1. Support for milk processing in the pre - and after Polish accession to the EU
Magdalena Nowicka
Poland
Ministry of Agriculture and Rural Development
Department of Rural Development

3. Republic of Poland - general information
Member of the EU since May 2004
Population: 38,2 mln
Area: km2
Rural areas cover 93.2% of the country
Number of farms (over 1 ha): 2 mln in 1996, 1,5 mln in 2010,
Agricultural land – 16,9 mln ha (2002),
15,5 mln ha (2010)

4. The extensive dairy sector in the pre-accession period
Milk production = 12.2 bln l (1998)
1.3 mln holdings had dairy cows, 19,5 % of them more than 3 cows. Milk production/cow = 3700 l
About milk producers, full-time employment for people.
About 290 milk processing co-operatives and 130 private firms (with or without foreign capital).
Only 19 plants meeting EU export license standards.

5. Number of cows and the production of cows’ milk in Poland
Rocznik Statystyczny Rolnictwa 2011 TABL ZWIERZĘTA GOSPODARSKIE

6. Production of cows’ milk per 1 ha of agricultural land
Rocznik Statystyczny Rolnictwa 2011 TABL. 123.

7. Average annual quantity of milk
Rocznik Statystyczny Rolnictwa 2011 TABL. 142

8. Preparation of the SAPARD in Poland [1/2]
April 1999 – The beginning of the preparations for the implementation of SAPARD in Poland
June 1999 – Adoption of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the pre- accession period.
July 1999 – Council of Ministers approves the strategy for rural development and agriculture in Poland.
July 1999 – Adoption of Commission Decision 1999/595/EC on the indicative allocation of the annual Community financial contribution to pre-accession measures for agriculture and rural development.
December 1999 – Adoption of Commission Regulation (EC) No 2759/1999 laying down rules for the application of Council Regulation (EC) No 1268/1999 on Community support for pre-accession measures for agriculture and rural development in the applicant countries of central and eastern Europe in the preaccession period.
December 1999 – SAPARD programme submitted to the Commission

9. History of the preparation of the SAPARD in Poland (Special Pre-Accession Programme for Agriculture and Rural Development) [2/2]
June 2000 – Adoption of the Financial Implementing Regulation.
October 2000 – SAPARD programme adopted by Commission Decision.
January 2001 – Signature of Multi-Annual Financing Agreement with Poland
2001 – 2002 SAPARD Agency preparations, audits
August 2002 – Start of the SAPARD programme in Poland

10. SAPARD budget by measures [EUR]
Total eligible
cost
Total public expenditure
EU contribution
National
contribution
Private
1. Improvement in processing and marketing of food and fishery products
 004
(after the final change
1 095 393 824)
 002
547 696 912)
 000
410 772 688)
 002
136 924 224)
2. Investments in agriculture holdings
 066
(513 111 638)
 533
(256 555 819)
 148
(192 416 864)
69 361 385
(64 138 955)
3. Development of rural infrastructure
 002
(672 348 175)
 002
(658 901 211)
 004
(494 175 908)
 002
(164 725 303)
8 920 000
(13 446 964)
4. Diversification of economic activities in rural areas
 338
(349 561 432)
 669
(174 780 716)
 000
(131 085 537)
45 346 669
(43 695 179)
5. Agri-environmental measures
30 560 003
(0)
22 920 000
7 640 003
6. Vocational training
34 146 668
(32 993 032)
25 610 000
(24 744 773)
8 536 668
(8 248 259)
7. Technical assistance
35 350 012
(6 172 417)
32 463 450
(4 937 932)
2 886 562
(1 234 485)
Total
 093
(2 669 580 517)
 889
(1 677 100 107)
 602
(1 258 133 702)
 291
(418 966 405)
 204
(992 480 410)

11. Changes in the SAPARD programme
Changes made in the program after the start of its execution and implementation procedures were designed to simplify and facilitate access offered under the SAPARD program support to the beneficiaries, as well as broadening the category of beneficiaries eligible for support.
November 3, 2004 the Commission approved the final financial table for the SAPARD programme.
Initial allocations
Final allocations
Agri – food industry
37,32%
↓ 32,65%
Agricultural holdings
17,32%
↓ 15,29%
Infrastructure
27,29%
↑ 39,28%
Diversification
11,33%
↓ 10,42%
Agri-environment
1,91% 0%
Training
2,13%
↓ 1,97% TA
2,70%
↓ 0,40%
The initial and final allocations for each of the program

12. Support for milk processing – measure description [1/4]
Measure 1: Improvement in processing and marketing of food and fishery products
Scheme Support for processing of animal origin products
Beneficiaries - Milk, meat and fishery sectors
Objectives:
to increase the volume of production coming from plants with food safety systems (HACCP) and EUROP grading system;
to improve the milk collection system;
to improve the quality of fish supplied to processing plants or for direct sales;
to increase the number of processing plants with sewage, waste and by-product management facilities;
to introduce new technologies ensuring better adjustment to market needs;
to increase the share of raw material purchased on the basis of long- term contracts between processing plants and agricultural producers, and in particular between processing plants and agricultural producer groups.

