Jan Fałkowski

Access to credit, factor allocation and farm productivity: Evidence from the CEE transition economies

This paper analyses how farm access to credit affects farm input allocation and farm efficiency in the CEE transition countries. Drawing on a unique farm level panel data with 37,409 observations and employing a matching estimator we are able to control for the key source of endogeneity – unoberserved heterogeneity. We find that farms are credit constrained both in the short-run as well as in the long-run, but that credit constraint is asymmetric between inputs. Our estimates suggest that farm access to credit increases TFP up to 1.9% per 1000 EUR of additional credit. The use of variable inputs and capital investment increases up to 2.3% and 29%, respectively, per 1000 EUR of additional credit. Due to credit-financed investment in labour-saving farm equipment, labour use reduces for low level of credit. Farms are found not to be credit constrained with respect to land.

Political Reforms and Public Policies: Evidence from Agricultural Protection

This paper studies the effect of political regime transitions on public policy using a dataset on global agricultural distortions over 50 years (including data from 74 developing and developed countries over the period 1955-2005). We employ both difference-in-differences regressions and semi-parametric matching methods, exploiting the time series and cross-sectional variation in the data. Our semi-parametric estimates show that parametric methods might underestimate the effect of democracy on public policy. In addition, we find that the effect is asymmetric: agricultural protection increases after a country’s transition to democracy of about 9% points, but there is no effect when the political regime shifts from democracy to autocracy. Overall, the evidence supports the redistributive nature of democratic institutions toward the majority and, therefore, it is consistent with the median voter model of political behaviour.

Public policies and private initiatives in transition: evidence from the Polish dairy sector

The drivers of institutional change in Central and Eastern Europe have changed considerably since 1989. Taking these changes into account, we identify three – partly overlapping – transition stages: public policy changes dominated the start of transition, private initiatives became crucial in a second stage and, more recently, policy changes related to the EU accession process became the dominant drivers. We use unique primary interview data on the supply chain and farm household data to study the impact of these institutional changes on structural adjustments in the Polish dairy sector. We find distinct patterns in farm restructuring and link these results to specific institutional changes in the different transition stages.

Resilience of farmer-processor relationships to adverse shocks: the case of dairy sector in Poland

Purpose – Recent literature has considerably improved our understanding of vertical relations in the food chain. One area which has received relatively little attention however relates to the resilience of an agro-food supply chain, that is its ability to face and, if needed, to recover after a major disruption. The purpose of this paper is to study what factors, including characteristics of vertical links between upstream and downstream sectors, may make farmer-processor relationships more or less resilient to adverse shocks. Design/methodology/approach – To do so, the author uses a unique region-level data set on disruptions to dairy supply chain in Poland during the transition from a centrally planned economy to a market economy. More specifically, using between-region variation, the author investigates why in some regions supply chain disruptions, measured as the breakdown of relationships between farmers and processing industry, were smaller than in other regions. Findings – The findings suggest that...

Farmers’ self-reported bargaining power and price heterogeneity: Evidence from the dairy supply chain

Purpose While it is commonly argued that food supply chains are characterized by severe imbalances of power between contracting parties, there is an insufficient understanding of the factors affecting the negotiating position of farmers. The purpose of this paper is to provide quantitative evidence documenting the position of farmers and to explain variation in farm gate prices in the dairy supply chain by using unique micro-survey data from Poland. Design/methodology/approach The bargaining power of farmers is elicited from their self-reported assessment about how confident they feel in their relationships with both the processing industry and input suppliers. Findings Using econometric modelling, it is shown that farmers who perceive themselves as having a relatively “strong position” in the food chain receive a higher milk price from dairy companies. Research limitations/implications While this result comes with some caveats, it suggests that the self-reported beliefs farmers hold about relations with their contractors may reveal additional insights into the distribution of power throughout the food chain. Originality/value Compared to the existing studies, the paper offers two innovations. First, to construct a proxy for farmers’ bargaining power, their subjective opinion on how easy they could be substituted for by their contractors is used. In effect, the paper goes beyond the standard measures which focus on farm size or its location. Second, it investigates farmers’ relationships vis-a-vis both processing industry and input suppliers. Consequently, this paper is the first to analyze power relationships by explicitly taking into account three stages of the supply chain.

From Macro to Micro: The Change of Trendsetters in the Polish Beer Market

The market and society changes in Poland have created a good environment for a dynamic beer market. A considerable part of this dynamics, especially in recent years, can be attributed to the emergence and development of microbreweries. Based on a qualitative investigation, this research aims to identify the key trends and factors affecting this phenomenon. The first part provides the context of the changes of the Polish beer market since 1989 and the conditions which shaped it. The second part outlines the main circumstances lying behind the new brewing scene in Poland characterised by the creation of microbreweries.

On structural change, the social stress of a farming population, and the political economy of farm support

A rationale for providing support to the farm sector in the course of economic development and structural change is a growing gap between the incomes of non‐agricultural workers and the incomes of farmers. Drawing on a model that enables us to analyze the level of social stress experienced by farmers as employment shifts from the farm sector to other sectors, we find that even without an increasing gap between the incomes of non‐agricultural workers and the incomes of farmers, support to farmers might be needed/can be justified. This result arises because under well‐specified conditions, when the size of the farm population decreases, those who remain in farming experience increasing aggregate social stress. The increase is nonlinear: it is modest when the outflow from the farm sector is relatively small or when it is large, and it becomes more significant when the outflow is moderate. This finding can inform policymakers who seek to alleviate the social stress of the farming population as to the timing and intensity of that intervention.

Economic effects of reorganising an agro-food supply chain: some evidence from Poland

Purpose – Much has been said about the nature of the agro-food supply chain. Yet, the consequences of reforming supply chain institutions have less often been studied, especially from an empirical perspective. The purpose of this paper is to examine the economic consequences of a radical reorganisation of the system of exchange in the agro-food sector in Central and Eastern Europe, during the process of transition from a centrally planned economy to a market economy. By considering a historical example from the dairy sector in Poland, the author provides evidence that the disorganisation of vertical linkages between upstream and downstream producers can be very costly. The most conservative estimates suggest that the dislocation of inter-firm relationships accounted for approximately 20 per cent of the drop in milk production observed in the early-transition phase in question. Design/methodology/approach – The empirical approach is based on econometric analyses. The empirical strategy the author adopts is...