CREDIT SUPPORT FOR AGRICULTURAL LAND PURCHASE IN POLAND - EVOLUTION AND PERFORMANCE

Abstract

The aim of the paper is to examine the characteristics and evolution of the credit support for agricultural land purchase in Poland and to assess its outcomes after 23 years of operating with a special focus on changes in farm structure. The examined period covers years 1994-2016. Descriptive statistics were applied for analyses of empirical data. The analysis showed that besides the privatization of state land, the preferential credit has been an important tool of agricultural policy for farm structure improvement in Poland for a period of the market economy. It is very remarkable that the credit support has been very well organized, stable and long-term. During this long period there where only minor changes in terms of credits. The data indicate that 14% of the Polish farms were beneficiaries of preferential credits for financing the land purchase. 1.8 million ha of agricultural land (ca 10% of the stock of agricultural land area in Poland in 1994) changed the owner during the examined period. Subsidised agricultural land purchase influenced the farm structure by area. The average per farm area of agricultural land increased from 6.7 ha in 1994 to 10.3 ha in 2016. The share of agricultural land bought with the credit support in market turnover of agricultural land in examined period, estimated at 45%, illustrates the role of this support for improvement of a farm structure. However, the contribution of preferential credits to a sharp increase in agricultural land price was a negative outcome of the support.