Eight more dairies get clean EU bill of health
Almost two years after safety concerns prompted the economic bloc to place a total ban on this country's milk, the European Commission last week granted eight additional Polish dairies the right to export to the European Union (EU).
The new batch of certificates issued brings the total number of Polish dairies permitted to export to the EU to 13 and marks the amplification of the detente in relations between Poland and the EU following the ban imposed in January 1998.
"The EU is opening up to us by allowing us to export," said Kazimierz Konieczny, chairman of the board of the National Dairy Council (KZSM). "They are treating us like partners and not like the third world."
Polish dairies said the EU stamp of approval meant they would no longer have to settle for inferior prices for their exported products, which had been the case after the ban was imposed.
"Not having certification for export meant that the buyer could dictate prices," Konieczny said. "Meeting EU requirements means that we can negotiate on equal ground with other countries as far as prices are concerned."
While the news means a potential increase in sales and exports for Polish milk products, it is also a pat on the back from the EU for improvement in Poland's veterinary services. The EU closed its market to Polish milk goods following 1997 inspections that found sanitary and hygiene conditions sorely lacking in two out of four plants inspected. That move closed off an estimated $200 million annually in dairy exports.
The announcement will undoubtedly also mean a boost to Polish negotiators who are preparing to start EU accession talks in the spring over the integration of Polish agriculture with that of the Western trade bloc. It is widely considered that the Polish dairy sector lags the furthest behind EU norms, and negotiators have estimated that the cost of necessary improvement to this country's sector will cost some zl. 16 billion ($4 billion). That is more than half of the anticipated zl. 25 billion ($6.25 billion) Poland will have to spend on improvements to its entire agriculture industry in the run up to the country's target accession date of Jan. 1, 2004.
"This (decision) has an enormous psychological affect, not only in the EU, but also in other markets as well," said Zygmunt Smolenski, a researcher at the Institute of Agriculture and Food Economics (IERiGZ). "We are still far off from an (equal) partnership, but it's still an important step because it also (means) confidence in our veterinary services, and that is significant."
The Polish veterinary agency was also heartened by the EU's clean bill of health for eight more dairies. "We are getting out of the impasse (that has existed) since '97," said Krzysztof Jazdzewski, milk hygiene inspector at the chief veterinary offices. "It seems to us that trust in the veterinary services (in Poland) has been rebuilt."
To effectively compete with EU producers, Poland's dairy industry must not only improve the quality of milk products sold on the market, it also has to increase the quantity of milk produced on a per-unit basis, Konieczny said.
At present a cow in Poland produces on average 3,200 liters of milk a year, well below the 5,000 liters produced by cows in the EU. That dynamic is expected to eventually force three-quarters of Poland's half-million dairy farms out of business, Konieczny estimated.
Polish dairies will also have to become much more specialized in their production profile, Konieczny said. "To become competitive, one dairy can't produce 20 different (product) assortments, we have to limit that to two, three or four products," he said.
Spoldzielnia Dostawcow Mleka (SDM) in Wielun, one of the eight dairies granted EU certification last week, spent zl. 5 million ($1.25 million) in the last two years to bring its operations up to EU standards, said Stefan Bartela, president of SDM Wielun. Of that amount, Wielun dairy laid out zl. 1 million ($250,000) on laboratory equipment to test milk. It also refitted the factory with hand-free sanitation equipment and replaced its water-supply system with stainless steel infrastructure, Bartela said.
In addition, farmers supplying the dairy spent their own zl. 5 million ($1.25 million) to upgrade their own farms. Those investments included buying cooling tanks that keep fresh milk at the proper four degrees Celsius temperature prior to delivery. The improvement also meant renovating barns for cows.
With the upgrades, Bartela said the dairy now receives better supplies from fewer farms. While 10 years ago 7,500 farmers were delivering fresh milk to SDM Wielun, today that number has fallen to 5,400, he said.
