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Abstract
The research is an attempt of examination of the macroeconomic relation between prices, productivity and incomes
in agriculture in Poland in the context of the changes of the CAP. The Authors explain this relation and confirm the
existence of market failure in agriculture in Poland in macroeconomic approach. The developed model proves the
existence of puzzling, exchangeable relationship between real productivity of production factors in agriculture and
agricultural income (economic surplus) under adaptive expectations. It also stems from the dominant influence of
sector price scissors, not productivity on incomes. The authors hypothesize that there is a need to correct market
mechanism in agriculture, but subsidies do not fulfill the corrective role, capturing the effect of King.