Few are happy with EU proposal

Polish agriculture concerns preparing for competition The European Union this week will consider sensitive funding mechanisms for Poland and other candidate countries as a proposal released last month comes under heavy criticism from EU members and nations looking to join the political and economic bloc. Poland's coalition government is increasingly stressed by the European Commission's proposal, which would initially give only 25% of the agricultural subsidies to Poland that current members receive. The head of the Peasants Party (PSL), junior partner in a Democratic Left Alliance (SLD)-led coalition, threatened to quit the government. If "the Polish European Union accession negotiators accept the 25% subsidy rate for Polish farmers in 2004, as well as a 5% increase in subsequent years, then the PSL will leave the coalition," parliamentary club President Zbigniew Kuźmiuk told Radio Zet. EU country finance ministers last week also criticized the plan, though for being too generous. In Brussels, ministers reviewed the commission's €40.2 billion ($35 billion) price tag for eastern enlargement. The EU budget plan - which includes regional aid and covers 10 countries - would run from 2004-2006. EU foreign ministers and agricultural ministers will discuss the financial package this week. The EU member states have to draft a common negotiating position for agricultural policy before formal negotiations with candidates can begin. Within the EU, Common Agricultural Policy (CAP) reform threatens to bring the accession process to a halt. Germany, a net contributor to the CAP, supports reform before any new members are allowed to join. German Finance Minister Hans Eichel said, "we can't escape a necessary reform of the CAP - it would be best if this comes into force before enlargement otherwise expansion is going to cost us dearly." As politicians argue over euros, big agricultural concerns are preparing for the integrated market. Andrzej Budziński, CEO of Rolimpex, one of the country's largest agricultural concerns, said the 10-year plan to phase in full subsidies for Poland is "not a good solution." But Rolimpex is already facing up to competition from the West, he said. Among its largest competitors are U.S.-based processor and distributor Cargill and U.S.-based dairy giant Land O'Lakes. "Our feed plants already run as if they were operating within EU directives," he said, noting that adjustment costs will be minimal. Budziński favors an elimination of the CAP subsidy altogether but said that powerful French agricultural interests within the EU make significant reform unlikely. In the meantime, subsidized competition limits opportunities for the firm. "We would like to go abroad to Eastern markets, but it is not possible at the moment because of the subsidy from the EU," he said. Either a 100% or 0% subsidy for all would provide a fair and level playing field but even faced with the EU's 25% solution, Budziński is not pessimistic about his company's prospects - 25% of the EU subsidies would be better than nothing. Exposure to tough EU agricultural competition will sort out the wheat from the chaff among Polish farmers, and this is very much in the long-term best interests of Polish agriculture as a whole, and Rolimpex in particular, since Polish farms supply Rolimpex, he said. "We're counting on farmers consolidating … things will not be as they are today," he said. - Staff writer