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Agriculture and forestry

Send Print Download added: Patrycja Operacz | 2017-05-11 14:33:21
poland, agriculture, forestry, resources

Agriculture and forestry in Poland have a very long and deep rooted tradition. Over 60% of Poland’s territory has been declared agricultural land.

The most common crops are grains, especially rye, wheat, barley and oats. Another important crop group are potatoes, sugar beets, fodder crops, flax, hops, tobacco, and fruits. Poland can be found in diverse statistics as one of the biggest producers of potatoes, rye and sugar beet in Europe. Because of the climate and differentiated soil quality amongst the regions, mixed farming is the most common. Raised livestock in those cases is mostly dairy cows, beef cattle, pigs and poultry.

 

The share of Polish working-age population employed in agriculture is still relatively high, compared to other Western European countries and amounts as for 2015 ca. 11.2%. The average farm area amounts to 10.3 hectares (ha) and is usually spread over a couple of plots in the area. Statistics of the main statistical office suggest, successive development towards modern agriculture. This can be seen mostly in the numbers concerning amount of farms, average farm area, average crop etc. The modernisation of the Polish agricultural sector has accelerated greatly with the accession to the EU which has triggered inflow of funds assigned within Common Agricultural Policy.

 

On 1st May 2004, the general rule whereby a permit is required for purchase by foreigners of real estate or shares in companies which are legal owners or perpetual usufructuaries of real estate ceased to apply to nationals and entrepreneurs residing or established in the territory of the European Economic Area (EEA).

 

However, the Act provides for derogation in this respect. EEA nationals and entrepreneurs willing to purchase agricultural and forest land have been obliged to obtain a permit for 12 years after Poland’s accession to the EU (i.e. until 2 May 2016).

 

On the 14th of April 2016, the Polish parliament (Sejm) adopted the Land Act to suspend the sale of agricultural land of the Treasury and on the amendment of certain acts. The act entered was enforced as of 30th April 2016. The act suspends the sale of agricultural land owned by the Treasury for 5 years. It also imposes very strict limitations on the purchase of agricultural land. Under current laws, only an individual farmer is entitled to buy agricultural property, unless the law provides otherwise. The act was introduced due to the expiry of a 12 years grace period for the sale of agricultural land to foreigners imposed by section 4.2 of Annex XII to the Accession Agreement. The purpose of the act was to strengthen the protection of agricultural land in Poland from speculative purchases by domestic and foreign buyers who do not guarantee to use the acquired land for agricultural purposes in accordance with the public interest. The Act is supposed to minimize the danger that Polish agricultural land will be the subject of increased interest of buyers from other EU countries, especially those where prices of agricultural land are much higher than in Poland and where there are strong legal barriers preventing the acquisition of agricultural land by foreigners, as well as by their own citizens who are themselves not farmers.

 

A characteristic feature of the Polish agricultural land market is the role of Agricultural Property Agency (pol. ANR). According to the provisions of the Act of 11th April 2003 on the agricultural system in the sale of agricultural land by a natural or legal person other than the Agricultural Property Agency, the right of first refusal is granted by law to the tenant, if all of the following conditions are met:

  • the lease agreement was concluded in written form and has a certain date, and was performed at least three years, as of that date,
  • acquired property is part of a family farm tenant or leased by the agricultural production cooperatives.

In the absence of such a tenant Agricultural Property Agency has the right of first refusal to all agricultural properties sold with an area of not less than five hectares.

 

Nevertheless Polish agricultural land still seems to be a great investment opportunity not only because of the constantly growing land prices but also because of the single area payments. With Poland’s EU accession on 1st May 2004 the agricultural sector enjoyed land subsidies of 25% of the standard single area payment from the European funds. The rest of the payment came from national budget and there was a subsidy maximum cap set to 55% for the possible overall combined help. In the following years this percentage grew and from 2013 the full amount of the payment comes from the EU and reached its EU wide maximum level.

 

In December 2013 Heads of State of EU members agreed a final version for the Common Agricultural Policy. For 2014 and 2020 Poland received from the EU’s budget – EUR 82.5 billion for the cohesion policy and EUR 32.09 billion for agricultural policy from the EU’s budget.

 

One of the pillars of Common Agricultural Policy is Rural Development. The Polish Rural Development Programme was adopted by the European Commission in December 2014, defining Poland’s priorities for using the EUR 13.5 billion in public money that is available for the period 2014–2020 (EUR 8.6 billion from the EU budget plus EUR 4.9billion of national funding). With one third of the funding aimed at “enhancing farm viability and competitiveness”, the programme is expected to provide investment support to roughly 200,000 farms, and intends to see the creation of more than 22,000 jobsand more than 1,800 producer groups.

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Source: Polish Investment and Trade Agnecy, Poland your business Partner. Invest in Poland, 2016.