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Competitiveness of the Polish Agriculture Sector after 4 Years of EU Membership

Competitiveness of the Polish Agriculture Sector after 4 Years of EU Membership Miroslaw Zielinski Unilob Poland. Short characteristic of Polish agriculture. All pictures : 10.000 meters altitude. ldfhlflf. small, carved-up farms poor living standards ¼ of population → 6% GDP.

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Competitiveness of the Polish Agriculture Sector after 4 Years of EU Membership

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  1. Competitiveness of the Polish Agriculture Sector after 4 Years of EU Membership Miroslaw Zielinski Unilob Poland

  2. Short characteristic of Polish agriculture

  3. All pictures : 10.000 meters altitude

  4. ldfhlflf

  5. small, carved-up farms • poor living standards • ¼ of population → 6% GDP.

  6. Relatively young and active population

  7. Dichotomic farming sector Since 1989 Polish agriculture and ruralareas have undergone tremendous changes but still are way behind the rest of the economy. Today there are almost 3 mln farms, 2/3 of them > 1ha Average farm size: 6,59 ha (all farms included) Average farm size: 8,44 ha (in the group of farms > 1ha) Huge regional diversity: Northern regions – average 14 ha, Southern only 2,1 ha

  8. Main Agricultural Production Share and place of Polish agriculture in Europe (in %)

  9. Main Agricultural Production Poland occupies the leading position in apple, in all types of berries and outdoor vegetables, e.g. onions, cabbage and cauliflowers production. Other main EU export products: • poultry • sausages and hams • meat (pigs, cows, horses) • flowers • milk and milk related products • eggs

  10. Agricultural production conditions differ in Poland, especially as compared to EU agriculture. Agricultural holdings = small areas + to many employees + not effective production means Individual farmers – mostly self sustainable approach. Animal production - small intensity of breeding. Market-oriented holdings–developing and growing fast.

  11. ldfhlflf

  12. ldfhlflf

  13. ldfhlflf

  14. ldfhlflf

  15. ldfhlflf

  16. Available at our web:www.unilob.pl/agro2007.pdf

  17. Current strength of Polish agri-foodtrade between Poland and EU In 2006, the process of increasing importance of EU countries as trading partners for Poland continued. In the export structure of 2006, EU Member States constituted 76.8%, and goods imported from the European Union – 63.1%. The second largest group of Poland’s trading partners is the Commonwealth of Independent States, with 10.1% share in the export and 2.9% in the import of Poland. Foreign trade in agri-food products in 2005-2006 broken down by groups of states (EUR million)

  18. Current strength of Polish agri-foodtrade between Poland and EU In bn euro Source: Polish Food Conquers Europe, “Rzeczpospolita”

  19. Primary fears of EU accession related to agriculture

  20. Importance of sharing experience with potential future EU members • History -Potential estimated costs of adjustment processes and integration • Fears: • Shortage of own funds or low state budget will not allow to use structural funds, • Inflow of agricultural products, • Complicated bureaucratic rules to comply with, • Restrictions in production – quotas, • Closing down many agri-food enterprises, • Big cost of compliance and adjusting to EU hygienic regulations, • Foreigners will buy the Polish land

  21. Public opinions – statistical information after 4 years of EU membership

  22. Public perception The public opinion research conducted in April 2007: - 86% of citizens declares themselves EU votaries - 7% declares themselves as opponents. High level of public acceptance to EU proves we are satisfied with membership. The level of EU supporters is growing year by year.

  23. In August 2004 39% of citizens were convinced that integration brings more advantages than loses. After 4 the first 3 positive effectsgraduated almost equally to: • 35% open borders and freedom of traveling within EU • 35% benefits to agriculture and farmers • 30% open labor market for Polish citizens In 2008 75% of Poles agree with benefits to agriculture – that is 16% more than in 2007. According to Center of Public Opinion Research (CBOS): The most comfortable groupare farmers (55%) and employees at individual (62%)

  24. Governmental opinions: • agricultural sector + rural areas, significantly influenced by the effects of the economic growth, - establishment of new jobs, - possibility to influence the Common Agricultural Policy (CAP), • Polish foreign trade in agri-food products demonstrate that agriculture and processing are doing well, - Polish food recognized in Europe and beyond.

  25. AGRICULTURAL AND RURAL DEVELOPMENT SUPPORT Domestic and European Union funds - Since 2004 more resources goes to agricultural and rural support. - Polish + EU budgets for implementation of the CAP and structural programmes. - In 2004-2006, totalled PLN 89,800 million. Domestic and European Union funds for agricultural and rural support in2004-2006

  26. Domestic and European Union funds for agricultural and rural support in2004-2006(excluding KRUS) In bn PLN

  27. Growth of prices of agricultural land and negotiated temporary protective periods in land turnover

  28. Land prices vary greatly from region to region. New owners are mostly seeking to take land out of agricultural use, in order that they might gain higher prices from its sale. The prices of agricultural land in Poland < UE-27 average but > Czech Republic & Lithuania.

  29. Projections of price increase for the agricultural land: -         direct farming subsidies, -         agricultural production financially rewarding, -         the demand for land exceeds supply. Polish Land More Expensive Than German In Brandenburg, in early 2008 the land was cheaper than in Poland wherehe price amounted €2729 per hectare. Negotiated temporary protective periods in land turnover - sensitive negotiations with EU - the longest 12-year protective period in land turnover - exemptions to individual farmers who lease and cultivate the land for 3-7 years - ways of evading land turnover limitation

  30. Benefits and disadvantages of EU accession

  31. Benefits for agriculture: - Direct supplemental payments for land cultivation - EU subsidies for farmers for complying with environment protection rules, - Subsidies for farmers for cultivating deficit agricultural products - Improved products quality and hygienic standards of cultivation and farming - Abolition of trade limitation among EU members countries • Limitation of food import from non EU markets decreases the competition - Food export subventions for farmers - Polish farmers receive earlier and higher pensions

  32. Disadvantages for agriculture: - High cost of introduction of EU norms - Direct land supplemental payments makes the some farmers lazy - Unequal subsidies within EU lower competitiveness - Lower ability to obtain subsidy and structural funds • Often empty promises of big money out of reach

  33. Summary - Conclusions The accession of Poland to the European Union turned out to be beneficial. The Polish market was not flooded with the products from EU. The Polish exports increased. The labor productivity and the quality of products is higher.

  34. 3 summary points • Farmers are the first, the biggest direct beneficiares of EU integration, • Polish agricultural products turn to be competitive at UE market, • Integration with EU caused improvement of market conditions of Polish agriculture.

  35. THANK YOU FOR YOUR ATTENTION WWW.UNILOB.PL

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