The Nature of Rural Development:

Towards a Sustainable Integrated Rural Policy in Europe

Zbigniew Karaczun

Actors, Institutions and Attitudes to World-Wide Fund for Nature and the Statutory Countryside Rural Development:

The Polish National Report Research Report to the Agencies of Great Britain

Department of Environmental Protection, Warsaw Agricultural University December 2000

1 Contents Page

1. Introduction ...... 3 2. Institutions and programmes...... 6 2.1 Institutions...... 6 2.1.1 Central government institutions...... 6 2.1.1.1 The Ministry of Agriculture and Rural Development ...... 6 2.1.1.2 Agency for Restructuring and Modernisation of Agriculture (ARMA) ...... 7 2.1.1.3 Agricultural Market Agency (AMA) ...... 7 2.1.1.4 The Agency of State Treasury Ownership in Agriculture (ASTOA)...... 8 2.1.1.5 Ministry of Environment...... 8 2.1.1.6 National Fund of Environment Protection and Water Management ...... 9 2.1.1.7 Other institutions...... ……9 2.1.2 Regional and local institutions...... 9 2.1.2.1 Regional branches of the Agency for Restructuring and Modernisation of Agriculture...... 9 2.1.2.2 Regional branches of Agency of State Treasury Ownership in Agriculture ...... 10 2.1.2.3 Departments of Environmental Protection and Agriculture in Voivodship Offices10 2.1.2.4 Agricultural Advisory Centres ...... 11 2.1.2.5. Regional Inspectorates of Environmental Protection (RIEP) ...... 11 2.1.2.6 Voivodship, Powiat and Local Funds of Environment Protection and Water Management...... 11 2.1.2.6. Local authorities ...... 11 2.1.3 Other institutions ...... 11 2.1.3.1 The World Bank...... 11 2.1.3.2 Foundations...... 12 2.1.3.3 Labour unions...... 12 2.1.3.4 Non-governmental organizations ...... 13 2.1.3.5 Banking sector ...... 14 2.2. Programmes ...... 15 2.2.1 National programmes ...... 15 2.2.2 Programmes supported by foreign resources ...... 16 2.2.2.1 PHARE...... 16 2.2.2.2 SAPARD Programme...... 17 2.2.2.3 Programmes of the World Bank...... 19 3. Evolution of agricultural policy...... 21 4. Chances and barriers for sustainable developoment of rural areas in Poland...... 27 4.1 Factors limiting opportunities for sustainable rural development...... 27 4.2 The development of government policy...... 29 4.3 Opportunities for sustainable rural development ...... 31 5. Conclusions...... 34

Annex I An institutional map for rural development in Poland...... 36 Annex II Institutions involved in rural development in Poland ...... 37

Zbigniew Karaczun Department of Environmental Protection Warsaw Agricultural University 02-787 Warsaw Nowousynowska 166 Poland

Tel: (+48) 22 84 39041 ext. 11287 Fax: (+48) 22 84 71562 E-mail: [email protected]

2 1. Introduction

Poland is a country with agricultural tradition. In 1945 the share of agriculture in the national Gross Domestic Production (GDP) accounted for over 60%. In spite of the fact that the share of agriculture in GDP creation is decreasing (in 1990 it was equal 14.9%, and in 1998 – 4.2%), agriculture and forestry are still the dominant land use (see table 1). After 1945 Polish farmers paid a high price for the maintenance of private ownership – in the form of backwardness and insufficient investment.

Table 1 Changes in the form of soil utilisation in Poland

Share (in %) of the country territory in specific years 1950 1980 1990 1995 1998 Agricultural soils 65,5 60,6 59,9 59,7 59,0 Forests and soils covered with 22,0 27,8 28,0 28,7 28,5 trees 12,5 11,6 12,1 11,6 12,5 Others [GUS 1999]

A characteristic feature of the Polish agriculture is its predominantly small-scale structure of farms (Table 2). One cannot forget, however, that this structure has an immense, positive impact on biodiversity1.

Table 2 The structure of farms in Poland

Years 1990 1995 1997 1998 The number of farms in thousands 2138 2048 2008 1989 Farms with the surface of 1 – 1,99 ha 17,7 20,9 21,9 22,6 2 – 4,99 35,1 33,7 34,4 34,0 5 – 6,99 14,9 13,4 12,7 12,4 7 – 9,99 14,9 13,3 12,3 12,3 10 – 14,99 11,3 10,7 10,3 10,2 15 – and more 6,1 8,0 8,4 8,5 Average acreage of the farms in ha 7,1 7,6 7,8 7,7 Including arable 6,3 6,7 6,9 6,9 soils [GUS 1999]

Another characteristic feature of Poland is a relatively low population density – 124 persons/km2, and rural areas are particularly scarcely populated – in the total number of more than 56 thousands of rural municipalities approximately 94% have less than 1000 inhabitants. This has a low impact on equipment regarding technical infrastructure in rural areas which constitutes one of the barriers for their development.

1 Small pieces of farm land with numerous lines of division marked with trees and shrubs form many ecotone zones – which constitute habitats with the largest number of species. In the process of creation of large fields of farmland a significant number of ecotones is eliminated. See e.g. paper McNeely J.A., 1995: How traditional agro- ecosystems can contribute to conserving biodiversity. [in] Conserving Biodiversity Outside Protected Areas. IUCN. Gland – Cambridge, pp20–36. Modern agriculture technology influences also the diversity of breeds. Due to using of qualified seed the local, indigenous varieties of agricultural crops are endangered. During the 1990s it has been observed that richness of local breeds of animals is endangered, especially sheep and horses, but also pigs and poultry.

3 Because of climate conditions as well as low quality soils, Polish agriculture is in a more difficult situation than most of the countries of the European Union (EU). Climate is highly changeable, and the vegetation period begins at the verge of March and April, and lasts 180-220 days. At the beginning of this period strong frost often occurs. Precipitation is very low, the country average amounts to approximately 600 mm/year, with regional diversification in the range between 500 and 1500 mm/year. Most of the farmers use medium- and low-quality soils; very good quality soils constitute less than 4% of agricultural land (Table 3). In addition, over 50% of soils are soils with inappropriate water conditions. Low amount of water resources in addition to low precipitation also constitutes a problem, limiting the possibilities of development of agricultural production. The above mentioned factors influence the size of harvest generated by the Polish farmers, which is usually lower than average yield achieved in the EU countries.

Table 3 Breakdown of soils categories according the to various quality standards in Poland

Share [in %] of soils in a given category Categories Agricultural Cultivated soils Meadows and soils total pastures I 0,4 0,5 0,1 II 2,9 3,3 1,5 III 22,3 24,8 13,4 IV 39,9 39,1 42,4 V 22,7 20,3 31,3 VI 11,8 12 11,3

Polish soils are not polluted2, agricultural soils with natural content of heavy metals and other pollutants prevail, whereas acidification and erosion of agricultural land constitute a problem (Table 4 and 5).

Table 4 Breakdown of soils according to the level of acidification

Acidic and very Medium- and Soils with Low- and Alkaline soils acidic soils low-acidic soils balanced PH medium-alkaline soils 29,7 39,5 11,8 18,4 0,6 [PIOΠ1998]

Table 5 Exposure of Polish soils to erosion

Type of erosion % of the total Level of danger in % of total surface surface Weak Medium strong Water erosion 28,5 13,8 11,0 3,7 Wind erosion 27,6 17,3 9,3 1,0 Gully erosion 17,5 10,5 4,3 2,8 [GUS 1999]

2 PIOS, 1998: State of Environment in Poland. Library of Environmental Monitoring PIOS, Warsaw.

4 While comparing the situation of agriculture and rural areas in Poland and in the EU countries, one should remember that the Polish definition of rural areas differs from the definition adopted in the European Union. In Poland, rural areas are defined as the territories situated beyond the boundaries of the cities and towns. The criterion of population density is not used (as in case of EU or OECD). Due to such a definition the share of rural areas in Poland amounts to more than 90%, and 38% of the country population lives in such areas.

Table 6 Rural areas in Poland according to different criteria

Criteria of division Percentage share Average population density, persons/km2 Rural population Surface of rural areas According to the Polish 38,1 93,4 50,4 definition According to population 32,8 83,0 48,9 density (EU definition) [GUS, 1999]

The goal of this paper is to analyse the state agricultural policy and to evaluate the possibilities for implementation of sustainable development of rural areas in Poland.

5 2. Institutions and programmes

2.1 Institutions

The increasingly serious crisis of Polish agriculture resulted in a rising interest in possibilities, and the necessity of reforms, in this sector. Therefore, many institutions in Poland deal with development of agriculture and rural areas – including governmental bodies, scientific fora and non-governmental organisations. They exert various pressures on the direction of the state agricultural policy, and it is obvious that some of them represent contradictory interests. One of the major drawbacks of the existing system is the very weak co-operation among the individual institutions – both at the governmental level and among non-governmental organisations. Lack of such co-operation implies that the work is carried out in two paths – on the one hand the institutions responsible for agricultural policy create their own programmes, on the other hand programmes for environmental protection are prepared which are not fully consistent with agricultural policy. In spite of the attempts to integrate agricultural and environmental policy, lack of coherent agricultural-environmental policy implies that although many activities are being undertaken, the situation of rural areas is not undergoing rapid improvement, which may in the longer term hampers preparation of Poland to implement the selected legal regulations of the European Union3. Lack of co-operation can also create a barrier for sustainable development of rural areas.

2.1.1 Central government institutions

2.1.1.1 The Ministry of Agriculture and Rural Development The most important institution co-ordinating the governmental policy in relation to agriculture and rural areas is the Ministry of Agriculture and Rural Development (MARD)4. The ministry prepares draft legal acts regulating the manner and directions of development of rural areas and agriculture. Through participation in budget planning it has an impact on the amounts of financial resources that is spent on this purpose. The MARD creates programmes and strategies, and these determine the instruments used in agricultural policy. The ministry is responsible for appropriate use of SAPARD resources by Poland5. Its role will be to co-ordinate design, to popularise information about the programme and promote it, and to supervise the implementing units (including the paying agency) regarding the amount and the manner of spending the resources as well as implementation of projects. The ministry (the Department for European Integration) also co-ordinates Polish negotiations with the EU, as well as approximation activities in this field. The Department for Rural Development implements the tasks in the field of activation of the inhabitants of rural areas, both regarding social aspects and employment, in order to enhance multi-functional development of rural areas, labour market both in agriculture and in other sectors, social security, technical infrastructure, technology, involvement of co-operative organisations, and with scientific institutions and units, as well as consulting services for agriculture. In the Ministry also exists a special Team for Agri – Environmental Programs which has been working on the preparation of implementation of agri- environmental programs in Poland.

Since the beginning of the nineties, the activities of MARD regarding development of agriculture and rural areas are supported by governmental agencies.

3 Lack of cooperation among the institutions responsible for environmental protection and agriculture was indicated by almost all interviewed people. They consider lack of such cooperation at the central level. 4 In November 1999 the name of the Ministry of Agriculture and Food Industry was changed into the Ministry of Agriculture and Rural Development. 5 These tasks are implemented by the Department for Pre-accession Aid and Structural Funds.

6 2.1.1.2 The Agency for Restructuring and Modernisation of Agriculture (ARMA) The Agency for Restructuring and Modernisation of Agriculture (ARMA) is a governmental institution with the mission of supporting the activities that accelerate the process of structural changes in agriculture and in rural areas. The Agency was established with the Act of 29 December 1993, but it started its work in 1994. Its goal is to support structural changes in agriculture and in rural areas. This goal is being accomplished through the following activities: · Investments in agriculture; · Creation of new workplaces outside agricultural sector; · Development of the infrastructure in rural areas; · Creation of agricultural markets; · Training, agricultural consulting etc.

ARMA has been equipped in instruments, allowing direction of the resources coming both from the state budget and from foreign assistance, to a number of units that are active in all the basic aspects of rural life. Beneficiaries of the financial assistance offered by the Agency are primarily: · Farms, agricultural and food industry plants, institutions providing services in agriculture, · Units interested in creation of new work places in rural areas, · Gmina (local commune) authorities which implement the tasks related to technical and production infrastructure in rural areas, · Universities, schools, agricultural consulting centres and units dealing with education and consulting for the sector of food management, · Units creating agricultural exchange markets and agricultural wholesale markets.

