The EU and Poland - milking the situation
Well before 2014, say milk co-operatives, the Copenhagen quota will much less serve the needs of this country, and more the needs of the current 15 members of the EU, who will be able to dump their excess production on Poland. Nevertheless, in the short term, Poland's competitive prices will mean that for domestic companies with the right qualifications, sales in the West will be booming.
Come May 1, Poland will be allowed to sell a total upper limit of between 8,964 and 9,380 thousand tons of milk. It's a figure that may seem generous, until you realize that Poland's purchased milk-product consumption rate of 185 liters a year per head is expected to grow to at least the average European norm of 336 liters. Given general dietary similarities, a more likely estimate is that Polish consumption will grow to equal that of neighboring Germany, currently at 400 liters. Well before 2014, Poles will be consuming at least 13,500 thousand tons of milk, which means that some 4,200 thousand tons will need to be imported. According to Waldemar Broś, deputy managing director of the National Association of Milk Cooperatives (KZSM), it's good news for the present 15 members of the EU, which currently produce about 7.2 million tons too much milk each year, but bad news for Poland, which will have to reduce its own production rates to comply with EU quota agreements.
'Poland has been tricked," says Waldemar Broś.
He also criticizes the EU funding administration mechanisms intended to help farmers comply with EU technical, sanitary and veterinary standards. Although the SAPARD funds can provide up to half the costs of restructuring, the mechanism has been constructed in such a way that farmers can only receive funds once the restructuring process has been completed. In other words, they must make the necessary investments out of their own pockets, and are only eligible for funds in the form of a reimbursement.
"As we all know, many Polish farmers are simply too poor to find the kind of money needed," he says.
Only 10-15 percent of the 770,000 farmers who will be affected by EU regulations, are currently entitled to sell their milk on the common market. However, the intensive preparation underway in the run-up to the crucial date, plus the fact that banks are starting to get wise to the situation, means that by some estimates, the figure could be closer to 80 percent or even 90 percent come May 1.
Meanwhile, more than a quarter of the existing 423 commercial dairy plants will probably be closed down as a result of failure to comply with required EU standards. Of the 300 or so that are expected to survive, only one sixth currently hold EU standard certificates. Those that don't manage to obtain them will only be allowed to sell on the domestic market, under a label clearly announcing their inferior 'b class' status.
However, Polish milk product prices, currently 30-50 percent cheaper than the European norm, mean that the next few years could be very profitable for those companies and farms with the right certificates and contacts.
'Polish milk products and indeed Polish milk will be very much in demand. We're looking at big business," says Elżbieta Nitecka, who cites the example of German milk processing giant Miller, which is currently building a new plant close to the Polish border, and actively courting suppliers among Polish farmers.
Sales in Western Europe are not the only happy prospect. EU subsidies of 100 percent of the price of milk products exported to countries outside the EU market would also appear to offer lucrative benefits. Always depending, that is, on what upper quantity limit the EU decides to allocate for this country's exports.
Falling EU prices and rising domestic prices for milk, however, plus the fact that processing costs in the current EU 15 are often actually cheaper than on the domestic market, could mean that the competitive prices will provide only short term advantages for the Polish dairy industry.
"After that we will switch to promoting our products as being ecologically superior," says Waldemar Broś, stressing that Polish dairy farmers use on average only 1/10 of the fertilizers and just 1/30 of the other chemicals regularly applied in western European countries.
Come May 1, Poland will be allowed to sell a total upper limit of between 8,964 and 9,380 thousand tons of milk. It's a figure that may seem generous, until you realize that Poland's purchased milk-product consumption rate of 185 liters a year per head is expected to grow to at least the average European norm of 336 liters. Given general dietary similarities, a more likely estimate is that Polish consumption will grow to equal that of neighboring Germany, currently at 400 liters. Well before 2014, Poles will be consuming at least 13,500 thousand tons of milk, which means that some 4,200 thousand tons will need to be imported. According to Waldemar Broś, deputy managing director of the National Association of Milk Cooperatives (KZSM), it's good news for the present 15 members of the EU, which currently produce about 7.2 million tons too much milk each year, but bad news for Poland, which will have to reduce its own production rates to comply with EU quota agreements.
'Poland has been tricked," says Waldemar Broś.
He also criticizes the EU funding administration mechanisms intended to help farmers comply with EU technical, sanitary and veterinary standards. Although the SAPARD funds can provide up to half the costs of restructuring, the mechanism has been constructed in such a way that farmers can only receive funds once the restructuring process has been completed. In other words, they must make the necessary investments out of their own pockets, and are only eligible for funds in the form of a reimbursement.
"As we all know, many Polish farmers are simply too poor to find the kind of money needed," he says.
Only 10-15 percent of the 770,000 farmers who will be affected by EU regulations, are currently entitled to sell their milk on the common market. However, the intensive preparation underway in the run-up to the crucial date, plus the fact that banks are starting to get wise to the situation, means that by some estimates, the figure could be closer to 80 percent or even 90 percent come May 1.
Meanwhile, more than a quarter of the existing 423 commercial dairy plants will probably be closed down as a result of failure to comply with required EU standards. Of the 300 or so that are expected to survive, only one sixth currently hold EU standard certificates. Those that don't manage to obtain them will only be allowed to sell on the domestic market, under a label clearly announcing their inferior 'b class' status.
However, Polish milk product prices, currently 30-50 percent cheaper than the European norm, mean that the next few years could be very profitable for those companies and farms with the right certificates and contacts.
'Polish milk products and indeed Polish milk will be very much in demand. We're looking at big business," says Elżbieta Nitecka, who cites the example of German milk processing giant Miller, which is currently building a new plant close to the Polish border, and actively courting suppliers among Polish farmers.
Sales in Western Europe are not the only happy prospect. EU subsidies of 100 percent of the price of milk products exported to countries outside the EU market would also appear to offer lucrative benefits. Always depending, that is, on what upper quantity limit the EU decides to allocate for this country's exports.
Falling EU prices and rising domestic prices for milk, however, plus the fact that processing costs in the current EU 15 are often actually cheaper than on the domestic market, could mean that the competitive prices will provide only short term advantages for the Polish dairy industry.
"After that we will switch to promoting our products as being ecologically superior," says Waldemar Broś, stressing that Polish dairy farmers use on average only 1/10 of the fertilizers and just 1/30 of the other chemicals regularly applied in western European countries.