13. Support for milk processing – measure description [2/4]
Scope of grants for Scheme 1.1.
construction and modernisation of buildings of processing plants and equipment in accordance with EU veterinary, sanitary and animal welfare standards – in existing enterprises;
modernisation or replacement of production lines and the introduction of technologies which will increase value added and which will conform with the requirements of the acquis communautaire in relation to hygiene, quality, packaging and labelling, not later than before the grant is paid out;
investment enabling the reduction of nuisance caused by waste water discharges, gas and dust emissions;
investments related to the reduction of power and water consumption with regard to the technological processes;
investments in waste and by-products management;
implementation of food processing safety system (HACCP);
purchase of equipment to introduce the EUROP grading system;
purchase of milk tanks and coolers.

14. Support for milk processing – measure description [3/4]
Eligible expenditure
construction and modernisation of buildings;
purchase and installation of new machinery and equipment including computer software and special transport equipment;
general costs, namely costs of architects, engineers and consultants' fees, legal fees, feasibility studies, acquisition of patents and licences, for preparing or implementing a project.
Levels of aid
the maximum rate of aid is up to 50% of the total eligible costs
cannot exceed EUR/per the industrial plant over the programming period
in addition, a plant may receive in total up to EUR for investments in favour of poducer groups
not lower than EUR/project

15. Support for milk processing [4/4]
The results of the measure 1
1 778 applications submitted, contracts signed, the budget of the measure fully used
Dairy sector: 385 applications submitted, 325 contracts signed (value: 101 mln euro), payments reached the amount 97 mln euro.
The average value of the project in the dairy sector = euro.
Most of the expenditure (about 70%) in the dairy industry was spent on the purchase and installation of machinery and equipment and to adjust processing plants to sanitary and veterinary standards.

16. The achievement of the expected results (projects completed)
Result indicators
The value of the indicator
Expected results 1
number of plants approved as complying with EU veterinary and sanitary regulations
147
100 2
volume of production coming from plants with export certificates to the EU countries (in million litres)
1 386
2 700 3
number of plants with HACCP system
127 - 4
number of plants, that have implemented the adaptation to the sanitary and veterinary EU
154 5
number of plants compliance of the industrial plant with the minimum national requirements related to the production hygiene and animal welfare
155 6
number of milk tanks purchased
320 7
amount of processed raw material (in million litres)
8 530 8
volume of production (in million tonnes)
3 838 9
amount of raw materials contracted with agricultural producers (in million litres)
4 928 10
average size of producers group (number of members of the group) 11
% of E-grade milk collected 80 12
reduction in pollution by plants (in %)
-8,8 13
waste and by-products treated (in %)
68,2 14
amount of waste and by-products treated (in tonnes)

17. SOP 2004-2006 budget by measures [EUR]
Total eligible cost
Total public expenditure
EU contribiution
Poland’s contribution
Private expenditure
1.1 Investments in agricultural holdings
1.2 Setting up of young farmers
1.3 Training
1.4 Agriculture advisory support
1.5 Improvement of the processing and marketing of agricultural products
2.1 Restoring forestry production potential damaged by natural disaster and fire and introducing appropriate prevention Instruments
2.2 Land reparcelling
2.3 Renovation of rural areas and preservation and protection of cultural heritage
2.4 Diversification of agricultural and
agriculture-related activities to provide multiple activities or alternative incomes
2.5 Agricultural water resources management
2.6 Development and improvement of the infrastructure related to agriculture
2.7 LEADER + Pilot Programme
3.1 Support to the system managing and implementing the Programme
3.2 Institutional development
3.3 Providing information about the Programme and promotion
Total

18. Measure 1.5. Improving processing and marketing of agricultural products [1/3]
Measure objectives
improvement of sanitary-hygienic and veterinary conditions of production;
market orientation of production and utilization of the existing market niches;
creation of new and the rationalization of existing sales outlets;
improvement of production quality;
increase in value added of production;
reduction of adverse environmental impact;
improvement of the logistics structure;
improvement of animal welfare;
introduction of new and modernization of the existing production technologies

19. Measure 1.5. Improving processing and marketing of agricultural products [2/3]
Scope of Aid
construction or modernization of production plants or the agricultural product wholesale infrastructure;
environmental protection investments bringing measurable ecological results.

20. Measure 1.5. Improving processing and marketing of agricultural products [3/3]
Level of Aid
max 50% of total eligible costs
max 5 million euro / beneficiary
no less euro per one project
Beneficiary
Processing plants in milk, meat, fruits and vegetables, grain and other sectors defined in eligibility criteria); agricultural product wholesale markets, commercial freezing and storage of agricultural products, egg packaging.