Depending on the type of undertaking, ARMA financial assistance may be granted in the following forms: · Subsidies to banking rates for credits for investments and current activities, · Subsidies for undertakings in the field of technical/production agricultural infrastructure and subsidies supporting activities related to improvement and change of professional qualifications, consulting ant information in agriculture and its environment, · Credit guarantees.

Assistance of the agency, regardless of its form, always constitutes a supplement to the investor’s resources, because the granted resources have the goal of supporting, and not substituting, the investor’s resources.

The goals and methods used by the agency indicate that it is the most important executive institution, with the goal of supporting the Ministry of Agriculture in achieving the objectives of the governmental agricultural policy (thus, ARMA should not create its own policy). Therefore, its significance in creating the framework for sustainable development of agriculture should be high. But it should be remembered that ARMA has to implement the objectives of national (government) agricultural policy, and its activities in sustainable agricultural development depends on political decisions made by the Ministry of Agriculture.

2.1.1.3 Agricultural Market Agency (AMA) It was established according to the Act of 7 June 1990. The task of the agency is to stabilise the agricultural market and to protect revenues of agricultural producers. The agency implements the intervention policy of the country through: · intervention purchase and sale of agricultural produce and products; · gathering and managing state reserves of agricultural and food products; · granting credit guarantees, except for investment credits, to economic units which implement the tasks established by the agency.

7 The most important activity of AMA is the intervention in agricultural markets in order to protect the interests of domestic producers. Over the recent years the number of products covered with interventions of the agency is decreasing. In 2000 it is planned that AMA will have influence on the following agricultural products6: · within the framework of intervention activities: milling wheat and rye, butter, skimmed powdered milk, pork, honey, potato starch and colza; · within the framework of management with state reserves: milling wheat and rye, butter, pork.

The above information indicates that the impact of AMA on sustainable development of agriculture is limited to the activities aimed at stabilisation of agricultural market. The methods adopted in AMA activities have recently been strongly criticised, especially because of lack of clear procedures in the activities that are implemented. The criticism refers among others to the fact that the activities of AMA limit the possibilities of development of local agricultural markets, that they hamper the activity of small producers in this market, and support only selected firms – intermediaries in trade with agricultural products7. Therefore, one can expect that if the formula of work of AMA is not changed, it may become a barrier in multi-direction development of rural areas.

2.1.1.4 The Agency of State Treasury Ownership in Agriculture (ASTOA) The Agency was established with the Act of 19 October 1991, with the main goal of implementation of ownership transformation in agriculture. Its implements among others the following tasks: · restructuring and privatisation of State Treasury properties used for agricultural purposes, · trade and administration of State Treasury properties, · carrying out management/agriculture activities and support for establishment of private agricultural farms on State Treasury properties, · creation of workplaces in relation to restructuring of state agricultural management, · support for activities aimed at granting assistance to former employees of state farm enterprises and to their family members.

The agency can sell the property, in part or in total, can lease it, donate it to companies, pass it for management purposes to an administrator, or transfer the ownership without compensation claims to the following entities: gminas (for infrastructural investment purposes), Polish Academy of Science, universities and R&D institutions for the purposes serving their statutory goals, State Forests in order to increase the forestry areas, as well as to legal representatives of Churches for various purposes. The Agency has practically completed two first stages of ownership transformation, i.e. it collected the properties to the pool of State Treasury Ownership in Agriculture and prepared a project of its restructuring. The third stage – redistribution and management of the properties – is highly advanced.

Activities of the ASTOA indirectly influence the prospect of sustainable agriculture development. The Agency could, for example, prefer to create very big (industrial) agricultural farms, with several hundred or thousand hectares of arable land (it is easier and cheaper to sell one big piece of land than to make several smaller transactions), which will be dangerous for biodiversity, and can reduce possibilities for future sustainable development of rural areas.

2.1.1.5 Ministry of Environment In the Ministry of Environment no separate department dealing with rural areas and agriculture exists, but these issues are taken into account during the work of individual units of the

6 Public Relations Department of AMA. Telephone conversation, 25 June 2000. 7 Such opinions have been formulated by several interviewees, who asked to remain anonymous.

8 Ministry8. The role of the MoE is first of all creation of legal framework for agricultural activities so as to take into account environmental protection requirements. Rural areas and agriculture development plays an important role in the work of two of the ministry’s departments: Forestry, Nature and Landscape Protection and Water Resources. The Department of Ecological Policy and European Integration is responsible for integration of environmental objectives to other sectors strategies (e.g. to agriculture policy), additionally the department co-ordinates work on the Implementation Strategy of the requirements of the Nitrates Directive 91/676/EEC) in Poland.

2.1.1.6 National Fund of Environment Protection and Water Management The National Fund for Environmental Protection and Water Management is the most important institution financing environmental protection programmes in Poland. The National Fund supports investments with country-wide significance. During recent years the Fund has devoted significant resources to the development of environmental protection infrastructure in rural areas. The National Fund co-operates also with the World Bank in implementation of the project aimed at implementation of the requirements of the Nitrates Directive in Poland.

2.1.1.7 Other institutions Some other central institutions have an impact on rural development. These include the Ministry of Finance (which consult all economic instruments and prepare the preliminary National Budget Plans), Government Centre for Strategic Studies which prepares middle and long term development strategies (which can influence the direction of rural development); and the Office of the Committee of European Integration which is responsible for Polish preparation to the participation in EU. In the middle of the 1990s a new institution, the Ministry of Regional Development and Architecture, was established. In the future this Ministry could play an important role in regional development, but currently it is under the organisation phase, and it is too early to discuss its full competence and influence on the sustainable development of rural areas.

2.1.2 Regional and local institutions

2.1.2.1 Regional branches of the Agency for Restructuring and Modernisation of Agriculture The Agency has 16 voivodship offices which implement its tasks at the regional and local level. The offices of ARMA co-operate in their activities with Agricultural Advisory Centres (AAC) and banks. The Agricultural Advisory Centres issue the opinions regarding planning of the undertakings, submitted by the persons who apply for investment credits with ARMA subsidies to the interest rates. Based on the agreements signed with ARMA,the banks issue credits for investment and current expenditures, where ARMA grants interest rate subsidies. The credits are granted from banks’ own resources according to the rules established by ARMA and to the credit issueing rules which are in place in the banks. The banks provide also detailed information on the rules of granting soft loans. Moreover, based on separate agreements, the banks grant zero-interest loans out of the ARMA resources.

Regional branches of Agency for Restructuring and Modernisation of Agriculture should play the most important role in regional agriculture (and rural areas) development, but their role will depend on the Ministry of Agriculture policy.

8 The Ministry of Environment is among others responsible for transposition and implementation of the requirements of the Nitrates Directive (91/676/EEC) policy will influence significantly the pace of construction of water and sewer infrastructure in rural areas etc. Grazyna Niesyto, vice-director of the Department for Environmental Policy and European Integration, MoE. Discussion on 12 June 2000.

9 2.1.2.2 Regional branches of the Agency of State Treasury Ownership in Agriculture Since April 1st, 1999 11 regional branches of the Agency exist, and their tasks include in particular: · Adopting properties to the pool of the Agency according to the formula set in the Act, · Preparation and implementation of the programmes of restructuring and privatisation of the property, including entering into agreement on carrying out economic activity in the name of the Agency and its cost, using the separate parts of the property, · Owners’ supervision over the property, · Vindication of the amounts due and restructuring the debt of the Agency, · Activities aimed at creation of work places and activisation of ex-employees of the state agricultural farms.

One of the branches with the office in Warsaw was charged with the task of taking over, restructuring, and privatisation of the firms with special significance to agriculture, dealing with cultivation of plants and breeding of animals, situated within Poland. Regional branches of the Agency of State Treasury Ownership in Agriculture play important role in regional land modernisation and creation of new agricultural units (plants, farms etc).

2.1.2.3 Departments of Environmental Protection and Agriculture in Voivodship Offices They are responsible for creation and implementation of regional programmes of economic development and environmental protection. They co-operate with other regional institutions (e.g. with voivodship funds for environmental protection, voivodship inspectorates for environmental protection etc.). They issue (together with starosta – self-governmental poviat offices) administrative decisions related to the scope of using the environment by the economic agents. In some voivodships exist one common department responsible for agriculture and environmental issues, and it should be expected that it will be easier to create development plans which integrate ecological goals to agriculture and rural areas development. In these regions, where both problems are managed by different departments, it should be expected that integration of agriculture and ecological issues will not be so easy.

2.1.2.4. Agricultural Advisory Centres The network of AACs currently constitutes the most important element of the domestic system of agricultural consulting. Often the AACs are the only sources of knowledge, education and cultural development in an area, therefore their role cannot be overestimated9. Activities of AACs are financed out of the state budget, and they are subordinate to the Ministry of Agriculture and Rural Development. The activities undertook by the AAC are carried out in 4 basic directions: 1. popularisation and implementation activities; 2. educational activities; 3. economic and organisational consulting; 4. information and editing activities.

The scope of activities of AAC is highly dependent on the level of energy of the AAC employees – if they are inert, the activities concentrate practically only on technical and technological consulting related to agricultural production. Active AAC, however, are capable of receiving financial resources from other sources (e.g. in voivodship and poviat funds for environmental protection) and carry out joint activities with other institutions. One of the most popular Agricultural Advisory Centres is situated in Przysiek near Toruñ, which is known for activities aimed at promotion of ecological agriculture.

9 Metera, D., IUCN employee, expert of the Ministry of Environment. Intervies on 6 September 2000.

10 As already mentioned, AAC cooperate with ARMA. They issue the opinions for individuals applying for investment credits. Agricultural Advisory Centres also provide detailed information on rules of granting preferential credits by ARMA and by other institutions.

2.1.2.5 Regional Inspectorates of Environmental Protection (RIEP) Voivodship Inspectorates are the most important institutions responsible for enforcement of environmental protection regulations in Poland. RIEP inspectors have a right to enter the territory of each economic unit, and to carry out the control of compliance with the environmental protection regulations. Since 1999 RIEP is subordinate to voivodas. The impact of RIEP on sustainable development of agriculture, however, is limited, because in principle RIEP do not carry out inspections of farms.

2.1.2.6 Voivodship, Powiat and Local Funds of Environment Protection and Water Management10 These funds finance environmental investments of local significance, and they constitute a very important source of financial support for local programmes of infrastructure development (sewerage systems, water provision pipelines), water protection (wastewater treatment plants) and soil surface protection. The funds cooperate with AAC, gmina authorities, they also co- finance the investments implemented by individual economic agents and individuals.

2.1.2.7 Local authorites (Local (gminas) self-governments, voivodship Marshall Offices etc) After administration reform and decentralisation of the government in Poland, most of the competencies in environment protection were left in the hands of local authorities (e.g. water protection, waste management, supply to drinking water, establishing of the local energy policy plans are a duty of gmina offices, and Powiat offices make decisions about the location of new industrial plants). Local and voivodship authorities are also responsible for preparation of regional/local development plans. It is expected that involvement of self governments and local/regional authorities in regional development will increase because of European integration (e.g. according to some environmental EU directives local governments are responsible for the preparation and implementation of such plans). In agricultural regions it should be expected that rural development will be seriously taken into account during preparation and implementation of such plans. On the other hand, it should be remembered that farmers are only a small group of people among the candidates for local self-governments, therefore their influence on the decision making process is (and probably will be) very limited. Local authorities are thus likely to take care more about activities other than agriculture.

2.1.3 Other institutions

2.1.3.1 The World Bank Since 1990, when the first World Bank loans were extended to Poland, the Bank commitments for the benefit of Poland have totalled approximately US $ 5 billion, supporting implementation of 33 projects, including 3 agricultural programs totalled approximately 500 million US $. On July 25 2000 - a US $120 million loan for the Rural Development Program in Poland, for a medium- term assistance for development of rural areas in Poland was signed at the World Bank Office in Warsaw.

