Income level

The level of income represents one of the basic determinants of living standards of the family. The analysis of data on sources of income for the farming households indicates that in 2005 the average income per non-farming family was less than PLN 21,000, i.e. below the average for non-farming families (more than PLN 36,000). According to the 2000 IAFE-NRI survey on rural household budgets, in 2000 the average income in non-farming families amounted to PLN 17,500, also below the average for farming households (PLN 24,200).

The income gap between the farming and non-farming families stems from the differences in the income structure. In non-farming households, unearned income sources (old age and disability pensions, unemployment benefits etc.) accounted for more than one-third of total income, whereas the respective proportion for the farming population was only one-fifth. It should be emphasised that insofar as non-farming households usually obtained one type of income, the farming population was often engaged in multiple activities, thus having income from different sources. In 2005, more than 24%

of members of farming families combined farm work with off-farm employment, and a further 10% exclusively relied on non-agricultural earned income. In addition, farming families benefited from support measures under the common agricultural policy (such as direct payments), which contributed to the widening of the income gap between farming and non-farming households after Poland’s accession to the European Union.

Figure 4. Average income of non-farming families in 2005 by macroregions (in thousand PLN)

8

Total Central- Central- South-

South-Northern Western Eastern Eastern Western

Source: IAFE-NRI survey 2005.

Differences in the income level should be seen not only as a result of the categorisation as farming or non-farming families, but consideration must also be given to the place of residence. The group in question is characterised by significant disparities between regions in terms of income. For instance, in 2005 a non-farming family in the South-Eastern macroregion obtained an annual average income of over PLN 24,000, whereas the respective amount in the Central-Eastern macroregion was less than PLN 18,000.

The income gap was largely determined by the share of income-earning families in the total number of the non-farming households and the nature of employment. Earned income tends to be much higher than pensions.

As a consequence, in areas where income earning was rather widespread the

average income of non-farming families was also higher. Such differences were further increased by an uneven distribution of self-employment. Since self-employed activities (running a business) usually provide greater income than paid employment, regions with a relatively higher share of self-employed persons were usually characterised by higher average income of non-farming families. It should be noted that in the southeast of Poland, distinguished by advanced multifunctional rural development and non-agricultural activities, the average income of non-farming households was higher than in other regions. The crucial importance of the number of income-earning families for regional disparities in the income situation of the non-farming rural population also stems from the fact that the average income of pensioners’ households was rather similar, and only in areas where pensioners combined unearned income with sales of agricultural products the average income was close to that obtained by income-earning families.

Figure 5. Average income of non-farming families in 2000 by macroregions (in thousand PLN)

28.1

22.2

20.6 21.0

19.3 19.4

10.6 10.5 10.5 11.1 10.6 10.5

17.5 16.6

income-earning families pensioners’ families all families in question Source: IAFE-NRI survey 2000.

Differences in the income level in non-farming families across Poland were more evident in terms of income per capita. From the point of view of living standards, such a measure is more reliable as it allows to take account of the varying number of household members in the surveyed groups. It should be pointed out, however, that even though in non-farming families income per capita showed reduced differences compared to income per family, regional disparities continued to be significant. According to the survey, in 2005 an average non-farming family in the north of Poland had PLN 2,000 less income than a non-farming family in the southwest. But the level of this indicator was rather similar, irrespective of the main source of income, at ca. PLN 7,000 in annual terms (in 2000 the respective figure was approx. PLN 6,000), with the exception of the Northern macroregion.

Map 3. Spatial differences in average income of non-farming families, per capita in 2005

less than 6,000PLN over 7,000 PLN 6,000-7,000 PLN

Source: IAFE-NRI survey 2005.

The analysis of regional disparities in the level of income in non-farming families should take account of the fact that significant differences between specific rural areas are also observed within macroregions; in each macroregion there are villages and districts characterised by advanced multifunctional rural development and relatively widespread non-agricultural activities, as well as areas where no adaptation to new economic conditions had taken place and the living standards remained extremely low. The survey data confirmed the continuing significant differences in the living standards of non-farming rural families; although such disparities stemmed from different economic activities pursued by persons without agricultural land, they reflect regional diversity in terms of economic development in rural areas.