NEEDS ANALYSIS

In terms of the model of the agricultural sector development, two opposing views clash. The neoliberal optics assumes the primacy of microeconomic efficiency and treats state interventionism as an unjustified privilege of the food sector. Such reasoning, however, does not take into account specific conditions of agricultural market and land factor. This is because the market, guided by the principle of equalisation of marginal costs, favours the concentration of production creating large-scale agricultural enterprises and transnational corporations. At the same time, the liberal approach to the agricultural sector ignores the externalities of industrial agricultural production, both negative ones, such as deprivation of weaker farms, disappearance of production in areas with less favourable natural and economic conditions, degradation of the natural environment, worse quality food, and positive ones, related to the provision of public goods. The scale of the problem intensifies under conditions of globalisation and the increasingly powerful position of transnational corporations. Meanwhile, the agricultural sector in many regions of the world is based on the functioning of small family farms, whose area does not exceed 5 ha of arable land. In global terms, there are approx. 500 million, out of 2.5 billion people living there, in the EU-28 more than 6 million. The share of smallholder farms is particularly high in Central and Eastern European countries. Thus, the question arises about the desired scenario for the development of the agricultural sector in these regions. It seems that for the implementation of sustainable agricultural development it is necessary to sustain the functioning of small farms in the situation of industrial agriculture bringing more and more socially and environmentally destructive side effects. The implemented Project addresses these problems and tries to demonstrate the validity of such thinking. This is particularly important for countries where smallholder agriculture plays a key role in the functioning of rural areas. At the same time it is important to indicate universal premises for the functioning of fragmented agriculture, if only in the context of the implemented support policy. The point is to include small-size farms in market processes by increasing their competitiveness, while at the same time retaining their function as providers of public goods, in accordance with growing expectations of the society.