Is There Room for Instruments in the Common Agriculural Policy? Casus of Poland

A number of new geopolitical conditions, new EU priorities, reform of the euro area with the possibility of establishing a separate budget, fiscal consolidation of most of the EU countries, constitute difficulties in terms of the construction of the EU budget. The aim of the study was to identify the possibility of using financial instruments under the CAP. The analyses concerned mainly Poland. The considerations, illustrated with theoretical and empirical materials, were focused around the following thesis: the permanent domination of the subsidies under CAP and its first pillar radically narrows down the space for using financial instruments. An eclectic approach was applied, using elements of the theory of economics of the public sector, public finances, financial economics and institutional economics. Some justifications of financial instruments do not seem well- -founded in theory and probably would not pass the rigorous empirical verification. In order to avoid over-reimbursement and re-promotion of agriculture, it is not advisable to start identifying development barriers to this sector with financial issues. Financial instruments are adjusted mainly to achieve allocation and stabilisation objectives under the CAP and national agricultural policies. Only larger farms may be interested in financial instruments