THE CONVERSION OF THE AREA OF ECOLOGICAL CROPS IN THE SELECTED EU STATES

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1 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Jelgava, LLU ESAF, 7-8 April 07, pp THE CONVERSION OF THE AREA OF ECOLOGICAL CROPS IN THE SELECTED EU STATES Joanna Stefanczyk, MSc; Dominik Sieradzki, MSc Department of Economics and Organisation of Enterprises, Warsaw University of Life Sciences (SGGW) Department of Econometrics and Statistics, Warsaw University of Life Sciences (SGGW) Abstract. The study describes the changes in the area of organic farming in selected countries that joined the EU in 004. Changes in the years were analysed as well as the dependence between changes in the area of the country and prosperous organic operators there. The development of organic farming in the EU is determined by many factors, including the large financial support from the EU budget. Therefore, in May 004, not only was the biggest ever enlargement of the European Union (the Community has adopted the 0 countries (EU-0): Cyprus, the, Estonia, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, and Hungary) but also for those countries it created a chance for alteration their farms to organic farms, owing to EU subsidies. Key words: organic farming, agriculture, area of agricultural crops. JEL code: Q5, Q8 Introduction The 80s of the 0th century witnessed the Kowalski J., Michalek R., Kubon M., Kwasniewski D., Malaga-Tobola U., 04). In 005, the popularisation of the term ecological farming IFOAM Norms for Organic Production (Duda-Krynicka M., Jaskolecki H., 00) whose principles, accepted methods, and practices have been specified in detail in the Regulation of the European Economic Community (EEC) no. 09/9 of 4 June 99 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs, which was subsequently repealed by the Regulation of the European Economic Community (EEC) no. 834/007 of 8 June 007 that entered into force on January 009 (European Commission, 007). As part of EU legislation, it had priority over national regulations, and it has been complemented as a part of national laws. The Act of 6 March 00, amended on 0 April 004 (in connection with Poland s accession to the EU) (Zelezik M., 009) defines production by ecological methods as the manner of producing an ecological product based on to the extent possible natural methods which do not disturb natural balance (Zelezik M., 009). The International Foundation for Organic Agriculture Movements (IFOAM) defined in 00 ecological farming as the set of various concepts for agriculture management that complies with the needs of the soil, plants, and primarily aims at quality food production while maintaining a biological diversity in natural environment (Domagalska J., Buczkowska M., 05) extended this definition: a whole system approach based upon a set of processes resulting in a sustainable ecosystem, safe food, good nutrition, animal welfare, and social justice (Zelezik M., 009). Due to the abundance of legal regulations which must be observed, relevant documents that must be kept as well as complex certification and control mechanisms, this type of activity that constitutes an alternative to conventional farming requires substantial commitment and specialised knowledge (Zelezik M., 009; Tyburski J., Zakowska-Biemans S., 007). Despite these highly restrictive factors, we can observe a global an increased interest in this type of agricultural production (Komorowska D., 05). Ecological production constitutes an attractive niche for small agricultural farms which are unable to compete with large enterprises (Ligenzowska J., 04). Moreover, in connection with the fact that many countries are committed to environmental protection, certain governments also support ecological production (Ligenzowska J., 04). Apart from a vague statement that ecological farming is economically friendly, this practice gives rise to a number of advantages for the environment and not only (Table ); however, as with many other directions, it also has some (Rudenska B., Wojcicki Z., 05; Tabor S., weaknesses (Table ). The primary and Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 90

