Market versus agriculture in Poland – macroeconomic relations of incomes, prices and productivity in terms of the sustainable development paradigm
Abstract
In the article macroeconomic relations of prices, productivity and incomes in Polish agriculture in the context of changes in the EU Common Agricultural Policy were studied. The authors have developed a macroeconomic model which explains these relations and confirms the occurrence of market failures in agriculture in Poland. The developed model proves the existence of a puzzling exchangeable relation between the real productivity of production factors in agriculture, and agricultural incomes, under conditions of adaptive expectations. It also proves that it is price scissors, not the efficiency of production, that have a dominating influence on incomes in the sector. The authors propose the hypothesis that correction of market mechanisms by government intervention in agriculture is an objective necessity. However, direct subsidies (area payments) do not have a correcting role, but reinforce King’s effect.
First published online: 13 Feb 2017
Keyword : agricultural incomes, prices, productivity, market failures, sustainable development, expectations
How to Cite
Czyżewski, B., & Majchrzak, A. (2018). Market versus agriculture in Poland – macroeconomic relations of incomes, prices and productivity in terms of the sustainable development paradigm. Technological and Economic Development of Economy, 24(2), 318-334. https://doi.org/10.3846/20294913.2016.1212743
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Bonini, N.; Ritov, I.; Graffeo, M. 2015. On the evaluation of public goods: cognitive and emotional aspects, On the Horizon 23(2): 119–127. https://doi.org/10.1108/OTH-02-2015-0009
Brelik, A. 2004. Agroturystyka jako czynnik rozwoju przedsiębiorczości na obszarach wiejskich [Agrotourism as a factor in the development of entrepreneurship in rural areas]. Roczniki Naukowe Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu VI(4): 22–26 (in Polish).
Brelik, A.; Grzelak, A. 2011. The evaluation of the trends of Polish farms incomes in the FADN regions after the integration with the EU, Journal of Agribusiness and Rural Development 2(20): 5–11.
Buckwell, A. 2009. Public goods from private land. Rural Investment Support for Europe.
Cunha, A.; Swinbank, A. 2011. An inside view of the CAP Reform Process: explaining the MacSharry, Agenda 2000, and Fischler Reforms. New York: Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199591572.001.0001
Czyżewski, A.; Kryszak, Ł. 2015. Relacje cenowe w rolnictwie polskim a dochodowość gospodarstw rolnych i gospodarstw domowych rolników [Price relations in Polish agriculture and profitability of farms and farmers’ households]. Problems of World Agriculture, Scientific Journal Warsaw University of Life Sciences – SGGW 15(30): 17–29.
Czyżewski, B. 2013a. Surplus distribution in Polish agribusiness, Folia Pomeranae Universitatis Technologiae Stetinensis, Oeconomica 306(73): 7–30.
Czyżewski, B. 2013b. Renty ekonomiczne w gospodarce żywnościowej w Polsce [Economic rents in food economy in Poland]. PWE, Warsaw, 184–210 (in Polish).
Czyżewski, B; Brelik, A. 2014. Political rents in the European Union’s agriculture, Management 18(2): 191–203.
Czyżewski, B.; Matuszczak A. 2016. A new land rent theory for sustainable agriculture, Land Use Policy 55: 222–229. https:/doi.org/10.1016/j.landusepol.2016.04.002
Daszkowska, E. 2008. The reasons and perceptible effects of the food crisis in the first decade of the 21st century. Actions taken by the European Union and the World Bank aimed at stabilizing the situation, Journal of Agribusiness and Rural Development 2(10): 17–24.
EUROSTAT. 2014a. Economic accounts for agriculture (EAA) [online], [cited 15 October 2014]. Available from Internet http://ec.europa.eu/eurostat/data/database
EUROSTAT. 2014b. National accounts (NA) [online], [cited 15 October 2014]. Available from Internet http://ec.europa.eu/eurostat/data/database
Fałkowski, J. 2010. Wielofunkcyjność rolnictwa jako przedmiot analizy ekonomicznej [Multifunctionality of agriculture as a subject of economic analysis], in J. Wilkin (Ed.). Wielofunkcyjność rolnictwa. Kierunki badań, podstawy metodologiczne i implikacje praktyczne [Multifunctionality of agriculture. Directions of research, methodological basics and practical implications]. Instytut Rozwoju Wsi i Rolnictwa Polskiej Akademii Nauk, Warszawa, 53–58 (in Polish).
