Sector Overview
In 2014, the Polish agricultural sector’s gross value added came to just under PLN 52bn, representing 3% of Poland’s GDP compared to over 6% in 2000, according to World Bank data. The current 3% is still around double the figure for France and 3-4 times more than in the UK and Germany. More than 2.3 million people or around 13% of Poland’s total workforce are employed in the agricultural sector, also a high figure in comparison to rich Western European countries. Poland is a significant agricultural producer in the EU. According to Polish agriculture minister Marek Sawicki, in 2015 Poland was the largest producer of poultry meat, apples, black currant, mushrooms, triticale and cabbage, the second largest producer of rye, oats and strawberries, and the third in terms of sugar beet, wheat, rapeseed, potatoes, onion and cauliflower production.
Russian Embargo
In 2014, Russia introduced three bans on agricultural and food product import, which affected the sales of Polish products to the country. In January 2014, Russia banned pig and pork imports from Poland and in August of that year it followed with further bans on fruits and vegetables and certain processed foods. As a result, the Polish agricultural and food export to Russia fell by 30% y/y in 2014 to EUR 882mn .
In the first five months of 2015, the value of export to Russia came to EUR 152mn, down by 70% y/y.
Drought
The late spring and the summer of 2015 were very unfavourable in terms of weather conditions. A cold May and then June and July with higher temperatures than the average for this period of the year were followed by August with whole weeks of temperatures exceeding 30oC. At the same time, the rainfall was below the season average in all summer months, including August with just a quarter of the usual amount of rain. This led to a drought across all Poland with nearly 40% of the farmland suffering from extreme drought. Losses were estimated at well above PLN 1bn. Over 231,000 farms and 1.8mn ha of farm land were affected.
Outlook
Within the EU’s 2014-2020 financial perspective Poland is to receive EUR 28.5bn (in constant prices) as part of the Common Agricultural Policy budget. This includes EUR 18.74bn in direct subsidies to farmers. In the previous financial perspective (2007-2013) Poland was granted EUR 26.9bn in total payments and EUR 13.7bn in direct payments.
As far as harvests and crop production is concerned, most of the cereals, crops, fruits and vegetables are expected to have lower production levels than in 2014 due to the effects of the drought in the summer of 2015.