Differences in Outcomes of the “Modernisation of Agricultural Holdings” Measure Across Polish Regions

Since the Polish accession to the EU, a substantial amount of financial support has been allocated to the agricultural sector, thereby underscoring the necessity for a comprehensive evaluation of the efficacy and ramifications of the implemented agricultural policy. One such instrument was the “Modernisation of agricultural holdings” which was implemented under the 2007–2013 Rural Development Program (RDP) and continued, in a slightly modified form, in subsequent programs. The primary objective of this paper was to assess whether the implementation of the “Modernisation of agricultural holdings” has contributed to the improvement of agricultural development indicators in areas with a high number of modernization projects implemented, compared to areas with similar farming conditions but with low interest among farmers in this measure. Additionally, the analysis sought to determine whether the initial level of agricultural development was a determining factor in any observed differences in the improvement of these indicators. We compared the indicators of agricultural development calculated over two periods: 2010 and 2020 in Polish regions with similar farming conditions and similar characteristics (climatic conditions, farm size, crop structure, production direction, etc.), but different in their activity in applying for investment funds from the Modernization measure. The results demonstrate that in regions where agricultural conditions are more favorable, agricultural potential is higher, and agricultural structures are more developed, the impact of Modernization funds is negligible. Farms invariably evolve in a similar manner, irrespective of whether they have sought external support. The role of support for investment financing is significantly more pronounced in areas characterized by substantial agricultural fragmentation and predominance of small farms. In the regions of Poland where agricultural output was below the national average, the disparities in agricultural development between municipalities that received substantial Modernization funds and those that received less support were more highlighted. Thus, our findings reveal that to encourage investment in agricultural holdings, the funds should be allocated to regions with lower production potential and more fragmented agriculture, where the impact of the support is more evident.