Gałązka, M. 2013. Próba oszacowania stopnia zaspokojenia potrzeb żywnościowych w gospodarstwach domowych w Polsce [An attempt at estimating the degree of meeting the food needs of Polish farms], Zagadnienia Ekonomiki Rolnej 2: 85–102 (in Polish).
Gerson, K. K.; Fen, H. 2013. A review of different types of subsidies and how they work in theory, Asian Agricultural Research 5(11): 1–4.
Grzelak, A.; Brelik, A. 2011. Procesy konwergencji czy dywergencji w zakresie dochodów gospodarstw rolnych w Polsce w regionach FADN po integracji w UE? [The processes of convergence, or the divergence in range of income of agricultural farms in Poland in FADN regions after the integration with the UE?]. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu – Polityka ekonomiczna. Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu, Wrocław, 201–211 (in Polish).
GUS [Central Statistical Office in Poland]. 2014. Ceny w gospodarce narodowej [Prices in the national economy] [online], [cited 15 October 2014]. Available from Internet http://stat.gov.pl/obszary-tematyczne/ceny-handel/
Haile, M. G.; Kalkuhl, M.; von Braun, J. 2013. How does food supply respond to high and volatile international food prices? An empirical evaluation of inter- and intra- seasonal global crop acreage response, in 4th International Conference of the African Association of Agricultural Economists, 22–25 September 2013, Hammamet, Tunisia.
Heberton Evans Jr., G. 1967. The law of demand – the roles of Gregory King and Charles Davenant, The Quarterly Journal of Economics 81(3): 483–492. https://doi.org/10.2307/1884813
Hvid, A. 2015. Increasing natural resource rents from farmland: a curse or a blessing for the rural poor?, Peace Economics, Peace Science and Public Policy 21(1): 59–78. https://doi.org/10.1515/peps-2014-0004
Kallhoff, A. 2014. Why societies need public goods, Critical Review of International Social and Political Philosophy 17(6): 635–651. https://doi.org/10.1080/13698230.2014.904539
Kiryluk-Dryjska, E.; Baer-Nawrocka, A. 2010. Wpływ akcesji do Unii Europejskiej na poziom i relacje cenowe w rolnictwie polskim (analiza długookresowa) [The impact of the accession to the UE on prices and price relations in Polish agriculture (long term analysis)], Zeszyty Naukowe SGGW – Ekonomika i Organizacja Gospodarki Żywnościowej 85: 59–67 (in Polish).
Koniunktura w rolnictwie [economic conditions in agriculture] [IRG]. 2014. [online], [cited 02 October 2015]. Available from Internet: http://kolegia.sgh.waw.pl/pl/KAE/struktura/IRG/Strony/news. aspx?NewsID=eaa88f43-e531-49e4-8c2d-cdba6b2ba452&ListID=950ed719-d169-4dc4-b598- 52cb08988932 (in Polish).
Kowalski, A.; Figiel, S.; Halamska, M. 2011. Społeczne i ekonomiczne uwarunkowania rozwoju sektora rolno-żywnościowego [Socio-economic conditions of food sector development], Polish Journal of Agronomy 7: 29–42 (in Polish).
Musiał, W.; Wojewodzic, T. 2013. Bariery przemian agrarnych w rolnictwie polskim – poszukiwanie rozwiązań innowacyjnych [Agrarian transformation barriers in Polish agriculture – seeking innovative solutions] [online], [cited 02 October 2015]. Available from Internet: http://www.pte.pl/kongres/referaty/Musia%C5%82%20Wies%C5%82aw,%20Wojewodzic%20Tomasz/ Musia%C5%82%20Wies%C5%82aw,%20Wojewodzic%20Tomasz%20-%20BARIERY%20PRZEMIAN%20AGRARNYCH%20W%20ROLNICTWIE%20POLSKIM%20-%20POSZUKIWANIE%20 ROZWI%C4%84ZA%C5%83%20INNOWACYJNYCH.pdf (in Polish)
Nerlove, M. 1956. Estimates of the elasticities of supply of selected agricultural commodities, Journal of Farm Economics 38(2): 496–509. https://doi.org/10.2307/1234389
Öhlund, E.; Zurek, K.; Hammer, M. 2015. Towards sustainable agriculture? The EU framework and local adaptation in Sweden and Poland, Environmental Policy and Governance 25(4): 270–287. https://doi.org/10.1002/eet.1687
Rembisz, W.; Sielska, A. 2013. Ryzyko i cenowa elastyczność podaży produkcji rolniczej [Risk and price elasticity of supply of agricultural products], in T. Trzaskalik (Ed.). Studia Ekonomiczne 163 – Modelowanie preferencji a ryzyko ’13. 175–190 (in Polish).
