Barclay Crop Protection

Poland’s grain producers gear up for competition

Poland's grain producers gear up for competition

Experts predict bright future for Polish production

While the inaugural Polish Cereals Event, the sister show to the UK event held last month in Poznan, served to highlight the sometimes substantial gulf that still exists between farming practices in Poland and those of Western Europe, it also raised the game of what to expect from this potential grain powerhouse in future years.

Just a third of the size of its UK sibling, the show had many parallels with the domestic event including a show conference, sponsored by Barclay Crop Protection, which saw what locals described as the best line‐up of agricultural experts ever assembled in Poland - quite a coup for the first show.

The basics were provided by Zibiniew Kaszuba, President of the National Federation of Grain Manufacturers, who focused on the structure of Polish farming. Agriculture is the country's smallest contributor, providing less than 4% to the country's gross domestic product. There are 1.65m farms registered in Poland, yet only 150,000 of those deliver any commercial value to the market. Those 150,000 cover 75% of the land area and provide 85% of Poland's grain harvest, but it is the remaining 1.5m farms that pull down Poland's average yield to just 3.1t/ha.

"Within the next 3‐4 years Polish grain production could increase from the present level of 26‐27m tonnes to 30‐32m tonnes by creating co‐operative groups of commercial farms and employing trading specialists," he said. "These groups would have more negotiating power in buying inputs and sharing machinery, and would eventually be able to reduce their cost of production."

It wasn't a view shared by all the panellists. Professor Walenty Poczta from the University of Life Sciences in Poznań conceded that while Poland has a rich agricultural heritage, and enjoys high demand for its fruit and vegetables as well as pork, dairy and confectionery, grain production is struggling to find a competitive position in the market.

"The structure of the EU budget does not allow for an increase in the competitiveness of Polish grain on the European market," he said, "predominantly due to the disproportional support provided to older, western EU countries (EU‐15) over the newer entrants to the EU under the Common Agricultural Policy.

"As much as 62% of grain production revenue in EU‐15 is generated by direct subsidies, but in Poland only 45% of revenue is generated in this way."

Zibiniew Kaszuba's vision of co‐operatives involved considerable obstacles thanks to the simplified system of direct subsidies, he said.

"What's more, farms facing such competition on the world markets would have to take into account economic and climatic factors which might inhibit intensification of their production. The current system also encourages small subsistence farmers to hold onto their land rather than sell it on to more commercial neighbours, considerably reducing the average yield in Poland."

Improving yields and overall efficiency of the industry was a common theme for the conference speakers. Dr Arkadiusz Artyszak of the Warsaw University of Life Sciences cited better use of soil testing as a solution to improve the efficiency of crop production and cut costs.

"Polish farmers frequently fail to commission proper examinations of their soil," he pointed out.

"Between 2004 and 2007, 1.6m soil samples were taken in Poland which amounts to only 3m ha out of the total 8.5m ha of arable land under cultivation. Fertiliser has typically been applied without resorting to proper soil testing and as a new member of the EU, Polish farmers now have a duty to consider the effects of agriculture upon the environment."

Artyszak added that by spending four zlotys (about 80p) per hectare - the unit cost of testing 1 ha of soil ‐ farmers could make huge savings and demonstrate improved sustainability. Artyszak placed equal importance on the problem of the inappropriate selection of varieties supplied from unidentified sources. According to his figures, the use of farm‐saved seed has been reported at 90% for all major crops, while the amount of certified seed used achieves only 7‐8% according to suppliers.

Jerzy Grabiński, of the Institute of Soil Farming and Fertilisation, pointed out that present climatic changes have influenced the harvest potential of grains while considerable simplifications to the crop rotation have reduced opportunities for timely sowing and farming procedures. In particular, recent years have shown that springtime water shortages are causing the greatest obstacle to harvesting potential. According to Mr Grabiński, "Work to develop drought‐resistant varieties needs to be stepped up, and the area farmed with warm season grains should be further reduced to improve the efficiency of production."

