imProvement oF aGriCuLturaL hoLd-inGS PoSitionS in the Food Chain.
Changes presented in the cell processing and distribution of the food chain, put agricultural produc-ers operating in a completely different company structures (formed histori-cally and related to the specificity of agricultural production) in a difficult situation characterized by significant dispersion of producers and low degree of their organization. This situation indicates the need for bi-directional actions. First of all, this applies to the agricultural raw materials recipients, i.e. collecting subjects and process-ing, and sometimes also distributors, who by developing their structures and functioning models, should take great-er account of the intgreat-erests of farmgreat-ers.
The use of own position against weaker partners is a common thing in prac-tice. Therefore, there is a need to take resolute administrative and legislative actions at a national and EU level, en-suring the transparency of the func-tioning of the food chain and restrain-ing the unfavorable signaled processes.
Adaptation activities to the functioning on the dynamically changing market and strengthening the negotiating posi-tion when dealing with the agricultural products recipients, must be taken also in agriculture. Structural and organi-zational changes are needed. Poland is dominated by the traditional model of family farming. The vast majority (Figure 5.) are small farms.
A better measure for determining the size of the farm, at the same time taking into account its relationships with the market, is engaging its eco-nomic strength ESU10. Farms from 0 to 4 ESU are defined as small or low marketability. In Poland to this group, belong approximately 80% of all ag-ricultural holdings. They have been using (according to the FADN data) about one-third of agricultural lands [3]. The existing structure of farms clearly indicates the need to promote concentration processes in our agri-culture. The basic form of this con-centration is to increase the area of farms. This process, although it still continues, is slow. The developmental direction of the family farms facilitating their contacts and narrowing their ties with the market is, above all, horizontal integration. Following the example of farmers from other countries, Polish
10 ESU - (eng.: European Size Unit) presents the economical amount of the holding counted basing on the standard direct surplus (1 ESU = 1200 EUR). Standard direct surplus- is the excess of three-year average production volume of a particu-lar agricultural activity over the three year average value of direct expenses incurred for this activity.
farmers should also be included in a vertical integration processes, link-ing their business activities with other cells of the chain.
Creation and development of groups and producers organizations
Such form of integration increas-es the farmer’s possibilitiincreas-es to act as one of the cells of the food chain. Tangible benefits flowing from it are:
• better chain cells matching in terms of volume flow of goods, the orga-nization of sales, marketing, activi-ties
• increase of the supply scale which promotes: -improvement of the position of farmers in the nego-tiations with customers, -market orientation increase -improve-ment of distribution through the use of new channels. Research [1] shows that in the aftermath of horizontal integration the direct sales to processing companies and retailers and wholesalers is grow-ing. While sales of private markets and brokers is declining. Also, the use of contracts as a form of busi-ness relations expands, which in turn promotes the improvement of vertical ties. Approximately two thirds of the surveyed households have reduced production costs, improved quality, found new markets and started to use simple advertising tools for creating de-mand for their products. In our agriculture the process of farmer’s integration through the creation of producer groups is growing at a pace that is hardly satisfactory.
The disposal scale of agricultural products by groups and the pace of the concentration processes are small. Currently (in the framework of RDP) operates 655 producers groups and 39 recognized groups and 182 initially recognized groups of fruit and vegetable producers.
However, their role in the
mar-ket is still small. In the interests of farmers (in order to improve their position in the rapidly changing market structures) lies the devel-opment of organized forms of sup-ply of agricultural products.
Participation in the processes of vertical integration
Participation of agricultural holdings in incomes resulting from the further processing of agricultural products produced by these farms, and distribution of food products, is the best way of protecting farmers interests in the distribution of income generated in the food chain. Unfortunately, this is a poorly developed model of action in Polish agri-food sector. Cases in which processing of produced agricultural products and their subsequent disposal by producer groups are extremely rare.
However, a positive example could be dairy cooperatives.
Another way is participation in the privatization of processing enter-prises, allowing gaining greater in-fluence (control) of farmers over the businesses. Participation of farmers in the privatization of enterprises is mar-ginal. It is a pity that the privatization of the agri-food industry took place with little participation of farmers. The legal and organizational form allowing for wider participation of agricultural producers in controlling the process-ing and marketprocess-ing of food products is, according to the experience of West-ern European countries, a cooperative form. Development of bottom-up or-ganized cooperatives involved in the agri-food processing seems to be the most appropriate way of vertical inte-gration, also in our conditions. With regard in particular to a real coopera-tive organization associating involved members and realizing their economic objectives.
