ERS/USDA Briefing Room - Poland: Issues and Analysis

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		poland: issues and analysis

Farm structure and land reform
EU accession
Poland's agricultural market information and analyis system
Past issues

Farm structure and land reform
Even during the Communist period, Polish agriculture was dominated by over 2 million private farms, each averaging 5 hectares (12.5 acres). Consolidation since 1989 has been quite slow—the average farm size had increased to 8 hectares by 1998. The number of commercially viable farms increased, but at least half the farms still produce mainly for self-consumption. Land sales have been legal throughout the transition period, but many landowners are reluctant to sell because they lack alternative employment. Land owners have also been holding on to their land in anticipation of higher land prices after EU accession.

The privatization of state farms has proven difficult. Prior to the land reform initiatives, state farms occupied about 20 percent of agricultural land. Poland created the Agricultural Property Agency (APA) in 1992 to privatize and restructure the state farm sector. The APA took over ownership of the assets of all former state farms with the goal of selling the land and other assets to private owners. However, the APA encountered difficulties in finding buyers because of the high indebtedness of most state farms and the uncertain income prospects in agriculture. In 2001 (the latest information available), the APA still controlled 15 percent of the land, although most of that was leased to private owners.

The Polish food processing industry, once dominated by state enterprises, is now nearly 100-percent privatized. Thousands of small- and medium-sized companies have emerged. Nevertheless, privatization of state enterprises was slow. Early in the transition, the Government converted these enterprises to shareholding enterprises, aiming to privatize them through sales of the shares. But demand was slack through most of the transition period, due to outdated technology and high indebtedness of many firms. However, as EU accession drew closer, foreign investors became more interested in acquiring stakes in these firms.