POLSKA... tastes good!
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1 POLSKA... tastes good! Dear Reader, The approaching holiday season is a special time in Poland. Christmas has been an inseparable part of Polish tradition for centuries. I wish everyone plenty of wonderful and delicious Polish food on their Christmas tables food that entices consumers with its wealth of flavors and quality. Marek Sawicki Minister of Agriculture and Rural Development
2 14 Polska... tastes good! Polish Food Exports on the Rise Polish foodstuffs are enjoying growing popularity among international consumers. The proof can be found in Poland s rising food exports, which will reach a record value of 14.2 billion euros this year. Poland s accession to the European Union in 2004 triggered the rise in food exports to European markets by eliminating customs barriers and including Poland in the EU s Common Agricultural Policy, the main destination of the country s food exports. The EU market has expanded steadily since then, accounting for about 70 percent of Polish foodstuff exports in 2004 and more than 75 percent in Before 2004, the main export foods were red meat (pork and beef), offal and poultry. Today the main Polish farm and food products headed for EU markets are baked goods, raw and processed meat and processed fruit. Exports of dairy products also have grown significantly since 2004, especially liquid milk and cream. These products were not previously exported to the EU, but have accounted for 15 percent of exporters sales since Sales of cheese, powdered milk, yogurt, butter and ice cream are growing quickly, too. The main export market for these products is Germany, followed by the Netherlands, the Czech Republic and Italy. Poultry meat has become a highly valued export product, with chicken breasts in especially high demand among EU importers. The greatest export growth by 50 percent was reported just after Poland joined the EU. Companies could offer foreign buyers cheaper meat at the time, which consolidated Poland s position in this segment. Germany is also the top market for Polish poultry. In early 2009, most analysts expected the global crisis to slacken international demand for Polish meat, cheese and fruit. There were dire predictions that some processing plants would go bankrupt because they would be saddled with excessive supply and dropping prices. Indirectly, this could have affected the entire economy because food accounts for more than 10 percent of Polish exports. Luckily, nothing of the sort happened. The value of exports of Polish food and farm products decreased in 2009 for the first time since Poland joined the EU, but the 2.2 percent drop was much smaller than analysts had forecast. Some had even suggested a decline of 8-10 percent. Instead, exports were rescued by the weakening of the Polish currency. Moreover, transaction prices did not drop as much as expected. The year 2010 was a much better one and forecasts for this year speak of another record-breaker. The latest analysis from the Market Research Department of the Institute of Agricultural and Food Economics- National Research Institute (IERiG - PIB) shows that in the first half of 2011, compared with the same period of 2010, the value of farm and food product exports grew 13 percent, to 7.1 billion euros, while imports in the same segment grew 16.3 percent, to 5.9 billion euros. This yields a trade surplus of 1.1 billion euros, compared with 1.2 billion euros in the first half of The share of food and farm products in total exports decreased to 10.6 percent in the analyzed period compared with 10.9 percent in 2010, while imports remained unchanged (8.1 percent). The surplus generated in the food trade, therefore, has a significant impact on the balance of foreign trade. Foreign trade has a beneficial influence on the market situation in many sectors of agriculture and the food processing industry. In 2010, 29 percent of sold food processing industry output was exported, compared with 25 percent in This year marks a continuation of a new trend in the geographical structure of Polish agricultural exports that started in the second half of 2010: a growing diversification of sales and purchase markets. Polish exporters have been seeking new sales opportunities, while importers are looking for new sources of goods. The role of the Commonwealth of Independent States countries and developing countries has increased in exports, at the cost of the EU and other developed countries. The IERiG -PIB s analysis shows that, as in previous years, the main trade partners this year are EU countries, accounting for about three-fourths of turnover. The changes in the geographical structure of exports confirm that Polish exporters have been responding to the still-unfavorable economic situation in developed countries, which are their main trade partners, by continually seeking for new markets in order to diversify sales. This is shown by the decreasing share of developed countries and the growing share of eastern markets and developing countries in export sales. The first half of 2011 saw a substantial increase in the export of animal products over the same period last year (18.7 percent, to 3 billion euros). Export growth for plant products was half as fast (9.4 percent, to 3.7 billion euros). Among animal products, the export of most goods grew, with the exception of live animals. It was the same for plant product exports, the only decreases coming in foreign sales of mushrooms and mushroom products as well as bottled water and carbonated soft drinks. Experts estimate that for the whole of 2011, the surplus in trade in farm and food products could reach 2.5 billion euros (2.6 billion euros in 2010). Export sales will grow by more than 5 percent, to 14.2 billion euros, while spending on imports will increase by almost 8 percent, to 11.8 billion euros. The forecasts for next year are optimistic as well. Overall exports of farm and food products are expected to be worth about 7.2 billion euros in the first half of 2012, over 1 percent more than in the first half of Spending on imports will grow by just under 0.4 percent, to 5.9 billion euros. The positive balance of trade could reach about 1.2 billion euros, surpassing 1.1 billion euros in the same period of A.R.