deveLoPinG direCt SaLeS oF aGriCuL-turaL ProduCtS
Agricultural producers shall not be convicted solely on the role of sup-pliers of raw materials. They can also play an active role in the creation of their own contacts with consumers, who are more and more interested in food products acquired “at source” and produced in a natural way (not indus-trial way). The issue of market access by agricultural producers is reflected in the proposals of changes related to the EU’s policy in the creation of short dis-tribution channels of agricultural prod-ucts [11]. The European Commission wants to encourage the development of local markets by promoting direct marketing and installation of city mar-kets, and also encouraging the habit of buying the agricultural products in the vicinity of their manufactures. In Poland, the Ministry of Agriculture has already started actions (the “my market”) designed to provide support from the Rural Development Program for construction in the municipalities of up to 50 thousands inhabitants of approximately 80 modern markets, in which farmers would sell their products. Furthermore, there is also planned modernization of around two hundred already existing markets.
The use of market niches, in which small farms have got an advantage
Like any entity operating in the market, agricultural holdings should seek for market niches in which they could find stable environment to oper-ate, leading production, which is the most suited and which can provide ad-equate economic efficiency. Individual farms (family farms), especially the smaller ones, frequently have surplus of labor resources. This may be a com-petitive advantage for them in making labor-intensive patterns of production.
An opportunity for such farms can be production under food quality schemes.
In recent years there has been a change in consumer attitudes towards food quality. This is, among others due to the increase in wealth, greater inter-est in issues of nutrition impact on health, as well as the growing inter-est in culinary traditions. As a result an interest in high quality products is constantly growing. In the EU food quality schemes have been developed covering the principles that ensure the maintenance of quality in certain areas.
These include systems established pri-marily for the certification of:
• organic products,
• regional and traditional products (registered as a Protected Des-ignation of Origin or Protected Geographical Indication, or Tra-ditional Specialty Guaranteed),
• Integrated Production (IP).
Organic production in Poland is the most common direction of food production with higher quality. Ac-cording to GUS data, half of the organ-ic farms are farms with a 0-4 ESU, or subsistence. At the same time, however, according to research of FAPA, 80 per-cent of them are entities exceeding 5 ha.
[3]. Organic production of agricultural holdings is developing quite dynami-cally. Last year there were registered 20 626 organic farms11. There are also more and more ecological manufac-tures (264 registered factories), which is important from the standpoint of the possibility of a broader introduc-tion of organic products on the market.
The organic food market should be considered forward-looking, as far as the awareness of the society grows. To increase this awareness very important are appropriate promotional activities,
11 According to MARD. Website: http://
www.minrol.gov.pl/pol/Jakosc-zywno-sci/Rolnictwo-ekologiczne-w-Polsce/
(read dated. 28.04.2011)
which may significantly speed up the development of the market. Education of appropriate distribution channels and at the same time ensuring absolute maintenance of quality standards is no less important. Important for the quality of agricultural products is not only ecological context. An increas-ing amount of consumers groups are particularly interested in certain as-pects of the production of foods, such as welfare of animals. As an example of such an approach we can refer to the classification of eggs, which takes into account four ways of keeping the hens12. A similar approach may be imagined in the production of milk and its products, e.g. specially marked milk (and its preparations) from small herds of cows kept in free range rear-ing, nourished with a balanced diet that includes staying in the pastures.
The organizer of this kind of produc-tion could be small dairy cooperatives bringing together farmers that meet established criteria. Appropriate sup-port (promotional activities directed to consumers) could significantly speed up the development of such form of production. In terms of quality systems Protected Designation of Origin, Pro-tected Geographical Indication or Tra-ditional Specialty Guaranteed on the list of Polish products are currently13 24 names registered, eight applications for registration published in the Of-ficial Journal of the EU and four ap-plications for registration submitted to KE. Integrated Production (IP), which is the national system of production quality, is a system allowing for ob-taining the agricultural products with the highest biological and nutritional values manufactured under controlled
12 Class A: 0 - organic farming, 1 - free range farming, 2 - rearing bedding, 3 - cage farming.
13 By IJHARS. Website: http:ijhars-s.gov.
pl/produkty-regionalne-i-tradycyjne.
html (read dated. 28.04.2011)
production process until the same set14. These products are also inspected for residues of plant protection products, fertilizers and other substances haz-ardous to health. These systems do not cover all the possible confirmation of characteristics that provide high-qual-ity food. Based on these examples from EU15 countries, the Polish trade orga-nizations have created a new systems for the quality production:
• beef (QMP),
• pork (PQS),
• different products (QAFP) currently pork and poultry,
• traditional products (quality, tradi-tion).
