The Effectiveness of Subsidizing Investments in Polish Agriculture: A Propensity Score Matching Approach

Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

The article is well written although the following changes are necessary:

• Limitation of Causal Inference Beyond PSM: Although Propensity Score Matching (PSM) is useful in eliminating selection bias by equating observed attributes in control and comparison groups, it is deficient in addressing unobserved heterogeneity as well as endogeneity. These unobserved determinants can also continue to affect both the assignment for treatments as well as outcomes, thereby perhaps leading to erroneous estimates. This does not address how this is done, and so a weakness in the strength of its causal conclusions. In the lack of application of the more sophisticated econometric methods—such as Difference-in-Differences (DiD) that would address unobserved attributes that vary with time or Instrumental Variables (IV) that could address endogeneity—any causal inference is speculative and may be in error.
• Limited Control for Exogenous Economic Trends: The study does not control for exogenous macroeconomic trends and policy surprises between 2015 and 2023, like changes in inflation, commodity prices, or the impact on the economy due to COVID-19. These higher-level forces have a considerable impact on farm-level economic performance, independent of CAP support. Attribution of observed changes in productivity or revenue to the presence or absence of investment subsidies, thus, does not capture the richness in this relationship, implying oversimplification. If it does not control for such confounders, this can exaggerate or downplay the true effect of CAP interventions, implying weaker study conclusions that cannot be generalized to varying economic conditions.
• Scale Effect Overshadowing CAP Impact: The prime conclusion in the paper—that those benefiting from the CAP achieved greater outcomes due to higher investment scale, rather than due to the support per se—tends to cast a doubt upon the true effectiveness of the CAP programme. If economic performance can be ascribed to investment size, rather than the support mechanism, it is uncertain whether CAP funding is worthwhile above and beyond the funding itself. This can be taken to imply that those capitalized more intensely would have had higher outcomes if they had not been subsidized. Unless CAP support itself is allowing farms to invest at a higher scale—i.e., in the case where scale is endogenously determined with respect to support—its impact could be overstated, negating its policy rationale.
• Ambiguous Interpretation of Liabilities: The study documents a big rise in financial liabilities for both CAP-supported and unsupported investing farms but fails to examine the nature or meaning of this borrowing. Without a consideration for whether the liabilities are sustainable, productively deployed, or a sign of financial distress, it is impossible to measure whether observed investment activity increases long-term farm sustainability or imposes risk. For example, increasing debt may be a sign of strategic expansion and the availability of finance, or, on the contrary, financial overreaching. Failing to conduct such analysis prevents the study from being able to definitively measure the long-term consequences of investment behavior and the actual success of CAP support.
• No Sectoral or Regional Disaggregation: The paper offers a generalized, aggregated examination of investment performance without sectoral or regional disaggregation, which constrains the intensity and usefulness of its conclusions. Various farm types—e.g., crop versus livestock enterprises—tend to have different cost structures, investment requirements, and reactions to support mechanisms such as CAP funding. Likewise, differences in regional levels of physical infrastructure, market proximity, and administrative efficiency—e.g., between Eastern and Western Poland—tend to affect investment support effectiveness. By failing to address such sectoral and geographical heterogeneity, the paper risks hiding essential heterogeneity in performance, thus compromising on policy relevance and the accuracy of conclusions.
• Lacking Productivity or Efficiency Metrics: The report speaks in terms of economic “improvement” for those farms that benefit from investment support but is not specific as to what the improvement represents. Major performance indicators in the form of net profitability, return on investment (ROI), or particular productivity ratios like output per unit of labor or total factor productivity aren’t directly evaluated. As such, it’s not evident from the observed “improvement” whether efficient resource application, temporary boosts in revenue, or higher input levels account for the results. Without making the distinction between the factors that produce profitability, productivity, and scale growth, the evaluation is not sufficiently in-depth to measure the economic effacacy of the investments as well as the value provided by CAP support.
• Limited Policy Implications: The paper, having evaluated a substantial EU policy instrument—the investment support through the Common Agricultural Policy (CAP)—provides limited insights into how the results might shape or streamline policy design. It refrains from answering essential questions, including whether CAP funding is unduly favoring large, already capitalized farms and so increasing structural disparities. The study could have considered whether the mechanisms for targeting must be corrected to favor less competitive or smaller-sized farms in the interests of equity or longer-term sectoral resilience. Without this, the study fails to be able to make a meaningful contribution to the debate surrounding how best to make CAP delivery both more efficient and fairer.
• Limited Comparison with Non-investors: The paper recognizes in passing that funded and unsubsidized investors perform better than non-investors, but this is not developed. The main analytical effort is reserved for comparing CAP-subsidized farms with those investing without the support from public finance. The wider policy relevance is lost as a consequence. A stronger tripartite comparison—in which it is unambiguously established that the group is a non-investor, a supported investor, or an unsupported investor—would give a truer picture of the value added by CAP support. This could be a way of eliminating the specific effect of the subsidy from the overall investment effect, giving a better insight

