Poland - Agriculture

Summary

For years Polish agriculture has struggled with financial problems, and as a result, machinery is often obsolete and limited. As a member of the European Union (EU), Poland will receive grants for agricultural expenditures. These funds are assigned to farmers according to number of hectares, but other incentives are also provided to support purchases of agricultural machinery. Poland relies on imports for a wide range of Agricultural Machinery and Equipment

Market Overview

According to official statistics, 25 percent of all working people in Poland are employed in farms. Nearly 95 percent of arable land in Poland remains in the hands of private owners. The characteristic feature of the country’s agrarian structure is the fragmentation and small acreage of private farms. The average size of a Polish farm ranges from 2.5 ha (hectares, approximately 6.18 acres) to 17 ha (approximately 42 acres), depending on the province. There is a total of more than 3 million farms, 90 percent of them private and one third of them having an area not larger than one hectare. Such farms do not create demand for agricultural machines and equipment.

The remaining two million farms, with an area exceeding one hectare, constitute the principal group of potential customers for agricultural machinery, although only 20 percent are larger than 10 hectares. The agrarian structure of Poland’s agriculture constitutes one of the main barriers to demand for farming machinery supplied by domestic producers.

Although the quantity of Polish equipment and machinery in use in Polish agriculture is high, it is usually old and has a low production capacity. The average level of wear of the used farming machines is about 70 percent.

The degree of agricultural mechanization in Poland is far lower than that in developed countries in the European Union. The present agrarian structure and utilization of farming machines means that despite the considerable saturation level of Poland’s agriculture with machinery, the degree of mechanization of work on Polish farms is still low.

Farming machines and equipment are manufactured by some 300 enterprises in Poland. Beside state-owned enterprises, there are also a large number of private, usually small producers in this sector.

According to analyses carried out by the Ministry of Agriculture and Institute of Building, Mechanization and Electrification for Agriculture (IBMER), demand for farming machines in Poland will remain relatively high until 2020.

Market Trends

Joining the European Union has had very positive effects on Polish agriculture. Each farm is now eligible for special funds granted by the EU. The funds are designated to support development of Polish agriculture, and are assigned according to the number of hectares for each farm. The funds are assigned to help Polish agriculture to modernize and become competitive in Europe. Increasing the mechanization of Polish farms is a means to accomplish this.

Other EU financial incentives should also increase demand. Farmers are eligible to receive a refund of approximately 50 percent of the cost of new equipment, although the amount depends on the type of equipment. The Agency for Restructuring and Modernization of Agriculture is the body designated by the EU to dispose of these funds.

Since EU accession on May 1, 2004, Polish produce has been sold freely in other EU countries. Polish agricultural products are popular abroad and are competitive versus local produce. This increased demand creates an incentive for Polish farmers to increase their crops, and thus, to mechanize.

Under-financed for years, Polish agriculture now faces great opportunities for development. Access to new, modern equipment will help farmers respond to new opportunities. Compact size tractors are particularly well adapted for use on small Polish farms. Also, the convergence of Polish lifestyle towards that of its Western neighbours has created new sales opportunities for small agricultural equipment. Golf is growing in popularity in Poland particularly around large urban areas and newly opened golf courses are becoming very popular.

In consideration of the factors mentioned above – i.e. relatively small farms, old and worn equipment, funds available for farm modernization and opportunities to export produce, as well as changing lifestyles – demand for Agricultural equipment and machinery in Poland is high.

Import Market

When considering a purchase, Polish buyers focus on price and quality. Service is also a factor. Thus it is important that a dealer also operates a service shop. There is an increasing trend towards well-developed, modern farms, run by well-educated farmers who purchase farms with a clear plan on how to operate according to European standards of modernization.

They are interested in high quality, modern equipment, focusing on how it meets specific requirements. There is also a class of young Polish farmers who are keen to learn about new products. They typically have inherited a farm and seek to depart from old ways of operating and raise production standards. They are careful in spending their money, but are also eager to make their life on a farm easier and their work more productive. They have a greater tendency to research and purchase new equipment.

There is also a demand for equipment used in parks and open field areas in cities. Therefore municipal authorities constitute another group of end users. They typically have very limited funds and their spending is carefully monitored. The government Procurement Agency oversees all purchases made by city authorities. Private owners of golf courses are still few in number. However, this sector is growing and should be considered by those approaching the Polish market.