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The Impact of Agricultural Investments on the Economic Efficiency of Production Factors: An Empirical Study of the Wielkopolska Voivodeship

Author

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  • Wawrzyniec Czubak

    (Department of Economics and Economic Policy in Agribusiness, Faculty of Economics, Poznan University of Life Sciences, Wojska Polskiego 28, 60-637 Poznan, Poland)

  • Krzysztof Piotr Pawłowski

    (Department of Economics and Economic Policy in Agribusiness, Faculty of Economics, Poznan University of Life Sciences, Wojska Polskiego 28, 60-637 Poznan, Poland)

Abstract

The functioning and development of each economic entity requires the implementation of investments. In the case of farms in Poland, which are characterised by structural problems and a lack of capital, it is essential to undertake investment activities of a modern nature. The main objective of this research was to assess agricultural investments made in farms, considering the example of the Wielkopolska Voivodship in Poland, from the point of view of their impacts on changes in the economic efficiency of production factors. The data source was unpublished individual data from the agricultural accounting “Polish FADN” results for all farms in the Wielkopolska Voivodship who had continuously participated in the data collection system from 2009 to 2021. The project’s complexity was determined by measuring the scale of investments, relating the sum of investment expenditures to the average annual value of fixed assets (reduced by land value). Farmers endowed with a greater asset base had the ability to invest more comprehensively (i.e., in their most desirable scale regarding the value of possessed fixed assets) in a manner primarily concerning the value of fixed assets, especially the agricultural area, as a primary agricultural production factor. In terms of the effects of differentiating the scale of investment outlays (which was the aim of the study), a better initial state allowed farms to increase their area significantly, with an average annual rate of change of 3%. On the other hand, a lack of investment led to the decapitalisation of assets (−6.7% per year), which also concerned land sales (−1.5% per year). These research results indicate that not only does the undertaking of investments, in general, impact the development possibilities of farms—and, therefore, improvements in the resource situation of farms—but also the scale of investment (with respect to the value of possessed fixed assets).

Suggested Citation

  • Wawrzyniec Czubak & Krzysztof Piotr Pawłowski, 2024. "The Impact of Agricultural Investments on the Economic Efficiency of Production Factors: An Empirical Study of the Wielkopolska Voivodeship," Agriculture, MDPI, vol. 14(12), pages 1-16, December.
    • Handle: RePEc:gam:jagris:v:14:y:2024:i:12:p:2217-:d:1536889
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