10 In 1999 administrative reform was implemented in Poland. The new division is structured in 4 levels: governmental administration – central and voivodship level (16 voivodships-regions), and self-governmental administration: poviats (c.a. 350 in Poland) and gminas (c.a. 2500 in Poland). Self-governmental administration exist also on the voivodship level.

11 2.1.3.2 The Foundations The development of rural areas receives support also from the foundations. Some of these foundations has been established by the Government of the Republic of Poland, or has been selected by the Government for implementation of specific goals. They offer support for concrete investment programmes, training or consulting services. Part of these foundations are based on domestic resources, others – on foreign resources. Because of a high number of foundations with an interest in agriculture, the activities of only several of them will be presented here, as examples11.

· Foundation of Assistance Programmes in Agriculture (FAPA). It has been established by the Polish Government for co-ordination of assistance programmes for Polish agriculture (among others, Phare). It implements, among others, the projects of support for co- operatives, financial services in rural areas and in agriculture, development of agricultural market etc.

· European Fund for Development of Polish Rural Areas is a governmental foundation granting support for pro-ecological and educational investments, and for investments related to development of the infrastructure.

· Foundation Supporting Rural Areas, the Agency of Municipal Development, the Polish Agency for Regional Development support the following types of activities: construction of water pipelines and sewerage systems, as well as of wastewater treatment plants, development of infrastructure for waste removal and disposal, energy provision, gas and heat provision.

· Foundation for Development of the Polish Agriculture implements and supports many educational and consulting projects, and runs a substantial micro-credit programme in selected rural areas.

In addition to non-governmental foundations, which evidently focus their activities on rural areas, there are many organisations in Poland which are interested in environmental protection. Most of them carry out educational activities; some of them support specific investment programmes implemented in rural areas, using mostly foreign funds (these investments include construction of sewerage systems, pipeline systems and gas networks, wastewater treatment plants etc.12).

2.1.3.3 Labour unions During the 1990s a significant role in setting the directions of agricultural policy was played by agricultural labour unions – among others the Independent Self-governing Labour Union “Solidarnosc” (Solidarity) of Individual Farmers, Agricultural Labour Union ”Samoobrona (Self- defence)13, and The National Union of Farmers associated in Agricultural Organisations. The main goal of attack was the liberal policy of the government. The postulates of the farmers included implementation of custom barriers for import of food, using direct and indirect subsidies for the farmers and agricultural producers, and intervention purchase of agricultural products. Although the impact of these organisations should not be overestimated, a certain number of activities of the Ministry of Agriculture were undertaken under the pressure of agricultural labour unions.

11 Only these foundations are described here, which activities for agriculture is widely known, or which were mentioned by the interviewees. It does not mean, however, that other foundations do not carry out activities for agriculture.

12 Karaczun Z. M., 2000: Foreign financial aid on the environment protection in Poland in years 1990 – 98. Archives of environment Protection. Vol. 26(2):113-127 13 ALU “Samoobrona” is the association with clear anti-globalisation and anti-european approach

12 2.1.3.4 Non-governmental organizations The democratisation process of the political life after 1989 resulted in increased public activity. The majority of non-governmental organisations which were created during this period declare an interest in environmental protection. A small percentage deals with agriculture, mostly with development of ecological agriculture. The most important non-governmental organisation dealing with this issue is “Ecoland” Association, which was created according to the initiative of farmers and scientists interested in development of ecological agriculture. The goals of Ecoland are: representing the interests of food producers who use ecological methods of production, popularisation of ecological agriculture and promotion of its products, certifying the farms and processing plants which meet the criteria of ecological agriculture14. Ecoland grants the certificates exclusively to those farms which have completed the period of transformation to using ecological methods (Table 8).

Table 8 Certified ecological farms in Poland during the years 1990-1998

The number of farms The number and surface of certified farms during the years 1990-98 1990 1995 1996 1997 1998 With certification 0 235 236 207 182 In transition 27 0 0 0 0 Surface in ha 300 4550 6855 6007 5558 [GUS 1999]

Ecoland implements its goals through organising training for farmers, promotion of products generated in ecological farms, education of the public, and through lobbying activities.

On 28 May 1998, according to the initiative of the Polish Ecological Club – Gliwice division, the Coalition for Development of Ecological Agriculture was created. Currently it is formed by twenty one institutions. The main goal of activities of the coalition is to support development of ecological agriculture, and it is being implemented through educational activities and lobbying, as well as through promotion of products of ecological agriculture.

Since the beginning of the 1990s the national office of International Union for Conservation of Nature (IUCN) has been implementing its activities. Because of the impact of agriculture for biodiversity, the office considers agriculture to be one of its first priority fields of interest15. The main IUCN activities are: preparation of reports, opinions and analyses; IUCN also implements pilot projects which are used for presenting appropriate solutions etc.

In addition to non-governmental organisations listed above, many environmental organisations express their interest in environmental protection, in rural areas, and in the sustainable development of agriculture (e.g. the Polish Ecological Club, Nature Protection League, Green Federation, National Society of Birds Protection etc.). However, only some of them (e.g. Society of Birds Protection) undertake actual activities it this field and induce regional/local actions.

An important feature of non-governmental organisations in Poland is their weakness – especially in rural areas. It results from a lack of tradition of creating associations in order to jointly manage own territories (although in places where true local leaders are active, often

14 Another organisation designated by the MARD to issue certificates and to carry out controls is Polish Association of Ecological Agriculture. 15 Tederko, Z., IUCN Polska director. Interview on 6 September 2000.

13 spectacular and successive joint activities are implemented16), as well as from lack of capabilities to attract people interested in co-operation, and new members. Weakness of the environmental organisations results also from low interest of the society in environmental protection problems. During the 1990s the number of individuals who consider environmental problems to be important dropped significantly in Poland (this may be a result of the improvement of the state of environment but it is more likely that this is caused by many emerging new problems during this period – among others very high unemployment)17. The effectiveness of environmental organisations is limited also, because of the low level of awareness among politicians at both the central level and local level. The usual approach is that economic activity is much more important than environmental protection18. Unfortunately, also in case of environmental organisations, their ability to co-operate one with another as well as with governmental institutions is low, therefore most of the activities are being undertaken by individual organisations, which lowers their effectiveness.

2.1.3.5 Banking sector The banking sector plays an important role in the development of rural areas. It is created by over eight hundred of banks organised in the form of joint stock companies or state banks as well as approximately 1500 co-operative banks. Most of them operate as commercial units, and some of them, based on the agreements with governmental agencies or foundations, offer preferential credits (including soft loans for environmental investments).

Conclusions for Section 2.1

Based on the information provided in this chapter, one can state that in Poland has a well developed structure of organisations dealing with the issues of agricultural development and environmental protection. However, the analyses performed in this field indicate major drawbacks of this institutional set-up, namely a lack of co-operation among these organisations, as well as lack of one institution which would feel fully responsible for co-ordination of the programme of sustainable development of rural areas.

The current situation shows also that in Poland a centralistic approach to rural areas development still dominates, and it is still a “top – down” approach. From the second side administration reform was finished in 1999, and could influence the future bigger role of local authorities and local society. It is very important therefore which development strategy will be chosen by the Ministry of Agriculture and Rural Development. Its policy will influence the activity of Agricultural Agencies, and other institutions involved in rural areas development. The role of MARD increases also because European integration negotiation process are fully dominated by the government, and decisions taken by the government (and exactly by the MARD) during the negotiation will influence the future of agriculture and rural areas in Poland. It is also important that even the special Inter-Government Negotiation Commission exists. The Commission will discuss and accept negotiations statements in all areas, including agriculture and environment protection. Agriculture negotiations are almost in any case influenced by the objectives of ecological policy (see next chapters).

16 Galiñski, W., independent expert. Discussion on 27 June 2000. See also publication of the Institute for Sustainable Development: “Global Climate, local activity” (in Polish) 17 Andrzej Kassenberg. President of the Institute for Sustainable Development. Interview. 2.10.2000. 18 Dariusz Szwed, coordinator of the Office for Ecological Lobbying Support. Interview. 19.10.2000.

14 2.2. Programmes

2.2.1 National programmes Many national agricultural programs are supported by the Agency for Restructuring and Modernisation of Agriculture. For accomplishing such goals, the agency acquires funds from the budget as well as foreign assistance funds, and it utilises various forms of financial aid (see Table 7): 1. Subsidies to credit interest rates – they constitute a fundamental form of assistance granted by ARMA in agriculture, and they can be granted among other for: · purchasing agricultural land; · creating or putting into operation an agricultural farm by the individuals younger than 40; · creation of new workplaces outside the agricultural sector in rural areas; · creation of new agricultural farms at the land which belongs to the State Treasury. 2. Subsidies for: · development of technical, production-related infrastructure in rural areas; · vocational trainings and development of agricultural consumption. 3. Guarantees and endorsement of credits for: · investments in agriculture, agricultural and food industry and agricultural services; · creation of new workplaces outside the agricultural sector.

Table 7 Expenditures of ARMA during the years 1994 – 1998 according to the directions of investments (in thousands zloty – current prices)

1994 1995 1996 1997 1998 Basic activities Investments in agriculture, processing 10 919 163 953 395 719 664 733 972 222 etc. Infrastructure 34 986 75 733 213 379 416 236 124 972 Creation of new work places 0 14 489 76 405 77 884 23 519 Education 3 728 8 224 58 793 70 593 16 460 Others 13 804 24 976 63 730 48 901 87 922 Ordered activities Subsidies to trade credits 9 853 312 016 437 171 618 161 519 136 Sugar subsidies 0 0 1 921 64 200 21 997 Total 73 290 599 391 1 247 1 960 1 766 118 708 208 [ARiMR 1999)

The elimination of State Agricultural Enterprises resulted in increased unemployment, therefore one of the most important goals of ASTOA is counteracting this. One of the instruments used by the Agency includes a special clause in lease agreements referring to State Treasury land, which obliges the tenant to employ a relevant number of workers for a given period of time, and at the same conditions as before. Moreover, ASTOA provides support for the following activities: 1. Active programmes for counteracting unemployment: refunding costs of vocational training, reducing by half interest rates for loans granted from the Labour Fund, and facilitating access to these loans (loans for launching economic activity by the unemployed), refunding of social security rates. The agency co-operates in implementation of this programme with employment-related administration, the State and Voivodship as well as with the Regional Employment Offices. During the years 1995-98 approximately 5.2 million zloty was spent for implementation of the programme, and 1200 individuals received support. 2. Granting credit guarantees for small-scale entrepreneurs who act in rural areas and in towns with less than 10 000 inhabitants (first of all in the regions covered with activities aimed at

15 restructuring of state agricultural management). Credit line has been created in co-operation with the European Fund for Development of Polish Rural Areas, and with the State Employment Office. Interest rate on credits amounts to approx. 4.6% in the areas considered to be especially prone to unemployment, and 8% at the remaining areas; 3. Granting credit support from a credit line created from ASTOA resources, with contributions to the interest rate from the Labour Fund. The credit is devoted to creation of new workplaces for the registered unemployed, where former employees of State Agricultural Enterprises must constitute at least half of the newly employed individuals. The credit is granted for the amount equal up to 80% of the value of an undertaking according to the financial plan, the interest rate amounts to 0.6% in the areas especially prone to unemployment, and 4% in the remaining gminas.

Moreover, ASTOA, in co-operation with the Polish Foundation for Children and Youth, the Foundation for Support of Water Provision to Rural Areas, and with the State Agricultural Section of the Independent Self-governing Labour Union “Solidarnosc” (Solidarity), implements the programme “Improvement of educational chances of children from former state agricultural enterprise areas”. The goal of this programme is to enable children from the areas of former state agricultural enterprises to continue education and to gain medium-level education. Children from poor families of former state agricultural enterprises, or children who live in districts which had been created for employees of such enterprises, may receive special stipends.