The proposed courses of actions for agricultural holdings enhancing the position of farmers in the food chain through the concentration of supply, broadening the offered food product range and improving their quality standards, require adequate administrative support (including leg-islation) both from the EU and national authorities. Therefore, they must be strongly emphasized by the Common Agricultural Policy and national policy through the creation of appropriate instruments, including in particular the presence of small family farms and supporting the participation of these households in the consolidation activi-ties and food quality schemes. The pro-motion of high quality food and food with specific characteristics is no less important. This promotion at the same time should be directed to consumers and farmers. The functioning of the market of products manufactured in quality systems is dependent on the demand for these products, and it is increasing. Adequate promotion and information could “expose” a
signifi-14 PIORIN. Website: http://piorin.gov.pl/
index.php?pid=1499.
15 Such as the French “Label
Rouge-”, Austrian “Gute AMA Singles,”
or German “QS”.
cant number of consumers who have not yet been brought to the attention to the quality of food. According to the observed in the society increased healthy attitudes for diet composition, the provision of proper information, combined with greater availability of healthy food creates an opportunity for further development of the mar-ket. The shaping of the consumption is already implemented on a large scale by the Agricultural Market Agency, the actions under the “Glass of milk” and
“Fruit at school” programs. These pro-grams are addressed to a large popu-lation of children and youth. It is also important to promote food quality systems among agricultural produc-ers and the benefits of this food among consumers. It is especially important to reach out with this information to small holdings, which typically have less contact with the market and at the same time have a surplus of labor.
For them the production of quality systems can provide a unique oppor-tunity. In all the activities related to the promotion and information, espe-cially those directed to the consumers and agricultural holdings, media plays a huge role. Promotion among healthy food consumers can be treated as an element of social mission not only to support agriculture, but also for the improvement of the health of society and the state of the environment. All media should feel obliged to partici-pate in the implementation of such a mission. However, the weight of the transmission of information ad-dressed to the farmers rests mainly on the media focused on agricultural and rural district. The content provided in such media may have a broader, more specialized scope and may relate to I.A. consolidation activities used to strengthen the position of the farmers in the food chain, which were men-tioned before. Unfortunately, the me-dia do not always objectively present
the point of view of all participants of the food chain. Often, under the guise of concern for the consumer, positions of distribution companies are used for unilateral presentation. Analysis of the functioning conditions of the family farms in the rapidly changing situa-tions in agriculture requires regular monitoring of the evolving changes and trends. This in turn leads to the need for adequate information relat-ing not only to agriculture itself, but also to the other cells of the food chain.
A special role here plays public statis-tics, which due to the nature of the research (statistical secrecy) may be the only source of information. This statistic, unfortunately, does not keep up in terms of data provision with the pace of economy development. This applies in particular to trade, for which there are no data regarding new forms of organization (commercial networks, including discount rates and other e-commerce) and forms of action (own brands, franchising). It seems neces-sary to change this situation and to extend the research area of the miss-ing items. At the interface of agricul-tural production and other cells of the supply chain, as well as between those cells, appear many issues that should be carefully studied. The most predes-tined to such research are scientific in-stitutions with sufficient staff and expe-rience, as well as public institutions (e.g.
Office of Competition and Consumer Protection). In the action programs of these institutions, it would be useful to apply a more comprehensive approach, including the whole chain, taking into account contacts between farms and
the processing industries and distri-bution of food. Propositions from the science could contribute to the adop-tion of legislative and organizaadop-tional solutions limiting the adverse events for both producers and consumers.
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wProwadzenie
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KonstytucjiRzeczypo-spolitej Polskiej zawar-ty jest zapis, w myśl którego podstawę ustroju rolnego stanowi gospodarstwo rodzinne. Jednakże pojęcie gospodar-stwa rodzinnego jest tu rozumiane jako rodzinna wspólnota własnościowa, a nie jako wzorzec ustrojowy, czy nor-ma agrarna. Konstytucja nie odpowia-da więc na pytanie, do czego dążymy ani z jakich gospodarstw rolnych ma pod względem ekonomicznym skła-dać się ustrój rolny. W polskiej my-śli agrarnej i w polskiej świadomości społeczno-gospodarczej niezbędne jest więc uzupełnienie istniejącej luki. Bez świadomości tych braków nie możemy odpowiadać na pytanie, czy przemiany zmierzają w dobrym kierunku. Pol-ską racją stanu jest zdecydować o tym, czego chcemy, a więc jakie ma być rol-nictwo.
Gospodarstwa rodzinne w rolnic-twie odegrały wielką rolę historyczną.
Ich stan własnościowy zawsze określał udział i miejsce Polski w Europie. Dzię-ki solidarności rodzinnej zdolne były one do pokonywania różnorodnych kryzysów narodowych, politycznych, demograficznych i ekonomicznych.
Są one w stanie przetrwać duże klęski nieurodzajów i wielkie zapaści ceno-we na rynkach surowców rolnych. Na