With the following changes you can orient the article for publication.

 

 

 

Author Response

I am submitting the article after making the corrections suggested by the other reviewers.

Best regards

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

The paper assesses the effectiveness of state policy tools by examining the range of investments promoted by Polish agricultural producers within the institutional framework of the Common Agricultural Policy. The authors utilise data on farms in Poland from 2015 to 2023 to assess changes in the economic outcomes of agricultural producers. The authors use two different groups of producers: those who invest with the support of funds from the EU Common Agricultural Policy and those who bear the burden of investment without using these instruments. The authors inform us that, according to an informative policy implication, producers who used these tools achieved better results. The paper is informative but requires some revisions before being published in Agriculture.

1. The literature review is comprehensive, but it is presented as a list of studies rather than a cohesive narrative. The authors should synthesise the findings more, highlighting key debates and conflicting results. They have to explicitly state the position of this study within the existing literature.
2. The authors should explicitly state the research question(s) or objectives of the paper at the end of the introduction. This addition will provide a clear roadmap for the reader.
3. The paper requires a clear and concise summary of the study's main findings. This summary is crucial in discussing the paper's theoretical and policy implications.
4. The authors stress the critical importance of the Common Agricultural Policy. It would be informative to link this EU tool with sustainable development. The authors should briefly discuss sustainable development in the paper's introduction. Two papers are informative: https://doi.org/10.1080/13563467.2022.2038114 and 10.2478/zireb-2018-0005. 
5. The authors should discuss the paper's policy implications. What recommendations can be made to policymakers based on the results of this study? It would be informative if the authors linked their results with Sustainable Development Goals (SDGs).
6. The authors should add a separate section to discuss the paper's limitations.
7. Carefully proofread the manuscript for any grammatical errors or typos.

Author Response

At the beginning I would like to thank you for all comments. I agree with everyone. Indeed, the work had several serious disadvantages. I hope that thanks to your comments, it looks more professional now.

 

1. The literature review is comprehensive, but it is presented as a list of studies rather than a cohesive narrative. The authors should synthesise the findings more, highlighting key debates and conflicting results. They have to explicitly state the position of this study within the existing literature.

I changed the literature review to meet your demands

2. The authors should explicitly state the research question(s) or objectives of the paper at the end of the introduction. This addition will provide a clear roadmap for the reader.

I stated the research question at the end of the introduction.

3. The paper requires a clear and concise summary of the study's main findings. This summary is crucial in discussing the paper's theoretical and policy implications.

I changed summary

4. The authors stress the critical importance of the Common Agricultural Policy. It would be informative to link this EU tool with sustainable development. The authors should briefly discuss sustainable development in the paper's introduction. Two papers are informative: https://doi.org/10.1080/13563467.2022.2038114 and 10.2478/zireb-2018-0005. 

I attached information from this article to my work

5. The authors should discuss the paper's policy implications. What recommendations can be made to policymakers based on the results of this study? It would be informative if the authors linked their results with Sustainable Development Goals (SDGs).

It seems to me that the problems I raise are essentially too technical to combine them with such long -term goals

6. The authors should add a separate section to discuss the paper's limitations.

I made it at the end

7. Carefully proofread the manuscript for any grammatical errors or typos.

I spent some time to improve it. I hope it looks better now.

