The Agri-Environmental Program in the case of large-scale farms in Poland

Introduction: The aim of this paper is to analyze the economic situation of large-scale farms participating in the agri-environmental program in Poland. The program provides compensation for loss of income due to environmentally-friendly production. Also presented brief information on the implementation of this program at national level. In this study we omitted the analysis of soil, water and environmental indicators. Author analysed the impact of environmental payments on income and economics of the surveyed farms. Data and methods: Author performed research of large-scale farms (> 100 ha UAA) and used the statistical analysis and ratio analysis in the field of economic and production situation of these farms. The technical efficiency of these farms was estimated by using the parametric method (Stochastic Frontier Analysis). Then its determinants were indicated by using the panel models. Results: The greatest amount of realized agri-environment payments was observed in Zachodnio-pomorskie, Wielkopolskie and Warminsko-mazurskie voivodeships (Polish name of regional units). In those provinces of Poland are the biggest farms. There is an area of the NATURA 2000, too. Farms with the largest area and the biggest scale of production can more easily overcome administrative barriers associated with obtaining environmental subsidies. In the rest of the country the program didn't use widely instrument of the CAP due to a number of formal requirements and transaction costs. The largest farms participated in many programs of support and the farmers wanted to maximize the amount of the subsidy. The average value of the subsidy was over 800 thousands zlotys. The amount of subsidies were so high that determined the economic results of the farms (liquidity, profitability or efficiency). Conclusions: The main theoretical basis for environmental analysis is welfare economics, which is a subdiscipline within the framework of neoclassical economics. The main objective of agri-environmental program is to improve the natural environment and rural areas by reducing the negative impact of agricultural production. The biggest areas where agri-environmental program was implemented are mainly in the northern Poland. Beneficiaries of the program were mainly the biggest farms. This instrument of CAP had significant impact on economic indicators.