Methodical and Practical Aspects of the Parity Income in the Polish Agriculture

Abstract

The topic of farmers’ income is one of the most frequently discussed issues in agricultural economics literature. Particular interest is focused on the problem of the so-called parity income. The study attempts to assess the amount of farmers’ income from own labour in the context of average wages in the national economy. The analysis covered individual farms within the field of the Polish FADN observation. The study used farm net income (SE420) and the income from farmers’ own labour. The results of the study based on the FADN sample were compared with the average net wages according to the Statistics Poland. The analysis covered the period between 2006 and 2017. The analyses showed the existence of a clear difference between the average income from work on the farm (calculated after taking into account the alternative costs of land and capital) and the average net wage in the national economy. At the same time, significant differences were observed between agricultural income per unit of own labour depending on the economic size of the farm. Only medium-large, large and very large farms provided wages higher than average in the economy. The existing differences in the level of income correspond to the level of labour productivity, which suggests that one of the ways to limit the income problem in the Polish agriculture are structural changes leading to an increase in the average economic size of farms.

Keywords: farm income, income parity, remuneration of the labour factor, economic size of farms, labor productivity

JEL Classification: Q12, Q14, Q19