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The Warsaw Voice » Business » February 18, 2009
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Food for Thought
February 18, 2009   
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Władysław Łukasik, president of the Agricultural Market Agency (ARR), talks to Elżbieta Wrzecionkowska and Andrzej Jonas about Polish food and what the agency does to promote it internationally.

What is the role of the food sector in the Polish economy?
It is one of the economy's mainstays-and not just at a time of crisis. Prior to Poland's entry to the European Union [in May 2004], many people were skeptical about whether Polish agriculture would be able to find its place in the new economic reality. They said Polish food would face international competition and might be unable to deal with it. Those fears were due to insufficient technological support and a lower level of direct payments for Polish farms and, moreover, in the case of the food processing sector, due to the fact that Polish food-processing businesses were far less well organized than their counterparts in other EU countries.

But before long food producers became one of the first enterprises in Poland to successfully adapt to EU standards, while sales of Polish products on Western European markets started to grow steadily.

The numbers speak for themselves. Poland reported a zl.2 billion surplus in the trade of farm produce and foodstuffs in 2007, up from just zl.500 million prior to the country's EU entry. Over 80 percent of Poland's exports go to other EU member states, which means competition is not as stiff as we feared. Let us not forget that in the meantime, Poland had to deal with a sharp appreciation of its currency and difficulties on the Russian market [a prolonged ban on Polish food imports-ed.]. Poland is now working to regain that market, and the first effects are there, though you can hardly speak of a complete success for now.

What are Poland's chances of staying on Western European markets as far as food exports are concerned?
This is not an easy question to answer. If you look at the breakdown of exports, semi-processed produce plays a more important role in it than final products. Take butter, for example. Polish butter is usually exported in 25-kilogram units whose producers remain undisclosed. This leads to the problem of branding and persuading the customer that a given brand is really a good product.

The thing is that when French consumers, for example, come to a supermarket and buy products containing butter or milk powder, they will not be aware of the fact that it was made in Poland. Although butter produced in the Podlasie region is very good, hardly anybody knows this. In a booming economy, markets crave all kinds of products, and so you can sell even those without a well-promoted brand name. But when there is a slump in the economy, it primarily affects products that are not well established on the market and have no clear-cut image. This is what we should focus on if we want to stay on Western European markets.

An even more serious problem than the absence of a brand is distribution, or actually a lack of very well organized distribution. This applies to both Western European markets as well as food sales on the Polish market.

A few chains call the shots on the Polish market-you can count them on the fingers of one hand. This not just concentration, but globalization when it comes to distribution. On the production side we have hundreds of independent operators, for example 231 in the dairy industry. This constitutes an asymmetry. The key to success, to stay on Western European markets, is building up our own distribution channels and quality brands. Only such products stand a chance in developed countries.

What does the Agricultural Market Agency do to help promote Polish food?
Essentially, the ARR works to stabilize agricultural markets by using intervention mechanisms, subsidies and programs. The agency is managing 54 EU programs and nine Polish programs. However, a new piece of legislation waiting for review in the lower house of parliament seeks to expand the powers of the ARR in the field of food promotion, among other things.

As part of the EU's Common Agricultural Policy, we have been running campaigns to promote dairy and apiary products as well as traditional, organic food. These are diverse activities that not only seek to stimulate demand on the Polish market through sales of food products, but also protect the health of children and shape their eating habits. For instance, over 2 million Polish children benefit from the "School Milk" campaign every day. In September, we will launch a program called "School Fruit," for which the European Commission has assigned 90 million euros annually in 2009-2010. The funds will be spent on providing children in schools and other educational facilities with fresh and processed fruit and vegetables. This year, Poland has 10 million euros for the campaign.

We will also be utilizing EU funds on two campaigns, "A Table Full of Flavors" and "Tradition and Taste", both of which promote quality meat and meat products on markets such as Japan, Ukraine, South Korea and the United States.

In all the programs supervised by the agency, the absorption of EU funds approached 100 percent in 2008.

If you were to host an official reception, what Polish products would your guests find on the table?
There are so many of them and the choice is difficult. The Polish table should abound in cold meats, especially those from southeastern Poland whose taste is exceptional. Polish bread is a must as well-I got a chance to see for myself how immensely popular a Polish bakery is in Berlin. As for main courses, I would say buckwheat pie, which can be served both hot and cold. It is healthy, rich in calories and cheap.

Overall, we have lots of top quality products in Poland, but the problem is that some of these brands have lost their appeal and could use some revamping. Not only new products but also those good, traditional ones need promotion so that people in other countries could appreciate them-of course, by tasting them. The taste of Polish food is exceptional, it is worth acquiring.
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