POLAND: AGRICULTURAL POLICY, PRODUCTION AND BALANCE OF TRADE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000501740001-6
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 25
• Document Creation Date: December 22, 2016
• Document Release Date: May 11, 2010
• Sequence Number: 1
• Publication Date: August 19, 1983
• Content Type: MEMO

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Central Intelligence Agency
Washington, D. C.20505
DIRECTORATE OF INTELLIGENCE
19 August 1983
Poland? Agricultural Policy, Production and Balance of Trade
Summary
Poland moved from being a net agricultural
exporter with a food trade surplus of $100 million
in 1970 to a net importer with a deficit of $1 .9
billion in 1981. This change occurred mainly
because political pressures forced the Gierek
regime in the early 1970s to expand consumption
beyond the capacity of the country's agricultural
sector. Poor weather limited the expansion of
domestic production, but other important
constraints were the lack of investment in
agriculture, inadequate incentives for the private
farmer to increase production, and discrimination
against the private farmer in the allocation of
land and inputs. After 1975 Warsaw increasingly
had to rely on credit-financed agricultural
imports from the West.
Poland most likely will not become a net
agricultural exporter in the 1980s for several
reasons, but the country could improve its trade
balance by radically altering its present policies
toward domestic production, consumer demand, and
exports. The regime could stimulate farm output
by increasing investment in the agricultural
This memorandum was prepared by
East European Division, Office of European Analysi~t
was requested by Stephen Canner, Director of East-West Economic
Policy, Department of Treasury. Comments and questions are
welcome and should be directed to Chief
East European Division, Office of European Ana ysis,
EURM83-101`9,
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infrastructure and by providing additional
assurances and incentives to private farmers. It
could control consumer demand by raising retail
food prices to reflect their true costs,
maintaining a better control on incomes, and
importing only minimum amounts of foods that
cannot be produced in Poland. At the same time,
Warsaw could increase exports by investing in
larger and better storage and processing
facilities, developing better marketing techniques
for selling to Western countries, and
concentrating on the production of labor intensive
and specialized commodities that can be produced
in excess of domestic needs.
Odds are against the regime taking many of
these steps. We believe agriculture will continue
to get insufficient investment funds because of
industry's successful lobby for more funds. For
ideological reasons, the regime will not be likely
to implement policies which would convince the
private farmers that their future looks bright
enough for them to invest and produce more.
Moreover, the government will remain cautious in
regulating consumer demand because of fear of
worker reaction to increased austerity. For the
same reason, we believe it will allow food prices
to increase only moderately in the 1980s, and it
has already said it hopes to surpass the moderate
consumption plans of 1983-90, especially to raise
the low per capita meat consumption goal. And the
regime has no formal plans to improves
marketing techniques in the West.
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Performance in the 1970s
Poland had an agricultural boom in the early 1970s that was
unprecedented in the postwar period. Between 1970 and 1974,
overall agricultural production increased by 5 percent annually,
grain production rose by an average of 9.0 percent a year, cattle
numbers by 4.7 percent, and hogs by 12.5 percent. Other farm
products such as milk, vggetables, and fodder crops increased
1
bl
) .
e
significantly (ta
The boom was due to a coincidence of favorable weather and
Communist Party Chief Edmund Gierek's efforts to give greater
support to private farmers. During these years, the government
increased purchase prices of grain and livestock, reduced land
taxes, abolished compulsory deliveries, and granted farmers
national health insurance and retirement benefits.
Despite higher output, the regime found it had to expand
imports of agricultural products and food to satisfy the
population's growing demand. In fact, the value of such imports
increased by a whopping 324 percent between 1970 and 1974, while
agricultural exports grew by only 86 percent. Grain imports
increased from 2.3 million tons in 1970 to 3.9 million tons in
1974 .
Increased production and imports improved the Polish diets
considerably in this period. Per capita consumption of meat
increased an average of 5.5 percent annually, eggs by 2.5
percent, fats by 2 percent, and sugar by 2.9 percent. At the
same time, consumption of less desirable foods, such as potatoes
and grains, decreased 1.7 percent annually (table 2).
The farming boom faltered after the middle of the decade.
Weather was partly to blame, but a key factor was the decision by
the Gierek regime to shift back to policies that weakened
incentives for private farmers. Grain production stayed at 1975
levels; only in 1976 and 1978 did it surpass 20 million tons.
The potato and sugar beet harvests fell to record lows in 1980
after four years of stagnation. Cattle and hog production were
at 1973 levels in 1980. Livestock numbers stagnated or fell
every year after 1978.
Although imports continued to grow throughout the decade,
stagnating domestic production slowed the growth of consumption
of quality foodstuffs. Consumption of meat rose only 5 percent
1 Except as noted, all statistics in this paper are taken
directly from or are based upon official Polish sources. ~ 25X1
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in the last half of the decade and that of eggs rose 7 percent.
Consumption of milk stagnated, while that of sugar fell by 4
percent. At the lower end of the demand scale, cereal
consumption rose 6 percent, and potato consumption fell 9
percent.