2 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Jelgava, LLU ESAF, 7-8 April 07, pp substantial task of agriculture is to provide economic development of countries, the mere agricultural products, which is the essential part production function of agriculture is no longer of the national food chain (Zietara W., 008). sufficient. However, as a result of constant social and Table Advantages and disadvantages of ecological farming Ecological farming ADVANTAGES Local biodiversity is preserved; Soil is not barren nor saline; No eutrophication of surface waters; Surface waters are not contaminated; Rural unemployment rate decreases; Small farms become more profitable; The use of renewable energy sources; Little or no chemicalization; Proper conditions for farm animals. DISADVANTAGES Smaller yield (on average by 0 % of conventional production); Labour intensity; Lower management efficiency; Products are more expensive than those manufactured by traditional methods; Frequent inspections. Source: autohors study on the basis of M. Zelezik (009) The Reasons for Ecological Farming, Rocznik Swietokrzyski, B series Natural Science, no. 30, p , and Malgorzata Duda - Krynicka, Henryk Jaskolecki (009): The History and Perspectives of Ecological Farming in Poland, Problems of Ecology, vol. 4, no., March - April, At present, due to the expectations of the residents of Europe as regards food safety and environmental protection, the function of agriculture also involves services in relation to the environment and people (Koloszko- Chomentowska Z., Sieczko L., 04). Therefore, the fact that ecological farms which produce economically friendly goods is a response to the expectations of conscious society, and as to the analyses on the ongoing and probably long-term development of ecological farming (Brodzinska K., 04) - they all seem to be understandable. In his work published in 009, H. Runowski claims that the dynamic growth in ecological crops in the general area of arable land primarily resulted from substantial subsidies to the areas of ecological crops, which were granted as part of Poland s accession to the EU. He argues that this was the reason for certain newly registered ecological farms to commerce the new type of production (Runowski H., 009). Similarly to T. Tambovceva (06), H. Runowski states that ecological farming is already a global trend, and its dynamic in Europe should be emphasised (Tambovceva T., 06). In 04, R. Kisiel and N. Grabowska also stated that Poland s integration with the European Union had a positive impact on agriculture in Poland. The changes were primarily caused by the introduction of area payment scheme to national agriculture that took into account agricultural farms (Kisiel R., Grabowska N., 04). In her work Ecological Farming and GMO as a Chance for the Development of Polish Economy. Advantages and Risks, M. Ciepielewska also emphasises that the development of ecological farming all around the world within the last several years was substantial. There were several reasons for that, for instance, undermined trust in products developed by traditional farming methods that focus on production volume and intensification instead of product s quality. With interest of natural environment in mind, farmers change the profile of their activities because they want their children and grandchildren to live in uncontaminated environment (Ciepielewska M., 04). She also emphasises the significance of aid programmes of the European Union which support ecological farming and promote sustainable development (Ciepielewska M., 04; Harasim A., 00). Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 9

3 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Materials and methods The purpose of this article is to review the changes in organic crop areas in the chosen EU countries and to analyse the correlation between organic crop areas in each country and the prosperous organic operators within this area. The time series moments (Pulaska-Turyna B., 008) considered in this article relate to the period from 005 to 05. The data used in this paper refer to organic crop areas and the prosperous organic operators in chosen EU countries at this time. The countries analysed in this paper belong to the group of countries which were given access to the European Union in 004, with the exception of Cyprus and Malta because of no data available. Thus, the analysed countries are:, Estonia, Lithuania, Latvia, Poland, Slovakia, Slovenia and Hungary. The source of the data was Eurostat Database. Firstly the chain indices and average pace of change in organic crop areas in considered period were computed. To check the correlation between both the variables, the Pearson correlation coefficient was used. The computation was made with SPSS software. There were no prosperous organic operators data available for Lithuania, Hungary and Slovenia, therefore the correlation was considered for the, Estonia, Latvia, Poland and Slovakia. When creating this article, the theoretical part was made with based on the review of the literature and the methodological part was presented with tables and figures. Research result and discussion Development of the organic agriculture within the EU area is determined by many factors, such as financial support from the EU budget Jelgava, LLU ESAF, 7-8 April 07, pp (Golinowska M., 03). Therefore, in May 004 not only the biggest enlargement of the EU took place (UE-0, when ten countries: the, Cyprus, Estonia, Lithuania, Latvia, Malta, Poland, Slovakia, Slovenia and Hungary got access to the EU), but also there was an opportunity created for those countries to transform their agricultural farms into the ecological ones with the help of EU subsidies. As it was said before, eight countries were considered: the, Estonia, Lithuania, Latvia, Poland, Slovakia, Slovenia and Hungary. Table presents ecological crop area in chosen countries from 005 to 05 (from right after the access to the EU to the last year, where data is already available). In the analysed period, there was a visible, regular increase in the ecological crop area in each country. For example, in Poland the crop area was almost five times smaller than in the, where the crop area was the biggest then, and in 05 ecological crop area in Poland became the biggest one at the time and was hectares bigger than in the. So significant increase of the discussed area was possible because of 57/99 Regulation of the Council of Europe from 00, which established the financial support to the ecological agriculture at euro and was received by recipients from the EU countries (Golinowska M., 03). In Figure, the average ecological crop area in the analysed period is presented. After the access of the considered countries to the European Union, the average annual ecological crop area was successfully increasing in the period of In 05 however, there was a decrease. Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 9