3 Polska... tastes good! 15 North American and European Union Agricultural Conference Joint Action Needed More than 250 participants representing agricultural organizations from Europe and North America came to the 35th North American and European Union Agricultural Conference held in Warsaw in October. This was the first time Poland hosted the event. NAEU Agricultural Conference is held every two years. The The previous one took place in Niagara Falls, Canada, in The sessions focused mainly on the global economic crisis and its impact on agriculture. This year s conference, organized by Poland s National Council of Agricultural Chambers and the COPA- COGECA committees European organizations of agricultural trade unions and farmers cooperatives was an opportunity to discuss trade policy within the World Trade Organization (WTO) and its future directions, to exchange experiences and sum up the benefits of a common trade policy. The goals of the conference, whose theme was Which direction for agricultural policies?, included identifying common elements and the most important differences in individual countries agricultural policies. The new Common Agricultural Policy should be clear, simple and therefore comprehensible to everybody, said Poland s agriculture and rural development minister Marek Sawicki about the discussion on EU agricultural policy priorities. It should foster innovation and competitiveness in European agriculture; it should not be conservative in the sense of maintaining and preserving stagnation through unequal terms of competition. Conference participants also talked about what actions could serve to improve the position of farmers in the food chain. Gerd Sonnleitner, president of COPA, pointed out that the economic and financial crisis changed all the points of reference on which people relied when trying to understand the changing world. Agriculture has once again become a priority topic on the international arena. This is obvious when you look at the conclusions from the G20 summit and the World Bank s conclusions as to agriculture s huge importance for economic growth, Sonnleitner said. Representatives of farmers cooperatives spoke of necessary reactions to globalization and concentration of entities in the food chain. Paolo Bruni, president of COGECA, said there was just one objective: better valorization of agricultural production so that farmers can benefit the most. Sawicki pointed out the dangers of speculation on agricultural markets. Food cannot be the subject of speculation. We cannot allow repeated situations when the same wheat is sold 15 times over without ever being moved from its original place of storage. Forward transactions have to be required to include the movement of goods with their purchase, Sawicki said. The conference participants could exchange views regarding the main factors causing market instability and how to meet the challenges farmers face today. These challenges include price fluctuation, predicting economic frameworks, supply and demand management. Participants could also present their proposals for action aimed at ensuring the proper functioning of the financial market for agricultural products. Everyone agreed that food chain security has been a key issue in recent years. Despite the publication of numerous reports and recommendations, farmer incomes have not increased, while dishonest trading practices continue, conference participants said. This explains why it is necessary to identify the key problems and develop instruments to improve farmers position in the food chain, increasing their incomes in the process. Other discussions at the conference concerned innovation and development opportunities for agriculture and rural areas. As the debate s participants pointed out, international institutions dealing with development policies agree that it is necessary to improve research for agriculture and accelerate the transfer of innovations to farms. A.R.
4 16 Polska... tastes good! Regional and Traditional Products Kabanos Sausages The latest Polish product to be included on the EU list of traditional specialties guaranteed (TSGs) are kabanosy (kabanos sausages) thin dried smoked pork sausages, registered in October. name kabanos comes from The kaban, a word used in 19thcentury Poland to denote an extensively fed young pig. Kabanosy are long, thin sticks of dry sausage twisted off at one end. These sticks are folded in half, with an indentation in the bend showing where they were hung. The surface of the sausages is dark red with a cherry tint. A diagonal cross-section shows dark red pieces of meat and cream-colored pieces of fat. A kabanos sausage s surface is smooth, dry and evenly wrinkled. Kabanosy have a strong taste of roast cured pork and a slightly smoky aftertaste of caraway and pepper. The special character of kabanos sausages is the result of several features typical for this product: the tenderness, juiciness and specific qualities of the meat, the unique flavor and aroma, and the uniform and distinctive shape. Another characteristic feature of kabanos sausages is the audible cracking noise they make when they are broken in two, which is due to the meat s tenderness and the way the sausages are dried and smoked. Kabanosy were eaten throughout Poland as early as the 1920s and 1930s. Before that, in the mid-19th century, hams, ribs and sausages from kaban meat had been produced at farms for rural families own use. Kabanos sausages were very popular when Poland was under communism from 1945 to 1989, becoming a Polish export specialty next to ham and bacon. There were a few problems with registering kabanosy as a Polish specialty. During the registration procedure, Austria, Germany and the Czech Republic raised objections. While the Austrians and the Czechs withdrew their protest quickly, the Germans refused to agree to the registration for several months. They argued that kabanos sausages were too popular to treat them as a traditional product reserved for a single country. In the end they accepted that this particular EU trademark means a traditional recipe and not a restricted region of production. Once a TSG registration certificate is obtained, all EU countries will be able to make kabanosy, but only Poland will be allowed to place the EU logo on the packaging. The TSG trademark is one of the pillars of quality in the EU s agricultural policy, its aim being to promote highquality agricultural products and support the development of rural areas. The logo is awarded for the distinctive character of the product submitted