Smędzik-Ambroży, K.; Guth, M. 2016. Public goods in the Common Agricultural Policy of European Union countries, in B. Czyżewski (Ed.). Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective. Polish Scientific Publishers PWN, Warsaw, 131–144.
Sulmicki, P. 1959. Przepływy międzygałęziowe [Input–output model]. Polskie Wydawnictwo Gospodarcze, Warszawa, 77–83 (in Polish).
Świetlik, K. 2014a. Krajowy popyt na żywność w cieniu sukcesów eksportu [Domestic demand for food in the shadow of export success], in International Scientific Conference entitled “The CAP and competitiveness of the Polish and European food sectors” 26–28 November 2014, Józefów, Poland (in Polish).
Świetlik, K. 2014b. Popyt na żywność – stan i perspektywy [Food demand – state and perspectives]. Analizy rynkowe 15/2014, Institute of Agricultural and Food Economics National Research Institute (in Polish).
Tomek, W. G.; Robinson, K. L. 2001. Kreowanie cen artykułów rolnych [Agricultural Products Prices], PWN, Warszawa: 36 et seq (in Polish).
Tweeten, L.; Zulauf, C. 2008. Farm price and income policy: lessons from history, Agribusiness 24(2): 145–160. https://doi.org/10.1002/agr.20153
Varian, H. R. 1993, Markets for public goods?, Critical Review 7(4): 539–557. https://doi.org/10.1080/08913819308443317
Vatn, A. 2001. Transaction Costs and Multifunctionality, conference materials – Directorate for Food, Agriculture and Fisheries Workshop on Multifunctionality, Paris, July 2–3 [online], [cited 13 March 2012]. Available from Internet: http://www.oecd.org/dataoecd/27/36/37633999.pdf
Wallace, A. 1994. Sense with sustainable agriculture, Communications in Soil Science and Plant Analysis 25(1–2): 5–13. https://doi.org/10.1080/00103629409368998
Wilkin, J. 2010. Dobra dostarczane przez rolnictwo w świetle teorii dóbr publicznych [Goods provided by agriculture in the light of the theory of public goods], in J. Wilkin (Ed.). Wielofunkcyjność rolnictwa. Kierunki badań, podstawy metodologiczne i implikacje praktyczne, Instytut Rozwoju Wsi i Rolnictwa PAN, Warszawa, 42–43 (in Polish).
Yang, Z.; Cai, J.; Dunford, M.; Webster, D. 2014. Rethinking of the relationship between agriculture and the “urban” economy in Beijing: an input-output approach, Technological and Economic Development of Economy 20(4): 624–647. https://doi.org/10.3846/20294913.2014.871661
Bonini, N.; Ritov, I.; Graffeo, M. 2015. On the evaluation of public goods: cognitive and emotional aspects, On the Horizon 23(2): 119–127. https://doi.org/10.1108/OTH-02-2015-0009
Brelik, A. 2004. Agroturystyka jako czynnik rozwoju przedsiębiorczości na obszarach wiejskich [Agrotourism as a factor in the development of entrepreneurship in rural areas]. Roczniki Naukowe Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu VI(4): 22–26 (in Polish).
Brelik, A.; Grzelak, A. 2011. The evaluation of the trends of Polish farms incomes in the FADN regions after the integration with the EU, Journal of Agribusiness and Rural Development 2(20): 5–11.
Buckwell, A. 2009. Public goods from private land. Rural Investment Support for Europe.
Cunha, A.; Swinbank, A. 2011. An inside view of the CAP Reform Process: explaining the MacSharry, Agenda 2000, and Fischler Reforms. New York: Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199591572.001.0001
Czyżewski, A.; Kryszak, Ł. 2015. Relacje cenowe w rolnictwie polskim a dochodowość gospodarstw rolnych i gospodarstw domowych rolników [Price relations in Polish agriculture and profitability of farms and farmers’ households]. Problems of World Agriculture, Scientific Journal Warsaw University of Life Sciences – SGGW 15(30): 17–29.
Czyżewski, B. 2013a. Surplus distribution in Polish agribusiness, Folia Pomeranae Universitatis Technologiae Stetinensis, Oeconomica 306(73): 7–30.
Czyżewski, B. 2013b. Renty ekonomiczne w gospodarce żywnościowej w Polsce [Economic rents in food economy in Poland]. PWE, Warsaw, 184–210 (in Polish).
