Support for the agricultural investment in Poland – domestic versus CAP

Abstract

Although Poland’s accession to the European Union (EU) in 2004 has offered the great opportunities for the modernization of the Polish agriculture in the form of access to vast range of support under Common Agricultural Policy, the state aid existing before accession was not abandoned. The aim of the paper is to assess the scope and size of the domestic support for the investment in agriculture in the context of the support for such activity under the EU Rural Development Programs (RDPs) in years 2004-2017. The examination revealed that in the period of Poland’s membership in the EU, the state credit aid system has conducted operations on slightly changed rules, however, in 2015 the scope of the credit support was reduced noticeably. The comparison of the number of beneficiaries and value of the state credit aid and aid under RDPs during three financial perspectives indicates the very important relative role of preferential credits in financing the modernisation of the Polish agriculture. Nearly one quarter of market oriented agricultural holdings used preferential credits in years 20042017, while the small and semi subsistence farms were important group of beneficiaries of RDP. Although the difference between the nature of the state and EU aids (repayable credits and subsidised expenditures) they complemented each other. The decrease in the preferential credit lines and following fall in the number of credits, suggest that the role of the preferential credits in modernisation and restructuring of the agriculture will fall unavoidably.