Implementation of subsidies by the government for farmers who use ecological methods of agricultural activities, or who are in transition to ecological agriculture, should be considered to be a success among organisations dealing with ecological agriculture. The rate of subsidies is diversified. It depends among others on size of the farm19 and on type of produce, and it oscillates within the range of 150 to 600 zloty/ha (farms undergoing transition), and 120-600 zloty/ha (certified farms). Also the subsidies for co-financing the costs of control of the farms, regarding the methods of production against the criteria of ecological agriculture, have been implemented. Another success is adoption by the government of the draft law on ecological agriculture. The farmers will receive subsidies during 2 years of transition, and during the first 4- 5 years of management of agricultural farms. According to the estimates of the authors of this act, the system of subsidies should lead to an increased number of ecological farms, up to approximately 10 000 in 2010.

2.2.2 Programmes supported by foreign resources 2.2.2.1 PHARE

In addition to the domestic programmes, an important role in implementation of the goals of agricultural policy can be attributed to foreign programmes. During the 1990s the largest resources were granted by the EU. These were within the framework of the PHARE programme, which was devoted to support the transition from a centrally planned economy to a market economy, and assistance for Poland in reaching compliance with the conditions set for future members of the European Union. This programme has been implemented in Poland since 1990. PHARE financial resources in agriculture play a leverage role, mobilising the capital coming from other sources.

The implementation of the agricultural part of the Phare programme was initiated with a non- monetary contribution of the EU (artificial fertilisers, animal feed, pesticides) for the amount of 100 million ecu. During the period 1991-97 the EU contributed the next 100 million ecu for development of agriculture. In the initial period these were primarily programmes aimed at development of the land market, privatisation, agricultural consulting and co-operative banks.

19 The farms with size smaller than 300 ha get co-financing.

16 During the later period mostly integration-related activities gained support (see Table 9 and 10), including: · Preparation for the implementation of Common Agricultural Policy of the EU; · Strengthening of the veterinary and phytosanitary standards; · Improvement of sanitary conditions in milk processing enterprises; · Adjustment of the systems of animal registration to IACS; · Institution building for using structural funds.

Table 9 Phare programmes implemented during the years 1991-96 (the programmes approved in the Financial Memorandum 1991-93)

Project Mln ECU Transformation of rural cooperatives 14,67 Reform of cooperative banks 12,0 Privatisation of State Farm Enterprises 7 Training in agricultural consulting 8,15 Support of activities of the Ministry of Agriculture and Food Industry 9,03 Support for marketing and investments 2,6 Development of infrastructure of rural areas (water management) 4,0 Administrative costs and project monitoring 7,55 TOTAL 65,00

Table 10 Phare programmes implemented during the years 1995 – 2000 (the programmes approved in the Financial Memorandum 1995 – 1997), in millions ecu

1995 1996 1997 Total Approximation of legal regulations in agriculture 0,5 0,6 1,5 2,6 Control of food quality, veterinary and phytosanitary 1,0 1,7 2,7 5,4 services Agricultural education, research, consulting 0,5 0,855 1,355 Support for agricultural sector authorities, staff training 0,8 1,2 0,7 2,7 Preparation for using CAP instruments 2,7 2,7 Promotion of agricultural and food markets 1,2 0,7 1,9 Support for vocational organisations of agricultural 0,5 0,5 0,4 1,4 producers Soil market and creation of the registry of soils 1,0 1,0 Development of wholesale sector 2,5 2,5 Support for rural cooperatives and marketing groups 1,5 1,5 Preparation of investments in rural areas 0,5 1,045 1,545 Financial services for rural areas 1,5 0,5 1,8 Administrative costs and project monitoring 1,5 0,9 2,4 TOTAL 13,0 8,0 8,0 29,0

Analysis of the data placed in tables 9 and 10 leads to the conclusion that development of infrastructure in rural areas, and sustainable development of rural areas, did not play an important role in PHARE programmes. Much more attention was given to the agriculture market development. Less than 20% of the resources were devoted to investments in rural development. The significance of these funds, however, was relatively high, because they played a role of financial leverage, enabling engagement of the financial resources from the

17 domestic sources, and increasing the interest of Polish partners in the implementation of the agricultural programmes.

2.2.2.2 SAPARD Programme Experience gained during implementation of the Phare programmes is important for the preparation and implementation of the SAPARD programme, therefore the beneficiaries and implementing institutions will receive support in appropriate preparation of projects. Over the next several years the implementation of this programme will constitute one of the fundamental instruments for preparation of the Polish agriculture to Common Agricultural Policy. SAPARD will grant support for the following activities: 1. Improvement of processing and marketing of agricultural and fishery products (improvement of quality of production, promotion of local products at the local markets, development, modernisation and improvement of competitiveness of agricultural and food production enterprises). Until 2006 1 195.52 million euro will be devoted to implementation of the activities within the framework of this component, and contribution of the Community assistance to it will amount to 448.32 million euro. 2. Investments in agricultural farms (improvement of the quality of agricultural production, lowering costs of production, creation of specialised farms). About 554.89 million euro will be devoted to implementation of these activities, including the EU share of 208.08 million euro. 3. Development and improvement of infrastructure in rural areas (improvement of life quality of the inhabitants of rural areas, improvement of the state of environment, development of entrepreneurial activity). 445.96 million euro will be devoted to implementation of these activities, with the EU share of 327.78 million euro. 4. Diversification of economic activity in rural areas (creation of new work places, diversification of the production sector, development of the services sector). 362.77 million euro will be devoted to implementation of these activities, with the EU share of 136.04 million euro. 5. Agri–environmental programs and reforestation (pilot projects). Agri–environmental programmes will be implemented in 5 regions of Poland: three river valleys of Narew, Biebrza and Warta and two regions: Warmia-Mazury and Podkarpacki. Programmes will be focused on two goals: protection of biological and landscape diversity and increasing of ecological farming methods. Support for one farm will be max 6,000 euro/year (biodiversity component) and 10,000 euro/year (ecological agriculture). Farmers which received grants will have to take part in training (20 h) and should have more than 3 ha of arable land. Reforestation programs will be implemented in two voivodships: œwiêtokrzyskie and podlaskie. Farmers who reforest more than 0,1 ha will receive grants. 30.56 million euro will be devoted to implementation of these activities, with an EU share of 22.92 million euro. 6. Professional training (preparation of rural inhabitants to work out side of agriculture). 34.15 million euro will be devoted to implementation of these activities, with an EU share of 25.61 million euro. 7. Technical assistance related to implementation of the SAPARD programme. 35.35 million euro will be devoted to implementation of these activities, with an EU share of 32.46 million euro.

Even though agri–environmental programmes will not play an important role in the SAPARD programme, it has to be stressed that the utilisation of these funds can positively influence the possibilities for sustainable development of rural areas. Improving the infrastructure in both individual farms and in rural areas has reduced one of the important barriers for development: implementation of the components. Diversification of economic activity in rural areas, and professional training, can help to create new working places outside agriculture in rural areas. It is also important that a substantial amount of money for the realisation of SAPARD programs will be paid by Polish funds, because this resource will play a role of financial leverage, enabling engagement of the financial resources from domestic sources, and increasing interest of Polish partners in implementation of the good, multi-direction agricultural development programmes.

18 Utilisation of SAPARD resources will be submitted to control both by Polish institutions (State Treasury Units, Regional Chambers of Financial Control, the Highest Chamber of Control) and the European Union control authorities (European Commission, Court of Auditors). Moreover, activities of ARMA are supervised by the Ministry of Finance in general scope, and by the Ministry of Finance within the scope of financial issues.

2.2.2.3 Programmes of the World Bank As it was mentioned earlier, since 1990 the World Bank has implemented 3 agricultural programs in Poland: · 100 million US$ - support for agricultural export; · 100 million US$ - programme of agriculture development; · 300 million US$ - programme of Polish agricultural modernisation.

In July 25, 2000 a loan for the Rural Development Program in Poland was signed. This project is designed to create a conducive environment for private investment in rural areas, which is expected to generate jobs and raise incomes of the rural population. Planned actions will include development of the necessary public infrastructure in rural gminas, where private sector enterprises are envisaged to develop. This funding can be co-ordinated with resources provided by the European Union. In addition, this program includes the financing of small or medium-size projects to strengthen rural schools. As a relatively large number of individuals, mostly in the younger age, will leave agriculture, the adjustment of their education and training will become crucial for the success of their transfer to the other sectors of the economy. This financing by the World Bank is expected to facilitate the program of decentralization and help local administrative units decide upon their own priorities (roads, water supply, rural schools, waste water treatment, etc).

The program is made up of the following components, each of which may be implemented at the local level, separately, or in conjunction with the other components: 1. Micro-credit. This component will help the government in promoting small enterprise development, targeted at stimulating self-employment type entrepreneurial activity in the rural areas. 2. Human capital development. This component is subdivided into the following sub- components: · Labour redeployment. The sub-component will assist the unemployed and the disadvantaged labour market in rural communities, in expanding and using their human capital in response to the new labour market and economic opportunities. The same sub-component will also finance, inter alia, economic and labor market surveys and labour redeployment services, specialized placement, on-the-job training and temporary local community employment referral services. · Education. The sub-component aims at increasing effectiveness of the rural education system, and the quality of education of school-leavers of the rural schools, through improving the quality of teaching, and the use of educational resources in rural primary schools and gymnasia. · Local and Voivodship level institution building. The sub-component aims at improving effectiveness of management of the local and Voivodship (regional) self- governments, through institution building, and capacity building, programs and actions. 3. Rural infrastructure. This component will aim at improving the technical infrastructure in the rural areas, through financing water supply systems and treatment facilities, solid waste management systems and rural roads. 4. Program management. This component will finance costs of the Project Co-ordination Unit, and of program teams located in the respective line ministries.

19 The total program costs amount to US $ 301.04 million, including the funds contributed by the Polish Government, the private sector and the local and Voivodship self-governments. The loan is a fixed rate, 15-year maturity and five-year grace period facility.

20 3. Evolution of agricultural policy

The current situation of Polish agriculture results both from the agricultural policy carried out in the conditions of centrally planned economy, and from the economic reform implemented at the beginning of the nineties.

At the beginning of the 1990s, after 45 years of a centrally planned economy, Polish agriculture was characterised by its fragmented structure and backwardness. Only 16% of agricultural farms covered a consolidated piece of land, and 7% comprised more than 10 pieces of land20. Lack of competition was the main reason for backwardness. It reduced the need for modernisation, and did not induce the necessity of caring for quality of products. A low level of education was also inherited after the communist regime. In spite of preferential treatment of the inhabitants of rural areas, most of them finished education at the level of primary school or vocational, medium-level school (in most cases, of agricultural profile). A common phenomenon was insufficient level of investment in rural areas, which resulted in a low level of equipment regarding technical, social and cultural infrastructure.

The current, difficult situation of Polish agriculture is also due to the phenomena occurring at the verge of the 1980s and 1990s. While implementing a deep reform, the new Polish government introduced the same measures in agriculture as in other sectors of the economy. It eliminated most of the subsidies and exemptions, and implemented market credit rates. High inflation resulted in a situation that many farms were caught in a credit trap, and high differences in terms of trade resulted in lack of funds for purchasing factors of production. As a result of the economic crisis and pauperisation of the society, the market for agricultural produce broke down. In December 1990, when the Polish government abolished custom duties for approximately 8 thousands products, Poland was flooded with cheap and visually attractive foreign food, which crowded out Polish products. Polish agriculture was not prepared for such competition21. As a consequence, the number of farm animals, milk production, and partially also plant production dramatically dropped22.

The liberal policy of the government was especially harmful for State Agricultural Enterprises, which occupied 22% of agricultural land in the country. In the second half of 1991 over 70% of them lost credit capacities23. Liberal policy towards state agriculture resulted in its collapse24, which soon led to social problems due to increased unemployment.

Another result of the reforms was pauperisation of society25. Households of the farmers experienced the most significant losses. Decrease of real incomes in agricultural households over the period 1989 – 92 was equal to approximately 50%26 (in the case of households of workers and pensioners, a 15-25% decrease was observed).

