The situation in Polish agriculture is grim… but there are signs of coming recovery, say analysts.
The economic situation in Polish agriculture has deteriorated again. The value of the business climate indicator (IRGAGR) decreased in the first quarter of 2024 compared to the fourth quarter of 2023 by 1.7 points, to -24 points. But….
This is a typical phenomenon…
– The deterioration of the economic situation in the first quarter of the year is a typical phenomenon. Over the last 25 years, only once (in 2017) did the value of IRGAGR increase in the first quarter – according to analysts from the Institute of Economic Development of the Warsaw School of Economics.
According to their assessment, this year’s decline is the lowest in the history of the study; the average drop in the indicator value at this time of year is 5.8 points.
– The recorded deterioration of the economic situation should therefore be assessed as shallow. The current value of the indicator remains lower than a year ago, but only by 0.9 points (1.5 points a quarter ago). The deterioration of the economic situation is therefore of a seasonal nature (i.e. determined by the rhythm of changes in the seasons) – point out Konrad Walczyk and Piotr Szajner from IRG SGH.
The second quarter should bring revival in Polish agriculture
The business climate indicator is a weighted average of two partial indicators: the indicator of equalized cash income of farms and their confidence indicator. Recorded in the first quarter of this year. the decline in the value of IRGARG is the result of a decline in the farm income index. The change is not large, the lowest in the history of the study; reached 3.7 points (over the year 3.5 points). Improved farmers’ moods – the value of the confidence index increased by 2.5 points during the quarter and by 4.2 points over the year – reduced the decline in the value of the business climate index.
– It should be noted that the research results contradict the image of the situation in Polish agriculture that emerges from the media narrative. Although the average value of the business climate indicator in the last two years (-22.4 points) is much lower than in 2010-2021 (-6.5 points) and we have been observing its low stagnation for several quarters, the results of the current survey show some signs of an improvement in the economic situation: not only an improvement in the mood on farms, but also in predictions about the future financial situation, an increase in investments, the tendency to take out loans for agricultural production and purchase current means of animal production. The second quarter should bring revival in Polish agriculture – say IRG SGH analysts.
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