Polish Toledo

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Thursday, March 27, 2014

Fast growing sector for Poland


25 years ago, when a visitor to Poland toured an agriculture museum, the museum's staff fired up an old American tractor, given to Poland by Americans not long after the war. As it chugged around a field, belching blue smoke, the visitor happened to see a neighboring field and its farmer working the land by horse.

There we some large co-operative farms, but back then Poland was mostly peppered with hundreds of thousands of small family owned subsistence plots that struggled to provide farmers with a proper income. Many of them took jobs in other sectors and farmed just for their own family's needs.

Things are different now. “This is a golden age of Polish farming,” says Jerzy Wilkin, an economics professor at Warsaw University. “Never before has such large amounts of money flowed into agriculture.”

The trigger for this golden age was Poland's accession to the European Union in 2004, which is somewhat ironic as Polish farmers were at the forefront of the anti-EU membership campaign. But instead of their farms drowning under a tidal wave of subsidized produce from the West, as farmers had feared, they've seen the money roll in. Farm incomes have tripled in the last ten years.

Polish farms benefited from increased domestic spending on agriculture. The dairy sector, for instance, has flourished; partly fueled by a need to comply with costly regulations governing modernization plans. This, in turn, has attracted international agri-food companies to Poland, and helped prompt an export boom.

Official Polish figures for last year put agri-food exports at $27 billion, an increase of 11.5% compared with the previous year. Growth for this year will be 10%, according to government estimates.  Poland even surpassed China as the world's biggest exporter of apples in 2013. Stanislaw Kalemba, who was agriculture minister up until early March, boasted “agriculture is one of the main pillars of the economy”.

The Ukrainian crisis might have an adverse effect on Polish farming. Last year exports to the Russian Federation amounted to $1.7 billion, but Russia tends to impose import bans on countries it wants to put under pressure. Polish farmers will probably be among those who will feel the vengeful wrath of a Kremlin angered by EU sanctions.

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