Czyżewski, B; Brelik, A. 2014. Political rents in the European Union’s agriculture, Management 18(2): 191–203.
Czyżewski, B.; Matuszczak A. 2016. A new land rent theory for sustainable agriculture, Land Use Policy 55: 222–229. https:/doi.org/10.1016/j.landusepol.2016.04.002
Daszkowska, E. 2008. The reasons and perceptible effects of the food crisis in the first decade of the 21st century. Actions taken by the European Union and the World Bank aimed at stabilizing the situation, Journal of Agribusiness and Rural Development 2(10): 17–24.
EUROSTAT. 2014a. Economic accounts for agriculture (EAA) [online], [cited 15 October 2014]. Available from Internet http://ec.europa.eu/eurostat/data/database
EUROSTAT. 2014b. National accounts (NA) [online], [cited 15 October 2014]. Available from Internet http://ec.europa.eu/eurostat/data/database
Fałkowski, J. 2010. Wielofunkcyjność rolnictwa jako przedmiot analizy ekonomicznej [Multifunctionality of agriculture as a subject of economic analysis], in J. Wilkin (Ed.). Wielofunkcyjność rolnictwa. Kierunki badań, podstawy metodologiczne i implikacje praktyczne [Multifunctionality of agriculture. Directions of research, methodological basics and practical implications]. Instytut Rozwoju Wsi i Rolnictwa Polskiej Akademii Nauk, Warszawa, 53–58 (in Polish).
Gałązka, M. 2013. Próba oszacowania stopnia zaspokojenia potrzeb żywnościowych w gospodarstwach domowych w Polsce [An attempt at estimating the degree of meeting the food needs of Polish farms], Zagadnienia Ekonomiki Rolnej 2: 85–102 (in Polish).
Gerson, K. K.; Fen, H. 2013. A review of different types of subsidies and how they work in theory, Asian Agricultural Research 5(11): 1–4.
Grzelak, A.; Brelik, A. 2011. Procesy konwergencji czy dywergencji w zakresie dochodów gospodarstw rolnych w Polsce w regionach FADN po integracji w UE? [The processes of convergence, or the divergence in range of income of agricultural farms in Poland in FADN regions after the integration with the UE?]. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu – Polityka ekonomiczna. Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu, Wrocław, 201–211 (in Polish).
GUS [Central Statistical Office in Poland]. 2014. Ceny w gospodarce narodowej [Prices in the national economy] [online], [cited 15 October 2014]. Available from Internet http://stat.gov.pl/obszary-tematyczne/ceny-handel/
Haile, M. G.; Kalkuhl, M.; von Braun, J. 2013. How does food supply respond to high and volatile international food prices? An empirical evaluation of inter- and intra- seasonal global crop acreage response, in 4th International Conference of the African Association of Agricultural Economists, 22–25 September 2013, Hammamet, Tunisia.
Heberton Evans Jr., G. 1967. The law of demand – the roles of Gregory King and Charles Davenant, The Quarterly Journal of Economics 81(3): 483–492. https://doi.org/10.2307/1884813
Hvid, A. 2015. Increasing natural resource rents from farmland: a curse or a blessing for the rural poor?, Peace Economics, Peace Science and Public Policy 21(1): 59–78. https://doi.org/10.1515/peps-2014-0004
Kallhoff, A. 2014. Why societies need public goods, Critical Review of International Social and Political Philosophy 17(6): 635–651. https://doi.org/10.1080/13698230.2014.904539
Kiryluk-Dryjska, E.; Baer-Nawrocka, A. 2010. Wpływ akcesji do Unii Europejskiej na poziom i relacje cenowe w rolnictwie polskim (analiza długookresowa) [The impact of the accession to the UE on prices and price relations in Polish agriculture (long term analysis)], Zeszyty Naukowe SGGW – Ekonomika i Organizacja Gospodarki Żywnościowej 85: 59–67 (in Polish).
Koniunktura w rolnictwie [economic conditions in agriculture] [IRG]. 2014. [online], [cited 02 October 2015]. Available from Internet: http://kolegia.sgh.waw.pl/pl/KAE/struktura/IRG/Strony/news. aspx?NewsID=eaa88f43-e531-49e4-8c2d-cdba6b2ba452&ListID=950ed719-d169-4dc4-b598- 52cb08988932 (in Polish).
