Factor Relations in Agriculture – Conceptual Reasoning with Empirical Verification

The research presented in the paper allowed the author not only to fully recognize the correctness of production processes, but also determine the relations between production factors and production volumes (productivity and factor relations). Based on the adopted analytical assumptions and general conditions of farming processes in agriculture, the paper analyzes relations between production factors, i.e., the essence of production techniques. The research on relations between production factors is very complex, thus the paper focuses only on some areas of the issue, such as: labor productivity and its dependency on technical equipment of labor or agrarian structure (approximate land-labor ratio) and the dependency of capital-labor and land-labor ratios on production factors. The analysis is based on the principle of generality and the methodological approach for deduction is used in the paper. The empirical part of the paper uses the dataset for selected EU countries. It was concluded that the ( ) ratio, relatively to ( ) ratio, has a greater impact on the level of labor productivity. These conclusions may be significant for agricultural policy, since improving the agrarian structure does not seem to be a priority, whereas the technical equipment of labor seems to be more important. Thus, it is crucial to increase the involvement of the capital factor.