The economic potential of farmers and the entire agri-food sector is enormous. The value of the agri-food market is approximately PLN 400 billion annually, and the value of annual agricultural production alone is PLN 120 billion. The Agribusiness Financing Forum was born, bringing together farmers, industry and the financial market.
- The agricultural credit market in Poland is currently over PLN 30 billion.
- Almost 2 million agricultural companies and 200 thousand farmers used credit at the end of last year.
- These data were quoted by Dr. Tadeusz Białek, president of the Polish Bank Association, and pointed to the need for cooperation between the entire agro sector and the financial market, including banks. His words were spoken during the Agribusiness Financing Forum, organized by the Polish Bank Association.
- The forum took place on March 27-28 this year. in Warsaw.
– We would like this meeting to be an annual banking and agribusiness roundtable, an event focused on financial management, dedicated to the priorities of cooperation between both sectors – said the president of the Polish Bank Association during his speech opening the dialogue.
The aim of the forum is to create a permanent space for constructive economic dialogue, discussion and joint search for innovative solutions instead of what we have observed in recent years, the de facto lack of any consultations or even the destruction of laws adopted without dialogue and without consultations, and even against the will and interests of the addressees of such provisions. Many harsh words were uttered by Dr. Białek regarding the regulations regarding the consumerization of farmers, which are currently the subject of parliamentary works.
The forum focuses on the most important aspects of cooperation between agribusiness and the financial market in the context of the current situation and future challenges. It is also a place to share knowledge and experience between business leaders who influence the development and future of Polish agriculture.
Let’s talk about the future
Recent events have shown that Poland needs a broad and open debate on the future of Polish agriculture and, more broadly, the entire agribusiness.
– We need a breakthrough in cooperation, we need a constructive dialogue widely announced by the new government between farmers and business, including banks, and regulators, politicians, institutions with the participation of experts from the world of finance, science and technology, who should have a greater say than – Let’s call it openly – populists who often mislead public opinion – said Dr. Tadeusz Białek at the opening of the forum. – What is needed is a cold calculation, a vision and a strategy that will allow Polish agriculture and the Polish economy to come to an understanding, allow them to meet the challenge and take advantage of the opportunities brought by the last crisis, he added.
The Polish agri-food industry is one of the key branches of the country’s economy. The value of this market is approximately PLN 400 billion annually. The value of annual agricultural production alone is PLN 120 billion.
This industry is responsible for over 9% of the total production produced and 6% of the total gross value added.
The Polish food industry stands out from other European Union countries as one of the largest beneficiaries of European Union funds. Among others Thanks to this, the value of Polish exports of agri-food products exceeded PLN 230 billion last year.
The strong influence of this industry is also visible on the labor market. It provides employment for almost 3 million people, i.e. de facto for every sixth person working in Poland.
Our agriculture is also an area of huge investment potential for the technology industry. The use of various types of automatic systems, drones, new technology, remote data transmission and settlements is growing in popularity. It is forecast that the value of the agricultural networking market alone will amount to almost PLN 1 billion annually.
– Agriculture is also an extremely interesting area in terms of ecological transformation under the now partially revised European Green Deal. Agriculture is a strategic sector for the financial sector, especially for banks, which are the oldest business partner of farmers and the entire agro sector. Banks also finance the digitalization of agri-food processing, said the president of the Polish Bank Association.
The agricultural credit market in Poland is currently over PLN 30 billion. Almost 2 million agricultural companies and 200 thousand farmers used credit at the end of last year. In addition, there is the leasing, factoring and insurance market, as well as the slowly but constantly developing capital market. The bank guarantee market is also developing thanks to cooperation with the government and Bank Gospodarstwa Krajowego.
– Banks are also the leader of an efficient aid system for agriculture, also in the area of eliminating the effects of natural disasters, where a special partner of farmers is cooperative banking co-managed by farmers themselves, as shareholders – pointed out Dr. Białek.
A strategy for financing is needed
Forum participants discussed primarily the future of the entire agro sector.
Our agriculture faces many challenges and financial threats. These include, among others, climate change, the effects of the Covid-19 pandemic or the war in Ukraine, growing quality and sanitary requirements, changing consumer preferences, low incomes in rural areas, demography, unstable legal environment, lack of coherent and stable long-term agricultural policy, and also deteriorating access to external financing, forcing farmers into the hands of parabanks.
These are just some of the problems faced by farmers and, more broadly, agribusiness entrepreneurs. On the other hand, we have an overregulated financial market, which for many years has been bombarded with mainly national regulations making it difficult to finance agriculture. This is despite the demand for this financing and the opinions of farmers themselves. The law, as was the case with the consumerization of farmers, is created incidentally for selected entities or small groups of indebted entities at the expense of hundreds of thousands of those who honestly managed their interests. This concerns the previously mentioned provisions regarding full immunity from enforcement.