Regime Policies
Little Investment in Agriculture. Poland's agricultural
problems stem in part from Warsaw's failure to invest
sufficiently in the sector. Historically, the regime in the
postwar era apportioned an average of only 11 to 15 percent of
the state investment budget to agriculture compared with 40
percent to industry. Private farmers could not buy enough modern
machinery and high-quality seeds, and rural roads, storage
facilities, and irrigation projects were not upgraded. To some
extent, weather damage to crops in the late 1970s could have been
reduced had the state invested more in flood control and land
improvement projects and in the construction of transport and
storage facilities. Even in years of good harvests, Polish
economists estimate that inadequate rural infrastucture_
contributes to losses of 15 to 20 percent of the crop.
We believe that private farmers, moreover, have invested
little to improve their land because they believe it may be taken
eventually by the state, either by force or after their
retirement. Low procurement prices--restricting the private
farmers' income and incentive to increase investment and output--
have discouraged them from building more storage facilities,
updating farm implements, and improving soil management.
Discrimination Against the Private Farmer. Unlike its
neighbors, Poland decided not to force the collectivization of
farming in the 1950s because the regime feared that resistance by
the farmers would severely disrupt food supplies. Subsequent
regimes had similar fears and in 1982, private farms accounted
for 80.7 percent of gross farm production; state farms, 15.8
percent; collectives, 3.2 percent; and associations, 0.3 percent
of output. Associations provide services such as plowing and
harvesting to private farms and demonstrate new farming
techniques.
Warsaw, however, took other steps to try to control the
farmers. It established compulsory delivery quotas for products
that private farmers had to sell to the state, and at the same
time favored state farms over private farms in the sale of many
farm inputs, especially key items such as tractors and
fertilizers. By the mid-1970s, only one private farmer in 13
owned a tractor; most of the others depended on horses to farm
their land. In 1975, the supply of fertilizer provided private
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farms per unit of land was only half that allotted to state
farms. Relative to land area and livestock numbers, the state
farms received more machinery and equipment and had greater
access to services of veterinarians and soil scientists.
The government also limited the size of private farms and
this along with the traditional dividing of a father's land among
his sons--now forbidden--has made private farms small and
inefficient. In the early 1950s, private farmers were not
permitted to hold more than 15 hectares (1 hectare equals 2.47
acres). This limit was subsequently increased, and by the late
1970s farmers were allowed to own 50 hectares of land.
Apparently recognizing the key role of private farming--and
perhaps economies of scale--the regime doubled the amount in
1982. Local officials, however, often have been a stumbling
block in implementing the policy: they have been slow to approve
land sales to prosperous farmers and have used controls over
credit and other powers to hinder farm expansion. Moreover,
chronic shortages of machinery have made farmers reluctant to
acquire more land. As a result. only 5 percent of private farms
in 1980 were over 15 hectares.
State procurement prices for private farm products rarely
have been high enough to stimulate production. Historically,
regimes raised procurement prices substantially only in response
to pressure from workers to increase food supplies, and they then
eroded farmers' real gains by raising input prices. Prices of
many inputs such as fertilizers, pesticides, and farm machines
were doubled in the late 1950s, and some were increased by 20 to
30 percent again in the late 1960s.
In the early 1970s, Gierek temporarily increased real farm
income by raising procurement prices much more than input
costs. In 1974, however, input prices were increased by 10
percent while purchase prices rose only 7 percent. In real
terms, private farm income increased over 25 percent from 1970 to
1974, but stagnated between 1975 and 1978 before dropping 5
percent in 1979 and 8 percent in 1980. In contrast, the real
income of an urban worker increased about 30 percent from 1970 to
1974 and rose 10 percent between 1975 and 1980, including a 2-
percent increase in 1979 and a 4 percent rise in 1980.
Low farm incomes have forced many farmers to take second
jobs to make ends meet. A government survey in the mid-1970s
showed that nearly 60 percent of Poland's private farm families
depended to some extent on non-agricultural income. Because
second jobs divert these people from farm work, Polish statistics
show that yields are 20 to 30 percent lower on their farms than
on others of similar size or soil fertility.
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As in other countries, the Polish agricultural sector has
the problem of keeping sufficient labor on the farms. The number
of private farmworkers declined 30 percent from 1970 to 1980
mainly because higher incomes and improved lifestyles have drawn
many young farmworkers to the cities. In addition, over one-
third of the private farmers today are over 60 years of age and
some older farmers are being enticed off the land by liberalized
retirement benefits granted in 1980. This pension system allows
farmers to retire at age 65 for men and 60 for women if they
surrender their land to the State Land Fund or to younger
relatives.
