SIGNIFICANCE OF PRODUCTION DIVERSIFICATION IN ENSURING FINANCIAL SECURITY OF FARMS IN POLAND

The purpose of the present study is to define, based on a theoretical identification, the significance of production diversification in ensuring financial security of agricultural farms and a presentation of the specificity of multi-directional farms in Poland. The entities included in the research were the ones conducting agricultural activity of a mixed type: mixed cropping and mixed crops-livestock in the years 2007-2013. The analysis was carried out based on data obtained from the statistical publications of the Central Statistical Office. On the basis of an analysis of the structure and dynamics. The size of utilised agriculturally area and their use, economicsize, the type and structure of plantation as well as the species and number of farm animals were all taken into consideration in the analysis. Based on the theoretical considerations presented it is evident that production diversification plays an important role in the reduction of the agricultural activity risk, and thus it contributes to maintaining stability and thereby preserving the financial security of farms. The results of empirical research prove that those farms that diversify their production are mainly farms of small economic size, producing for their own use. Diversification acts as a safety buffer in the case of these farms. It ensures self-sufficiency in terms of consumption and fodder production as well as small income. In the case of farms with bigger UAA it ensures proper functioning and survival on the market