Reviewer 3 Report

Comments and Suggestions for Authors

Dear author,

The article is quite relevant and addresses the issue of the effectiveness of subsidizing investments in Poland, but there are a number of comments:
1. The abstract should be improved and show what the contribution of this work is compared to previous studies. Also provide more specific results of the analysis.
2. It is not good to call section 1. Introduction and Discussion, usually the Discussion Section is presented separately after the results.
3. Section 1. Introduction and Discussion should be divided into two sections 1. Introduction and 2. Literature Review.
4. In the literature review, it is worth adding more relevant articles for 2022 to 2024 and not only from Poland, such as: Analysis and Assessment of Infrastructural Potential in Rural Territories
Investment trends in the development of the agricultural economy sector.
5. The removal of almost 20% of all farms for 2021–2023 is not sufficiently justified. This may lead to the exclusion of potentially the most active farms, which may underestimate the economic indicators in the control group and thereby distort the results of the comparisons.
6. The same applies to the lack of justification for the omitted variables in the PSM, affecting both the receipt of a subsidy and income. This raises the question of the validity of the model.
7. The results need a more detailed description of the ATT and p-value, but the interpretation of the results is limited mainly to a descriptive presentation, without an in-depth analysis of the economic significance of the effects obtained. At the same time, the effect size is not discussed, and there are no confidence intervals that would help to assess the reliability and variability of the results.
In addition to the fact that ATT is calculated separately for two types of investors, the author does not provide a comparison between them, it is possible to show the differences in growth for each indicator on the graph.
8. The word "Agricultural" can be added to the Title to emphasize the specificity of the article.

Author Response

Thank you for your comments. Taking them into account significantly increased the quality of work. Thank you again

1. The abstract should be improved and show what the contribution of this work is compared to previous studies.Also provide more specific results of the analysis.

I improved it

2. 
   It is not good to call section 1. Introduction and Discussion, usually the Discussion Section is presented separately after the results.

I changed it.

3. Section 1. Introduction and Discussion should be divided into two sections 1.Introduction and 2. Literature Review.

I changed it.

4. 
   In the literature review, it is worth adding more relevant articles for 2022 to 2024 and not only from Poland, such as: Analysis and Assessment of Infrastructural Potential in Rural Territories Investment trends in the development of the agricultural economy sector.
   I made changes
5. The removal of almost 20% of all farms for 2021–2023 is not sufficiently justified. This may lead to the exclusion of potentially the most active farms, which may underestimate the economic indicators in the control group and thereby distort the results of the comparisons.
   I wanted to avoid taking into account farms that are undergoing an investment process, which usually significantly affects the results obtained. I was afraid that taking them into account would distort the results due to the existence of investment costs, but there is still no benefits from them. I explained it in the article

 

6. The same applies to the lack of justification for the omitted variables in the PSM, affecting both the receipt of a subsidy and income. This raises the question of the validity of the model.

It seems to me that I took all the necessary variables into account. Please indicate what I could improve in this regard.

7. 
   The results need a more detailed description of the ATT and p-value, but the interpretation of the results is limited mainly to a descriptive presentation, without an in-depth analysis of the economic significance of the effects obtained.At the same time, the effect size is not discussed, and there are no confidence intervals that would help to assess the reliability and variability of the results.
   I made changes to the article in accordance with these suggestions
8. 
   The word "Agricultural" can be added to the Title to emphasize the specificity of the article.

I changed it

Round 2

Reviewer 2 Report

Comments and Suggestions for Authors

The authors addressed most of my comments adequately. 

Author Response

I am submitting the article after making the corrections suggested by the other reviewers.

Best regards

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

The author has significantly improved the paper, but it is necessary to correct:

1. Section 2 should be renamed not Discussion, but Literature Review.

2. Figure 2 should have the title two graphs with a mention and more detailed description before it, not after.

3. It would be worth adding an analysis of the statistics of general investments in Poland and possibly in other countries at the very beginning, to give a general idea.

4. It is better not to indicate "posed by the author of this paper", it is advisable to avoid indicating the author or personal pronouns such as "we" lines 533, 554.

Author Response

Dear reviewer,

although I fully share your postulate regarding the separation of Part 1 Introduction and Discussion into two separate subsections, I will have to connect them again. I received information from the publisher that due to maintain consistency with the standard structure expected for research articles in our journal I must combine the Introduction and Discussion sections into a single "1. Introduction" section, followed by "2. Materials and Methods". So I feel obliged to introduce this change and I will show it when I will send You corrected article in a few days.  again. As for the other comments, I will refer to them in the coming days.

Apart from that, I have made all the corrections suggested in the four points and I hope that everything is fine now.

Author Response File: Author Response.pdf