Impact of The Labour Productivity on Farm Income in Poland

In the case of all farms, the issue of profitability achieved is crucial. The effectiveness of production factors involved, including labour, shapes income in agriculture to a large extent. Thus, the increase in the productivity of the labour factor determines the increase in the labour profitability. On the grounds of classical microeconomic relationships, it can be pointed out that the increase in farm income, which is the remuneration of the labour factor, can take place, ceteris paribus, with the increase in production. Assuming the permanence of labour factor inputs in the long term, the source of production growth should, in turn, be the increase in the labour productivity. The objective of the paper is to identify differences in the impact of labour productivity on farm income, with the dominance of family labour force and on farms with a dominance of paid labour force in Poland. The results presented may serve as a basis for concluding on the income situation of farms depending on the type of labour factor involved. The study will use the FADN data from 2009-2015 for Polish farms. The impact of labour productivity on farm income will be analysed using the propensity score matching method