Policymakers who currently promote large, mechanized farms in Poland to the detriment of smaller farms should reevaluate these policies. Smaller farms are more labor-intensive than large farms, and no less efficient.
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.
So, van Zyl, Miller, and Parker 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. Then they used Data Envelope Analysis to estimate scale efficiencies.
The results show that, for the sample of farms analyzed:
These results have important policy implications for farm restructuring in Poland and other transition economies facing similar issues and conditions.
This paper --- a product of the Sector Policy and Water Resources Division, Agriculture and Natural Resources Department --- is part of a larger effort in the department to investigate appropriate policies to foster agricultural growth in transition economies. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Melissa Williams, room S8-222, telephone 202-458-7297, fax 202-522-1142, Internet address mwilliams4@worldbank.org. (47 pages)
The full report is available on our FTP server.