Agribusiness in Poland – an attractive market for foreign investors

Anna Wojciechowska

Due to economic and demographic changes, now more than ever European-inspired agribusiness can awaken the breadbasket plains of Poland
by Anna Wojciechowska LL.M. legal counsel and head of the German Desk at WKB Wierciński Kwieciński Baehr law firm

Poland has been at the forefront of foreign investments in the CEE region for a few years. Recently, a survey of a group of over 1,400 investors with German capital conducted by the German-Polish Chamber of Industry and Commerce revealed that Poland beats the Czech Republic and Estonia in attracting foreign investors. In addition to EU membership, qualifications, commitment and productivity of employees, as well as availability of local suppliers are factors determining the choice of investment location.

Cornucopia of plenty
Polish food has attracted recognition in Europe and the rest of the world, placing in the top ten of food exporters in the EU. The main export products of this sector include meat, dairy, cereals, vegetables and fruit. For many years, the main market of Polish agricultural products was Germany, which is a major consumer of poultry, fish, baked goods as well as milk, cream, frozen raspberries, strawberries, apple juice, wheat and rapeseed oil. Great Britain, France, the Czech Republic and Russia round out the top markets for Polish agricultural products. Polish wheat also travels to Saudi Arabia, Egypt, Zimbabwe and Sudan. The meat industry is the largest sector in Polish food production with over 100 thousand employees, with Animex Group and Sokołów as the main meat packers.

Eco around the corner
The number of organic farms boosted by national subsidy programs is systematically growing in the last 10 years. Experts point out that Polish agriculture is predestined to use organic methods of food production due to the relatively low use of chemical means of production, good organic quality of the soil and biological diversity. In 2013, more than 80 percent of Polish organic food was exported to Western Europe and the USA. Healthy Polish food has also reached Japan and South Korea.
The number of organic processing plants is increasing as well. At the beginning of September 2104, a group of vegetable producers, Primavega, opened a modern facility for storage, packaging and distribution of certified vegetables. Competition on this market is still small and the field for expansion of new organic processing plants remains open. Development of organic produce processing is a way to increase sales, as the majority of farms are located in agricultural areas, while consumption of such products – in large agglomerations.
Despite interesting investment prospects, foreign investors have to deal with the imperfection of the Polish legal system, in particular with the instability of tax legislation. However, the attractiveness of Polish agribusiness makes it worthwhile to take up this challenge.

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