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The Warsaw Voice » Special Sections » November 29, 2012
Polska... tastes good!
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Driving the Economy
November 29, 2012   
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Agriculture and food processing have become major drivers behind the development of Poland’s economy in recent years. They have played an especially important role in the expansion of exports.

According to the latest forecast from the Institute of Agricultural and Food Economics, food exports from Poland will reach their highest-ever value this year: 16.3 billion euros, over 1 billion euros more than last year. Though it’s not the record itself that is the most important, it is vital to maintain a growth trend in Polish food exports, even at a time of crisis. The value of agrifood products sold abroad, expressed in euros, grew by 190 percent in 2004-2011. The share of exports in the total value of agrifood sales is also growing. When Poland was joining the European Union in 2004 this share was 18 percent; it has since increased to 40 percent.

The Agriculture Ministry estimates that the value of exports grew by almost 11 percent in the first six months of this year. Despite growing food prices around the world, Polish agrifood goods are still relatively inexpensive and therefore find willing buyers in Western Europe. The crisis has made consumers in those markets more frugal.

Polish food producers are encouraged to increase exports also because they have been producing more food than expected. Data by the Central Statistical Office (GUS) show that in the first three quarters of this year, production of agrifood goods (accounting for 16 percent of total industrial production sold) was 6.5 percent higher than in January-September 2011 when 4.6 percent growth was reported.

Sales increased in all product groups, including vegetable oil and vegetable and animal fats by 24.4 percent, baked and flour-based goods by 15.8 percent, meat processing and preserving and meat products by 11.9 percent.

Growing agricultural production and increasing food exports are extremely important not only for the agrifood sector.

“In difficult times agriculture could turn out to be a good stabilizer and strong pillar for the economy as a whole,” Stanis³aw Kalemba, the Polish minister of agriculture and rural development, said at the Agro-Conference organized by BG¯ bank in October. “The Polish agrifood sector is the only sector with a positive balance of foreign trade. We estimate that we will achieve a trade surplus of around 3 billion euros in the agrifood sector this year,” he added.

Poland is among Europe’s biggest food producers and a leading producer of apples, champignons, potatoes, rye, rapeseed and sugar beets. The high quality and natural taste of Polish food means that Polish products find their way abroad while jobs stay in the country. It is also important that thanks to EU funds, among other factors, Poland has some of the most advanced processing facilities in Europe.

“Apart from the obvious benefits of modernization, investing in farms and the food processing industry helps stabilize the entire sector working for agriculture and industry, such as the manufacturers of machinery and equipment, tractors, fertilizers and feed,” Kalemba said. “In this sense, this is a major stabilizing factor, though not very prominent in terms of public awareness due to the fact that we only quote the sums of money transferred to rural areas and the processing industry. This money, however, very quickly flows to other sectors, enabling them to maintain employment,” he added.

Kalemba also said that, due to changes in not just the Common Agricultural Policy but also other European policies, EU member states face new challenges. For Polish farmers and processing plants, one of these is further consolidation.

“Joining forces by forming producer groups can be an effective response to globalization,” Kalemba said. “Today we are taking more notice of the need for consolidation on the single EU market with its more than 500 million consumers. However, this is only 10 percent of the world population. We are diversifying our markets, and new opportunities are opening up before Polish producers. This is also a task for the agriculture ministry, to help farmers set up cooperative or producer groups. Among other things, we want to do this by changing the awareness of food producers and educating young people in these issues. Cooperation always produces the best results, while consolidation is a chance for greater profits for farmers.”
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