for registration. For a product to be recognized as a TSG it has to be made using traditional ingredients or has to have a traditional composition, production method or processing method. It can be made all over the country as long as it meets all the specific requirements. EU law provides for the registration of product names based on the place and method of production and processing (Protected Designation of Origin PDO), the geographical origin of the products making up a given product (Protected Geographical Indication PGI) or a traditional production method (Traditional Speciality Guaranteed TSG). As the European Commission points out, having products registered on these lists of protected names of foods fosters agricultural diversity, helps eliminate fake products, and facilitates sales. Over 30 Polish products have been entered in the EU s PDO, PGI and TSG registers so far. A.R. The Polska... tastes good! special section published by WV Marketing sp. z o. o. in association with Warsaw Voice SA is a project co-financed by the Ministry of Agriculture and Rural Development. Address: 30 Wspólna St., Warsaw
5 Polska... tastes good! 17 Common Agricultural Policy Reform and Polish Priorities By Marek Sawicki, PhD, Minister of Agriculture and Rural Development This year has not been an easy one, with some of the most difficult harvests of the last four decades. Grain yields were lower than usual in many regions, with grain of inferior quality. The situation, naturally, looked different in different parts of Poland. Taken together, the harvest was close to the average of many years. We can thus rest assured we will not run out of grain. Next year s prospects for agriculture are good. The Rural Development Program is under way and Polish farmers have been highly efficient in utilizing all kinds of EU and national funds that are available to them. As a result, Polish farms continue to modernize, as does the entire agricultural sector in Poland. Unless some weather anomaly occurs, next year s harvest is sure to be good. The way they always do, farmers started preparing for another year at their farms soon after harvest time. Unfortunately, agriculture remains a highly weatherdependent sector of the economy and that is the way it is going to be in the future. Needless to say, weather is a key determinant as far as plant production is concerned. Complete data on foreign trade results has not arrived yet, but analyses from the first half of the year clearly indicate that the positive trade balance has increased and may reach up to billion euros. This is a very positive trend which promises further opportunities for Polish agriculture to develop. This year, Poland has significantly increased sales of fruit and vegetables to Commonwealth of Independent States in the East which accounts for almost 80 percent of exports of fresh Polish apples. The search for new markets and negotiating conditions on accessing markets is the task of the administration, whereas making the most of opportunities thus presented is the task of producers and exporters. As a large agricultural producer, Poland is able to develop its agriculture to closely match the growth of exports. Poland exports far more produce and food than it imports, which means that the production surplus is placed on external markets. Decisions made this year should bring positive effects next year. What I mean here are the effects of the My Market program. When we launched it, we envisioned the establishment of around 300 modern marketplaces, including 200 modernized and 100 completely new ones. Judging by the interest we can see in districts, the marketplaces are sure to emerge, which will help ensure more civilized standards of sales and reestablish direct links between sellers and buyers. This will also create a superb opportunity to watch the prices, free from disturbances such as middlemen. This will mark a return to the roots of a healthy market economy where the relations between demand and supply are shaped by prices instead of speculation on commodity exchanges and excessive numbers of brokers. We have also been working on regulations on insurance against sales risks, which should repair the damaged relations between individual links in the chain that leads from the producer to the broker and processing plant to the retailer. One more project which is well under way and scheduled for continuation next year is the National Plan for Drainage and Flood Control Reconstruction. A plan like this has to be comprehensive and well thought out, as rivers have no respect for boundaries between villages, counties, provinces and countries and we all experienced the results of floods. Poland will also conduct changes which have to be made to the insurance system concerning crops and farm animals. My idea is for this to be a common system which really extends to all farmers, but at the same time causes no extra burden for the farmers. We need to remember that as a part of Europe, we have been faced with a crisis, especially when it comes to the eurozone. Poland is a member of the EU, which means that the overall situation in the EU takes its toll on the economic environment of Polish citizens. Debate is still under way on changes to the Common Agricultural Policy after The policy will determine the position of European agriculture, and Polish agriculture along with it, for years to come. This is a crucial discussion and so taking advantage of the Polish presidency of the EU, I have proposed for the discussion to take an open format. The first public debate has already taken place at the European Parliament. What it has shown is that practically no country is satisfied with the legislation package proposed by the European Commission. Almost all participants in the discussion expressed concern over the negative impact the Commission s proposal would have on plans to simplify the Common Agricultural Policy which were previously declared. The participants referred to the idea for the first pillar of the policy to go green and the plan to abolish the Single Area Payment Scheme (SAPS) in new member states. More public debates will follow and I am convinced we can do better and work out a new and modern Common Agricultural Policy to foster the development of European agriculture. This should be a policy of development, innovation and competitiveness to face the challenges presented by the rapidly growing demand for food around the world. The discussion continues and no binding decisions have been made so far.
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