The Impact of the Common Agricultural Policy on the Investment Behaviour of Polish Farm Households

This paper analyses farm-household strategies and investment behaviour of Polish farmers with a particular focus on the perceived effects of CAP. The paper is based on a survey of Polish farmers carried out in 2006 on a sample of 63 farms. Farmers where selected in order to fit in the intersection of different farms’ location (altitudes above sea level), different specialisation level and technologies. Selected farm-households were modelled with the use of multicriteria dynamic programming. Models simulate economic behaviour of farmers under different policy (decoupling and reduction of payments options) and market (reduction of prices) scenarios. Results show multifaceted expectations toward the future. CAP payments are normally used on farm and concentrated on covering current costs and investment expenditure. The perspective of decoupling is expected to produce either no change or an increase of on farm investments.