Financial needs in the agriculture and agri-food sectors in Poland

The European Commission – Directorate-General for Agriculture and Rural Development (DG AGRI) in partnership with the European Investment Bank (EIB) organised on 11 May 2021 the webinar on ‘Financial needs in the agriculture and agri-food sectors in Poland’. Key objective of the webinar was to shed light on the financial environment in which farmers and processors operate in the country. 128 participants from managing authorities, financial intermediaries, EU institutions and stakeholders from the agricultural and agri-food sectors attended the online event. The webinar was moderated by Bruno Robino, Head of fi-compass at EIB. 

In his opening statement, Maciej Golubiewski, Head of Cabinet of European Commissioner for Agriculture and Rural Development underlined that EAFRD supported financial instruments bring value-added. He specified that EU agriculture is often disadvantaged in its access to bank finance and two-third  of the problems with access to finance are due to difficulties in obtaining long-term loans. Young farmers and new entrants are among the most affected groups. Small farms also have tough access to ‘farm development’ loans. Riskier investments related to research need to be stimulated further. 

He explained further how EAFRD supported financial instruments can bring benefit to reduce this gap and to stimulate investments in research and farm development. The Polish Guarantee Fund is seen as a step in the right direction and more specific targeting towards young farmers could be developed. He stressed that financial instruments can be key in difficult periods, like now under Covid-19 and that tailor-made solutions are needed to rightly cover all needs and respond to national circumstances. He placed special emphasis on the recommendations to MS and the need to continue using financial instruments under the new CAP Strategic Plans, in synergies with other EU policies and funding sources.

Monika Grążka, Director of the Technical Assistance and Promotion Department at the Ministry of Agriculture and Rural Development in Poland, emphasised the importance to improve the competitiveness of agriculture by supporting micro, small and mid-sized enterprises in rural development area, especially to tackle the consequences of the Covid-19 pandemic in the sector and highlighted the key role of the Polish EAFRD financial instrument in helping to cover liquidity needs.

Miglena Dobreva, Financial Instruments Advisor at the European Investment Bank and Michal Deuszkiewicz, Researcher at Ecorys, shared the findings from the fi-compass study ‘Financial needs in the agriculture and agri-food sectors in Poland’. It estimates a financing gap for the agriculture sector  of EUR 3 – 6 billion, among which the needs of young farmers and new entrants represent a considerable part, twice as much as the EU24 average. The estimated financing gap for the agri-food sector is of maximum EUR 84 million and concerns mostly small-sized processors. 

Ryszard Kogut, Deputy Director of support for farmers at the Polish Ministry of Agriculture and Rural Development, presented the findings of the ex-ante assessment undertaken by the managing authority. Based on its analysis, a guarantee product with a budget of EUR 68.6 million has been created under the Polish RDP for the programming period 2014-2020. He also explained the administrative procedure attached to the setting up.

Ewa Chudoń, Deputy Director of the Department of Investment Project Evaluation at the Agency for Restructuring and Modernisation of Agriculture (ARMA), explained the role of the Paying Agency in the process of implementation and control of the financial instrument. She showed the scope of the support for processing, marketing and developing agricultural products, as well how the reporting between the contracted banks and ARMA works in practice.

Piotr Natkański, Sales Director, Guarantees and Warranties Department at Bank Gospodarstwa Krajowego (BGK), provided an overview of the BGK’s experience with the implementation of the Polish Guarantee Fund. BGK, being the Fund’s manager, contributes to ease access to finance for farmers and food processors by cooperating with eleven other banks through which are offered guarantees for working capital loans as well as investment credits. This banking product is exempt from fees and most of the final recipients are micro-enterprises operating in the sectors of farming, food processing and production, food transportation and trade, and in other agri-food related sectors. 

Danuta Różanek, Director of Business Client Department at SGB-Bank an intermediary body under the Polish EAFRD Guarantee Fund, shared her insights related to the deployment and the delivery of support under the financial instrument from the Bank’s perspective. Thanks to the guarantees provided under the Polish Guarantee Fund, entrepreneurs with insufficient collateral can access loans. Additionally, this has allowed SGB-Bank to increase the volume of lending capital. Around 60% of the guarantees have been offered to growers of crops combined with animal breeding (mixed farming). 

Maciej Piskorski, Director of Agro Products Department at BNP Paribas Bank Polska, also an intermediary body under the Polish EAFRD Guarantee Fund, pointed out that the credit institution puts an emphasis on agriculture, group-wide as well as in Poland. He listed some of the benefits of the Polish Gurantee Fund for the customers, including the fact that it allows the Bank to lower the requirement for collaterals and to provide loans with longer maturities.

In her closing remarks Silvia Michelini, Director at DG AGRI, highlighted that the Polish Guarantee Fund is a well-structured financial instrument, which proved its efficiency also during the Covid-19 crisis. She confirmed that the new CAP and the new legal basis will offer significant opportunities and flexibilities for the implementation of financial instruments for agriculture. She encouraged all Member States to also address the green and digital transitions in order to be reached the targets of the Green Deal and the new CAP Strategic Plans. She also supported the Polish authorities in continuing using FIs under the new CAP Strategic Plan.