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The Warsaw Voice » Business » September 30, 2011
Business & Economy
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Bringing Funds to Agriculture
September 30, 2011   
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Władysław Łukasik, president of the Agricultural Market Agency (ARR), talks to Elżbieta Wrzecionkowska about the Agency’s tasks during Polish Presidency of the EU Council, including the Agency’s role in shaping the EU Common Agricultural Policy (CAP).

The EU presidency puts obligations on Poland but at the same time it gives the country an opportunity to present its own position and views on the EU agricultural policy.

The presidency is certainly an opportunity for the country to present its ideas, but one should remember that there are few activities one can initiate and complete within several months. And the presidency lasts only six months. Most programs take years to complete. Of course, one may come up with ideas and initiate changes, but one should be aware that the decisions will be made by someone else. Moreover, my experience shows that work in EU institutions means constant efforts to reach a consensus, work out a compromise, and combine various interests, sometimes contradictory ones, in the name of a single goal.

I think the presidency is not a time for emphasizing one’s own interests, but a platform for building relations with individual countries. As a host country, we should above of all display our negotiating skills. For instance, we organized the Conference of Directors of EU Paying Agencies in Gdańsk at the end of September, with the participation of former Polish President Lech Wałęsa as part of the Polish EU presidency agenda. We did not talk about agricultural policy, but about introducing simpler procedures, improving efficiency in our activities and propagating good practices. Of course, some procedures cannot be simplified without changes to the mechanisms governing them, and this is where we have to do with politics, but our activities are chiefly aimed at turning the Agency into a modern organization, one efficiently using intervention instruments and managing programs supporting agriculture. Last year, the ARR marked its 20th anniversary. It came a long way over these years.

The Agency’s activities include supervision over 50 instruments and programs supporting agriculture. What specific tasks has the ARR been pursuing for more than 20 years now?
The Agency was set up in 1990. Initially its main goal was to carry out intervention policy on the agricultural market. In 2001, it was chosen to play the role of a paying agency. But the greatest changes came after Poland’s accession to the EU. In April 2004, the ARR received unconditional accreditation and the status of EU paying agency. Thanks to the accreditation, confirming that the ARR met the European Commission’s requirements, from May 1, 2004, the day of Poland’s accession to the European Union, we could start paying out CAP money to farmers. Today, the ARR deals in its work with more than 20 commodity groups and administers more than 50 support instruments and schemes. Our activities cover not only intervention purchases on the agricultural market, but also assistance to producers at a time of difficult and unpredictable developments.

This year, for example, the E-coli threat, hyped up by the media, caused major losses to Polish vegetable producers. The total amount of compensation we managed to pay out to our producers for the damages they incurred exceeded 46 million euros. Additionally, as part of its statutory operations, the ARR pursues activities aimed at promoting and providing information about agri-food products. It also conducts large-scale market research and supports Polish businesses in their efforts to enter third-country markets. Many of our activities, especially those targeted at consumers, are under-reported in the media. Among the European Commission-funded campaigns we have carried out are School Milk Scheme, School Fruit Scheme and Aid for the most deprived. In the 2009/2010 school year, EU member states had an opportunity to launch programs to provide free fruit in schools. We also benefited from the scheme. The program was targeted at elementary school children in grades one to three. Its purpose was to change children’s eating habits by increasing the proportion of fruit and vegetables in their daily diet. Every child taking part in the program received free fresh fruit, vegetables and juices. It is worth citing some figures in this context. In the second half of the 2009/2010 school year, we managed to cover with the program almost 6,000 elementary schools and 571,000 children. In the second half of the 2010/2011 school year, the number of schools taking part in the program increased to 8,600 and the number of children was 792,000. The ARR provided zl.31.9 million for the program, of which zl.23.9 million came from EU sources and zl.8 million from the national budget. We have conducted more than 10 campaigns of this kind with large EU funding. The money is used directly to carry out the programs rather than promote the campaigns.

