Slow moving EU ag funds expected to come on line by summer
After a series of delays both in Poland and in the European Union (EU), the European fund Sapard, which is designed to provide the agriculture sector with much-needed capital for restructuring, should be up and running by July, government officials said last week.
Originally targeted to come on line Jan. 1, the fund's start date was pushed back due to Polish officials' lateness in providing the EU with an action plan for disbursing the money. Officials here did not provide that plan until the end of December. The EU, in turn, has six months to comb through the proposal, which has government officials estimating the program will be up and running no later than the beginning of July.
While government officials are setting a fairly aggressive deadline, many close to the project said that a series of barriers could delay the funds actually being distributed. The funds must be put to work soon, however, if Poland is to get its agriculture sector in shape before EU accession takes hold.
In a recently submitted negotiation position on agriculture, the Polish government said that the sector would be ready to join the EU by Jan. 1, 2003. But agriculture needs an estimated zl. 25 billion ($6.09 billion) worth of investment before that happens, a large portion of which is supposed to come from EU pre-accession funds such as Sapard, ISPA and Phare.
Sapard is directed primarily at assisting in the restructuring of the agriculture sector, while ISPA is used for large environmental infrastructure projects.
According to the Finance Ministry, these three funds together should provide Poland with roughly E900 million annually to pour into agriculture.
The first barrier to overcome in the process is gaining European acceptance for how the funds will be deployed. In its plan submitted last month, the government presented a broad, four-pronged strategy, which includes the improvement of processing and marketing of agricultural products, development of better technical infrastructure in rural areas and additional investment into individual farms. The forth prong of the strategy focuses on bringing down the importance of agriculture in terms of employment in rural Poland by retraining farmers to do other jobs. Roughly 25% of Poles are employed in the agriculture sector.
At this point, the strategy outlined is only theoretical and awaits EU approval. "All of this could change because right now these are just projects," said Anna Zygierewicz, senior specialist at the department of pre-accession assistance and structural funds in the Agriculture Ministry.
The EU has until the end of June to scrutinize Poland's proposal. If the bloc does not give a green light, that means that specialists like Zygierewicz will have to go back to the drawing board and fine-tune the program.
Another obstacle in fund disbursement could be how the actual money will be administered to farmers. At present, the government is banking on setting up a national payment office through the Agriculture Restructuring Agency (ARR), which will disburse funds at local offices in defined geographical regions.
But Poland and nine other countries in line for EU membership still have not received detailed instructions outlining EU rules on disbursement of funds. Not following these requirements could jeopardize the country's ability to be reimbursed for eligible projects.
The EU was supposed to release these rules late last year, but so far have not done so. Officials said that they hoped Brussels would send the guidelines out sometime in February.
Once these issues are settled, farmers and companies hoping to get their hands on EU money will need time to prepare their applications. Since the actual application forms still do not exist, groups interested in getting access to funds are using hearsay as guidelines for initial preparations, officials said.
Trainers assisting farming groups currently are using PHARE applications as a guideline. Joanna Maciejewska, European integration department manager at the Regional Advisory Center for the Development of Agriculture and Rural Areas in Wroclaw (RCD), said the word on the street was that 80% of the Phare application guidelines will also apply to Sapard. Still, that information does not give farmers much of a head start. Maciejewska estimated that farmers need at least two months to put together a solid application.
"Preparing an application is not just a question of three days," she said. "The worst thing is we don't have defined which investments are going to be supported, or which projects can be accepted as far as Sapard is concerned."
Such vagaries are doing little to improve farmers' relatively negative opinions on EU entry. As of November last year, only 59% of Poles supported joining the EU, down from 80% in May 1996, according to Centrum Badania Opinii Spolecznej (CBOS).
Since last winter, pep squads from the ministry have been visiting different voivodships in an attempt to bolster interest in the pre-accession funds, which were supposed to be available at the beginning of the year. But now, "it's January and we don't have much to tell these people," Zygierewicz said.
