Polish reforms through farmers' eyes
When the reconstruction of the marketplace economy in Poland began in 1990, agriculture was in a circumstantial situation. On the 1 hand, it was the only sector dominated by private ownership, which should aid to adapt to fresh conditions. On the another hand, the sector was heavy backward, characterised by excessive fragmentation and mediocre productivity of private households and waste of resources by state farms. The economical marketplace seemed to favour agriculture. The massive shortages of agri-food products, which characterise the communist system, after the release of food prices in 1989 resulted in an 11-fold increase, compared with six-fold increase in the prices of another goods and services. As a result, the alleged price scissors, i.e. the ratio of the prices of goods sold by farmers to the goods purchased by them, developed importantly in their benefit (from 1988 to 1989 this relation improved by 35%). The full beginning of the economy and the widespread release of prices in 1990, however, have led to a drastic change in the situation. request for home agricultural production has decreased strongly. Food prices have tripled, but the remaining prices have quadrupled and the price shears ratio has doubled by half. After comparative satisfaction with the situation in the late 1980s, farmers, alongside the unemployed, rapidly became the most dissatisfied with marketplace reforms group in the country1.
Within 20 years of EU membership, Polish agriculture and agrarian areas received a full of EUR 79 billion of support, of which 2 thirds in the form of direct payments to farmers. Therefore, it is clear that accession has led to large changes in the conditions of improvement of Polish agriculture.
The situation was different erstwhile Poland joined the European Union. More than 60% of farmers declared aversion to membership. Among the reported concerns, the most (80-90% of the indications) afraid the flood of imported food, increased difficulties in selling Polish agricultural products, the mass decline of farms and the acquisition of land by foreigners2.
Meanwhile, Polish agriculture benefited from accession. Membership in the EU meant unlimited access of Polish food to the European single market, which resulted in a ten-fold increase in exports, with a increasing affirmative exchange balance in this commodity group. This besides meant supplying Polish agriculture and agrarian areas with powerful resources for both improvement and modernisation, as well as supporting farmers' incomes. Within 20 years of membership, Polish agriculture and agrarian areas received a full of EUR 79 billion of support, of which 2 thirds in the form of direct payments to farmers. Therefore, it is clear that accession has led to large changes in the conditions of improvement of Polish agriculture.
Changes in the function of agriculture in the Polish economy
From a general economical point of view, however, the most crucial question is how changes in Polish agriculture during the years of EU membership affected the economical improvement of the country and how the function of agriculture in the Polish economy evolved at the time3.
When the transformation of the Polish economy began in 1990, agriculture played a more crucial function in it than in most European economies. Its GDP share was 7.3% (in Western European countries it was on average below 3%; from 0.9% in Luxembourg, to 13.8% in Greece). By the time of accession to the EU in 2004, this rate had fallen to 3.7%, which placed Poland much closer to the EU average at the time, and in the years of membership it had fallen only somewhat to 3.2%. On the another hand, employment in Polish agriculture played a much greater role, clearly distinguishing Poland from most European countries. The number of agricultural workers estimated on the basis of the census in 1990 was nearly 27% of all economical workers, 1 of the highest shares in Europe. By 2004, this percent fell to 17% and fell to 8.4% during the membership period (in the EU countries, between 0.8% in Luxembourg and 21.4% in Romania). These changes reflected crucial trends shaping both the share of agriculture in Poland's economy and its economical efficiency.
Firstly, in 1990 agriculture, on the 1 hand, had a crucial part of the resources of the production factors available in the Polish economy, especially labour resources, and on the another hand, it was distinguished from the remainder of the economy by a very low level of combined productivity of the production factors (work and capital), i.e. the efficiency of their use.
Secondly, the fast restructuring in the first years of the transition led to a crucial simplification in agricultural labour resources and a simplification in the stock increase. Unfortunately, advanced unemployment combined with low labour mobility has led to a deficiency of crucial labour flow to another sectors of the economy. This posed a serious threat to the ability of agriculture to make fair income.
Thirdly, the period of EU membership was characterised by a simplification in differences in the economical efficiency of agriculture compared to the remainder of the economy. However, these differences stay very large, and the increase in efficiency was mainly due to a further decrease in labour expenditure (the outflow of agricultural workers, mainly for demographic reasons). At the same time, it should be noted that the progressive simplification in labour resources was not accompanied by crucial labour flows to another sectors of the economy, nor by strong processes of mechanisation of agriculture. While restructuring processes continued, they slowed down as a consequence of the drop in marketplace pressure, despite the very serious measures that the agricultural sector benefited from for EU membership.
Polish agriculture did not take full advantage of the chance to velocity up restructuring processes and increase efficiency resulting from EU membership. A crucial function could have been played in this way by the way available funds were spent on direct payments, and not in support of pro-efficiency changes in agriculture and agrarian areas.
In view of the above, it can be concluded that Polish agriculture has not taken full advantage of the chance to accelerate restructuring processes and increase the efficiency of EU membership. A crucial function could have been played in this way by the way in which the available EU budget was spent mainly on direct payments alternatively than in support of pro-productive changes in agriculture and agrarian areas.4. It remains to be hoped that the next years will bring about changes in this area, especially since the shift of part of labour resources to non-agricultural sectors (mainly services in agrarian areas) favours the favourable situation on the Polish labour market.
What about the next decades?
The declining function of agriculture as a branch of the agrarian economy does not mean that it will decrease its importance in ensuring food safety of the country. Current developments, and in peculiar the consequences of climate change, will make maintaining a sufficiently advanced level of food production likely to become 1 of the EU's most crucial agricultural policy objectives. At the same time, trends in sustainable agriculture in line with environmental policy will continue. All of this, together with persistent marketplace force and changing policy priorities, will be a strong impetus for the transformation of Polish agriculture.
In view of the current situation of the Polish agricultural sector, peculiar attention should be paid to the non-optimal ownership structure which hinders the increase in labour productivity and to the importance of farms producing food only for their own needs (the data may be misleading due to the mass leasing of land). However, the analysis of basic agricultural production indicators in Poland and Western European countries reveals another crucial decisive element
the situation of this sector. These are the differences in the marketplace value obtained by the full agri-food sector from the sale of the primary agricultural production unit (e.g. kg of fruit, kg of meat or litre of milk). A simple comparison of the physical size of agricultural production with the marketplace value obtained from food sales by the agri-food sector in Poland and Western Europe suggests that 2 or 3 times the marketplace value is obtained from the agricultural production unit in Poland, mainly as a consequence of the higher degree of product processing.
Polish agriculture will so gotta proceed to change in order to guarantee the country's food security, acceptable farmers' income and fulfilment of environmental and non-renewable resources.
1Social diagnosis 2000, ed. J. Czapinski, T. Panek, Council of Social Monitoring, Higher Pedagogical School of TWP, Warsaw 2000.
2 Social Opinion investigation Centre, Declarations of participation and voting in the accession referendum. Test message, Warsaw 2003.
3 Quoted data comes from: W.M. Orłowski, Did Polish agriculture take advantage of the opportunities created by membership of the European Union? Macroeconomic evaluation, in: Polish village and Polish agriculture. 20 years in the European Union, ed. P. Chmieliński, G. Gorzelak, IRWiR, Warsaw 2024, pp. 139-156.
4 Cf. W. Post, The top benefits of Poland's accession to the EU in the agri-food sector, in: Where are the jams really? The main economical benefits of Poland's membership of the European Union, ed. W.M. Orłowski, Wydawnictwo Uniwersytet Warszawskiego, Warszawa 2021, pp. 136-151.
