Mr Wladyslaw Piskorz, Mr Dariusz Laska and Mr Wieslaw Moldawa

9 MARCH 2005

  Q680Lord Livsey of Talgarth: Are you expecting an increase in the spending on rural development over the next few years? Are you expecting this to come more from within your own budget in Poland or from the EU?

  Mr Piskorz: If you follow the Commission's proposals for rural development, on the graph it looks nice because it is increasing, but when you analyse what is behind it, you find that the only item which is really increasing is the spending for LEADER. The increase is foreseen for LEADER— almost doubling. Other items they are just because of the EU enlargement spending for Bulgaria and Romania. For other items in the EU budget reduction of expenditures is planned in real terms (increase in normal terms by 1 percent per year—with inflation 2 per cent per year it means reduction by 1 per cent in real terms) You see that there is an increase by 25 per cent, but in reality there will be no more money available for Member States. For us Poland's accession to the EU is beneficial because we are starting now to spend more money on rural areas because money from the EU is available for rural development. Before joining the EU we had other important issues at stake. Now, in order to get 80 euro from the EU, we need to add 20 of our euros. We also have other preferences maybe, but we could not get money from EU.

  Lord Plumb: Lord Chairman, after what we have heard, I am wondering if there are any vacant farms around!

  Chairman: I thought you might say that.

  Q681Lord Plumb: I might ask the question: what has happened to land prices during this last year? Indeed, I will ask that question. It was not my intention to ask the question, but there are two funds in addition to the ones we have been talking about, of course. One is the structural fund; the other is the cohesion fund. The cohesion fund, of course, is one that has helped in building the roads, highways and helping with infrastructure. To what extent is Poland either benefiting from or anticipating benefiting from both those funds?

  Mr Piskorz: We are quite efficient using cohesion and structure funds available for us since we joined the EU. Already in 2004 we received from this source 2.4 billion euro when our contribution to the EU budget was around 1.2 billion euro, so there was a benefit there. It means that we were able to present the applications, and in a very short time, 10 months after joining the EU, we received application for support from structure funds and cohesion funds which will exhaust more than 35 per cent of the envelope available for three years. We were told that when Spain joined the EU, in the first two years they did not receive much money from structure fund because they did not have the absorption capacity. We prepared ourselves and Member States helped us in the transition period to build in sufficient capacity, the EU supported us with PHARE, and this was very helpful and therefore we are benefiting from this.

  Q682Lord Plumb: Land prices?

  Mr Piskorz: Land prices. I always told farmers that they should not sell easy their land before we joined the EU because farming will be more profitable after we join, and this is the case. Land prices increased only in 2004 more than 30 per cent, but still the price of agricultural land is relatively low in Poland. If you take one hectare of agricultural land of average quality in the areas where you could not change this into construction land, just as agricultural land, you may have one hectare of land for less than 2,000 euro, which is still relatively low.

  Q683Chairman: Before we break up, and we must, you have now been members of the EU for nearly a full year, not quite. At this stage, you and the other new Member States, what is your attitude as far as the CAP is concerned? Do you talk together with the other new Member States or not? Do you feel that the promises that were made to you are going to be kept? You were quite strong in your statement about the promises that you felt had been made to you regarding CAP before you decided to join.

  Mr Piskorz: We have been very warmly received in the club. There is still from time to time a situation where there is a separation—new Member States, old Member States—and sometimes we face some scepticism, but the time of this division of very hard negotiation is over and now you see the coalition, not just new Member States but across. I think what still is missing is we are not yet fully represented in the European institution, we do not have people on the managerial level in the European Commission and it is for us very difficult to know in advance what is prepared and what is cooked by the administration. I know that other Member States, existing Member States, are in a much better situation because they know in advance and they could prepare the position for us, sometimes not sufficient time. It is important to have a knowledge of what is prepared in order to be prepared for negotiation, but this is a transition time and we are trying to learn very quickly. As you observed, the world did not collapse. When Poland with two million farmers joined the EU you did not observe that we flooded the EU market with cheap agricultural products. It was not the case. There were fears that this would happen, but it did not happen. In other areas there were also fears that Polish cheap workers would flood the European labour market. It did not happen. I think at the end enlargement was a success, it was a win-win event, and this gives satisfaction for the EU 15 and for the new Member States.

  Q684Chairman: Good. It is very good to hear that. I would very much like to thank you, Minister Counsellor, and all your team for coming to talk to us today. I know you have the full hearted support of all my colleagues in welcoming you into the European Union and we hope the years ahead will be very fruitful for you as a member of this club.

  Mr Piskorz: Thank you very much.

  Chairman: Thank you very much indeed.