Mr Wladyslaw Piskorz, Mr Dariusz Laska and Mr Wieslaw Moldawa

9 MARCH 2005

  Q653Chairman: Good morning. I do not know the proper way to address you. Is it as Minister Counsellor?

  Mr Piskorz: As simply as possible. My rank is Minister Counsellor.

  Q654Chairman: Thank you very much indeed. You will have heard what I said earlier, Minister Counsellor: that we are being recorded. Whether it will all go out on BBC 1 tonight, I rather doubt; but we are being recorded and it will be on the website. Would you like to introduce your colleagues and, if you would like to make an opening statement, please do so?

  Mr Piskorz: My Lord Chairman, I am accompanied by my colleagues from the Polish Embassy, Mr Dariusz Laska and Mr Wieslaw Moldawa. If you will allow me, I will make a very short statement. I would like to make clear that, for Poland, it was very difficult to reach an agreement in the accession negotiation in the area of agriculture, because this was a very sensitive point. One of the very difficult points was the direct payments for the new Member States. During the negotiation, the Member States of the EU said, "We have bigger needs in rural development; therefore, the focus should be on rural development". We have taken this point, and for my government rural development is important. Therefore, we are in the position that, in the negotiation on the next financial perspective, there will be a proper allocation for Poland for rural development. We therefore do not see the possibility of reducing the rural development allocation for Poland for the next financial perspective. I think that you will understand that position.

  Q655Chairman: We will come on to that in a little more detail. What do you think about the ability of the European Commission and the Council of Ministers to maintain the undertakings that have been made to the agricultural sector if the UK Government, and the other five net contributor governments, were successful in achieving the overall target of 1 per cent only of national income for the 2007-13 period? What are your views on that?

  Mr Piskorz: I think that the ability to finance the restructuring and modernisation of agriculture and the rural economy in the new Member States will be seriously diminished. This would leave unresolved serious social and economic difficulties in rural areas. I would like to illustrate what the kinds of social and economic problems are in Polish rural areas. We have huge hidden unemployment on farms, which is estimated to be above one million.

  Q656Chairman: Remind me of what the total population of Poland is.

  Mr Piskorz: Thirty-eight million. There is a large number of people who are under-employed, who have work on farm for a few weeks or months a year, and they do not have other jobs. This is in the general situation where we have a total unemployment rate in Poland above 18 per cent. It means that there are no jobs available for people who stay in agriculture. Therefore, answering your question, it will be really difficult in the medium term to solve those serious problems, and those serious problems have political implications. The farming sector is still important in Poland because a large number of people depend for their income on agriculture, and therefore the Polish Government takes seriously the need to restructure agriculture and the need to modernise rural areas.

  Q657Chairman: Before I ask Lord Lewis to take this a little further, could I mention to you that, when we were in Brussels last week, the comment was made to us that there had been a 50 per cent increase in farm incomes in Poland recently—almost in the time since Poland joined the European Union. Is that correct?

  Mr Piskorz: I would not quarrel with figures, because it depends what you take into the calculation. However, that is true. Incomes increased significantly after Poland joined the European Union. Farmers benefited from different sources. First of all, the prices received for basic agricultural commodities increased—for some, very rapidly. To give you an example, the prices received for milk increased by 30 per cent; prices received for beef increased by 50 per cent and, for pork, 40 per cent. That means higher revenues from the market. Secondly, it was a time when we started to pay money from SAPARD. It took us almost three years to prepare institutions to pay pre-accession support, and money is paid out right now. Every month, we are paying more than 100 million euros support for SAPARD and, from SAPARD, 15,000 farmers benefited. In addition, we started payment of the direct payment. 1.4 million applications for direct payment have been collected. This is evidence that we succeeded. There was a lot of scepticism even in the European Commission that Poland, having such a large number of very small farms, would never ever be able to implement the instruments of the CAP, and would not be able to have, on time, the integrated administration and control system. It is true that it was very costly to establish, but we were able to be on time and to pay the direct payment on time. We were even able to convince the Commission to allow us to pay the direct payment in advance: not on 1 December but on 15 October.

  Q658Chairman: I think that you have some lessons to teach our Department of Agriculture!

  Mr Piskorz: But it was all possible, thanks also to the European Commission. The European Commission was wise enough to offer new Member States a simplified area payment scheme, which is a kind of decoupled payment scheme, area payment scheme, where farmers have to identify only the parcel which they are cultivating, and they are not obliged to present what he is cultivated on each parcel.

  Chairman: Before you make us any more jealous, Lord Livsey has caught my eye, and then Lord Lewis.

  Q659Lord Livsey of Talgarth: Just to establish a couple of facts on what we are talking about. You said that there were 1.4 million applications for a single farm payment. Does that mean that there are 1.4 million farmers in Poland—that is, if they all applied? What is the average size of holding of those farmers?

  Mr Piskorz: I have to talk about statistics. In Polish statistics, we recognise as a farm somebody who is cultivating at least one hectare of agricultural land. We have 1.8 million such units with more than one hectare of agricultural land. If you take into account those above one hectare, then you have an average size of eight hectares. However, please bear in mind that 25 per cent of the total agricultural area—around five million hectares—is in large farms. They are located in the north and the west of Poland, and they were the former state farms, now private farms. Those are farms of that size: 5,000 hectares, 1,000 hectares or more. We even have one farm which is above 40,000 hectares. It means that on 25 per cent of the total agricultural land we have large-scale farms which are very competitive and very efficient. However, in the south and east parts of Poland we have very traditional, semi-subsistence farms, where the size of most farms is around three hectares and you will not find many farms bigger than that. They are not commercial farms. People do not rely entirely on those farms. I would say that this is just a shelter for them. It is a transformation freezer—because Poland was going through a very dramatic economic transformation. A lot of people, part-time farmers, lost their jobs in the state factories; they have returned to the farm. It is relatively cheap to stay on the farm, because the taxes which farmers pay are very low. The farmer does not pay personal income tax or property tax. It is therefore not very costly to keep the farm, but it is a shelter and they are able to produce a little for their own family and for the local markets. This helped us survive these dramatic changes. Otherwise, we would have a huge army of unemployed people who would have to be supported socially.

  Chairman: It is extremely helpful to have this quick sketch of the size of your farming industry, and I am very glad that you have given it to us.