4 Country/ Year Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Jelgava, LLU ESAF, 7-8 April 07, pp Organic crop areas in the chosen countries EU in [ha] Table Estonia Latvia Lithuania Hungary Poland Slovenia Slovakia mean Fig.. Mean organic crop area in the chosen countries of EU in [ha] Figure presents how much the ecological crop areas decreased in 05 in comparison with 04 in the chosen countries. Within the considered countries, the biggest decrease of the ecological crop area was observed in 05 in Poland and stood at hectares. What is more, the difference between Poland and following country the stood at approximately hectares. Following countries had very similar decrease of the ecological crop area, with the exception of Estonia and Slovenia, where minor decrease of the area was observed for Estonia it was slightly over 3000 hectares and for Slovenia - slightly over 000 hectares. Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 93

5 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Jelgava, LLU ESAF, 7-8 April 07, pp Fig.. Changes of organic crop area between 04 and 05 [ha] In Table 3 the chain indices and the average pace of change in each country and year is specified. When analysing the values of the chain indices and average pace of change of the ecological crop areas in following years in each country, it may be established that on average in years there was an increase in ecological crop areas. At the beginning of the analysed period it was significant in 006 in each of the considered countries, it was an increase of approximately 4.7 %, and in 007 almost 46 %. In 008, the average pace of change was smaller and established at approximately 35 %. It coincided with the world s financial crisis of In the following years until 04, the ecological crop area was fairly increasing. When analysing changes of the ecological crop areas for the considered countries, it may be established, that three countries Poland, Lithuania and Latvia had the biggest average increase at that time and it was respectively 9.4 %, 5.9 % and.7 %. Hungary presented the smallest dynamic of growth, where the area was increasing on average by % annually. The country with the greatest crop area at the end of the considered period was Poland. The country with the smallest crop area at the end of the considered period was Slovenia. Subsequently, the correlation between the ecological crop area and the number of the prosperous organic operators was researched. Table 4 presents the number of the prosperous organic operators in the considered countries. Value ed in the Table means no data available Table 5 presents computed Pearson correlation coefficients. Given the received results, it may be established that in the, Estonia, Poland and Slovakia the Pearson correlation coefficients between the ecological crop area and the number of the prosperous organic operators are statistically significant and the significance level equals 0.0 (values marked with **). Whereas in Latvia the correlation is not statistically significant. The values of significant correlation are positive and over It may be established, that in the, Estonia, Poland and Slovakia in correlation with the increase of the ecological crop areas, the number of the prosperous organic operators also increases and this dependence is very strong. This dependence was not identified in Latvia. Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 94

6 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 Jelgava, LLU ESAF, 7-8 April 07, pp Chain indices and average pace of change of ecological crop area in the chosen countries EU in [ %] Table 3 Country Average pace of change Estonia Latvia Lithuania Hungary Poland Slovenia Slovakia Average pace of change x Organic operators in the chosen countries EU in Table 4 Year/Country Estonia Latvia Lithuania Hungary Poland Slovenia Slovakia ed ed ed ed ed ed ed ed Country Specification Correlation coefficients Pearson correlation coefficient between organic crop area and Table 5 Estonia Latvia Poland Slovakia 0.90** 0.975** ** 0.85** plugin=&language=en&pcode=tag00098 Conclusions, proposals, recommendations After the access of the considered eight countries to the European Union, the development possibilities of their agriculture farms have changed. The European Union, all set for environmental protection, the beauty of the nature and the food safety offered subsidies for the ecological agriculture, which gave famers a chance to transform their cultivation and development of the already existing ecological cultivations. On the basis of the analyses of the ecological crop areas in eight countries from the EU in , the following conclusions can be made: Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 95