Increasing Food Supplies. The Gierek regime tried to win
the loyalty of the workers by providing increased amounts of
quality food at low prices. The main problems with this
strategy, however, were that in order to increase consumption the
regime had to bring in hard currency imports and to maintain low
prices it had to increase budget subsidies. By 1980, about 40
percent of the state budget was earmarked for food subsidies
because the government--to avoid worker discontent--refused to
raise retail prices. Besides low retail prices, a 243 percent
rise in money income between 1970 and 1981 also increased
consumer demand for food. The regime, however, was unable to
satisfy completely the increased demand. As a result, long lines
formed outside food stores, and the black market became an
increased source of food supplies. Farmers preferred to sell
their goods for higher prices on the black market, and the
government was unable to fulfill its procurement plans in 1980
and 1981, especially for meat and grain. In 1981, retail sales
of food in the socialized market measured in constant prices
decreased 11 percent from 1980 levels; the amount of meat for
sale by the state decreased 17 percent. As a result, the regime
established rationing programs for meat which were later extended
to almost all major foodstuffs in 1981 and 1982.
Increasing Imports, Decreasing Exports of Food. In the
1970s, the regime decided to import food and agricultural raw
materials mainly from the West rather than risk the political
repercussions that might result from curbing demand. The value
of agricultural imports from the West rose from $291 million in
1970 to a record $2.5 billion in 1981 (Table 3). Agriculture's
share of Poland's total hard currency import bill grew from 26 to
46 percent during this period. By 1981, Poland was dependent
upon the West for almost 80 percent of its imports of foodstuffs
and agricultural raw materials compared with 55 percent in 1970
(Table 4). By the last half of the decade, imports from the West
accounted for:
roughly one-quarter of Poland's total consumption of
coarse grains;
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approximately three quarters of the country's consumption
of high protein feedstuffs--oilcake and meal;
over half of total oilseed consumption; and
one-third of the raw hides processed.
Correspondingly, the USSR's importance as a provider of
agricultural commodities declined dramatically because of its own
production problems and increasing domestic needs. Whereas the
Soviet Union supplied 34 percent of Poland's agricultural imports
in 1970, the figure had slipped to 10 percent by 1980
Because of Warsaw's emphasis on expanding livestock output,
imports of grain and feedstuffs, almost entirely from the West,
accounted for over one-half of the increase in the value of
Poland's total agricultural imports between 1970-80. The share of
feedstuffs in Poland's total agricultural imports rose from
approximately 30 percent in 1970 to a peak of just over half in
1980. Roughly 30 percent of Poland's meat output in the 1
1970s was dependent on foreign grains and protein meals.
A 240-percent increase between 1970 and 1980 in the volume of
imports of semi-luxury commodities--tropical and subtropical
fruits, coffee, tea, cocoa and spices--also contributed to
.Poland's rising import bill. The growth of such imports reflected
the new demands of a more affluent, urbanized population. Because
of higher world prices, the value of such imports was about 7
times higher at the end of the decade, and their share in Poland's
total agricultural imports rose from 10 percent in 1970 to about
14 percent in 1980.
Poland's increasing dependence upon the West. resulted not
only from the West being the only reliable source for large
volumes of grain and protein meals, but also reflected Western
willingness to grant favorable financing, largely in the form of
government credits and guarantees. Poland used an increasing
share of hard currency trade credits to purchasg aaricultural
2 Both France and Canada extended credits for grain purchases
under long-term grain agreements with Poland during the 1970s.
Favorable financing in the form of US Commodity Credit Corporation
(CCC) export credits and guarantees greatly facilitated US
agricultural exports to Poland. Between 1970 and 1981, US
agricultural exports to Poland financed under CCC programs totaled
roughly $2.6 billion. In .fiscal year 1981 CCC programs financed
$645 million in agricultural exports to Poland, or approximately 92
percent of total US agricultural exports to the country. 25X1
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Food exports did not grow
in
pace
with imports. Although
Poland's agricultural exports
rose
from
$390 million in 1970 to a
peak of almost $1 billion in
1979,
they
fell back to $600 million
in 1982 (table 3, figure 1).
The
share
of agricultural exports in
total hard currency trade declined almost annually from 30 percent
in 1970 to 11 percent in 1981 as the regime diverted export goods
to the domestic market. Over 90 percent of total agricultural
exports to the West--mainly consisting of meat, processed meat and
live animals--were sold to Western Europe and the United States
(table 5).
As a result of increasing imports and falling exports,
Poland's hard currency agricultural trade balance deteriorated
rapidly during the 1970s, moving from a surplus of some $100
million in 1970 to a $1.9 billion deficit in 1981. This
deterioration also reflected a worsening in the terms of trade of
agricultural products. After rising rapidly in the early 1970s,
prices of livestock products tended to stabilize late in the
decade while prices of key import items generally increased (table
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Trends Since 1981
The regime under General Wojciech Jaruzelski has tried to
reduce agricultural and food imports by boosting domestic
production, reducing consumer demand, and encouraging private
farmers to sell more to the state. Nevertheless, in 1982--the
first year of martial law--agricultural output fell 4.5 percent
from 1981 levels--compared with an average 5 percent growth in
1970-75 and no growth during 1976-80. Although the grain crop
increased 7.6 percent, total crop output fell because of declines
in the production of potatoes, sugar beets, and rapeseed--a source
of vegetable oil. The fodder harvest also fell 17 percent
compared with 1981 and contributed to lower livestock numbers.
The martial law regime tried to keep up domestic market
supplies by using a combination of threats and incentives to
encourage farmers to increase production and sales to the state.
