How to protect agriculture and supply chains in times of change?

The backstage of Poland’s negotiations with the European Commission on the agricultural budget was presented by Krzysztof Ciecióra, Deputy Minister of Agriculture. – Today we are starting the debate again to operationalise our strategic plan. Talks with the European Commission and Commissioner Janusz Wojciechowski helped. We had to make a lot of compromises, but issues related to food quality or ecology arise from changes in the market. Quality is increasingly required of the farmer, hence the concern for animal welfare – we will subsidise farmers for taking care of their farms, said Krzysztof Ciecióra.

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Przemysł spożywczy

Jak chronić rolnictwo i łańcuchy dostaw w czasach zmian

Wspieranie rolnictwa w zmieniających się warunkach klimatycznych i geopolitycznych, a także model współpracy, który przynosi korzyści zarówno rolnikom, jak i odbiorcom ich surowców rolnych, były tematem panelu o zrównoważonej produkcji rolnej.

Evolution, not command

– The change in the agricultural model to a more sustainable one should be evolutionary, not mandated, and EU programmes make this possible, K. Ciecióra said. The panellists agreed that in the face of the market turmoil generated by Russia and the war, it is essential to support farmers as they are vulnerable in geopolitical wars and were the first to suffer economically when fertiliser prices skyrocketed in the fall. – Disturbances at the level of food producers will have a very serious impact on subsequent supply chains. If we don’t support farmers, they won’t make it on their own. That is why it is important to understand the problem and cooperate with the recipients of their raw materials, K. Ciecióra explained.

– We are at the verge of cost increases. As a company, through our activities we are able to directly support manufacturers; that is what we are focused on. Large company is responsible for smaller companies, for our suppliers. When thinking about the impact we have, I have four areas in mind – the planet, product quality, local communities, and employee development, said Adam Pieńkowski, CEO of McDonald’s Poland. Among other things, the company’s best practices in the field of agriculture consist of education and support for the development of partners and investment in green innovative solutions. The company works with 47 domestic suppliers, and is one of the largest buyers of beef on the Polish market – about 30% of the carcasses produced in the country go to McDonald’s restaurants. The brand aims to rely exclusively on sustainably sourced raw material within a few years; therefore, a few years ago it initiated a dialogue within the Sustainable Beef Platform. In addition, it regularly audits suppliers and breeders for required standards.

Accumulation of gigantic changes

Magdalena Brzezińska, Communications Director at the Żywiec Group, noted that the pandemic, the war, and the economic crisis happened to Europe in just two and a half years. – During this time, we have seen a great deal of enormous changes. The accumulation has caused a huge impact on the market. Farmers are indeed vulnerable; they have neither the resources nor the possibility to work together to manage themselves, said the spokeswoman for Żywiec. She recalled that during the pandemic, retail and food service markets collapsed, demand for certain products and services dropped tremendously. The effects hit farmers directly, with suppliers unable to pick up their produce due to a collapse in their own restaurant sales. – We decided to buy malt for more than PLN 5 million, which is beyond our needs. This was well received by farmers, and gave us access to sustainable raw materials, she said. The situation is changing rapidly, and as a result, there was the issue of the lack of availability of good raw materials for brewing. – At that momet, we saw the importance of long-term relationships and to think with the common interest, M. Brzezińska said.

The question was raised as to how the national strategic plan would allocate funds, when 40% of the budget is to be allocated to climate goals from both pillars, i.e. 35% to environmental goals from Pillar II and 25% – to schemes. The Minister attempted to answer the question of what plans are in the national strategic plan, which can combat the climate change. Krzysztof Ciecióra replied, however, that he wouldn’t ask too much from agriculture in this regard, because keeping livestock has its biological limitations and reducing the environmental load leads to a reduction in production, as is the case in Europe.

In his opinion, there is a need in Poland to be in the forefront and want to make too far-reaching changes when the situation does not call for it. Reducing pesticides is a greater need in the West than in Poland. The Minister pointed out that Western EU countries use far more fertilisers and crop protection products. The structure of agriculture is also very different; for example, in the small Czech Republic, there are only a few farms less than 1,000 hectares, when in Poland the average size is 27 hectares.

Accelerate change

– Building a farmer-friendly environment is a challenge as fragmentation is a problem. Farmers are lonely islands and are not equipped with legal, cooperative instruments. This is very much lacking in our country. Responsible cooperation between farmers and entrepreneurs is very important, K. Ciecióra said.

– Indeed, changes at the farm level are very difficult, but not impossible, admitted Adam Pieńkowski. – Our role is primarily to educate and work on innovation. I would like to invite you to our farms, where we show the way forward, e.g. the fields of Farm Frites near Lębork or Adam Warnke, a cattle breeder from Gajewo. Precision agriculture is about working with fertilisers, but also about water consumption, which is important for the future. Responsibility is the way we work together, A. Pieńkowski said.

Precision farming was referred to by the Minister, who acknowledged that he sees the prevailing belief about precision farming that it is only suitable for large farms. Meanwhile, according to the panellists, the opposite is true. It’s small farms that can’t afford to waste resources, land or water, and innovation is helping them do so.

Adam Pieńkowski mentioned that McDonald’s is supporting work on an emissions balancing calculator for farms by the Balice institute. With this tool, farmers will be able to calculate the carbon footprint of their farms. – About 80,000 farms work for us, and we are trying to support them in their quest for carbon neutrality,A. Pieńkowski said.

– Water availability is becoming a huge challenge that is even changing the structure of crops in Poland, the panellists said. By looking at their harvests, farmers can see which crops are becoming easier for them and require less cost than others. In Poland, the easiest crops to grow have always been cereals, wheat, and barley; and today, maize and soya crops are gaining popularity. This can make it difficult for beer producers to access raw materials. Żywiec has become involved in this issue in the Żywiec region, where heavy rains are becoming a problem, but they do not irrigate the land and do not improve retention; so, after very heavy rainfall, water quickly runs off the land into rivers.

- We are trying to build a large coalition there with local authorities, Polish Water and residents around how to take care of water. Our neighbour, Danone, is also in this coalition. It is only when you join forces that you can think about long-term solutions, Magdalena Brzezińska said.

Panic is bad for prices

Referring to the forecasts, Minister Ciecióra assessed that the agricultural raw material and food market is also being harmed by panic, which facilitates speculation in raw material prices.

– It is important to lower emotions. The situation is not as severe as it may seem, if only in comparison with the situation in Hungary, Spain, and Benelux, said Krzysztof Ciecióra.

In his opinion, the situation in Poland is not yet as bad as it is being portrayed. Food exports continued to grow by double digits and we are self-sufficient in food. – Of course, food will be more expensive; prices are not stable today. However, I would not expect extreme scenarios that we will pay a dozen or so zlotys for bread, the Minister reassured.

However, he stressed that farmers need to take matters into their own hands and organise themselves; and that making additional profits is also facilitated by recent changes to agricultural retailing, which now enables farm products to be traded more freely. In his opinion, the trade of local products has also already gone online, manufacturers are becoming professionalised and agricultural retail is making a hit that is simply not yet visible in larger cities.