90 percent farms in Poland have less than 30 ha. The paradox of the Polish agricultural sector

Over 90 percent agricultural farms in Poland are farms up to 30 ha. Such fragmentation of the agrarian structure limits the competitiveness of agriculture, affects the scale of production, the possibility of using capital and implementing modern technologies – according to the IERiGŻ report “The level of investment outlays in Polish agriculture”.

– An important challenge facing domestic agriculture is to improve its agrarian structure and the efficiency of production and management. In Poland, small farms with an area of ​​5 ha or more of agricultural land predominate, accounting for as much as 50%. of all farms, but they use only 11 percent total area of ​​agricultural land – told PAP the director of the Institute of Agricultural and Food Economics (IERiGŻ), Dr. Hab. Marek Wigry.

– Agriculture in our country is changing, but these changes are relatively slow and of an evolutionary nature. The smallest farms – up to 5 ha of UAA (designated as auxiliary farms) – are decreasing, both in Poland and in EU countries. These farms have low investment potential and their functioning largely depends on subsidies – said the head of the Institute.

According to ARiMR data, approximately 1.19 million farmers applied for direct payments in 2025. The average area of ​​a farm in Poland has increased to 11.75 ha, while the number of farms shows a downward trend.

A fairly large group in Poland are farms with an area of ​​UAA ranging from 5 to 30 ha of UAA (called farms at the crossroads). This is a group of approximately 520,000. farms that use 41 percent total area of ​​agricultural land. Their number is systematically decreasing, although they have a chance to move to larger groups. The condition for their further development is the implementation of investments that increase the value of fixed assets and the scale of production.

The authors of the report estimate that the long-term competitiveness of agriculture will depend on the pace of transition of farms from the “at the crossroads” group to higher economic and area classes. The basic condition for their further development is the implementation of investments that increase efficiency, including: production.

While in Poland the dynamics of changes in the structure of farms up to 30 ha is similar to the EU one, in the group of developing farms (30-100 ha) it is clearly different from the EU average. Their number in our country increased by 35.3% in the years 2010-2020. The growth rate of the number of model farms (over 100) was even higher (by 44.6%), significantly exceeding the EU average. “This process should be interpreted as an important signal of a gradual shift of domestic agricultural production to a group of farms that effectively compete internationally,” Wigier said.

Common Agricultural Policy in the financial perspective 2028-2034

According to the expert, the persistence of a relatively large number of auxiliary farms and farms at the crossroads, which do not move to higher area classes, can be largely interpreted as an effect of the existing system of direct payments under the Common Agricultural Policy. As he said, “area payments stabilize the income of land owners, limiting the economic pressure on the sale or lease of land, and thus slowing down the concentration process.”

According to the director of IERiGŻ, the future dynamics of structural changes in Polish agriculture will largely depend on the new shape of the Common Agricultural Policy in the financial perspective 2028–2034. “Limiting the importance of direct payments for investment and development instruments, such as loans, would undoubtedly accelerate the processes of land concentration and restructuring of the agricultural sector,” Wigier emphasized.

The report shows that investment opportunities in commercial farms are strongly related to their scale and production profile. The most favorable income relations occur on model farms (over 100 ha), and particularly high values ​​characterize animal production and mixed production.

The data (from 2023) of the report show that on farms up to 5 ha, the income per one full-time employed person is low, regardless of the production profile, and amounts to approx. PLN 46,000. PLN per year. The average national salary in the national economy in 2023 was PLN 85.8 thousand. PLN gross.

On developing farms (30-100 ha), the average income was PLN 141,000. PLN, and in plant and animal production it exceeded – 167 thousand. zloty. However, farms with an area of ​​approx. 100 ha, where the average total income reached PLN 306,000. PLN in plant production, and in animal production it reached over PLN 419 thousand. zloty.

“High incomes favor large-scale investments, also using own funds, because the involvement of private funds increases efficiency. Research shows that despite significant transfers from the EU, exceeding EUR 78 billion under the CAP, and the modernization and improvement of the competitive position of many commercial farms, statistically we still observe decapitalization of fixed assets,” Wigier noted.

The report “The level of investment outlays in Polish agriculture” was prepared by IERiGŻ scientists under the supervision of Dr. hab. Marek Wigier. It was developed at the request of the Analytical and Research Program of the Warsaw Banking Institute Foundation in cooperation with the Ministry of Climate and Environment.

Anna Wysoczańska (PAP)

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