Similarly, the importance of better use of crop protection products was discussed by Dr Michal Fogg of the Polish Plant Protection Association, who gave delegates an insight on Directive 91/414 and its significance for the Polish market. Dr Fogg reported that Polish farmers commonly reduce doses and combine individual components. Such uncontrolled use could stimulate resistance, particularly in fungicides. But much of that problem, delegates heard, stems from the dramatic reduction in the number of active ingredients available - down from 1,000 15 years ago to just 300 today.

One benefit of the directive will be the introduction of training courses for consultants, who will now take responsibility for providing crop protection advice to farmers. Dr Fogg predicted that proper monitoring of pesticide use will lead to major changes in Poland's overall grain production.

Another major change that's likely to come about is to the structure of trade within the domestic grain market. If this took place, Poland would become part of a uniform market, where price levels at home would reflect worldwide market trends. In 2007/2008, in spite of a decent harvest in Poland, grain prices remained at record levels because of a global decrease in production.

A considerable obstacle to effective competition on the world market is the bottleneck caused by the logistics of Polish sea ports, whose total terminal storage area is just 190,000 tons. Moreover, only one port, Gdynia, is able to handle ships of 25,000 tonnes or more. In comparison, France's storage capacity is almost 2.3m tonnes. Nevertheless, Polish grain exports this season broke records, with tonnage of 1.8m, of which 600,000t was exported outside the EU.

While much debate focused on transforming existing markets, other speakers concentrated on the creation of new ones. Michal Ćwil, from the Polish Economic Chamber of Renewable Energy, pointed out that while Poland currently ranks lowest among European countries in terms of generating renewable energy, it is obliged by the EU to triple its present capacity by 2020. Both wind power and biogas production have great potential, the latter of particular importance due to Poland's capacity for putting farming waste to use.

"Development is slow within this sector, thanks to laws which drag out project approvals for up to four years, providing poor support for energy providers," pointed out Mr Ćwil. A government initiative called 'Biogas Plant in Every Commune' intends to construct 2,500 biogas plants by 2020, a dramatic increase on the existing 104. Germany had almost 4,000 plants by the end of 2008. Mr Ćwil expects this program to improve Poland's image as a country mindful of its natural environment, and plans for biodiesel use can only serve to reinforce that, Mariusz Olejnik, President of the Polish Association of Rapeseed Manufacturers, explained.

"Despite oilseed rape output doubling to 2m tonnes since 2003, and an increased processing capacity, the government has favoured importers," he said. This had favoured the establishment of the Biofuel Coalition in June 2008 to support Polish oilseed rape suppliers. Its first major success is an agreement with PKN Orlen, the largest refinery in Poland, to change radically its purchase structure in 2010 in favour of Polish processors and farmers.

Event organiser David Ashdown was delighted with the show's success. "Attendance was better than expected considering that this was the first Polish agricultural trade show of its kind. Sadly the bad weather deterred some from making the trip, assuming the show would be cancelled."

"However, to have reached 4,731 top‐ranking Polish farmers in the first year is encouraging. Compared to the UK event, I think we produced a good clone. Cereals Poland offered all the elements of the UK event, despite being one third the size."

"As for the conference, it was a great success. Panel discussions were very well attended, the speakers and topics covered were highly informative and relevant to Poland's current agricultural situation and we were delighted to have Barclay's involvement as sponsors."

Since the show, he said that the effects of the show were being felt not just in Poland itself but also through cyberspace, with hundreds of Polish farmers and farming professionals participating in online forums and commenting positively on the event.

"We have high hopes for next year," he enthuses. "Our focus will be on renewable energy, given the great potential Poland possesses in this market."

There are also plans to introduce post harvest technology and Ashdown hopes to have an even higher attendance next year.

"Our intention is for it to match the UK event, in size and stature, within five years."

July 28, 2009