The importance of agriculture in Poland in LFA areas as a source of public goods in the context of EU agricultural policy

The aim of the study was to determine the role of institutions in neoclassical economics and New Institutional Economics (NEI) in the context of supporting agriculture in areas with natural constraints or other specific constraints (LFA areas) in providing society with public goods related to the protection of the natural environment. Its parallel aim was to indicate, in terms of communes, the state of agriculture in LFA areas compared to agriculture in other areas, as well as to determine the direction of development of selected measures of the EU Common Agricultural Policy (CAP) that particularly serve this purpose. This refers to the following measures: agri-environment-climate (AEC), "ecological agriculture" and afforestation. In addition, the aim of the publication was to indicate statistically significant factors that, in farms from communes with an exceptionally high saturation of agricultural land (UR) LFA, determine the willingness of these farms to participate in the above-mentioned measures. In order to achieve the objectives of the study, domestic and foreign literature on neoclassical economics and NEI was analyzed. Data from the Agency for Restructuring and Modernisation of Agriculture, the Agricultural and Food Quality Inspection, the Ministry of Agriculture and Rural Development from 2004–2021 and data from agricultural reports present in the Polish Farm Accountancy Data Network for 2021 were used. It was found that in 2021, 94.1% of the total area of ​​the analysed activities occurred in communes with ONW UAA. In communes with an exceptionally high saturation of ONW UAA, the factors of greater propensity of farms to implement the aforementioned activities turned out to be: the fact of having a lower income calculated without operational subsidies per 1 ha of UAA, a higher level of education of the farmer and his/her agricultural orientation, the presence of other farms participating in these activities in the immediate vicinity, as well as having a larger UAA area and their location in Natura 2000 areas.