20 Council of Ministers, 1998: Medium-term strategy for development of agriculture and rural areas, Ministry of Agriculture and Food Industry, Warsaw. 21 Staszynski, L., 1995: Social effects of trasformation. Agriculture and State No 2 – 3/95: 141-167. 22 Michna, W., 1994: Agricultural Policy during the period 1989 – 93., in: Auleytner, J., ed. Social Policy, its status and perspectives. , Scholar Agency, Warsaw, pp. 72-98. 23 Karaczun, Z., Grzeskiewicz, R., 1996: Ownership transformation in agriculture vs. environmental protection, ISD, Warsaw. 24 Wos, A., 1994: State agricultural management during the transformation period. Agriculture and State 2/94: 78 – 121. 25 Tomaszewski, E., 1995: Social impact of liberal reforms in Poland (1989 – 93). Agriculture and State 1 (18): 149 – 168. 26 Glowczyk, J., 1995: Pauperisation, redistribution and diversification of incomes – after the reform of Balcerowicz. Agriculture and State 2-3 (19/20): 117 – 140.

21 At the beginning of the 1990s two basic concepts of the reform of the Polish agriculture were created27. According to a liberal approach, agriculture is no different from other sectors, therefore it should be submitted to the same restrictions and measures. According to such an approach, the policy should help to quickly modernise the agricultural sector, through selection of the farms capable to function under the conditions of market economy28. The second concept indicates a specific character of agriculture, which implies the necessity of implementation of special measures of support for its development. From the point of view of the possibilities to promote sustainable development of agriculture, however, it is significant that none of these concepts perceived the need of integrating the goals of agricultural policy with the priorities of environmental policy. It can be partly justified with the fact that, until 1991, national environmental policy did not exist. Moreover, during this period a common opinion prevailed that control of industrial pollution is more important than limiting the negative impact of the agriculture. Lack of common grounds of co-operation between the ministries of environment and agriculture are mentioned in Chapter 2.1. This, however, resulted in a situation that it was necessary to integrate the goals of both policies, and this was taken into consideration only at the end of the 1990s. It should be noted, however, in that the documents related to agricultural policy created at the beginning of the 1990s, and in mid-nineties there are references to the necessity of environmental protection, and that the National Environmental Policy mentions agriculture. These are mostly just verbal declarations however, with no provisions regarding the instruments for their implementation.

After a short period of liberal agricultural policy at the beginning of the 1990s, state interventionism began to regain power. In 1993, after launching more protectionist activities, the largest political party of farmers, the Polish Agricultural Party (PSL), entered the governmental coalition. On entering government, the PSL became a hostage of social expectations. The party built its election programme on criticism of liberal economic policy, and promises of implementation of measures which will quickly improve the material situation of the farmers. Such a programme did not promote support for the idea of sustainable development of rural areas, and it focused the attention of politicians and institutions on quite narrowly defined agricultural production. This was reflected in the political programme of PSL, in which it was indicated29 that the scope of state regulation in agriculture, regarding the economic aspects, should cover among others: · Using guaranteed minimal prices for basic agricultural products; · Direct subsidies for agricultural development and social security; · Custom policy protecting domestic producers and market; · Minimisation of market imbalances through active state intervention in prices of agricultural products.

Therefore, one should not be surprised that in the document “Provisions of socio-economic policy for rural areas, agriculture and food industry until 2000”30, which was adopted in 1994 by the Government and the Parliament, the main focus was on development of agriculture and the food industry. Moreover, while creating the system of support for agriculture, the government decided to maintain the central system of distribution of financial resources. 78% of all expenditures for agriculture remained at the disposal of central institutions. Implementation of compensating fees for limiting the import of agricultural products was also announced, and their

27 During the initial period of transformation in principle nobody – except for the scientists and members of ecological movement – discussed development of rural areas, treating the activities for enhancing agricultural production and farms to be the same as activities aimed at development of rural areas. 28 Lichorowicz, A., (professor at the Department of Law and Administration at the Jagiellonian University in Cracow), 2000. Statement during the discussion at the conference: Agricultural policy of Common Europe and its consequences for the Polish agriculture. 29 Political and socio-economic programme of PSL. Computer printout. Materials of the 3rd Congress of PSL. 30 Ministry of Agriculture and Food Industry, 1994, “Provisions of socio-economic policy for rural areas, agriculture and food industry until 2000”, Warsaw

22 introduction was justified with their existence in the EU. Nevertheless, the document drew attention also to the necessity of governmental support also for other goals, such as: · Creation of new, non-agricultural sources of income for inhabitants of rural areas; · Improvement in the state of infrastructure in rural areas; · Alleviating the problem of unemployment in rural areas.

The “Provisions” also mentioned the necessity of integration of agricultural policy with the state environmental policy. However, this correct statement did not find a reflection in the activities of the state.

The next document “Development of rural areas”, adopted in 1996, covered the issues related to development of rural areas much more broadly31. According to this document, the goals of state policy toward rural areas should be the following32: · Renewal of the rural areas – multi-funcional development of rural areas, creation of new chances – modernisation of agriculture and creation of new work places beyond agriculture; · Adjustment of the directions of changes in agriculture to the processes observed in the EU and in the world; · Development of technical, social and economic infrastructure in rural areas; · Utilising natural values of rural areas.

The report indicated the barriers and instruments for the development of rural areas. The barriers include: bad state of infrastructure, low level of education, lack of non-agricultural work places, lack of own capital of rural areas’ inhabitants, lack of well developed agricultural market, lack of modern advice. The instruments are as follows: structural aid for farms, support for restructuring of agriculture, processing and marketing of agricultural products, support in creation of new work places which serve development of technical infrastructure, support for environmental protection in rural areas33. The report indicated also the process of European integration as one of the impulses for acceleration of the activities for the development of rural areas.

The governmental coalition of 1993-97 did not manage to solve most of the problems of rural areas. However its policy resulted in increased significance of agricultural issues in social and political life. Therefore, during the election campaign of 1997, all the political parties presented their point of view on agricultural policy. On the other hand, the significance of agricultural lobbies was increased, including agricultural labour unions. Expectations regarding state interventionism were awakened, which implied that during the next years implementation of extremely liberal agricultural policy became impossible. During the described period the agricultural policy underwent an important evolution, from focusing attention on agriculture to development of rural areas. Agricultural policy also began to be viewed in the light of integration with the EU.

The outcomes of parliamentary elections in 1997 brought about a new situation – a coalition of right-wing parties of AWS (Akcja Wyborcza Solidarnosc) and centrist UW (Unia Wolnosci), accused of excessive economic liberalism and anti-peasant approach, came into force. The new political situation quickly revealed a number of controversies. Agricultural parties of AWS, with the goal of maintaining a significant role of the state in supporting agricultural policy, were opposed to the liberal policy of budgetary discipline proposed by UW. Governmental policy constituted a compromise between these two tendencies. On the one hand a significant part of

31 Duczkowska-Malysz, K., Development of rural areas. Report, Ministry of Agriculture and Food Industry, Warsaw. 32 These goals were consistent with the goals of medium-term strategy of development adopted by the Polish Government in 1995. 33 In the field of environmental protection the instruments for support of increasing forested areas, for development of ecological agriculture, soil calcination and development of agrotourism were indicated.

23 direct subsidies for the farmers and for agricultural households was eliminated, but most of the subsidies for investment in agriculture and processing was maintained.

The liberal policy of the new government quickly becae the goal of attacks, mostly by PSL and agricultural labour unions. The main reason of criticism was abolition of a number of direct subsidies for farms (e.g. to fuels), limiting interventions at agricultural market, and alleviation of conditions for importers of agricultural products. These attacks became stronger after a crisis of the Russian market – traditionally the largest foreign market for selling products of the Polish agriculture. A number of spectacular actions took place at that time, and although a part of these activities was based on political reasons34, many of them resulted from lack of a coherent agricultural policy. In April 1998 the government, noticing this situation, adopted a document “Medium-term strategy of Development of Agriculture and Rural Areas”35. In the second half of 1998 a debate was carried out under the title National Programme of Development of the Polish Rural Areas. The participants of this debate included farmers, politicians, experts, representatives of self-governments, and NGOs. As a result, in 1999 the Government adopted the document “Coherent structural policy of development of rural areas and agriculture”36. In addition to the barriers described in the report of 199637, the “Coherent Policy…” indicated also the new ones: · Mono-production in some of the regions of the country, and, as a result, high level of dependence of the population on agricultural incomes; · Low economic, social and cultural activity of the rural population; · Weakness of the institutions and organisations supporting development of rural areas; · Marginalisation of the cultural heritage of rural areas.

According to the authors of the described document, the problems of agriculture and rural areas are aggravated by environmental protection problems, which in spite of a significant success of the National Environmental Policy during the nineties have not been resolved. The most important of these problems are: · Local threats to the natural environment of rural areas; · The level of equipment of rural households in environmental protection appliances; · Management of low quality soils; · High costs of construction of environmental protection facilities38.

Such a diagnosis served presentation of the fundamental goals of the state agricultural policy: I. Improvement of work and living conditions of the rural population, so that the inhabitants of rural areas can realise their economic, educational, cultural and social goals. II. Transformation of the structures of the agricultural sector, creating conditions for the adaptation of agriculture to changing economic and social situation. III. Creating conditions for sustainable development in rural areas, protection of natural resources together with rural cultural heritage. IV. Protection and promotion of culture in rural areas.

34 For example, the activities undertaken by the union “Samoobrona” were aimed at increasing popularity of its leader, Andrzej Lepper, who in 2000 was a presidential candidate. 35 Ministry of Agriculture and Food Industry, 1998 Medium-term Strategy of Development of Agriculture and Rural Areas., a document adopted by the Council of Ministers on 21 April 1998, Warsaw. 36 Ministry of Agriculture and Food Industry, “Coherent structural policy of development of rural areas and agriculture”, a document adopted by the Council of Ministers on 13 July 1999, Warsaw. 37 Duczkowska-Ma³ysz, K., opus cit. 38 For example, the average cost of construction of a slurry or manure-pit is estimated at the level of 5 000 euro, which is 3 times more than the average annual income of rural households. Also local self-governments have problems with financing infrastructural investments out of own resources –e.g. construction of sewerage, because after the administrative reform of 1999 they are obliged to finance among others local health care, educational system etc.

24 The above description indicates that the agricultural policy shifted significantly towards the activities aimed at development of rural areas. It happened probably under influence of the trends of development of the EU Common Agricultural Policy (CAP), where a shift in the same direction has been observed since the mid-nineties. As mentioned before, the process of integration with the European Union is one of the main forces which have shaped the agricultural policy since the beginning of the 1990s. However as the time passed, enthusiasm of the politicians and agricultural experts for integration was decreasing. Meanwhile in 1992 the Polish Senate adopted a resolution39, in which it was stated that “… undertaking efforts for full adoption of Poland to the European Communities constitutes a chance of development of the country…”. The resolution of 1998 expresses much higher scepticism towards integration40, indicating among others lack of preparation of the Community for enlargement. According to the politicians, the change of the approach to European integration was due to lack of balance in trade with agricultural products between Poland and the EU41. During the 1990s exports of food products from Poland to the EU increased only by 30%, whereas imports from the EU increased by 600%. This was possible42 thanks to subsidies for exporters and non-market mechanisms (e.g. blocking access to the EU market through delaying the decisions, as in the case of elimination of a ban on import of dairy products from Poland to the EU43).

An analysis of the Polish negotiation position in the field of environment, as well as debates in this area, indicate that both for the representatives of the government and for the farmers, the issues of agricultural market and access of particular groups of goods to this market are more important than the sustainable development of rural areas. For example, only 2 out of 16 working groups created in the Ministry of Agriculture, with the goal of preparation of the agricultural sector to future membership in the EU, will deal with the problems of development of rural areas This will be the group for structural funds and development of rural areas, and the group for agriculture and environmental problems in agriculture. The others will deal with solving sector-related problems. Therefore, it is not surprising that impact of the integration process is the most significant with regard to the agricultural market, e.g. in 1994, while implementing provisions of the European Treaty, Poland implemented custom tariffs consistent with the EU structures44.

