Investments in Polish Agriculture: How Production Factors Shape Conditions for Environmental Protection?

Abstract

In recent years, social and economic goals have been preferable compared to environmental issues. However, global problems with the environment, increasing pollution, and gas heating emissions have made environmental issues a major priority. Suddenly, human beings have realized that environmental investments are needed to maintain better world conditions for future generations. This article investigates the development of agricultural investment in the context of production factors in Polish voivodeships in the years 2000–2018. Farmers have to choose between investing and developing production or being more environmentally friendly and invest on a smaller scale or transform their farms into organic production. Moreover, the investment in environmental protection in Poland was analyzed. Investment outlays on fixed assets for environmental protection and outlays on fixed assets for water management were investigated. The level of investment has changed since Poland joined the EU. With membership, Poland gained access to new markets and technology. Particular attention has been focused on production factors (land, capital, and the work force). We have conducted as a proxy regular regression analysis and after panel regression to measure the impact of the chosen factors on explained variables: investment outlays in agriculture, and investment outlays per 1 ha of agricultural land. We have used correlation analysis to examine the relations between explanatory variables and total gross investment in agriculture and total investment outlays in agriculture per 1 ha of agricultural land, outlays on fixed assets for environmental protection, and outlays on fixed assets for water management. Our analysis confirms that explanatory variables are important in shaping total investment outlays in agriculture and total investment outlays per 1 ha of agricultural land.