For example, the regime warned that it would reinstate compulsory
deliveries and it deployed military teams to the countryside to
brow beat farmers into selling to the state. The government
refused to sell key inputs to farmers who did not make a minimum
amount of sales to the state. On the incentive side, it extended
credit for purchases of agricultural inputs and continued
subsidies on machinery and fertilizer in short supply. The regime
also offered to pay farmers who delivered grain above contracted
amounts with interest-bearing "grain bonds" redeemable at higher
prices in 1983-85. It also attempted to underscore its support of
private farmers by securing parliamentary approval of several
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measures that had been introduced the pre-martial law period,
including bills liberalizing farm inheritance and pensions and
increasing the maximum farm size to 100 hectares.
The incentives had little impact because they did not
increase farmers' profit. Prices of inputs, for example, rose by
over 35 percent in 1982 compared with 1981, the cost of services
increased more than 300 percent (including insurance and
retirement premiums), but procurement prices increased an average
of only 21 percent. The government raised procurement prices
again this July, but farmers' organizations claim that farmers'
costs still run above revenues. According to the Polish press,
the Ministry of Agriculture did not take into account higher
national insurance premiums or fuel costs when calculating the new
procurement prices, so that the output of many agricultural
products remain unprofitable. Farmers calculate, for example,
that the present costs of raising a hog are 25 percent more than
they will receive from its sale. Farmers' costs will increase
even more because the regime plans later this year to increase
land taxes on private farms and to tax high-income farmers as part
of the anti-inflationary program.
Although the regime has pledged to equalize the living
standards of the rural and urban populations, the income gap
widened in 1982 and 1983. Real farm income, including income in
kind, dropped about 20 percent in 1982, and we expect it to
decrease again this year. According to the Polish Planning
Commission, the ratio of private farm family income to the income
of an urban industrial family was 92:100 in the first six months
of 1983. The Ministry of Agriculture this year expects the ratio
to fall below the 90 percent level compared with incomes in other
sectors of the economy.
In large part because of poor policies and failure to
implement some of its programs, the regime was unable to procure
adequate grain domestically in 1982 and 1983. The shortfall from
the original plans was 0.7 million tons in the period July 1981 to
June 1982 and 2.6 million tons during July 1982 to June 1983. In
1982, farmers were keeping grain for their own feedstocks because
the state was unable to supply them with the imported high protein
feed as in the past or to provide consumer goods as an
incentive.
One way that the regime dealt with the shortfall was to lower
grain use by decreasing the numbers of poultry and livestock. By
the end of 1982, poultry stocks had fallen by 20 percent, cattle
herds by 4 percent and hog numbers by 8 percent (including a 25
percent decrease in sows). Private farmers reduced their hog and
sow stocks even more than the total--12 and 28 percent,
respectively. Although meat supplies increased early in 1982
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because of slaughtering, this practice reduced livestock numbers
available during the rest of the year, and per capita consumption
of meat in the year as a whole decreased to .57.8 kilograms per
capita in 1982 compared with 65.0 kilograms in 1981. By the end
of 1983, we expect livestock numbers and per capita consumption of
meat to decline further as a result of decreased breeding.
The regime could not completely make up the grain shortfall
by boosting imports because of Western credit restrictions imposed
in response to martial law. Although Warsaw purchased more than 2
million tons of grain from France and Canada in early 1982 on
credits agreed to before the imposition of martial law, credit
problems led to a one-third decline in grain imports in July 1981
to June 1982 compared with the previous year. In 1982 and 1983,
imports again decreased by one-third. Most of the grain
purchases, moreover, had to be made for cash or barter
Poland's ability to arrange grain credits almost certainly
will not improve appreciably in 1983. France and Canada failed to
renew long term grain agreements that expired in late 1982. The
United States, traditionally the supplier of more than half of
Poland's grain imports, is maintaining the restrictions imposed on
CCC credits when martial law was introduced. Some short-term
credits are available; the 1982 rescheduling agreement with
Western banks provides for the return of 50 percent of Polish
interest payments--$550 million--in the form of trade credits.
But unless more credits are available, the bulk of Poland's
agricultural purchases will continue to be made for cash or
through barter and countertrade.
As a result of the sharp decline in agricultural imports, the
hard currency agricultural trade deficit fell by some $1.2 billion
in 1982 to $687 million. Total hard currency agricultural imports
declined in 1982 by 49 percent while exports of foodstuffs and
agricultural raw materials remained at their 1981 level.
Declining earnings from the export of meat and meat products were
offset by increased earnings from-the export of sugar, fruits and
vegetables, and selected dairy products.
