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Polish Dairy Farm Transformations and Competitiveness 20 Years after Poland’s Accession to the European Union
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The Institute of Agricultural and Food Economics, National Research Institute, 00-002 Warsaw, Poland
2
Department of Economics and Organization of Enterprises, Institute of Economic Sciences, Warsaw University of Life Sciences—SGGW, 02-787 Warsaw, Poland
*
Author to whom correspondence should be addressed.
Animals 2024, 14(13), 2013; https://doi.org/10.3390/ani14132013
Submission received: 31 May 2024
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Revised: 24 June 2024
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Accepted: 2 July 2024
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Published: 8 July 2024
(This article belongs to the Special Issue Sustainability of Local Dairy Farming Systems)
Simple Summary
This research aimed to assess the changes in Polish dairy production after EU accession (2004–2022) from the perspective of the sector’s competitiveness at the industry and farm levels. Polish milk production has experienced dynamic development, including a strong decline in the number of dairy farms and the number of cows, an increase in herd size, an increase in milk production, and growth in milk yield per cow. These were among the highest growth dynamics compared to other analysed countries. The scale of milk production is the basic factor determining the efficiency and competitiveness of dairy farms. Milk production is highly uncompetitive for smaller farms (<15 cows), as measured by the Corrected Competitiveness Index. Larger farms (with 30 cows and more) are competitive and responsible for the majority (~60–70%) of milk produced and delivered to the market.
Abstract
Poland is one of the leading milk producers in the EU, being the fifth largest after countries such as Germany, France, Italy, and the Netherlands. From Poland’s accession to the European Union in 2004 up to 2022, Polish milk production experienced dynamic development. In this, there occurred a strong decline in the number of dairy farms (by −78%) and the number of cows (by −21%), an increase in dairy herd size (3.5 times) and increase in milk production (+60%) and milk yield per cow (by +62%). These were among the highest growth dynamics among the analysed countries. As a result of this significant transformation, Poland maintained an important position in milk exports, with a 31% export share in production in 2022. The scale of milk production was the basic factor determining the efficiency and competitiveness of dairy farms in Poland. Milk yield, farmland productivity, labour productivity, milk price, and the Corrected Competitiveness Index (based on labour and land opportunity costs) all showed a positive relationship with cow herd size on the farm. Milk production is highly uncompetitive for smaller farms (<15 cows). Despite substantial public support, the smaller farms, where subsidies equal up to 47% of total production value, could not earn sufficient income to cover the cost of capital, risk, and management in 2008, and even more so in 2021. This is because the farm income is too small to cover the extremely high opportunity cost of labour. The larger farms (with 30 cows and more) are competitive and responsible for the majority (~60–70%) of milk produced and delivered to the market. The most challenging from the sectoral policy point of view are medium farms (10–29 cows), whose share in production and deliveries is still important. To survive as economically viable units, these farms have to increase in scale and improve productivity. Otherwise, they will be gradually supplanted by larger farms.