21. The results of the measure 1.5
1 085 projects completed , total value = 1 bln euro, 243 projects in the dairy industry (22,4% of the total), total value of circa EUR 300 mln.

22. RDP 2004-2006 budget by measures [EUR]
Total eligible cost
EU contribution
National contribution
1. Early retirement
,30
,30
,00
2. Support for semi-subsistence farms undergoing restructuring
,60
,69
,91
3. Support for less-favoured areas (LFA)
,13
,93
,20
4. Support for agri-environment and Animals welfare
,42
,27
,15
5. Afforestation of agricultural land
,74
,02
,72
6. Meeting the EU standards
,00*
,00
,00
7. Support for agricultural producers’ groups
,50
,70
,80
8. Technical assistance
,58
,73
,85
9. Complements to direct payments
,42
,80
,62
Total
,69
,44
,25
* the original budget of measure was EUR

23. The results of the measure 6
agricultural holdings received the support of the total value euro 633 mln.
Scheme 2. „Adjustment of milk farms to the EU public health standard” households have received the aid (nearly euro/holding).
The value of payments reached 23 mln euro.

24. The effects of the investment in the dairy sector
Type of investment
Number
Value of investment
(mln euro)
Number of modernized cowsheds
Number of modernized posts
Modernization of the walls and floors in raw milk storage spaces and in milking spaces or milking stalls
5 003
0,62
Equipment for milking (modern milking systems)
3 305
5,3
Equipment in the milk cooler till 200 l
1 189
2,5
Equipment in the milk cooler from 200 to 400 l
2 145
6,9
Equipment in the milk cooler from 400 to 800 l
1 203
5,4
Equipment for water intake
867
1,4
Equipment room to store milk in the wash-basin with water heater
4 499
0,6

25. RDP 2007-2013 budget by measures [EUR]
Measure title
Total eligible cost
Public expenditure
Private expenditure
111 Vocational training for persons employed in agriculture and forestry
112 Facilitation of young farmers’ setting up
113 Early retirement
114 Making use of the advisory services by farmers and forest owners
121,144 Modernisation of agricultural holdings
123 Increasing the added value to basic agricultural and forestry production
125 Improvement and development of infrastructure related to the development and adjustment of agriculture and forestry
126 Restoring agricultural production potential …
132 Participation of farmers in food quality schemes
133 Information and promotion activities
141 Liabilities for the period ; Measure: “Support for semi-subsistence farms”
142 Agricultural producer groups
211,212 Support of management in mountain areas and in less-favoured areas (LFA)
214 Agri-environmental programme (agrienvironmental payments)
221,223 Afforestation of agricultural and nonagricultural land
226 Restoring forestry production potential damaged by natural disasters and introducing appropriate prevention instruments
311 Diversification towards non-agricultural activities
312 Establishment and development of microenterprises
321 Basic services for the economy and rural population
322,323,313 Rural renewal and development
413 Implementing the local development strategy
421 Implementing the cooperation projects
431 Running of the Local Action Group, acquisition of skills and activation
511 Technical Assistance
TOTAL

26. Measure 123 Increasing the added value to basic agricultural and forestry production [1/3]
Scope of Aid
construction, modernisation or reconstruction of buildings or facilitates constituting infrastructure of processing plants or of agricultural products wholesale,
Purchase and installation of new machinery or equipment (including laboratory equipement and software)

27. Measure 123 Increasing the added value to basic agricultural and forestry production [2/3]
Aid intensity
The financial aid cannot exceed 5 mln euro per beneficiary and :
40% of the total eligible cost of the project implemented by SME;
25% of the total eligible cost of the project implemented by non - SME;
50% the total eligible cost of the project implemented by a SME, who acquires the raw materials on the basis of the long-term agreements with agricultural producer groups or who implements a project related to the processing of agricultural products for energy purposes.

28. Measure 123 Increasing the added value to basic agricultural and forestry production [3/3]
Beneficiary
Enterpreneurs
registered and operating in processing or marketing of agricultural products,
SMEs or enterprises employing less than 750 persons, or an enterprise with turnover not exceeding mln euro
different sectors of agricultural products processing covered (including milk sector)

29. Current information - measure 123
1481 contracts with 879 beneficiaries signed;
75 % of the budget contracted;
Nearly 900 operations finished;
42 % of the budget spent.

30. Support for processing of agricutlural products and number of beneficiaries including the dairy sector – summary

31. Support for processing of agricutlural products and number of beneficiaries including the dairy sector – summary

32. What makes a program successful?
Consultations with the social, economic and regional partners – adjustment of the programme to their needs and objective asessment of the situation of the sector.
Communication through the meetings, conferences, trade newspapers and other media.
General and detailed information dissemination through different channels: websites, hotlines, printed materials advisory services, banks, commercial sector, branch organisations etc.
Good practice – neighbor effect
Grant system (refundation of eligible costs) can work if beneficiaries have an access to credits.