We expect Poland's hard currency agricultural trade deficit
this year to remain at about $600 million with exports expected to
rise slightly and imports to fall modestly or stabilize. This
prediction of the level of the deficit takes into account the
likely size of this year's harvest and our estimates of Warsaw's
willingness to curb domestic demand and ability to boost
exports. Because of a mild winter but followed by several weeks
of drought conditions, we expect the 1983 grain harvest to be
about 20 million tons this is more than 1 million tons below last
year's near-record crop but slightly above the recent five-year
average. At the same time, grain requirements have fallen from
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1982 levels. Reducing livestock and poultry numbers and lowering
the quality of feed rations, albeit at the cost of livestock
output, probably have reduced grain requirements by 1.5 to 2.0
million tons this year. Moreover, continued rationing and sharp
hikes in food prices should continue to offset the effect of
increases in real wages and reduce the demand for many foods,
particularly meat. On the other hand, Poland's ability to
generate production for export is limited. We expect livestock
output to decline further in 1983 and unless Warsaw is willing to
make sharper cuts in supplies for the domestic market, meat
exports will also decline.
Polish Policy Prescriptions
Poland could take a number of steps to increase domesttic
production, control consumer demand, and increase exports.3 The
regime could increase agricultural output by:
increasing the amount of investment pledged to the sector
in 1983-85 from the 28 percent now pledged for both the
food indusry and the agricultural sector;
increasing investment in the agricultural infrastructure,
such as research stations, rural transport, storage
elevators, and hardware stores; and
producing a better mix of pesticides and fertilizers.
In addition, the government needs to provide more assurances
to the private farmer by
changing its pricing policy so that an efficiently run
private farm can cover its expenses and earn a fair
return;
assuring the availability of inputs, such as fertilizers,
pesticides, seeds, and tools at reasonable prices;
encouraging private investment--which could improve
future production--by offering incentives such as
reductions in land taxes;
25X1
3 See Appendix 1 for a discussion of Polish agriculture and
consumption plans for 1985 and 1990. 25X1
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easing the 100 hectare restriction on land sales and
lessening local discrimination against the sale of land
to private farmers;
increasing supplies of consumer goods to rural markets;
setting a more equitable relationship among taxes,
prices, and credits;
establishing income parity between the urban and rural
population to discourage the migration of young farm
workers to the city; and
encouraging the development of individual and group
initiatives to increase production and services to the
private farm sector.
Although restrictions of consumer demand will be difficult
for political reasons, the government could try to regulate it by:
raising retail food prices to reflect their true costs;
maintaining better control on increases in income; and
importing only minimum amounts of food, such as coffee,
tea, cocoa, and citrus, which cannot be produced in
Po 1 and .
In order to increase its exports of .agricultural products,
the regime could:
concentrate on the export of value-added processed and
specialty type meat products, such as canned hams,
sausage, and salami;
invest in larger processing and storage facilities for
labor intensive and specialized products such as frozen
or processed fruits and vegetables and processed barley
and potatoes; and
improve its food marketing techniques in the West.
Outlook
We do not believe the regime has the ability or willingness
to implement many of these measures. Economic development plans
still call for agriculture to get insufficient investment funds
because of industry's successful lobby for more funds. In 1982,
the government reduced the amount of investment pledged to the
sector from 30 percent for agriculture alone to 28 percent for
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both the agricultural and food sector. Since there will be only a
5-percent increase in total investment in 1983-85, agricultural
investment will be only 80 percent of its 1976-80 level.
We believe that basic supplies, such as machinery,
fertilizers, and pesticides will continue to be inadequate in the
1980s. For example, although the regime plans to increase
fertilizer application to 214 kilograms per hectare in 1985, the
actual capacity of the chemical industry will allow for only 205
kilograms per hectare. In addition, the chemical industry does
not produce the correct type of pesticides--such as for less
resistant high yielding grains that are grown in Poland. 25X1
Although a constitutional amendment has ensured the existence
of private farms, the regime has not provided the assurances
farmers need to increase production. Costs still exceed revenues
for most of agricultural production, especially livestock, despite
regime promises to make production profitable. The supply of
inputs and consumer goods probably will not increase enough to
provide incentives or satisf the demands of the rural consumer in
the next several years. 25X1
With political discontent still simmering, the government
will remain cautious in regulating consumer demand. The regime
appears reluctant to increase food prices to lower consumer
demand. Polish officials have stated consumer prices will not
increase enough to cover the July 1983 procurement price increases
until January 1984 when the prices of meat, bread, and dairy
products will rise; even the coming increases will not fully cover
production costs. Instead, the government has opted to raise
budget subsidies to cover the additional costs. 25X1
General consumption, moreover, is to grow 11 to 12 percent
during 1983-85 instead of the original 10 percent because Polish
planners have bowed to public pressure to increase it. Likewise,
prices are scheduled to increase by only 11 to 13 percent annually
until 1985, whereas original plans called for average price
increases of 25 to 30 percent annually. Real incomes are
scheduled to rise by 15 to 16 percent annually in the 1983-85
period, while the supply of goods and services on the market will
increase 8 percent yearly. 25X1
Food exports probably will not increase greatly because the
government is more likely to yield to consumer pressure to
increase domestic consumption rather than to financial pressure to
increase hard currency exports. Additionally, some of Poland's
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GUNf lUtN 11HL
traditional markets for met over the past year have established
t __ .. J. L -.-.- - _.- ~ 1.. ~... .. .. ...L ..
