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The Wealth Effect in Agriculture in Light of Experiences of Farms from the Wielkopolska Region

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  • GRZELAK, ALEKSANDER

Abstract

The aim of the article is to initially identify the characteristics of farms in which the wealth effect appears and recognize the extent of this effect in market farms in the Wielkopolska Region. This was realized based on the results of 120 questionnaire surveys of farms in the Wielkopolska Region. The research shows that there is a group of farms in which the wealth effect takes place (9.2% in the surveyed group). This mainly applies to units specializing in field crops. Farms in which the potential wealth effect appears are characterized by a larger area of arable land but, on the other hand, by a lower income, value of assets and output. In addition to the risks associated with this effect, there are also positive aspects relating to an increased economic activity of farms or an increase in the possibility of credit guarantees. In the context of research results, it would be advisable, in the future, to increase the degressivity of area payments under the CAP due to their lower impact of payments on the capitalization of subsidies and, thus, the intrinsic increase in asset value in farms.

Suggested Citation

  • Grzelak, Aleksander, 2021. "The Wealth Effect in Agriculture in Light of Experiences of Farms from the Wielkopolska Region," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2021(4).
    • Handle: RePEc:ags:paaero:324127
    DOI: 10.22004/ag.econ.324127
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