Profitability of Agricultural Farms in the Years 1929-1937

Abstract

The economic crisis of the 1930s hit Polish agriculture with particular force and recovery came later than elsewhere, with a definite improvement observed only from 1935. The period 1929-1937 thus covers a full cycle of recession and partial recovery, characterized by sharp shifts in profitability of agricultural production.
This article analyzes the profitability of peasant farms and manor farms in Poland from 1929 to 1937, examining the structure of receipts and expenditures per hectare of arable land, the contrasting responses of the two farm types to the price crisis, the role of government intervention, and the process of decapitalization resulting from debt and deflation.
The study draws on data collected by the Department of Economy of Small Farms at the Puławy Institute, on comparative farm statistics from the Chambers of Agriculture in Poznań Voivodship (1930/31-1935/36), on questionnaire materials from the Archiwum Akt Nowych, and on the author's own unpublished doctoral dissertation.
The analysis shows that the fall in agricultural prices and the rise in the real burden of agricultural debts brought about widespread decapitalization and changes in the structure of supply. Manor farms and larger peasant farms reduced expenditures on hired labour; smaller peasant farms, with surplus family labour, could not reduce costs correspondingly and their economic position deteriorated most sharply. Government intervention (grain purchases, price support) benefited primarily manor farms. The absolute rent – reckoned in rye prices – became an abstract value when prices fell below the break-even level, which under Poland's deflation policy occurred throughout the crisis. The fundamental determinants of profitability were the price scissors between agricultural and industrial prices, the quality of soil, distance from local markets, and the degree of farm specialization.