Based on farm panel data the authors empirically investigate the determinants of Polish farm households' flexibility from 1994 to 2001. They focus on scale flexibility (adjustment in production volume) and scope flexibility (adjustment in product mix). The findings of our fixed-effects regression provide evidence that smaller farms are more flexible, both with regard to scale and scope of production. Farms with a higher share of variable costs tend to be more flexible, while producers who specialized in capital-intensive technologies turned out to be less flexible. Some results differ significantly from the prevailing expectations, in particular we found that farms where a generational succession took place displayed less flexibility over time. Moreover, access to off-farm income and finances (income of household members, loans, government subsidies) is significant, but its influence varies. The results suggests that Polish farmers use various strategies in order to adjust the farm to changing environment, which should be taken into account in the design of supporting policies.
A. Pieniadz, Leibniz Institute of Agricultural Development in Central and Eastern Europe, Halle (Saale), Bundeesrepublik Deutschland
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