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Market versus agriculture in Poland – macroeconomic relations of incomes, prices and productivity in terms of the sustainable development paradigm

    Bazyli Czyżewski   Affiliation
    ; Adam Majchrzak Affiliation

Abstract

In the article macroeconomic relations of prices, productivity and incomes in Polish agriculture in the context of changes in the EU Common Agricultural Policy were studied. The authors have developed a macroeconomic model which explains these relations and confirms the occurrence of market failures in agriculture in Poland. The developed model proves the existence of a puzzling exchangeable relation between the real productivity of production factors in agriculture, and agricultural incomes, under conditions of adaptive expectations. It also proves that it is price scissors, not the efficiency of production, that have a dominating influence on incomes in the sector. The authors propose the hypothesis that correction of market mechanisms by government intervention in agriculture is an objective necessity. However, direct subsidies (area payments) do not have a correcting role, but reinforce King’s effect.


First published online: 13 Feb 2017

Keyword : agricultural incomes, prices, productivity, market failures, sustainable development, expectations

How to Cite
Czyżewski, B., & Majchrzak, A. (2018). Market versus agriculture in Poland – macroeconomic relations of incomes, prices and productivity in terms of the sustainable development paradigm. Technological and Economic Development of Economy, 24(2), 318-334. https://doi.org/10.3846/20294913.2016.1212743
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Mar 20, 2018
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This work is licensed under a Creative Commons Attribution 4.0 International License.