Most of the constraints on the government's willingness and
ability to address the country's agricultural problems reflect the
regime's fear of one or another sector of the public. Because
this fear is long-based in postwar history and the gulf between
the regime and the people almost certainly will not be soon
healed, we do not expect any marked changes in the agricultural
situation for many years. It seems highly unlikely, therefore,
that Poland can return to being a net agricultural exporter in
this decade.
4 See Appendix 2 for a discussion of Warsaw's plans for grain
imports and meat exports in 1985 and 1990.
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CONFIDENTIAL
Appendix 1
Polish Agricultural Plan for 1985 and 1990
1982
1985
1990
Grain
(million metric tons)
21.2
23.0
24.6
Potatoes
(million metric tons)
33.8
45.2
44.0
Sugar Beets
(million metric tons)
14.0
16.5
17.0
Cattle (million)
11.9
12.5
14.5
Hogs (million)
19.5
20.5
23.0
Grain yields are expected to increase to 30 quintals per hectare
in 1990 from a 24.7 quintal average in 1978-82. The regime again
pledges to increase supplies of farm inputs, including
fertilizers, pesticides, and farm implements, improve the rural
infrastructure, and increase the farmers' standard of living to
accomplish these goals.)
Polish Consumption Plan for 1985 and 1990
The regime also plans to improve the Polish diet from
1982
levels. Annual per capita food consumption is scheduled to
increase to the following amounts:
1980 1982 1985
1990
Meat and products (kilograms) 74 58 58
63
M ilk (liters) 262 255 275
285
Eggs (units) 223 200 222
225
Total fats (kilograms) 24.8 21.6 23.4
25.1
Grain products (kilograms) I27 124 127
125
Vegetables (kilograms) 101 106 120
125
Fruits (kilograms) 38 41 45
50
Plans envisage only moderate increases in retail rices in the
1980s and cuts in budget subsidies for food. 25X1
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Appendix 2
If Warsaw achieves planned grain output targets of 23 million
tons in 1985 and 24.6 million tons in 1990, it could meet its
goals for meat production and secure a surplus of meat for export
in the amount of around 347,000 tons in 1985 and 487,000 tons in
1990 (Table 1 and 2). Production at these levels would require
grain imports of approximately 4.0 million tons in 1985 and 4.8
million tons in 1990.
Under less optimal conditions--grain output near the trend of
the past five years--production of livestock products at the
planned level would require imports of some 6.5 million tons in
1985 and 8.1 million tons in 1990, well above Warsaw's import
targets. If in either case the regime is not able to hold
domestic consumption to planned levels, availability of meat for
export would decrease rapidly. For instance, if per capita
consumption in 1985 fell from the 1980 level of 74 to 65 kilograms
instead of the planned 58, the quantity of meat for export would
fall from a level of 347,000 tons to only 45,000 tons.
Table l: Estimated Su 1 and Demand of Grain Re uired to
Meet Planned Targets for Livestock Production in 1985 and 9901
Million Metric Tons
1. Grain production
2. Nonfeed grain useage
3. Domestic feed
availability (1-2)
4. Projected feed
demand
5. Projected grain
shortfall (import
need) (3-4)
1985
1990
Trend
Plan
Trend
Plan
20.5
23.0
21.3
24.6
9.5
9.5
10.0
10.0
11.0
13.5
11.3
14.6
17.5
17.5
19.4
19.4
6.5
4.0
8.1
4.8
1 Required to produce in 1985--2,848 million tons of meat, 1,700
million liters of milk, and 9,000 million eggs; in 1990--3,240
million tans of meat, 18,500 million liters of milk, and 9,500
million eggs.
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Table 2
Pro'ected Meat Balances
Thousand Metric Tons
1985
1990
Meat Output, Planned
2848
3240
Meat Consumption, Planned
2501
3753
Balance for Export
347
487
