-agr, nep-ban and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iafepa:319699

DOI: 10.22004/ag.econ.319699

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