In Poland we are not under any illusions about the current round of Common Agricultural Policy (CAP) reform. We know that it is the European Commission’s way of getting off the hook of the world trade organisation (WTO), and reducing the costs of the CAP to the wealthier members of ‘the club’.
It is generally accepted that the new policy of subsidising agricultural land, rather than production, as explained on openDemocracy by Maeve Doran-Schiratti, does represent a change for the better and should ameliorate many of the current distortions of the agricultural market. However, all systems of subsidy inevitably lead to distortions. The new approach is likely to distort the land market and cause resistance to changing land-use from agriculture to more socially and economically useful activities. How the Commission intends to keep these distortions to a minimum in the reformed system will be interesting to see.
Poland’s rural economy
Poland still has 1.9 million farms which employ almost 19% of the country’s workforce. Only 47% of these bring agricultural products to market. Hidden unemployment in rural areas is estimated to be 1 million. Rural areas lag far behind urban ones in educational levels and access to public goods.
Yet the past decade has brought encouraging signs to Poland’s countryside. The physical infrastructure is improving; the rural population is healthier and living longer, and the physical environment has improved. Poland’s rural areas continue to provide a home for the greatest range of wildlife found in any European country. The value of exported organic products has increased tenfold over the past nine years, while the development of bio-fuels is increasing demand for rape-seed and giving farmers an alternative to mass production of grain.
The European Union and Polish agriculture
The European Commission has always argued that rural development and agriculture are top priorities in the process of accession to membership of the Union. The problem for Poland is that the European Union’s (EU) words speak louder than its actions.
Foreign aid for agriculture and rural development in Poland accounts for only 6% of all foreign assistance to our country. Throughout the nineties that aid has been declining. To give a very specific example: the EU is not funding any micro-lending initiatives for the development of small and medium enterprises in rural Poland, although it has funded such initiatives in urban areas. Indeed, the EU has accepted a situation whereby its gain from the opening up of the Polish food market far exceeds the amount of aid given to Poland’s rural sector. These are some of the reasons why so much of the rural population, including its elected representatives, have viewed accession to the EU with such scepticism.
As a result of rural pressures the Polish government was forced into a negotiating stance which asked for the right to top-up direct payments from budgetary sources and to switch structural funds to direct payments in order to make up for the loss of direct payments to farmers. The EU’s insistence on direct payments being smaller for the accession countries has caused anxiety, because together with the coming of the single market it could damage the competitiveness of Polish agriculture.
The fact that talks of a CAP reform began before Poland’s accession to the Union was naturally a cause for concern. Because Polish rural areas lag so far behind their western counterparts in terms of economic and technical development, Poland was obviously concerned that the CAP should not be re-nationalised. The principle of solidarity in rural and agricultural policy was one Poland was keen to defend. However, there is no denying that Poland has been guilty of missing its chances and has contributed nothing to the debate over the future of the disastrous CAP. The capacity of the Poles to snatch defeat from the jaws of victory should never be underestimated. What follows is the sorry tale of Poland’s failure to use its assets in the great debate over CAP reform.
Poland’s opportunity
For several years now it has been clear that Europe has been turning away from intensive farming. The onset of BSE; outbreaks of foot and mouth disease and the general trend towards respecting bio-diversity has changed the debate over agriculture. Organic farming is on the increase throughout Europe, as people begin to distrust food produced with the aid of high concentrations of fertiliser and pesticides. Genetically modified produce has been rejected by consumers throughout Europe.
There has also been a marked increase in European ecological tourism. Vacations down on the farm are becoming increasingly fashionable. ‘Back-to-nature’ has become a popular theme for attracting customers to rural tourism.
The debate over the reform of the CAP is coming to be dominated by environmentalists calling for measures to help organic farming and protect the environment. In Scandinavia, Holland, Britain and Germany they are winning the argument. Only the French and other south Europeans are resisting this tide and blocking reform.
Poland has an agriculture which is very nearly organic due to its low use of fertiliser and pesticides. The country has the richest bio-diversity in the whole of Europe. Suddenly the fact that Polish farming was so ‘rustic’ and its farms so small, was not a disadvantage but a potential strength.
Polish ineptitude
Yet Poland’s inept governments have done what they usually do. Nothing. Instead of getting as many Polish farmers as possible to begin the three year application period required to obtain organic certification, so that on accession Poland would be ready for an onslaught on EU food markets, the government took its time. The delayed agreement does not even contain any agri-enviromental measures that could enhance Poland’s ability to develop a sustainable farming sector.
The Polish organic farming industry is very scattered. It lacks the concentration required to be economically viable. Yet despite the strong western market for organic products, despite the fact that supply is not meeting demand, the Polish government has done nothing.
The same ineptitude marks the government’s attitude to tourism. Rural tourism may have grown significantly. But that still does not offset the falling number of foreign visitors to the country. Poland is not advertising itself to western tourist markets effectively. Rather than promoting the country’s wildlife and environmental qualities, advertisers commissioned by public authorities produce logos of kites. While countries like Croatia and Slovenia have made concerted campaigns to attract holidaymakers, Poland has done nothing.
With such a huge agricultural sector and such a diverse countryside, you would expect Poland to be bursting with ideas as to how the CAP should be reformed. The country could benefit greatly from a reform that decoupled direct payments from production and which began to favour organic farming, land management and environmental measures.
Yet Poland has been conspicuous in its absence from the CAP reform debate. Its decision-makers have been obsessed with getting the maximum in direct payments for Poland’s farmers without a thought as to how the CAP might evolve.
They have failed, of course. Politically it would have been wiser to have argued for an end to direct payments throughout Europe. Although there was no chance of that coming about, such a stance might have persuaded the British, Germans, Dutch and the Scandinavians to get tougher in the fight for CAP reform and to be more generous to the new kids on the block. But without backing from central Europe, the northern Europeans fought to keep direct payments for applicant countries to a minimum, in order to contain an emerging alliance between southern and central Europeans.
Passivity and lack of creativity are the hallmarks of Poland’s road to accession. These are not good omens for Poland’s future inside the EU. Having missed the carrot of organic farming and rural tourism Poland is now feeling the stick of EU budget constraints. The optimist would conclude by recalling that up until now no country has, in the longer term, lost out as a result of joining the EU. The Polish pessimist would add that there’s always a first time for everything!
