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The Agrarian Structure in Poland: The Myth of Large-Farm Superiority

In Poland, present policies are aimed at promoting large, mechanized farms over smaller family farms. These policies are based on the perception that large farms offer real economies of scale. But international evidence indicates that such large, mechanized farms are generally less efficient and use less labor than small family farms. The authors analyzed the relationship between farm size and efficiency in Polish agriculture. They used two different methods to do so. First they determined differences in total factor productivity between small and large farms. They then used Data Envelope Analysis to estimate scale efficiencies. The results show that, for the sample of farms analyzed: 1) large farms are not more efficient than smaller farms; and 2) smaller farms are more labor-intensive than larger farms. These results have important policy implications for farm restructuring in Poland and other transition economies facing similar issues and conditions.