The integration process indirectly influenced the issues of development of rural areas, because it turned out that the activities in rural areas cannot be limited to state interventionism in agricultural sector, and in agricultural production. After the CAP reform they must, however, cover all issues of social, economic and environmental development of rural areas 45. Therefore, access to pre-accession and structural funds of the EU should allow better coverage of the problem related to development of rural areas. For example, the resources received within the framework of the SAPARD fund in Poland will be partly devoted to the goals related to these

39 Resolution of the Senate of the Republic of Poland of 26 June 1992 concerning European policy of Poland. 40 Resolution of the Senate of the Republic of Poland of 16 April concerning the tasks faced by Poland in relation to launched negotiations for EU membership. 41 Statement of Stanislaw Kalemba (PSL), the member of Parliament 42 e.g. Rowinski, J., 1998: Chances and threats for the Polish food industry after EU integration [in] Closer to the European Union. Educational Foundation 4-H in Poland, Poznan; statement of the Chairman of Agricultural Commission of the Polish Senate Jozef Fraczek at 8th plenary meeting of the Senate of the Republic of Poland, 16 April 1998; statement of Gabriel Janowski (AWS), the member of Parliament at joint meeting of the Parliamentary Commissions: Commission for European Integration and Commission for Development of Agriculture and Rural Areas, 8 June 2000. 43 Statement of Jadwiga Stokarska, the member of the Senate. 44 Plewa, J., 1998: Predicted level of custom protection of agricultural market in Poland after EU integration [in] Agriculture. Poland versus EU. Economic Journal, Warsaw, pp. 29-49. 45 Stelmachowski, A., 1998: “Aricultural policy or rural policy. In: Agriculture. Poland versus European Union. Economic Journal. Warsaw, pp. 17-28; Lichorowicz, A., 2000: Directions of regulatory changes in the Polish agricultural low within the process of its harmonisation with environmental acquis. In: post-conference materials: Agricultural Policy of the European Union and its consequences for the Polish agriculture. Senate of the Republic of Poland. Editorial Board of the State, Warsaw, pp. 83-112.

25 issues46, and a similar situation should occur in case of structural funds47. Interest in the chance relate agricultural/environmental protection programmes to rural areas is growing48, and research studies in this field are very promising49. Nevertheless, enforcement of the instruments (both EU instruments and domestic ones) which are aimed at support of sustainable development of rural areas, can encounter a number of barriers: · Domination of the work on agricultural policy and on integration strategy by the groups of producers. · Limited public participation in the process of negotiations for membership50, which might result in domination of technical issues in relation to agricultural market. Moreover, in comparison with the countries of western Europe, Polish agricultural organisations seldom deal with broader problems, focusing their statements and actions on narrow sector-related problems51. · Relatively low interest in problems of agriculture and rural areas in society, including the members of environmental organisations. The ecological movement focuses on rural areas and agriculture to a small extent, limiting their activities almost exclusively to supporting development of ecological agriculture. · Lack of understanding for significance of multi-direction, sustainable development of rural areas by the politicians; until today this topic has exclusively been tackled by the scientists52.

These issues will be discussed in the next chapter.

46 MARD, 2000: SAPARD. Operational programme for Poland. Revised version, 27 March 2000, Warsaw. 47 Lusawa, R., Sczaniecki, A., 1999: Significance of the structural funds in the process of adjustment of rural areas to the requirement of multi-function profile. Regional Centre for Development of Agriculture and Rural Areas. Plonsk. 48 Szymañski, B., vice-chairman of the Polish Ecological Club, interview on 26 June 2000. 49 Tederko, Z., Technical and economic analysis of purposefulness of implementation of agricultural/environmental programme in Central Europe. Final Report. Foundation IUCN Poland, Warsaw. 50 The letter of Jozef Fraczek, the Chairman of the Senate Commission for Agriculture and Development of Rural Areas, to the Prime Minister, 4 February 2000. 51 According to professor Alina Jucewicz, leader of the Division for Agricultural Law of the Institute for Legal Science of the Polish Academy of Sciences, Polish agricultural organisations should implement more intensive lobbying in European institutions, and not limit themselves to fight for their narrowly defined interests in Poland. 52 Klodzinski, M., 1997: Multifunctional development of rural areas in Poland and in the EU countries. The Warsaw Agricultural University, ed.

26 4. Chances and barriers for sustainable development of rural areas in Poland

4.1 Factors limiting opportunities for sustainable rural development Although the notion of necessity to develop rural areas is becoming more and more common, the poor economic situation of many Poles creates a barrier for implementation of the programmes in this area. It implies that there is no social consent for carrying out the reform of agriculture at the expense of decreasing state expenditures for other goals. The problem is even worse due to the difficult situation of the state budget, among others because of the necessity to repay debt to foreign donors. Therefore, each government faces a dilemma how to distribute the funds for agriculture. Should the resources be divided equally among all the goals, which will imply that everyone will get very little amounts? Should just a few priorities be chosen and financed? These dilemmas are not related only to domestic resources but also to the EU assistance (among others, SAPARD)53.

According to Dorota Metera54, the very bad economic situation of the rural population constitutes the largest and the most important barrier to sustainable development of rural areas. Inhabitants of rural areas, unemployed and deprived of incomes are ready to accept each undertaking (even the actions resulting in environmental degradation) which would ensure financial resources for survival. Therefore, the programme of improvement of the material conditions of rural population, e.g. through support for creation of “green work places”, should constitute an important element of the strategy for sustainable development of rural areas. Unfortunately, in Poland the programmes of creation of work places supporting sustainable development do not exist, maybe except for the activities aimed at support for agro- and ecotourism. There are no programmes of support for traditional craft industry (important for agrotourism) neither are there programmes supporting “alternative” methods of agricultural production. Development of renewable sources of energy does not receive support either. Possibly the situation in this field will change after Poland’s accession to the EU.

Coherent policy also gets complicated due to the fundamental difference in approach to agriculture presented by different political powers. This results in fluctuations of agricultural policy from liberalism to state interventionism.

Among the barriers which make the reform of agriculture difficult, one should also mention reluctance of the Polish farmers to create co-operatives or to undertake joint activities. It is to a great extent due to the heritage of the socialist economy, in which the farmers were forced to create co-operatives for political reasons. After 1989 there was a lack of institutions interested in restitution of co-operatives. Lack of joint activities results in a number of threats: · Individuals or smaller groups will be less likely to influence the directions of development of agricultural policy, and they will have practically no impact on the decisions undertaken by the European Commission after integration of Poland with the EU; · In the situation of dispersion of the Polish farms individual farmers are not capable of financing not only the appropriate infrastructure aimed at increasing efficiency of the activities, but they also have problems with investments related to maintenance of the existing infrastructure; · During the next years difficulties with selling small amounts of products will be aggravated, and this phenomena is visible even currently (e.g. dairies prefer to co-operate with small number of large, specialised farms)55.

Another barrier for the sustainable development of rural areas may result from a lack of capabilities to co-operate, and lack of tradition in collective governance (see chapter 2.1.3.4.),

53 Franz Fischler, EU Commissioner for Agriculture and Fishing. Statement during the meeting of Parliamentary commissions: for agriculture and rural development, and for European integration. 8 June 2000. 54 Metera Dorota, Expert of IUCN Poland, adviser at the Ministry of Environment. Interview 6.09.2000 55 Rowinski, J., 1998, opus cit.

27 as well as from reluctance of the Polish administration to create a framework for public participation. The intrinsic concept of sustainable development assumes the necessity of co- operation between the administration and the society. On the other hand, lack of co-operation limits the capability of meeting all non-material needs of local communities, as the authorities are not sure of the inhabitants’ needs. This situation is additionally aggravated by the fact that environmental NGOs in rural areas are not very active, and not able to launch local actions.

A serious problem which may have a negative impact on possibilities for the sustainable development of rural areas is the level of education of people who live in these areas. This is much lower than the level of education of inhabitants of the cities (see Table 11). Access of children to education in rural areas is often difficult. Educational units are being eliminated, especially after 1999, when as a result of educational reform the costs of school maintenance are to be borne by the gmina budgets. There are not enough teachers of foreign languages and informatics in rural schools, and after limiting (or eliminating) stipends the cost of maintenance of students is to be borne almost exclusively by the parents, who can rarely afford covering the stay of their children in the cities where they study. Another drawback is that a majority of schools located in rural areas are agricultural schools. This limits the possibilities of searching for work positions in more promising sectors of the economy56. Another important issue is that the system of formal education in Poland only to a small extent takes into account sustainable development provisions. Therefore, as already mentioned several times before, the level of environmental awareness in society is very low. The low level of education influences not only the pace of agricultural modernisation, but also limits development of modern technologies.

Table 11 The level of education of inhabitants of rural areas and cities in Poland (individuals over 15 years of age)

Education level Cities Rural areas Higher 9,8 1,9 High school and specialised schools 34,1 15,4 Vocational 24,7 28,1 Primary school 27,6 43,8 Not completed primary school or with no 3,8 10,8 education [GUS 1999]

The situation is aggravated due to “escape” of young, educated people from rural areas to the cities, a phenomenon that has been observed for many years (see Table 12). During the last 10 years more people have migrated from rural areas to cities than in reverse. It is not surprising after noting that there are no appropriate instruments for promotion of young farmers57, and that the lack of work places in rural areas forces young people to look for jobs in cities. Even if this phenomenon is hampered to a certain extent by high unemployment and lack of work places in the cities, if no new places are created in rural areas, people who remain there will include primarily low educated individuals. This will create another barrier for the sustainable development of rural areas.

56 Bohdan Szymañski, deputy president of Polish Ecological Club, member of Polish Agricultural Party (PSL). Interview 57 Lichorowicz, A., 2000, opus cit.

28 Table 12. Internal migration of population with the goal of permanent residence (in thousands)

Years 1991 - 1995 1996 1997 1998 Inflow to rural areas 889,3 180,4 183,5 188,9 Outflow 1207,2 207,3 199,3 197,5

The bad state of infrastructure has a negative influence on development of entrepreneurship in rural areas, and creation of new work places in these areas. Difficult life conditions such as lack of sewerage or water pipelines, telephone, etc. (see Table 13), additionally induce migrations of young people from rural areas to the cities.

Table 13 Equipment of households in installations

% of apartments with specific installations Urban areas Rural areas 1990 1995 1997 1998 1990 1995 1997 1998 Water pipelines 95,3 96,7 97,1 97,4 67,6 76,2 79,4 80,8 Toilet 86,0 88,3 89,1 89,0 49,4 57,0 59,8 61,4 Bathroom 83,5 86,0 86,9 87,4 54,2 61,5 64,2 65,3 Gas from the 71,8 74,9 75,6 76,0 6,3 12,1 13,8 13,9 network Central heating 74,4 77,8 79,0 79,6 42,9 49,7 49,7 52,2 [GUS 1999]

4.2 The development of government policy In spite of difficulties and barriers, a number of factors create a chance for the sustainable development of rural areas. The most important one is an increase of environmental awareness of the Polish society, and including environmental programmes in governmental policy. Awareness of the necessity to include criteria of sustainable development in economic development has been increasing in Poland since the beginning of the 1990s. Environmental protection issues were already present during the discussions of “Round Table”58. Effects of these discussions were reflected in the National Environmental Policy adopted by the Parliament in 199159. The most significant statement of this document was an adoption of sustainable development as the main direction of Polish development; this declaration was confirmed in 1998 in the new constitution of the Republic of Poland. Although during the 1990s many chances of implementing solutions for sustainable development (also in relation to agriculture) were lost60, many environmental goals were achieved during this period61.

The significance of agriculture in environmental protection was underlined in the National Environmental Policy (NEP) issued in 1991, where attention is paid to the necessity of recognising the role of agricultural systems in protection of natural resources, and its role as a factor in maintenance of an ecological balance. To achieve this goal, the size of agricultural

58 Ecological “Round Table” after three years. Bulletin of the Institute for Sustainable Development, Warsaw 1992. 59 Ministry for Environmental Protection, Natural Resources and Forestry (MEPNRF), 1991: National Environmental Policy, Warsaw. 60 Karaczun, Z.M., 1998: Privatization of Polish Agriculture and Environmental Protection. Annals of Warsaw Agricultural University. Horticulture (Landscape Architecture) No. 19/1998, pp. 73-85. 61 Kozlowski, S., 1998: Ecological problems of future World and Poland. The Committee of Prognoses “Poland in XXI century” affiliated with the Polish Academy of Sciences.

