Transformation of EU countryside

| Foreign Markets |

In October 2013 the European Commission published a brief report about the most prominent changes in the rural areas in EU countries. It was based on data collected between 2005 and 2010. Let us take a look at the figures showing the extent of the transformations.

Fewer farms, bigger farms

The continuing fall of the number of farms is an important trend. Their overall number is diminishing despite the fact that new countries join the EU. There are now 12 million farms in all EU countries. Their acreage grew by 3.8% in comparison with the figure from 2005. The average size of farmland in every agricultural unit is 14.3 hectares, which is not little, unless we compare this European average to the standard farm in the USA, Argentina, and of course Australia. The acreage of farmed arable land decreased, but only slightly – from 172 million hectares in 2005 to 171.6 million hectares in 2010, ensuring reliable food supply for the inhabitants of Europe.

Transformation of EU countryside/fot. photpin.comDiscrepancies in farm acreages

Rural areas in the EU are characterized by small size of farms. One reason for this is the procedure of inheriting land and subdivisions of farms between numerous heirs. 69% of EU farms now fall below 5 hectares, while only 2.7% measure 100 hectares or more. However, the former group makes up as little as 7% of farmland, while the latter type, the largest farms, constitute as much as 50% of all EU arable land. It is worth mentioning here that the mean output of an agricultural enterprise rose by 5.2% in the 5 years analyzed and, reached 25,500 EUR in 2010.

Meanwhile in Poland

Over 3 million Polish citizens own farmland, but only c. 200,000 farmers have at least 15 hectares, or enough to run a profitable agricultural enterprise. Although the average size is only 9.5 hectares, it is almost twice as big as the figure from 2002 – 5 hectares. This resulted from the fall of the number of farms. Similar trend may be observed in the whole EU. Most farms (c. 96%) are small or medium in size, but the farmers who may boast about the largest acreages (15 to 100 hectares) take over more and more land, now owning 37% of the whole farmland in Poland.

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Polish countryside online

| Polish Market |

Work is under way to prepare the rules of allocation of EU subsidies for sustainable growth in 2014-2020. This also concerns Rural Areas Development Programme (Program Rozwoju Obszarów Wiejskich), this time focusing on increasing computer literacy and internet access in the Polish countryside.

Knowledge and communication come first

In the period of 2014-2020, the National Association of Farmers, Farmers’ Circles and Organizations is planning to work towards commonplace digital inclusion in the countryside, promoting the use of computers and gaining computer skills. Association’s proposals and demands submitted to the Ministry of Agriculture and Rural Development include projects connected with developing apps facilitating cooperation with trade exchanges, and institutions like the Agency for Restructuring and Modernization of Agriculture (ARMA) or the Agricultural Social Insurance Fund (KRUS), and launching online programs for management of a rural enterprise and supporting the work of sołectwa, the smallest administrative units in the countryside. Another initiative concerns creating an online database for farmers, providing information about law, marketing, education and employment.

Following the German example

At present as many as 71.1% of households in the countryside have at least one computer, with 67.8% of those having internet access as well. The high proportion of farms which remain offline is explained by little need to use it, inadequate competences for internet use and the cost of internet connections. Although IT equipment is becoming more available (also thanks to smartphones and tablet computers sold by mobile operators) and the offer of internet providers is becoming more attractive, the Polish countryside has a long way to go until it is truly online.

We ought to follow the German example. Our Western neighbors are preparing a program of providing fast (at least 50 Mb/s) internet connection in every household. The total cost of the venture for the the federal budget is expected to reach c. 20 billion euro by 2018.

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Nine years of change in Polish countryside

| Polish Market |

Since the country joined the European Union, the Polish country has transformed beyond recognition. This is visible if one examines the statistics, but also to any observer visiting Polish villages.

The structure of Polish farms in 2013

According to data given by Central Statistical Office (GUS), over 3 million Polish citizens own a plot of land. It is worth mentioning that 2 million Poles pay social insurance in the Agricultural Social Insurance Fund (KRUS). Also, upon Poland accessing the EU structures, Polish farmers started to receive financial support in the form of subsidies. They are paid out to 1.5 million Poles, but there are only 200.000 farmers who own farms over 15 hectares – the size which, according to economists, makes it possible to sustain a family. Let us look into why there are two million people who pay insurance to KRUS, but only 1.5 million farmers who receive subsidies.

From small farms to agricultural enterprises

Most Polish farms remain small in size. However, the structure of agricultural acreage has changed greatly over the past 9 years. At present the average farm measures about 9.5 ha, while in 2002 the figure stood at 5 ha.

Official statistics say that there are 12.1 million hectares of arable land in Poland. The use of fertilizers is nearly 30% smaller than in the “old EU” countries. The most important thing, however, is profitability of farming as a business activity. An analysis prepared by “PUŁAWY” shows that that farmers’ revenue has increased by 82% since 2005! This is confirmed in data gathered by Eurostat. In the 9 years since Poland joined the EU, the number of large farms has grown considerably. If we just count the absolute numbers, obviously the small farms will be in majority. Small and medium businesses account for 96% of all enterprises in this country, and the situation in the agricultural sector is alike. However, the share of large farms in Polish agricultural structure is on the rise. The 12.7% farms which fall in the 15-100 ha acreage group occupy as much as 37.1% of all arable land in Poland! The total number of farms has fallen by 23% in the last 9 years, whereas the average size of a farm increased by 44%. The number of farms covering at least 50 ha went up by 36%.

Demographics of the Polish countryside

For some years, statistics indicated that the population of the countryside was shrinking. The trend has been reversed over the past few years, and the rural population is growing, despite the stereotype of “the youth leaving the villages for the city”. The country is becoming more and more similar to towns and cities. The life expectancy of rural population has reached 71.4 years for men and exceeded 80 years for women. Education levels are rising markedly and rapidly. Up to recently, agricultural experts have complained about poor education of village inhabitants and about few farmers having professional agricultural training or a degree. This is changing as well, with more and more well-educated young people in the countryside.

Based on a talk by Zenon Pokojski Ph.D. at IFMA 19 Congress in Warsaw – July 26th 2013.

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Polish countryside becoming more and more modern!

| Polish Market |

Latest demographic data concerning Polish agriculture has been published. Almost 500,000 thousand workers have abandoned this sector of the economy in the past 10 years.

Technological progress on Polish farms

Specialists agree that the chief reason for the fall of agricultural employment is an increase in the use of machines in activities on the farms and general technological progress in the countryside. Authors of the report published by Central Statistical Office (GUS) have drawn attention to the fact that the number of people employed in the agricultural sector was 1,820,000 at the end of Q1 2013, whereas one year before there had been 84,000 more people in this group. The drop was considerable indeed.

Efficient farming

Poland joining the European Union and the launch of subsidies system gave farmers access to financial means for modernizing their businesses. Machines have made agricultural practice more efficient, and helped reduce emplacement cost as modern equipment replaced tasks previously done manually.

Forecast for the coming years

Experts are confident that the fall in the number of farm workforce is good news for the national economy, as Polish agricultural sector remains heavily overstaffed. Although data from recent years has proven that efficiency in the sector is on the rise, it remains on a relatively low level, especially as compared to the “old EU” countries’ average. It is therefore most likely that over the next decade on the one hand agricultural employment will continue to decrease, while on the other most farms will be becoming more and more efficient.

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