Poland: agricultural news week 37
In Poland the agrinews was dominated this week by new draft legislation for animal protection: ban on fur farming, on ritual slaughter and circus animals. But we also have a forecast on the export of 2020 and the details of the COVID-19 support for Polish farmers.
Five for Animals: will Poland ban fur farming and ritual slaughter?
This week the animal rights organization ‘Open cages’ published undercover recordings from Poland’s biggest mink farm as part of a larger investigation into Poland’s fur industry. The recordings revealed alleged cases of animal abuse such as crowded and unsuitable cages. Following the publication, the chairman of the ruling party Law and Justice (PiS) announced to (re)submit legislation to the parliament in the field of animal protection. The draft legislation has been given the name ‘Five for animals’ because of the 5 principles that are at the basis of the draft legislation: humane treatment, social control of animal protection, precise law & greater protection, safe shelters and no more chains.
The draft legislation on animal protection includes:
- Ban on fur farming, with the exception of rabbit farms.
- Ban on ritual slaughter, with the exception of production for the national religious communities.
- Ban on using animals for entertainment, including a ban on use of animals in circuses.
- Ban on keeping animals permanently on short leashes or chains.
- New regulations for animal shelters; shelters are to be run by local government units or public benefit organizations and frequent inspections are to be introduced with focus on the living conditions.
Whether this draft legislation will receive a majority is yet to be seen. An earlier attempt by the chairman of the ruling party in 2017 to pass the legislation on animal protection failed due to lobby of the fur producers and the meat industry. Also within the ruling party there are different views on the matter.
Poland 3rd fur producer and exporter of ritual slaughtered meat
Poland’s 1.190 fur farms produce 14% of fur sold worldwide, the third highest figure for any country, reported Wysokie Obcasy in 2017. Only Denmark and China produce more mink fur, notes The Economist. In 2015, Poland produced 8.5 million mink pelts with a value of $426 million, according to Mark Oaten, CEO of the International Fur Federation.
The beef sector emphasized the importance of ritual slaughter for the Polish production of live cattle, from which beef goes to mainly the Middle East. Beef export, which amounts to over PLN 4,5 billion (approx. € 1 bln), accounts for almost 5% of the value of Polish exports of agri-food products, of which religious slaughter accounts for over PLN 1,5 billion (approx. € 0,34 bln) annually.
Also the poultry sector pointed out the negative effects on the sector that the ban might have. "Currently, both in the EU and in third countries, the only segment of the poultry in which demands exceeds supply is this type of production. According to the poultry sector, every fifth poultry slaughtered in Poland is slaughtered halal or kosher and makes up for 40% of the Polish meat export. Poland is currently the largest producer and exporter of this type of meat.
For facts and figures on the poultry sector in Poland, see our factsheet
Forecast on Polish food export in 2020
Credit Agricole experts analyzed the agri-food products exports for 2019 and 2020 in the division to different product groups. They foresee further increase in Polish agri-food exports.
Credit Agricole experts analyzed data of 22 sectors of the Polish agri-food exports before and during COVID-19 epidemics. The results of the research indicate that 4 out of 22 analyzed product groups during the pandemic performed significantly better compared to the entire sector, while in recent years they have lost their importance in the structure of Polish agri-food exports: "cereals", "oilseeds and oil fruits, industrial", "vegetable and animal fats, their breakdown products, waxes" and "edible fruit and nuts". Particularly noteworthy here is the record-breaking grain export, which was at the same time the main source of the increase in the value of Polish food exports in the period January-May 2020. Its increase resulted from the increased global demand for grain in the initial stage of the pandemic, as well as the marked weakening of the zloty against the euro, which increased the price competitiveness of Polish exports. In 2019, the above-mentioned group of departments accounted for 9.1% of the value of Polish exports of agri-food products.
Moreover, according to the results obtained, 5 out of 22 analyzed sectors performed significantly better compared to the entire exports, both during the pandemic and in previous years. It is worth noting here the good results of Polish exports in the "tobacco and tobacco substitutes" category, which in recent years has recorded the largest increase in the share of agri-food products in the structure of Polish exports. The continued high growth in exports in this category compared to the entire exports is most likely due to rigid demand for tobacco products, which remained immune to the effects of the pandemic. The aforementioned group of products in 2019 accounted for 33.8% of the value of Polish exports of agri-food products.
