“I received an invoice from KOWR… the rent is PLN 117.34 per dt of wheat,” a farmer from the Opole region told us. Farmers began to receive the first invoices from KOWR for lease rent calculated according to the new method, which was included in the regulation of December 20, 2023.
On December 20, 2023, an amendment to the regulation of the Minister of Agriculture and Rural Development on the method of determining the amount of rent in lease agreements for real estate of the Agricultural Property Stock of the State Treasury entered into force. The regulation says, among other things: on calculating the rental rate according to the average price of wheat from the last 11 quarters, and so far it was calculated for two quarters. This means very high rates, completely inadequate to the current situation and the prices of agricultural produce in purchases.
The rental price calculated from the “grain hill”
Calculating the rent for the last 11 quarters means calculating the average price of wheat for almost the last three years, i.e. largely for the period when the purchase price of wheat reached PLN 1,500/t. The Central Statistical Office set the average price at PLN 117.34/dt. It is worth recalling that the average national wheat price for the first half of 2023 (according to the previous two-quarter calculation method) was PLN 109.97 per dt.
Today, purchased wheat – depending on whether it is classified as feed or consumption – is valued at PLN 650-740/t. With the current lease rent, this amount is almost twice as low. Therefore, if someone negotiated a rent of 2.5 tons of wheat in the lease agreement, he or she would pay PLN 2,933.50 in rent per hectare (and these were often higher values). Converting this amount by the current purchase price (let’s assume it is PLN 700/t, it turns out that the farmer must currently pay 4.2 tons of wheat for the rent per hectare of field.
Will the Ministry of Agriculture and Rural Development change anything regarding the lease rent?
January 30 this year A meeting with the Deputy Minister of Agriculture, Adam Nowak, took place at the Chamber of Agriculture in Opole, where, among others, the issue of lease rents was raised.
– Minister Nowa said that the rent will be charged to the benefit of farmers, i.e. as it is written in the contract – for the last two quarters. The invoices come with amounts calculated from the last 11 quarters – says Michał Konat, chairman of the District Council of Agricultural Chambers in Nysa.
We sent a question about possible changes in the calculation of lease rent to the Ministry of Agriculture and Rural Development from Farmer’s editorial office. We are waiting for answer.
At the request of farmers, questions on this issue – including the validity of changes in contracts signed by farmers on different terms – the Chamber sent questions to the director of KOWR in Opole and is waiting for an answer.
Prices in shopping centers are the same as they were years ago, and production costs have increased dramatically
“The intention of changing the regulations was to protect against drastic increases (lease rent, editor’s note), but no one predicted that purchasing prices would return to the prices from 6-8 years ago. Taking into account labor costs, costs of purchasing power, money, inflation, I don’t know if we have even gone back to times that no one remembers,” writes Michał Konat and goes on to give examples.
In 2012, the price of wheat in the first half of the year was PLN 85.06/dt. The minimum wage in January 2012 increased from PLN 1,386 to PLN 1,500 gross. Saltpetre cost PLN 870.
At the beginning of 2024, we have the following situation: the purchased wheat price in the second half of 2023 and at the turn of 2023/24 was PLN 84/dt. From January 1, 2024, the minimum wage was increased from PLN 3,600 to PLN 4,242 gross. Saltpeter costs PLN 1,870/t.
– Now, after the opening of the borders, when the price of wheat has dropped by approximately PLN 100/t in a month, the settlement is completely to the detriment of farmers – sums up Konat.
Given the current reality, the new method of calculating rent is another nail in the coffin for farmers. And it is worth mentioning that there is one more… nail – the calculation of agricultural tax. But that’s a topic for a separate thread.