Kowalski, A.; Figiel, S.; Halamska, M. 2011. Społeczne i ekonomiczne uwarunkowania rozwoju sektora rolno-żywnościowego [Socio-economic conditions of food sector development], Polish Journal of Agronomy 7: 29–42 (in Polish).
Musiał, W.; Wojewodzic, T. 2013. Bariery przemian agrarnych w rolnictwie polskim – poszukiwanie rozwiązań innowacyjnych [Agrarian transformation barriers in Polish agriculture – seeking innovative solutions] [online], [cited 02 October 2015]. Available from Internet: http://www.pte.pl/kongres/referaty/Musia%C5%82%20Wies%C5%82aw,%20Wojewodzic%20Tomasz/ Musia%C5%82%20Wies%C5%82aw,%20Wojewodzic%20Tomasz%20-%20BARIERY%20PRZEMIAN%20AGRARNYCH%20W%20ROLNICTWIE%20POLSKIM%20-%20POSZUKIWANIE%20 ROZWI%C4%84ZA%C5%83%20INNOWACYJNYCH.pdf (in Polish)
Nerlove, M. 1956. Estimates of the elasticities of supply of selected agricultural commodities, Journal of Farm Economics 38(2): 496–509. https://doi.org/10.2307/1234389
Öhlund, E.; Zurek, K.; Hammer, M. 2015. Towards sustainable agriculture? The EU framework and local adaptation in Sweden and Poland, Environmental Policy and Governance 25(4): 270–287. https://doi.org/10.1002/eet.1687
Rembisz, W.; Sielska, A. 2013. Ryzyko i cenowa elastyczność podaży produkcji rolniczej [Risk and price elasticity of supply of agricultural products], in T. Trzaskalik (Ed.). Studia Ekonomiczne 163 – Modelowanie preferencji a ryzyko ’13. 175–190 (in Polish).
Smędzik-Ambroży, K.; Guth, M. 2016. Public goods in the Common Agricultural Policy of European Union countries, in B. Czyżewski (Ed.). Political Rents of European Farmers in the Sustainable Development Paradigm. International, national and regional perspective. Polish Scientific Publishers PWN, Warsaw, 131–144.
Sulmicki, P. 1959. Przepływy międzygałęziowe [Input–output model]. Polskie Wydawnictwo Gospodarcze, Warszawa, 77–83 (in Polish).
Świetlik, K. 2014a. Krajowy popyt na żywność w cieniu sukcesów eksportu [Domestic demand for food in the shadow of export success], in International Scientific Conference entitled “The CAP and competitiveness of the Polish and European food sectors” 26–28 November 2014, Józefów, Poland (in Polish).
Świetlik, K. 2014b. Popyt na żywność – stan i perspektywy [Food demand – state and perspectives]. Analizy rynkowe 15/2014, Institute of Agricultural and Food Economics National Research Institute (in Polish).
Tomek, W. G.; Robinson, K. L. 2001. Kreowanie cen artykułów rolnych [Agricultural Products Prices], PWN, Warszawa: 36 et seq (in Polish).
Tweeten, L.; Zulauf, C. 2008. Farm price and income policy: lessons from history, Agribusiness 24(2): 145–160. https://doi.org/10.1002/agr.20153
Varian, H. R. 1993, Markets for public goods?, Critical Review 7(4): 539–557. https://doi.org/10.1080/08913819308443317
Vatn, A. 2001. Transaction Costs and Multifunctionality, conference materials – Directorate for Food, Agriculture and Fisheries Workshop on Multifunctionality, Paris, July 2–3 [online], [cited 13 March 2012]. Available from Internet: http://www.oecd.org/dataoecd/27/36/37633999.pdf
Wallace, A. 1994. Sense with sustainable agriculture, Communications in Soil Science and Plant Analysis 25(1–2): 5–13. https://doi.org/10.1080/00103629409368998
Wilkin, J. 2010. Dobra dostarczane przez rolnictwo w świetle teorii dóbr publicznych [Goods provided by agriculture in the light of the theory of public goods], in J. Wilkin (Ed.). Wielofunkcyjność rolnictwa. Kierunki badań, podstawy metodologiczne i implikacje praktyczne, Instytut Rozwoju Wsi i Rolnictwa PAN, Warszawa, 42–43 (in Polish).
Yang, Z.; Cai, J.; Dunford, M.; Webster, D. 2014. Rethinking of the relationship between agriculture and the “urban” economy in Beijing: an input-output approach, Technological and Economic Development of Economy 20(4): 624–647. https://doi.org/10.3846/20294913.2014.871661