The ARR manages millions of euros. The distribution of such enormous funding always prompts concerns. Many applicants complain about the complexity of EU and Polish procedures involved as well as the hundreds of documents they are required to submit while applying for funds. What standards has the ARR introduced to make this system simpler and more transparent?
Not everyone knows that in 2009, we introduced the ISO 9001 quality management system at the ARR. In 2010, we followed up with a corruption risk management system. Both systems are certified by the Polish Centre for Testing and Certification. Prior to launching the anti-corruption system, we appointed a team responsible for analyzing potential sources of corruption risks in all our processes. The sources of risk and posts exposed to it were identified.

We put special emphasis on examining the transparency of procedures to remove discretionary practices. This is in line with the philosophy of the 9001 management system, which is based on transparent procedures, with a clearly defined scope of authority, responsibilities and decision-making freedom. Today, all applications submitted to the ARR are examined in line with the “four eyes” rule. This means that every decision is made by two independent staff members. Responsibilities, with financial limits determined, have been defined for each post. Individual payments and advance payments can be identified in accounting registers. Audits are conducted to check how the payments are accounted for. We have introduced a uniform standard for preparing documents, with transparent rules for the ARR staff regarding expenditures. An IT system has been put in place to support these activities. Additionally, the ARR is constantly subject to external audits—both by Polish auditing and certifying bodies and institutions that supervise the ARR and by EU auditing authorities. This year, we plan to receive certification for our information security management system. We have reviewed our in-house regulations and managed to reduce the number of in-house documents from 16,000 to 5,000 pages, without changing our processes. This has not only streamlined our work but also meant huge cuts in paper consumption and consequently environmental benefits.

Polish food enjoys an increasingly good reputation worldwide, which translates into higher exports figures. Last year, Poland had a surplus of 2.6 billion euros in its trade in agri-food products. What is the ARR doing to promote Polish food and its exports? Which countries open up their markets to Polish food? Which promotion activities are the most effective?
Polish food exports are indeed growing by the year. It is worth noting that Poland has maintained a positive balance in this trade for years, despite a string of embargoes on Polish food imposed by Russia and the volatility of the zloty. Interest in Polish food is increasingly high. We can see that clearly as we take part in various trade fairs throughout the world. However, most of our food exports, around 80 percent, go to EU markets, especially Germany, Italy, the Czech Republic and Britain. These are our natural markets. Russia accounts for 4-5 percent of our exports and its role is steadily growing. We still have a lot to do on this market. As regards Asian and Arab countries, we are certainly able to export some specific kinds of food there. One example is chicken feet, which is a delicacy in China. Korea is interested in high-quality beef, while Arab countries buy our powdered milk. It is worth establishing long-term trade relations with these countries, but these need to be carefully prepared. It often happens that producers trying to enter these markets do not have the required sanitary and veterinary documents, kosher or halal certificates needed in Arab countries under Islamic law. We are trying to inform about this; we organize training courses for producers and provide funding for promotional campaigns. This is not only true in case of exporters but also producers selling their goods on the domestic market, where they have to compete with nicely packaged foreign foodstuffs supported by large promotional campaigns. The act on the establishment of agri-food products promotion funds has been in force since 2009. It covers nine sectors. Contributions made to these funds by producers—and there are more than 6,000 of them already—are spent on promotional activities. Thanks to the concentration of money within the funds, we are able to conduct market research for individual product segments, learn about the most effective promotional instruments, and conduct promotional campaigns, although on a modest scale for the time being. Our experience shows that large billboard and TV campaigns, or large stands at fairs, are not always effective. One example of a big success was a campaign to promote Polish carrot juices on the Bulgarian and Romanian markets. It was financed by a fruit and vegetable promotion fund. The campaign was very specific and well targeted. As an Agency responsible for promotional funds, we have organized more than 10 training courses for those who manage the funds so that they are able to work out their own effective methods to promote their products. Additionally, our campaigns in Poland are designed not only to improve the image of individual products and encourage consumers to buy them but also to provide nutrition education to consumers and schoolchildren.
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