The obtained results indicate that 7 out of 22 analyzed product gropus performed better before the pandemic compared to the entire exports, while during the pandemic they recorded weaker export results compared to the entire sector. The category "meat and edible offal" deserves attention here, as it was the main factor contributing to the decline in the value of Polish agri-food exports in January-May 2020. The decline in exports was particularly strong in the case of beef and poultry. In the opinion of Credit Agricole experts, this is largely due to the large share of the HoReCa channel (hotels, restaurants, cafes) in export sales in these categories, which was particularly strongly affected by the pandemic. The aforementioned group of products in 2019 accounted for 31.0% of the value of Polish exports of agri-food products.
In turn, 6 out of 22 analyzed sectors performed less well compared to the others, both before and during the pandemic. For these groups, the strongest decline during the pandemic was recorded in the 'dairy products, eggs and honey' category, which is consistent with the trends observed in recent years. The lower dynamics of exports in the period of the pandemic compared to the whole exports was most likely related to the large export surpluses achieved by the EU in this category, which, in the conditions of weaker exports outside the EU, were not used, leading to oversupply on the domestic market. In 2019, the above-mentioned group of products accounted for 26.0% of the value of Polish exports of agri-food products.
Particularly noteworthy here is the record-breaking grain export, which was at the same time the main source of the increase in the value of Polish food exports in the period January-May 2020.
Taking into account the data for the first half of 2020 Credit Agricole forecasts that throughout the year the value of Polish agri-food exports will increase by more than 6% y / y, and its value will exceed EUR 33 billion, which will be the highest result in history. Nevertheless, we expect that in the second half of 2020 the structure of Polish food exports will change and will gradually converge to the one observed before the outbreak of the pandemic. Consequently, in the second half of the year the experts expect an increase in the share of exports of meat and offal at the expense of exports of grains and other product groups, which clearly benefited from increased demand in the initial phase of the pandemic.
COVID-19 financial aid for farmers
The Polish Ministry of Agriculture developed the details of an extraordinary, one-off measure under the Rural Development Program (RDP) 2014-2020 supporting farms affected by the effects of COVID-19.
- We applied to the European Commission for consent to transfer the so far unused funds from RDP 2014-2020 in the amount of EUR 1 billion, but we received the consent only for the allocation of PLN 1 billion, i.e. 2 percent. RDP funds - said the minister Jan Krzysztof Ardanowski. € 273.4 million is allocated to the new measure developed under the Rural Development Program for 2014-2020.
The aid is addressed to farmers who have suffered financial losses due to the outbreak of the coronavirus epidemic. The new measure is a one-off and extraordinary support mechanism, being a response to problems related to the financial liquidity of farmers and maintaining the continuity of agricultural activity.
The support is intended for farms producing in sectors that have been most affected by the effects of COVID-19. This includes beef cattle, cows (milk), pigs, sheep, goats, slaughter and laying poultry and the cultivation of ornamental plants.
The aid takes the form of a lump sum payable depending on the type and size of agricultural production and is intended to partially compensate for the lost income in connection with the COVID-19 pandemic.
The amounts of support will depend on meeting the minimum production scale on the farm:
- at least 3 male cattle, aged 12-24 months - from PLN 5,100 to 20,200;
- at least 3 dairy cattle or combined utility cattle, aged over 24 months - from PLN 1,000 to 3,000;
- at least 21 pigs born on the farm of the farmer - from PLN 4 500 to 23,800;
- at least 10 female sheep, aged 12 months - from PLN 1,800 to 5,500;
- at least 5 female goats, 12 months old - from PLN 1,000 to 3,300;
- at least 1,000 poultry (broilers, slaughter geese and turkeys for slaughter and producers of eggs for hatching) – from PLN 2,200 to 30,000;
- at least 25 m2 of ornamental plant cultivation in heated greenhouses or at least 50 m2 of ornamental plant cultivation in heated foil tunnels - from PLN 1,400 to 30,000.
The aid depends on the scale of production on the farm, with a maximum amount not exceeding EUR 7,000 per farmer. The support is to be paid out by the Agency of Restructuring and Modernization of Agriculture (Polish paying agency) by 31 December 2020.
The details of the financial aid are specified in REGULATION OF THE MINISTER OF AGRICULTURE AND RURAL DEVELOPMENT of 24 August 2020 on detailed conditions and procedures for granting and payment of financial aid for operations of the type "Aid for farmers particularly affected by the COVID-19 crisis" under the measure "Exceptional temporary support for farmers, micro-enterprises and small and medium-sized enterprises particularly affected by the crisis related to COVID-19" covered by the Rural Development Program for 2014-2020.