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rvriatr nyr IL.U ILU ral rfUUUI,LIVrI, 110F/UrLS aflU GX~.IV I~LS
1970 197
1
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
Agricultural productiona
100.0 108
.1
113.6
118.7
120.8
105.3
107.0
107.5
116.7
109.9
95.7
98.5
94.6
(Index 1970 = 100)
Cropsb
Grain (million tons)
16.3 19
.9
20.4
21.9
23.0
19.6
20.9
19.4
21.5
17.3
18.3
19.7
21.2
(1970
= 100)
100.0 122
.1
125.2
134.4
141.1
120.2
128.2
119.0
131.9
106.1
112.3
120.9
130.1
Imports
(million tons)
2.3 2
.9
3.0
2.9
3.9
3.9
6.1
5.7
7.4
7.3
7.8
7.2
4.2
Exports
(million tons)
0.2 0
.1
0.2
0.4
0.3
0.1
0.1
0.0
0.0
0.1
0.0
0.0
0.0
Potato Production
(million tons)
50.3 39
.8
48.7
51.9
48.5
46.4
50.0
41.1
46.6
49.6
26.4
42.6
32.0
(1970
= 100) 100.0 79
.1
96.8
103.2
96.4
92.2
99.4
81.7
92.6
98.6
52.5
84.7
63.6
Sugar beet Production
(million tons)
12.7 12
.6
14.3
13.7
13.0
15.7
15.1
15.6
15.7
14.2
10.1
15.9
15.1
(1970 = 100)
100.0 99
.2
112.6
107.9
102.4
123.6
118.9
122.8
123.6
111.8
79.5
125.2
118.9
Livestock (June census)
Cattle (million) 10.8 11
.1
11.5
12.2
13.0
13.3
12.9
13.0
13.1
13.0
12.6
11.8
11.9
(1970 = 100)
100.0 102
.8
106.5
113.0
120.4
123.1
119.4
120.4
121.3
120.4
116.7
109.3
110.2
Hogs (million)
13.4 15
.2
17,3
19.8
21.5
21.3
18.8
20.0
21.7
21.2
21.3
18.5
19.5
(1970 = 100)
100.0 113
.4
129.1
147.8
160.4
159.0
140.3
149.3
161.9
158.2
159.0
138.1
145.5
Agricultural Products
Sugar Productions
(million tons) 1.5 1
.6
1.7
1.7
1.4
1.9
1.6
1.8
1.8
1.6
1.1
1.7
1.6
(1970 = 100)
100 106
.7
113.3
113.3
93.3
126.7
106.7
12.0.0
120.0
106.7
73.3
113.3
106.7
Imports (million tons)
.Ol .0
4
0.04
0.03
0.05
0.04
0.02
0.03
0.06
0.06
0.12
.18
NA
Exports (million tons)
.31 .0
9
0.35
0.43
0.18
0.07
0.35
0.27
0.29
0.11
0.02
0.01
0.12
Meat and Fat Productions
(million tons) 2.2 2
.2
2.5
2.7
3.1
3.1
2.9
2.9
3.1
3.3
3.1
2.6
2.6
(19970 = 100)
100 10
0
113.6
122.7
140.9
140.9
131.8
131.8
140.9
150.0
140.9
118.2
118.2
Imports (million tons)
0.04 0.0
2
0.07
0.06
0.01
0.02
0.05
0.10
0.03
0.00
0.05
0.23
0.12
Exports (million tons)
0.04 0.1
5
0.17
0.19
0.23
0.21
0.16
0.14
0.15
0.17
0.16
0.10
0.08
a
Source: L. W. International Finance Research, Inc., Economic Growth in Eastern Euopre, OP-48, OP-54, 1975;
Op-65, 1981.
b
Polish Statistical Office, Rocznik Statystyczny, 1971-81.
~
USDA
ON-FILE DEPT. OF AGRICULTURE RELEASE
INSTRUCTIONS APPLY
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Table 2
Poland: Per Capita Consumption of Selected Food Productsa
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
Meat (kilograms)
53.0
56.1
59.3
52.1
65.6
70.3
70.0
69.1
70.6
73.0
74.0
65.0
57.8
Milk (liter)
262
266
263
263
261
264
258
263
264
264
267_
257
255
Eggs (units)
186
193
196
202
205
209
214
2.14
219
221
223
227
200
Sugar (kilograms)
39.2
39.6
40.9
42.4
43.9
43.2
43.9
41.5
42.7
43.9
41.4
33.4
41.8
Fish (kilograms)
6.3
6.4
6.8
7.2
7.3
7.2
7.7
7.6
7.3
7.6
8.1
7.3
6.0
Cereals (kilograms)
131
128
127
125
123
120
119
122
120
120
127
121
124
Potatoes (kilograms)
190
189
187
183
177
173
171
168
166
163
158
157
161
a Polish Statistical Office, Rocznik Statystyczny, 1971-81.
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Million US Dollars (Current Prices)
Exports 338.1 389.5 765.5 663.4 825.0 982.7 955.8 604.5 599.5
(Index 1970 = 100) 86.8 100.0 196.5 170.3 211.8 252.3 245.4 155.2 153.9
Imports 301.3 291.0 795.5 1032.8 1472.1 1950.3 2407.1 2506,0 1286.3
(Index 1970 = 100) 103.5 100.0 273.4 354.9 505.9 670.2 827.2 861.2 442.0
Balance 36.8 98.5 -30.0 -369.4 -647.1 -967.6 -1451.3 -1901.5 -686.8
Percent of Total Hard Currency Foreign Trade
Exports ~ 38.8 30.3 30.2 16.1 16.9 15.3 12.7 11.1 11.1
Imports 33.8 25.7 20.9 15.2 20.9 24.0 28.4 46.2 34.0
Source: Wharton CPE Foreign Trade Data Book, 1982 edition, and Rocznik Statystyczny Handlu Zagranicznego, various .years.