7 Proceedings of the 07 International Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT No 44 ) In this period (005-05) in almost every following analysed year there was an increase of the ecological crop area in the considered countries. ) Only the year of 05 brought a bigger decrease in the ecological crop areas in the six considered countries, and in the other two countries a smaller decrease. 3) In the, Estonia, Poland and Slovakia, there is a very strong correlation Bibliography Jelgava, LLU ESAF, 7-8 April 07, pp between ecological crop area and the number of the prosperous organic operators. 4) In Latvia, there is no correlation ecological crop area and the number of the prosperous organic operators. 5) To summarize the considerations on the subject of ecological crop areas, it may be interesting to research a possibility of correlation between the ecological crop area and the amount of subsidies in each country.. Brodzinska, K. (04). Rolnictwo ekologiczne tendencje i kierunki zmian (Ecological Farming trends and anticipated changes), Scientific Papers of Warsaw University of Life Sciences SGGW in Warsaw, the Problems of Global Agriculture, Volume 4, No. 3, p Ciepielewska, M. (04). Rolnictwo ekologiczne i GMO szansa dla rozwoju polskiej gospodarki? Korzysci i zagrozenia (Ecological Farming and GMO as a Chance for the development of Polish economy? Advantages and Risks), Economy in Theory and Practice, No. 4 (37), p Council Regulation (EC) No. 834/007 of 8 June on Organic Production and Labelling of Organic Products and Repealing Regulation (EEC) No. 09/9, Official Journal of the European. 4. Domagalska, J., Buczkowska, M. (05). Rolnictwo ekologiczne. Szanse i perspektywy rozwoju (Ecological farming. Chances and Development Perspectives), Hygiene and Epidemology Issues No. 96 (), p Duda-Krynicka, M., Jaskolecki, H. (00). Historia i perspektywy rozwoju rolnictwa ekologicznego w Polsce (The History and Perspective of Ecological Farming in Poland), Problems of Ecology, Volume 4, No., p Golinowska, M. (03). Rozwoj rolnictwa ekologicznego (Development of Ecological farming), Publishing House Uniwersytet Przyrodniczy we Wroclawiu, Wroclaw, p Harasim, A. (00). Stan obecny i perspektywy rozwoju rolnictwa ekologicznego w Polsce (Current Condition and Perspectives of Ecological Farming in Poland), Institute of Soil Science and Plant Cultivation, State Research Institute, Pulawy, p Kisiel, R., Grabowska, N. (04). Rola doplat unijnych w rozwoju rolnictwa ekologicznego w Polsce na przykladzie wojewodztwa podlaskiego (The Role of EU Subsidies in the Development of Ecological Farming in Poland on the basis of Podlaskie Voivodship), Water Environment Rural Areas, Volume 4, No. 3 (47), p Koloszko Chomentowska Z., Sieczko, L. (04). Gospodarstwo rolne jako podmiot w gospodarce narodowej (Agricultural Farm as a Unit in the National Economy), Economics and Management /04, p Komorowska, D. (05). Znaczenie rolnictwa ekologicznego w Polsce (The Meaning of Ecological Farming in Poland), Polish Association of Agricultural and Agribusiness Economists, Scientific Annals, Volume 7, No., p Ligenzowska, J. (04). Rolnictwo ekologiczne na swiecie (Ecological Farming in the World), Scientific Papers of Warsaw University of Life Sciences SGGW in Warsaw, The Problems of Global Agriculture, Volume 4, No. 3, p Pulaska-Turyna, B. (008). Statystyka dla ekonomistow (Statistics for economists), extended edition II, Publishing House Difin, Warsaw, p Rudenska, B., Wojcicki, Z. (05). Systemy rolniczej produkcji ekologicznej i precyzyjnej (informacyjnej) (The System of Ecological and Precision (Information) Agriculture Production), The Problems of Agricultural Engineering, Issue (88), p Runowski, H. (009). Rolnictwo ekologiczne: Rozwoj czy regres? (Ecological Farming: Growth or decline?), Agriculture Science Annals, G Series, Volume 96, No. 4, p Tabor, S., Kowalski, J., Michalek, R., Kubon, M., Kwasniewski G., Malaga-Tobola, U. (04). Rozwiazania modelowe gospodarstw ekologicznych (The Model Solutions of Ecological Farms), Publishing House PTIR, Cracow, p Tambovceva, T. (06). Development of Organic Agriculture in Latvia, Economic Science for Rural Development, No. 4, p Retrieved: Access: Tyburski, J., Zakowska-Biemans, S. (007). Wprowadzenie do rolnictwa ekologicznego (Introduction to Ecological Farming), Publishing House SGGW, Warsaw, p Zietara, W. (008). Wewnetrzne uwarunkowania rozwoju polskiego rolnictwa (Internal Factors in the Development of Agriculture in Poland), Agriculture Science Annals, G Series, Volume 94, No., p Zelezik, M. (009). Dlaczego rolnictwo ekologiczne? (The Reasons for Ecological Farming), Rocznik Swietokrzyski, No. 30, p Corresponding author. Tel.: +; address: joanna_stefanczyk@sggw.pl 96