29 production should be adjusted to environmental conditions and “… negative impacts of agriculture on environment should be eliminated or limited, with maintenance of economic profitability of the farms…”62. The NEP also indicated the necessity to assure that food will not contain pollutants.

According to the NEP the government should create the framework for a promotion of more environment-friendly agriculture. The authors of the document stressed the necessity to create legal frames for appropriate use of chemical substances in agriculture, to decrease the impact of animals breeding on water pollution, etc. Unfortunately, because of weak co-operation between the Ministry of Agriculture and the Ministry of Environment (see chapter 2.1) many of these ideas existed only on paper63.

The necessity to integrate ecological goals in agricultural policy was stressed even more strongly in 1994 by the Ecological Council of the President of the Republic of Poland. According to the members of this Council, lack of inclusion of sustainable development criteria in agricultural policy would lead soon to breakdown of all the agricultural sector64. Also, the new version of the NEP prepared by the Ministry of Environment in 200065 stresses the role of agriculture in implementation of environmental protection goals. Because of the acreage of agricultural land in Poland, as well as thanks to the possibilities to influence the processes which occur in these areas, it is clear that agriculture plays a fundamental role in strengthening the natural system of Poland66. Appropriately shaped agriculture may strengthen the processes of self-purification of the environment, and contribute to increasing its resistance to impacts of pollutants 67. However, because of the fact that the Ecological Council of the President of the Republic of Poland has very little influence on directions of agricultural policy (among others, because of already mentioned low environmental awareness of the politicians), these sensible postulates have not been taken into account in the activities of the Government. This creates an unfavourable situation, especially that high significance of agriculture in nature (biodiversity) protection results also from the share of agricultural land in acreage of the protected areas (Table 14). Unsolved ownership issues affect the protected areas, and even the national parks contain pieces of farm land owned by the farmers living in the vicinity. The lack of national agri- environmental programmes in which the state would compensate the farmers for the losses resulting from the necessity of submitting the conditions of agricultural production to the goals of nature and environmental production, lead to local conflicts of interests between agriculture and nature fora. Therefore, the process of European integration and implementation of agricultural/environmental programmes according to the EU rules should be helpful in solving these conflicts, and create the chance for sustainable development of these areas 68.

62 MENRF, opus cit. 63 Grzeskiewicz, R., Karaczun, Z., 1995: Ownership transformation in agriculture versus environmental protection, ISD, Warsaw 64 Rules of ecological policy in development of rural areas. Resolution of the Ecological Council of the President of the Republic of Poland, 28-30 June 1994 65 Ministry of Environment (formerly: MEPNRF), 2000: II National Environmental Policy, computer printout, MoE, Warsaw 66 Karaczun, Z., Klisowska, A., 2000: Agriculture versus environmental protection (in print) 67 Ryszkowski, L., Balazy, S., 1995: Strategy of protection of the environment and nature in rural areas [in] The rules of ecological policy in development of rural areas. Research Institute for Agricultural and Forest Environment of the Polish Academy of Sciences, Poznan, pp. 49-64 68 These issues have been mentioned by Anna Liro, specialist in Department of Pre-Accesion and Structural Funds in Ministry of Agriculture and Rural Development. Interview. 9.08.2000

30 4.3 Opportunities for sustainable rural development Agriculture has positive and negative impacts on biodiversity. Each transformation of natural land in agricultural land causes a decrease in the number of plant and animal species. On the other hand, extensive agricultural land use has created many new habitats for flora and fauna over centuries. Appropriate agricultural policy may, to a certain extent, minimise this negative impact. It can also play a significant role in the appropriate shaping of agricultural landscapes, as well as maintenance of crop diversity69. Therefore, the current agricultural structure should be considered in positive terms, and thanks to it, rural areas are characterised with an interesting, diversified and rich landscape, which promotes maintaining a relatively high biodiversity. It contributes to an immense richness of species in Poland70, and creates a chance for the development of agrotourism.

Table 14 Share of agricultural soils in protected areas in 1998

Type of the protected areas Number Surface in thousands ha Total Including agricultural soils National parks 22 305,7 40,59 Reserves 1251 141,2 0 Landscape parks 120 2482,2 900,9 Areas of protected landscape 401 6840,2 3275,5 [GUS 1999]

Agrotourism has become popular in Poland, and it is treated by the farmers as an additional, and sometimes a primary source of income. This form of activity in rural areas is gaining increasing interest of regional and local authorities71. Increasing significance of this form of recreation creates a chance for sustainable development of rural areas, as it may be carried out only in naturally attractive territories with appropriately developed infrastructure, and not only with regard to technical, but also social and cultural infrastructure72. Therefore, as the number of farms implementing agrotourism increases, the number of individuals interested in sustainable development of rural areas also increases. One should not forget, however, that uncontrolled development of rural tourism constitutes a threat, especially as to date no system of control of environmental impact of agrotourism exists73.

The low level of pollution of soils in Poland creates a chance for sustainable development of rural areas. Over 80% of agricultural soils are characterised by a natural content of pollutants, and only in 20% of soils was the first level of pollution discovered (it is forbidden to cultivate vegetable for production of food for children on such soils)74. Clean soils create the possibility of development of ecological agriculture on a broader scale. After many years of reluctance and development barriers, ecological agriculture is increasingly often viewed, also by the

69 Ryszkowski, L., Karg, J., Kujawa, K., 1999: Protection and shaping of biodiversity in agricultural landscape. In:Conditions of biodiversity and landscape protection. Research Institute for Agricultural and Forest Environment of the Polish Academy of Sciences, Poznan, pp. 59-80 70 Andrzejeswski, R., Weigle, A., 1993: Polish study on biodiversity, NFEPWM, Warsaw 71 Zbrozek, O., 1999: Analysis of possibilities of development of agrotourism in the region of Western Polesie. Masters thesis of the Department for Environmental Protection of Warsaw Agricultural Univesity, Warsaw 72 Information of Public Relations Division of MARD, computer printout, Warsaw 2000 73 Kamieniecka, J., Borkowska, E., 1994: Development of pro-ecological tourism in Poland. Institute for Sustainable Development, Warsaw. 74 Information of the Public Relation Office of the MARD, computer printout, Warsaw 2000.

31 administration, as an optimal direction of development of agriculture in Poland75. Development of ecological agriculture will certainly be stimulated with subsidies for this form of production implemented in 2000. The adoption of the act on ecological agriculture will allow this to put the direction of production in legal frames, and will increase confidence of the customers to products with the certificate of an ecological farm.

Another potential role of Polish agriculture is support for the policy of climate protection, through76: 1. Storage of carbon in the soil; 2. Afforestation of marginal soils and soils where agricultural production has been abandoned; 3. Development of renewable energy sources based on biomass created in agricultural production.

The two latter functions should be considered as the most important and promising for development of rural areas. One of the goals of environmental policy77 is increasing the acreage of forested areas during 20 years from approximately 28% (currently) to 30%. This means the necessity to plant additionally approximately 700,000 ha of forests. Unfortunately, because of lack of financial resources, every year only approximately 15,000 ha of forests is planted78, which means that the possibility of implementation of the programme on time is not very realistic. Additional resources for financing works related to afforestation may be gained through application of flexibility mechanisms of Kyoto Protocol – emissions trading79 and Joint Implementation80. The programme of afforestation may also be used by local authorities in creating work places, and part of the financial resources could be gained from the Labour Fund.

Afforestation and agri-environment programmes should be co-ordinated during the planning stage to ensure that agricultural landscapes of high biodiversity interest are not completely covered in forest.

Positive effects of development of renewable energy sources (RES) on the situation of the agricultural sector, among others through decreasing consumption yield and creation of the new work places, were already considered at the beginning of the 1990s81. It is assessed82 that renewable energy, based on biomass, is of high potential in Poland, both on theoretical and market grounds83. Placement of RES technologies in rural areas may constitute a great chance. It will enable introduction of modern technologies in rural areas, creation of new, stable, non- agricultural work places, development of small and medium-size enterprises, and decrease of production aimed at consumption yield84. Unfortunately, in spite of many positive effects related to RES development in Poland, their broader utilisation still encounters a mentality barrier85.

75 Gorny, M., professor and an employee of Warsaw Agricultural University and School of Human Sciences in Warsaw. Discussion on 5 June 2000, Warsaw 76 Nalborczy, E., professor at Warsaw Agricultural University. Telephone conversation 77 MEPNRF, 1991, opus cit. 78 Main Statistical Office: Environmental Protection, Warsaw 79 FEWE, 1999: Elaboration and updating of macroeconomic and sector-related scenarios of emission reduction and absorption of greenhouse gases until 2020, Warsaw 80 Szyszko, J., Plenipotentiary of Prime Minister for Climate Convention, discussion on 25 May 2000 81 Ciechanowicz, W., et al., 1994: Comrehensive analysis of development of energy sector and its impact on natural environment. Institute of System Research of the Polish Academy of Sciences, Warsaw 82 Hille, E., vice-chairman of the Foundation for Efficient Energy Use. Discussion on 27 June 2000, Warsaw 83 Wisniewski, G., 1998: Renewable energy sources. In: Selected issues of Polish policy in the power sector, Polish Ecological Club, Warsaw-Cracow 84 Karaczun, Z., 1999: Development of renewable energy sources as a chance for the Polish economy. In: Bulletin of the Office for Analyses and Studies of the Parliament of the Republic of Poland. Conferences and Seminars. Development of renewable energy in Poland, No. 2(20)99. Parliamentary editions, Warsaw 85 Wisniewski, G., Director of the Baltic Centre for Renewable Energy. Discussion on 27 June 2000, Warsaw

32 As a conclusion, it can be stated that sustainable development in Poland still encounters a number of barriers, however it seems at the same time that high potential for implementation of this idea exists. Paradoxically, the current crisis of agriculture constitutes a chance for its future sustainable development. The difficult situation of this sector, pressure of agricultural and ecological organisations, and the process of integration with the European Union (especially facing the reform of Common Agricultural Policy) induce changes. Although the direction of these changes has not been determined yet, the changes implemented during the 1990s create a good basis for optimism. One cannot forget that the direction of development of Polish agriculture and rural areas depends first of all on the Polish government, non-governmental organisations, and the whole society. Nevertheless, because of future membership in the EU, the direction of development of rural areas in Poland will also depend to a high degree on the directions of the EU agricultural policy.

33 5. Conclusions

Polish agriculture is currently situated at the crossroads. Its shape and the direction of future development depend on decisions which are currently under preparation. Although different institutions have diverse ideas regarding the methods of regulation of agricultural market, an increasing number of them are perceiving the main functions and directions of development of rural areas in a similar way. According to this view, development of rural areas should include: · Securing production of a sufficient amount of high quality crops; · Creating work places both in agricultural production and in non-agricultural activities; · Enabling inhabitants of rural areas to realise their social aspirations, also with regard to access to education and culture; · Assurance that development will respect the rules of environmental protection and maintain the natural assets of rural areas.

The crisis at the beginning of the 1990s resulted not only in bankruptcy of unprofitable farms, but also in economic failure of the whole agricultural system – storage facilities, processing plants, agricultural consulting and other services. Whole groups of inhabitants of rural areas experienced impoverishment. Budget deficits caused closure of cultural and educational institutions located in rural areas. It made the frustration even deeper. In addition to these negative phenomena, positive changes also occurred. Younger farmers became the owners of farms, soil management was submitted to market reform, which in many farms allowed to improve agricultural structure, and the level of education of farms’ owners increased (due to their younger age)86. The approach of politicians to agriculture has also changed. It became clear to them that the directions of agricultural policy should not be dependent on interests of particular groups, and that state activities should be directed more to the development of rural areas, and less to solving concrete, individual problems. The possibility of submitting agricultural policy to the interests of individual groups of producers should be considered to be a factor which creates a very serious threat for the sustainable development of rural areas.

