Subsidies from the European Union Common Agricultural Policy affect how efficient Polish dairy farms are. Coupled and environmental subsidies help reduce short-term inefficiency, but Less Favoured Areas and other rural subsidies do the opposite. On the other hand, environmental, Less Favoured Areas, and other rural subsidies increase long-term inefficiency. Different types of subsidies have different effects on farm efficiency, and these effects can vary between short-term and long-term inefficiency.