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Table 4
Poland:
Graphic Distribution of Agricultural Trade
(Percentage Share)
1970
1975
1980
1981
1982
Total World Trade
Imports
100.0
100.0
100.0
100.0
100.0
Exports
100.0
100.0
100.0
100.0
100.0
Total Socialist Trade
Imports
45.5
33.0
21.6
21.3
45.0
Exports
19.7
32.5
21.5
19.6
33.1
USSR
Imports
34.1
22.4
10.3
12.0
18.0
Exports
3.6
16.7
9.9
6.5
16.3
Eastern Europel
Imports
7.5
6.0
7.6
6.1
11.8
Exports
15.4
14.8
10.0
12.1
13.6
Other2 Socialist
Imports
3.9
4.6
3.7
3.2
15.6
Exports
0.7
1.0
1.5
1.0
3.2
Total Nonsocialist Trade
Imports
54.5
67.0
78.4
78.8
55.0
Exports
80.3
67.5
78.5
80.4
67.0
Developed3
Imports
37.6
'
51.4
59.2
60.7
43.1
Exports
72.8
59.1
71.0
75.9
62.8
Less Developed4
Imports
16.9
15.6
19.2
18.1
12.0
Exports
7.5
8.4
7.5
4.5
4.2
1 The CEMA Five--East Germany, Czechoslovakia, Hungary, Romania and Bulgaria.
2 Other Centrally Planned Economies--Albania, China Cuba, Mongolia, North Korea, Vietnam,
and Yugoslavia.
3 Developed Countries--Western Europe, Turkey, North America, South Africa, Japan,
Australia, and New Zealand.
4 Less Developed Countries--all other countries not included above.
Source: Calculated from data in the Wharton CPE Foreign Trade Data Bank, 1982 edition;
from Rocznik Statystyczny Handlu Zagranicznego, various years,
Polish Statitical Office; and from Biuletyn Statystyczny-II, 1983. Zloty values for
Socialist trade were converted to rubles and then to dollars at the
prevailing ruble/dollar exchange .rate for each year.
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Tab 1 e 5
Poland's Agricultural Trade With The Developed Westl
1970, 1975, and 1980
(In Percent)
Poland's Imports
Poland's Exports
1970
1975
1980
1970
1975
1980
United States
23.8
50.4
29.3
16.6
24.1
21.6
Canada
7.3
13.2
15.1
0.4
1.1
0.4
Australia
0.0
1.1
0.1
0.1
0.2
0.1
Japan
0.0
0.0
0.0
0.8
1.0
1.8
Western Europe
68.7
35.4
55.5
82.0
73.8
76.2
EC-9
51.4
22.6
44.7
68.7
62.2
64.2
Netherlands
2.7
1.6
2.5
2.0
2.6
1.9
Belgium/Luxem.
1.0
0.2
0.0
2.1
2.4
2.0
France
13.3
3.5
22.0
5.2
10.5
9.3
Germany
21.4
6.7
8.0
19.4
24.5
24.6
Italy
3.0
3.2
1.4
17.6
8.1
18.8
Denmark
7.6
5.2
1.3
1.0
1.4
1.3
United Kingdom
1.6
2.2
9.5
21.3
12.6
6.3
Ireland
0.8
0.0
0.1
0.1
0.1
0.0
Other W. Europe
17.3
12.8
10.8
13.3
11.6
12.0
Austria
1.0
0.2
3.4
3.2
2.7
2.5
Finland
0.7
0.0
0.1
0.6
0.8
1.0
Sweden
I.9
5.7
1.2
4.2
3.8
3.4
Spain
6.0
1.6
0.7
1.0
1.2
0.5
Norway
3.7
1.6
0.6
0.9
0.5
0.3
Switzerland
0.2
0.1
0.1
2.4
2.1
2.1
Greece
3.8
3.6
4.7
1.0
0.5
2.2
100.02 100.02 100.02 100.02 100.02 100.02
1 OECD 19, SITC categories 0, 1, and 4.
2 Totals may not add due to rounding.
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Table 6
Poland: Volume and Value Indices of Agricultural Trade, Selected Commodities
1970
1973
1975
1977
1980
Volume
Value
Volume
Value
Volume
Value
Volume
Value
Volume
Value
(1970
= 100, Dollar Basis)
Imports
Grain
100
100
130
218
158
410
225
467
303
915
Oilmeal and Cake
100
100
230
544
303
525
336
789
435
1076
Oilseeds
100
100
192
290
162
443
26
92
327
756
Coffee, Tea
Cocoa and Spices
100
100
123
159
147
280
125
553
204
781
Citrus Fruits
100
100
174
234
186
294
250
382
254
604
Exports
Live Animals
100
100
144
319
156
221
132
136
222
273
Meat and Meat
Preparations
100
100
122
195
131
202
89
194
101
247
Bacon, Ham
100
100
74
137
38
101
29
70
26
78
Canned Meat
100
100
118
162
118
193
110
196
116
233
Dairy Products
and Eggs
100
100
143
175
133
238
100
190
65
220
Fruit and Vegetables
100
100
86
132
73
172
119
472
37
162
Source: Food and Agriculture Organization of the United Nations (FAO) Trade Tapes, 1981 edition.
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POUSH AGRICULTURAL IMPOSTS AND EXPORTS
0
1070 1972 1974 1976 t978 1980 1982
YEARS
Legend
~ IMPORTS
X EXPORTS
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Orig - Steven Canner (Treasury)
1 - DDI
1 - ADDI
1 - DDI Registry
1- EXDIR
1 - OD/EURA
2 - EURA PROD STAFF
4 - IMC/CB
1 - C/EURA/EE/EW
1 - C/EUR EE
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