During recent years the government implemented a number of instruments aimed at supporting the development of agriculture and rural areas. Unfortunately, many of them were not effective. The state interventions on agricultural market were delayed, insufficient financial resources were channelled for preferential credits, self-governments and firms could not use these credits because of lack of facilitation in getting guarantees, which resulted in difficulties with creation of new work places87. Too small funds designated to modernisation of agriculture constituted an obstacle. However because of limited capacity of the Polish budget it should not be expected that the resources will get increased. Therefore, it is necessary to focus the programme on a few fundamental priorities, and to assure that they will be implemented. Such priorities are: · Development of the infrastructure in rural areas, which will not only improve the quality of life of inhabitants of rural areas, but will also create new work places and facilitate attracting the investors who establish their firms in these areas; · Support for education in rural areas and assuring that more children from rural areas will have medium-level and higher education; · Creation of stable non-agricultural work places e.g. through development of renewable energy sources, agrotourism, etc.

Implementation of the above mentioned goals will have to be financed in the majority from domestic sources. However, because of the fact that CAP reform shifted the interest from development of agriculture to development of rural areas, part of these activities will receive support from pre-accession and structural funds of the EU.

86 Duczkowska-Malysz, K., 1996, opus cit. 87 Anonymous high official of the MARD, discussion on 10 July 2000

34 Another possibility is introducing large-scale agri-environment programmes. According to the opinion of non-governmental organisations88, Poland should cover all rural areas with such a programme, similarly to Austria. The need for undertaking such activities is indicated also by activists dealing with nature protection and biodiversity89. Because of the EU reluctance to direct to Poland a larger stream of funds for agriculture90, it is difficult to say how feasible this aspiration is. The Ministry of Agriculture is currently preparing proposals related to implementation of this type of reimbursement (according to Regulations 1257/1999 and 1750/1999)91.

One should not forget, however, that the possibility to assure sustainable development of rural areas depends not exclusively on the amount of funds directed to this goal. Much more important seems to be the activity of inhabitants of rural areas, so that they understand that the pattern of development of their region depends on themselves. The farmers should also understand that their activity should not be limited to agricultural production. They must become active participants of the market game, and they must actively promote their products at the market. It is also necessary to understand the significance of the quality, both in relation to agricultural production and to services provided by the farmers (e.g. in agrotourism). Many examples can be found in the management of Polish rural areas where activities were implemented only because of co-operation of the inhabitants, decisiveness of the local authorities, or vision of some individuals92. Therefore, it can be stated that the sustainable development of rural areas will be possible only in situation when the state agricultural policy will receive support from an actively involved society.

88 Bohdan Szymanski, vice-chairman of the Polish Ecological Club, discussion 89 See for example, Kozlowski, 1998, opus cit:; Ryszkowski, L, Karg, J., Kujawa, K., 1999: opus cit., Ryszkowski, L., 1999: Progress of research on biological and landscape diversity, and Andrzejewski, R., 1999: Biological diversity – an implementeation concept (both reports in: Conditions for protection of biological and landscape diversity. ZBSRiL, Poznan) 90 Franz Fischler, Commissioner for Agriculture and Fisheries. Statement during the meeting of Parliamentary commissions: for agriculture and development of rural areas, and of European integration. 8 June 2000. 91 Magdalena Nowicka, Main specialist of Pre-accession and Structural Funds Assistance in the MARD, telephone conversation, 7 July 2000. 92 According to Wojciech Galinski, independent expert who co-operates with the Institute for Sustainable Development inside project “Global climate, local action”, many local project related to using renewable sources of energy were completed only because courage and obstinacy of local leaders, and activity and co-operation of local public groups. Discussion on 27 June 2000.

35 Annex I

An institutional map for rural development in Poland

Sustainable Agriculture policy development of rural Ecological Policy areas National level MRRD MoE ARMA NFoEPWM AMA ASTOA WB (AP) WB (EP) ALU ENGOs (n) Fundations (s) Regional level ARMA (rb) RIEP ASTOA (rb) DEPVO DAVO VFoEPWM Marshal Offices ENGOs (regional) Local level Self (local) Governments AAS LFoEPWM (G,P)

MRRD - Ministry of Agriculture and Rural Development ARMA - Agency for Restructuring and Modernisation of Agriculture AMA - Agricultural Market Agency ASTOA - The Agency of State Treasury Ownership in Agriculture WB (AP) - World Bank (Agricultural Programs) ALU - Agricultural Labour Unions MoE - Ministry of Environment NFoEPWM - National Fund of Environment Protection and Water Management WB (EP) - World Bank (Ecological Programs) ENGOs (n) - Ecological NGOs (n0 – national; (r) - regional Fundations (s)- selected fundations (e.g. Institute for Sustainable Development) ARMA (rb) - Agency for Restructuring and Modernisation of Agriculture (regional branches) ASTOA (rb) - The Agency of State Treasury Ownership in Agriculture (regional branches) DAVO - Departments of Agriculture in Voivodship Offices Marshal Offices – Voivodship Marshal Offices RIEP - Regional Inspectorates of Environmental Protection DEPVO - Departments of Environment Protection in Voivodship Offices VFoEPWM - Voivodshiop Funds of Environment Protection and Water Management AAS - Agricultural Advisory Centres LFoEPWM (G,P) - Local Funds of Environment Protection and Water Management (gminas and Powiat)

36 Annex II Institutions involved in rural development in Poland

Governmental institutions Ministry of Agriculture and Rural Development 00-930 Warszawa, ul. Wspólna 30 http://www.minrol.gov.pl

Ministry of Agriculture and Rural Development is the main institution which creates and co- ordinate agriculture policy in Poland. There are several departments in the ministry, some of them are important to Sustainable Agriculture Development:

Dep. of Agricultural Policy Telephone numbers: (+48 22) 623 11 51, 623 17 04 The department realises tasks of the Minister in the field of shaping the policy on the agricultural sector on a national scale as well as collecting, processing, and communicating information concerning carrying out the agricultural policy, supervising trade quality of agro-food products in domestic and foreign trade, normalisation, cooperation with agricultural Chambers, trade and socio-professional unions of farmers, and creating the policy on agricultural extension and agrarian education.

Dep. of Pre-accession Aid and Structural Funds Telephone number: (+48 22) 623 25 55 The department realises tasks of the Minister in the field of preparing organisational structures and implementing procedures in order to use the aid promised and granted by the European Union for development of agriculture, agricultural markets and rural areas, and after the EU integration - the structural funds as well as preparing and co-ordinating programmes concerning regional development.

Dep. of Rural Development Telephone numbers: (+48 22) 623 22 41 The department realises tasks of the Minister in the field of social and professional activation of rural area inhabitants for multi-functional development of rural areas, labour market in agriculture and rural areas, social insurance, shaping the technical infrastructure of rural areas, technology, co-operation with cooperatives, and with institutions and scientific units as well as agricultural extension.

Dep. of European Integration Telephone numbers: (+48 22) 623 20 72, 623 24 71 The department realises tasks of the Minister, concerning the co-ordination of adjustment processes concerning the system of agriculture, rural areas, and the operation of agricultural markets to the European Union systems.

37 The Ministry of Environment Wawelska 52/54 , 00-922 Warsaw Phone (48 22) 825 00 01 http://www.mos.gov.pl/index_glowny.shtml

The role of the MoE is first of all creation of legal framework for agricultural activities so as to take into account environmental protection requirements. The Ministry of Environment is responsible also for implementation of Directive 91/676/ EEC and probably will be also participate in implementation of agri-environmental programmes in Poland.

Agency for Restructuring and Modernisation of Agriculture Warszawa, Al. Jana Paw³a II 70 Tel. (48 22) 860 29 50 Fax. (48 22) 860 29 80 e-mail:[email protected] http://www.arimr.gov.pl

Its goal is to support structural changes in agriculture and in rural areas. This goal is being accomplished through: investments in agriculture; creation of new workplaces outside agricultural sector; development of infrastructure in rural areas; training, agricultural consulting etc. The Agency has 16 regional (voivodship) branches.

Agricultural Market Agency 00-930 Warszawa, ul. Wspólna 30 tel. (48 22) 628-79-53, 628-79-24 fax. (48 22) 628-93-53 http://www.arr.gov.pl

The agency implements intervention policy of the country through: intervention purchase and sale of agricultural produce and products; gathering and managing state reserves of agricultural and food products and granting credit guarantees, except for investment credits, to economic units which implement the tasks established by the Agency. The Agency has 7 local branches.

38 The Agency of State Treasury Ownership in Agriculture 00-215 Warszawa, ul. Dolañskiego 2 tel.: (+48 22) 635 53 53 fax: (+48 22) 635 00 60 e-mail: [email protected] http://www.awrsp.gov.pl

The agency’s main goal is implementation of ownership transformation in agriculture by e.g: restructuring and privatisation of State Treasury properties used for agricultural purposes, carrying out management/agriculture activities and support for establishment of private agricultural farms on State Treasury properties etc. The Agency has 12 regional branches.

The Inspectorate for Environmental Protection Wawelska 52/54 , 00-922 Warsaw http://www.pios.gov.pl/

The Main Inspectorate for Environmental Protection and 16 Voivodship Inspectorates are responsible for control of execution of environmental protection regulations (also in agricultural enterprises), and for monitoring of the state of environment.

The National Fund for Environmental Protection and Water Management 2-673 Warsaw, ul. Konstruktorska 3a Tel: (48 22) 849 00 79, 849 22 82, 853 37 37, 853 37 24 Fax: (48 22) 849 72 72 e-mail: [email protected] http://www.fundusz.pl/info/default.htm

The National Fund for Environmental Protection and Water Management together with voivodship, poviat and gmina funds is the most important institution financing environmental protection programmes in Poland. The National Fund supports investments with country-wide significance; the remaining funds support projects at the regional and local levels. During the recent years the funds have devoted significant resources to development of environmental protection infrastructure in rural areas. The National Fund co-operates also with the World Bank in implementation of the project aimed at implementation of the requirements of the directive 91/676/EEC in Poland.

39 Foundation of Assistance Programmes for Agriculture FAPA Warszawa, 00-930 Warszawa, ul. Wspólna 30, tel: (0-22) 623 15 15, 623 16 03, 623 16 55, 623 17 05, 623 17 06 fax: (0-22) 628 93 87 e-mail: [email protected] www.fapa.com.pl

It has been established by the Polish Government for co-ordination of assistance programme for Polish agriculture.

The National Advisory Centre for Agriculture and Rural Development 99 Pszczeliñska Str, 05-840 Brwinów, tel.: (+48 22) 729 59 37 fax: (+48 22) 729 72 91 e-mail adress: [email protected] http://www.cdr.gov.pl/eng

The centre is a branch of the Ministry of Agriculture and Rural Development, collaborating with other units in implementation government policy in relation to agriculture and rural areas in the field of accelerating its adaptation to the free-market economy conditions, and requirements resulting from integration with European Union. This institution engages presently over 1000 employees, and includes departments in Poznañ, and Kraków, and 6 regional centres, enclosing all country area.

Non-governmental instititions

European Fund for Development of Polish Rural Areas ul. Reymonta 12a, 01-842 WARSZAWA tel. (0-22) 639 81 25 (6), fax 663 17 29

It is a governmental foundation granting support for pro-ecological and educational investments, and for investments related to development of the infrastructure.

Foundation Supporting Rural Areas, Skwer Kard. S. Wyszyñskiego 6, 01-015 WARSZAWA tel. (0-22) 38 46 83, fax 38 95 05

40 Foundation for Development of the Polish Agriculture ul. Mokotowska 14, 00-561 WARSZAWA tel. (0-22) 622 52 55, fax 622 52 45 e-mail: [email protected] http://www.fdpa.org.pl

The Foundation is a private, non-profit Polish institution established in 1988 to facilitate the sustainable transition of the Polish food and agriculture sector, and to promote the development of civil society in rural areas. Since its establishment, the foundation has had a significant positive impact on Polish agriculture, rural development, agricultural policies and rural citizens. FDPA operates both at the national and local level, where it provides development resources through seven field offices.

“Ecoland” Association Przysiek k/Torunia, 87-134 Z³awieœ Wielka tel./fax (0.56) 678 92 39 e-mail: [email protected] http://free.ngo.pl/ekoland/

The goals of Ecoland are: representing the interests of food producers who use ecological methods of production, popularisation of ecological agriculture and promotion of its products, and certifying the farms and processing plants which meet the criteria of ecological agriculture. Ecoland implements its goals through organising training for farmers, promotion of products generated in ecological farms, education of the public, and through lobbying activities.

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