Reflections on Family Farm Bankruptcy in Poland

Abstract

The functioning of agricultural farms in open market economy offers chances for their rapid and intensive development but also increases the risk of economic incapacity and failure. The problem has been presented in the paper mainly in the form of theoretical reflections addressing basic and recognisable symptoms of farm failure resulting from recessive character of events and economic categories describing them. Analysed and reviewed were the regularities and economic theories which explain the processes of bankruptcy of economic entities and institutions and these were referred to agricultural farms. Farm bankruptcy was discussed from the perspective of neoclassical theory of business enterprise, against the background of institutional economics and managerial theory of enterprise. Considerable attention was paid to the theory of biological life of an enterprise (farm) and its applicability to farms was stressed. The reflections were extended by the so-called generation cycle of family life on a farm. The problem of defining farm bankruptcy and a wide range of terms de-scribing this phenomenon were also addressed in the paper. Several terms not used so far in agricultural economics were introduced, which refer to the so-called demographic analysis of farms, i.e. birth rates, death rates and farm turnover index. The author pointed to a wide scope of research on the current state of family farms from the point of view of their future existence, particularly a threat of bankruptcy. The issues addressed in the article seem extremely important for the economic science and practice due to the growing problem of discontinuation of production, considerable extensification of farms and strengthening phenomenon of narrowed reproduction of production assets. Competitive income generated from the off farm jobs causes that a great part of small and medium sized farms has already entered or will enter the bankruptcy stage in the near future.