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Because of the acreage fragmentation and little economic power within most of the farms, the Polish agriculture in its general form is not prepared to effectively function under conditions of increasing liberalisation. The Improvement of competitiveness combines more intensified tendency towards increasing scale of production and the amount of economically strong farms. Under the conditions of Polish agriculture these processes combine land concentration, since such trends show pro-effective transformations within the agriculture sector. In respect of this, there has been done an analysis and assessment of the impact of agricultural lands on economical power of individual farms. The paper is mainly based on the results of long-term field research of IAFE-NRI (Institute of Agricultural and Food Economics National Research Institute) carried out within all individual farms situated in certain 76 villages. The survey data was completed with the CSO (Central Statistical Office) materials. It has been stated that although, in general, together with an agricultural progress the land factor is losing its significance, from the point of view of an individual farm in Poland, the utilised agricultural land area determines its economic power. This was mainly indicated by the relations between farm’s acreage and economic value, scale of sales and investment activity as well as farm income level. It has been assumed that 1 ha increase in the area of a farm gives 3-4% probability that the farm will switch to a higher production level ceteris paribus and as a result its economic power will increase Received: January, 2009 1st Revision: February, 2009 Accepted: March, 2009 JEL Classification: Q12, Q15, D63

THE AREA OF CULTIVATED LAND AS A FACTOR DETERMINING ECONOMIC POTENTIAL OF PRIVATE FARMS