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Poland - Agriculture

Agriculture, hunting and forestry accounted for approximately 4.5 percent of GDP in 2004. In 2005, agriculture, hunting and forestry as a percentage of GDP decreased to 4.0 percent and decreased further to 3.7 percent in 2006, increasing to 3.8 percent in 2007 and again to 4.0 percent in 2008 (based on preliminary data). The percentage of people employed in this sector was 16.5 percent in 2004, 16.2 percent in 2005, 15.8 percent in 2006 and 15.2 percent in 2007. There is substantial fragmentation of ownership within the agricultural sector, which is characterized by numerous small private farms.

In 2008, 96.7 percent of agricultural land in Poland was privately owned, as compared to 96.5 percent in 2007, 96.1 percent in 2006, 95.8 percent in 2005 and 95.5 percent in 2004. In 2008, cereals, particularly wheat and rye, as well as industrial crops such as rape and turnip dominated among crops produced on arable land, although production of crops such as sugar beet, potatoes and fruit is also significant. Other agricultural production largely comprises beef, poultry and pork. Polish farmers receive area-based subsidies provided by the EU Common Agricultural Policy on a yearly basis and such subsidies provide a source of additional income for farmers. The following table sets forth the subsidies received by Poland from the EU budget (European Agricultural Guarantee Fund and European Agricultural Fund for Rural Development) for the periods indicated.

Poland has a strong agricultural heritage with many products in high demand such as its high-quality fruits and vegetables, honey, hams, sausages, and dairy. It is a leading producer in Europe of dairy, apples, potatoes, and rye, with significant production of rapeseed, grains, hogs, and cattle. Nonetheless, agriculture remains among the least productive sectors of the Polish economy, employing 15.2% of the work force while contributing only 4% to the gross domestic product (GDP) (2007). Unlike the industrial sector, Poland's agricultural sector remained largely in private hands during the decades of communist rule. Most former state farms are now privately owned and represent the largest land holdings. Roughly 1.6 million farmers are considered rural dwellers who have other employment off the farm and produce food mostly for their own consumption. These farms are small, usually no larger than 5 hectares (12.36 acres) and are highly inefficient. There are about 200,000 farmers with plots over 15 hectares (37.07 acres), and 24,000 with plots up to 200 hectares (494.21 acres). These farmers produce about 90% of the food and enjoy better access to strong management techniques and technology.

Poland successfully transformed its farm economy to market principles following the end of communism but has now entered a period of greater state control of the market due to its membership in the European Union. Five years after Poland's EU accession, its agricultural policy is dominated by the EU's Common Agricultural Policy and by its open borders with the other 26 EU members. Land prices have increased dramatically, but less than 1% of farm land is traded each year due to the single area payment scheme for the EU's direct subsidies, intended initially to ease EU compliance with World Trade Organization (WTO) rules and to simplify payments in countries with limited administrative capacity. This approach assigns subsidies based on land use and thus encourages small farmers to hold onto land or lease it rather than sell to neighbors. Subsidies have become almost half of total farm income in Poland.

Poland remains a net exporter of food products overall, including confectionery, processed fruit and vegetables, meat, and dairy products. However, the net advantage to exports is diminished each year. Polish processors often rely on imports to supplement domestic supplies of wheat, feed grains, vegetable oil, and protein meals, which are generally insufficient to meet domestic demand. Additionally, imports have risen as quickly as exports as Poland's growing middle-class consumers begin to demand more variety and year-round availability of their food choices. Finally, Poland has begun to import significant quantities of primary foodstuffs as it has opened borders with larger, more efficient producers in other EU nations. Poland imports significant quantities of pork from other EU member states, and in 2008 became a net importer. Attempts to increase domestic feed grain production are hampered by the short growing season, poor soil, and the small size of farms.

In 2007, Poland experienced outbreaks of avian influenza (AI) in domestic poultry flocks. Poland's Veterinary Service identified and destroyed the domestic stock that was primarily in flocks of commercial laying hens. The United States is currently involved in the regulatory process to recognize Poland as AI-free.

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Page last modified: 11-07-2011 03:04:18 ZULU