Tax policy tools vs. sustainable development of agriculture. The case of Poland

A transition from conventional to sustainable model of agriculture depends on various factors. Sustainable development of farms may be described in terms of three dimensions, ("economic, environmental and social"). The Green Growth paradigm indicates the significance of economic policy interventions, including subsidies and tax incentives. A gap in the literature on agricultural economics and finance explains the need for studies on a fiscal dimension of sustainability of farms.The main aim of the paper was to highlight the role of selected tax policy tools from the perspective of sustainable development of agriculture. The research goals were as follows (1) to present a review of selected tax policy instruments in an international context, (2) to analyse the impact of selected tools on making pro-environmental actions (based on experts' opinions). Our paper concluded with proposals and recommendations on the aforesaid process for policymakers. Fiscal instruments that may affect sustainability in agriculture exist in the majority of Old Member States of European Union (e.g. the Netherlands, Germany, Austria). The ongoing ?Agricultural tax? (?podatek rolny?) that affect a majority of Polish farms and their organization of production favours leads to maintaining sustainability of agriculture (given an environmental dimension of sustainability). The existing tax instruments have a neutral or positive impact on environmental sustainability. The highest medium positive impact on the medium are characterized by capital allowances and deductions for the purchase of new environmental technologies.Polish policymakers should reasonably developed a more detailed fiscal policy instruments, e.g. investment reliefs (similarly, as in the Netherlands), subjective exemptions in respect of agro-environmental practices. In the near future a key role in environmental protection will be played by a group of small farm households. These entities will be responsible for provision of public goods for Polish agricultural sector.